Dropbox, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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26-0138832
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth
company
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☐
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TABLE OF CONTENTS
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Page
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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•
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our ability to retain and upgrade paying users and increase our recurring revenue;
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•
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our ability to attract new users or convert registered users to paying users;
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•
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our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying users, and free cash flow;
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•
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our ability to achieve or maintain profitability;
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•
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the demand for our platform or for content collaboration solutions in general;
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possible harm caused by significant disruption of service or loss or unauthorized access to users’ content;
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•
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our ability to effectively integrate our platform with others;
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our ability to compete successfully in competitive markets;
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•
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our ability to respond to rapid technological changes;
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our expectations and management of future growth;
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our ability to grow due to our lack of a significant outbound sales force;
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our ability to attract large organizations as users;
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our ability to offer high-quality customer support;
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•
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our ability to manage our international expansion;
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our ability to attract and retain key personnel and highly qualified personnel;
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our ability to protect our brand;
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our ability to prevent serious errors or defects in our platform;
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•
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our ability to maintain, protect, and enhance our intellectual property; and
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our ability to successfully identify, acquire, and integrate companies and assets.
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•
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Unified home for content. We provide a unified home for the world’s content and the relevant context around it. To date, our users have added hundreds of billions of pieces of content to Dropbox, totaling over multiple exabytes of data. When users join Dropbox, they gain access to a digital workspace that supports the full content lifecycle—they can create and organize their content, access it from anywhere, share it with internal and external collaborators, and review feedback and history.
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Global sharing network. We’ve built one of the largest collaboration platforms in the world, with more than 4.5 billion connections to shared content. We cater to the needs of dynamic, dispersed teams. The overwhelming majority of our customers use Dropbox to share and collaborate. As we continue to grow, more users benefit from frictionless sharing, and powerful network effects increase the utility and stickiness of our platform.
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New product experiences and integrations. The insights we glean from our community of users and our deep integrations with best-of-breed companies lead us to develop new product experiences and extend the capabilities of our platform. Products like Paper and Smart Sync, deep integrations with companies like Microsoft, Zoom, BetterCloud, Atlassian and Slack, and our acquisition of e-signature and document workflow solution HelloSign help us provide our users with the functionality they need to do their best work. Machine learning further improves the user experience by enabling more intelligent search, better organization, and utility of information. This ongoing innovation broadens the value of our platform and deepens user engagement.
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Encryption. Dropbox file data at rest is encrypted using 256-bit Advanced Encryption Standard, or AES. To protect data in transit between Dropbox apps such as desktop, mobile, API, or web and our servers, Dropbox uses Secure Sockets Layer, or SSL, and Transport Layer Security, or TLS, for data transfer, creating a secure tunnel protected by 128-bit or higher AES encryption.
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File recovery. Every deletion event in Dropbox is recorded, including when groups of files are deleted. Users can easily recover files through our web interface. Dropbox Plus subscribers may recover prior versions for up to 30 days after deletion, and Dropbox Professional and Dropbox Business subscribers may recover prior versions for up to 180 days after deletion.
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Sharing permissions: Team administrators can set up and monitor how their members share team folders, and can set sharing permissions on all folders, sub-folders, and links through the sharing tab.
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Remote device wipe: Team administrators can delete their organization’s Dropbox content from a member’s linked devices, which is especially useful should someone lose a device or leave the team.
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Audit log: Team administrators can monitor which members are sharing files and logging into Dropbox, among other events. They can review activity logs, create full reports for specific time ranges, and pull activity reports on specific members. Advanced and Enterprise team administrators have access to audit logs with file-event tracking.
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Device approvals: Advanced and Enterprise team administrators can manage how members access Dropbox on their devices.
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Tiered administrator roles: Advanced and Enterprise teams have the ability to set multiple administrator roles, each with a different set of permissions.
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Network control: Enterprise team administrators can restrict personal Dropbox usage on their organization’s network.
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Security information and event management: Allows Dropbox Business administrators to oversee and manage employee activity, and access sensitive data through the administrator page.
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Data loss prevention: Protects sensitive data like personally identifiable information and payment card industry data stored in Dropbox Business accounts.
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eDiscovery and legal hold: Enables secure search and the ability to collect and preserve electronically stored information in Dropbox Business accounts.
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Digital rights management: Provides third-party encryption for company data stored in Dropbox Business accounts.
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Data migration and on-premises backup: Assists in transferring large amounts of data between locations and securing sensitive information with on-site data backup.
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Identity management: Allows companies to keep their Dropbox Business team authenticated with an external identity provider like Active Directory.
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Help center: Provides an online repository of helpful information about our platform, responses to frequently asked questions, and best practices for use.
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Community support: Facilitates collaboration between users on answers, solutions, and ideas about our platform in an online community.
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Twitter support: Provides users real-time product and service updates, and offers tips and troubleshooting information.
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Guided troubleshooting: Offers step-by-step instructions to resolve common questions and provides a portal to submit help requests for questions that aren’t otherwise available.
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user-centric design;
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ease of adoption and use;
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scale of user network;
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features and platform experience;
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performance;
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brand;
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security and privacy;
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accessibility across several devices, operating systems, and applications;
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third-party integration;
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customer support;
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continued innovation; and
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pricing.
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user-centric design;
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ease of adoption and use;
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scale of user network;
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features and platform experience
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performance;
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brand;
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security and privacy
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accessibility across several devices, operating system, and applications;
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third-party integration;
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customer support;
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continued innovation; and
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pricing.
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awareness of the content collaboration category generally;
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availability of products and services that compete with ours;
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ease of adoption and use;
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features and platform experience;
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performance;
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brand;
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security and privacy;
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customer support; and
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pricing.
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our ability to retain and upgrade paying users;
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our ability to attract new paying users and convert registered to paying users;
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the timing of expenses and recognition of revenue;
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the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure, as well as entry into operating and finance leases;
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the timing of expenses related to acquisitions;
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any large indemnification payments to our users or other third parties;
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changes in our pricing policies or those of our competitors;
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the timing and success of new product feature and service introductions by us or our competitors;
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network outages or actual or perceived security breaches;
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changes in the competitive dynamics of our industry, including consolidation among competitors;
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changes in laws and regulations that impact our business; and
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general economic and market conditions.
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compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection, consumer protection, and unsolicited email, and the risk of penalties to our users and individual members of management or employees if our practices are deemed to be out of compliance;
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recruiting and retaining talented and capable employees outside the United States, and maintaining our company culture across all of our offices;
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providing our platform and operating our business across a significant distance, in different languages and among different cultures, including the potential need to modify our platform and features to ensure that they are culturally appropriate and relevant in different countries;
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management of an employee base in jurisdictions that may not give us the same employment and retention flexibility as does the United States;
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operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States;
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compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions, and other regulatory limitations on our ability to provide our platform in certain international markets;
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foreign exchange controls that might require significant lead time in setting up operations in certain geographic territories and might prevent us from repatriating cash earned outside the United States;
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political and economic instability;
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changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes and other trade barriers;
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double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of the United States or the international jurisdictions in which we operate;
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higher costs of doing business internationally, including increased accounting, travel, infrastructure, and legal compliance costs; and
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the impact of natural disasters and public health epidemics on employees, travel and the global economy, such as the coronavirus currently impacting China,
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implement usage-based pricing;
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discount pricing for competitive products;
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otherwise materially change their pricing rates or schemes;
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charge us to deliver our traffic at certain levels or at all;
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throttle traffic based on its source or type;
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implement bandwidth caps or other usage restrictions; or
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otherwise try to monetize or control access to their networks.
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cause a reduction in revenue or delay in market acceptance of our platform;
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require us to issue refunds to our users or expose us to claims for damages;
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cause us to lose existing users and make it more difficult to attract new users;
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divert our development resources or require us to make extensive changes to our platform, which would increase our expenses;
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increase our technical support costs; and
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harm our reputation and brand.
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acquisition-related costs, liabilities, or tax impacts, some of which may be unanticipated;
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difficulty integrating and retaining the personnel, intellectual property, technology infrastructure, and operations of an acquired business;
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ineffective or inadequate, controls, procedures, or policies at an acquired business;
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multiple product lines or services offerings, as a result of our acquisitions, that are offered, priced, and supported differently;
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potential unknown liabilities or risks associated with an acquired business, including those arising from existing contractual obligations or litigation matters;
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inability to maintain relationships with key customers, suppliers, and partners of an acquired business;
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lack of experience in new markets, products or technologies;
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diversion of management's attention from other business concerns; and
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use of resources that are needed in other parts of our business.
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require repayment of any outstanding lease obligations;
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terminate our leasing arrangements;
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terminate our access to the leased datacenters we utilize;
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stop delivery of ordered equipment;
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sell or require us to return our leased equipment;
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require repayment of any outstanding amounts drawn on our revolving credit facility;
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terminate our revolving credit facility; or
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require us to pay significant fees, penalties, or damages.
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price and volume fluctuations in the overall stock market from time to time;
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volatility in the trading prices and trading volumes of technology stocks;
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changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
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sales of shares of our Class A common stock by us or our stockholders;
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failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
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the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
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announcements by us or our competitors of new products, features, or services;
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the public’s reaction to our press releases, other public announcements, and filings with the SEC;
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rumors and market speculation involving us or other companies in our industry;
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actual or anticipated changes in our results of operations or fluctuations in our results of operations;
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actual or anticipated changes in our key metrics;
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actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally;
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actual or perceived breaches of, or failures related to, privacy, data protection or data security;
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litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;
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developments or disputes concerning our intellectual property or other proprietary rights;
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announced or completed acquisitions of businesses, products, services, or technologies by us or our competitors;
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
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changes in accounting standards, policies, guidelines, interpretations, or principles;
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any significant change in our management; and
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general economic conditions and slow or negative growth of our markets.
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any transaction that would result in a change in control of our company requires the approval of a majority of our outstanding Class B common stock voting as a separate class;
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our multi-class common stock structure, which provides our holders of Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock, Class B common stock, and Class C common stock;
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when the outstanding shares of Class B common stock represent less than a majority of the total combined voting power of our Class A and Class B common stock, or the Voting Threshold Date, our Board of Directors will be classified into three classes of directors with staggered three-year terms, and directors will only be able to be removed from office for cause;
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until the Class B common stock, as a class, converts to Class A common stock, any amendments to our restated certificate of incorporation will require the approval of two-thirds of the combined vote of our then-outstanding shares of Class A common stock and Class B common stock; and following the conversion of our
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our amended and restated bylaws will provide that approval of stockholders holding two-thirds of our outstanding voting power voting as a single class is required for stockholders to amend or adopt any provision of our bylaws;
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after the Voting Threshold Date our stockholders will only be able to take action at a meeting of stockholders, and will not be able to take action by written consent for any matter;
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until the Voting Threshold Date, our stockholders will be able to act by written consent only if the action is first recommended or approved by the Board of Directors;
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vacancies on our Board of Directors will be able to be filled only by our Board of Directors and not by stockholders;
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only our chairman of the Board of Directors, chief executive officer, a majority of Board of Directors or until the Class B common stock, as a class, converts to Class A common stock, a stockholder holding thirty percent of the combined voting power of our Class A and Class B common stock are authorized to call a special meeting of stockholders;
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certain litigation against us may be required to be brought in Delaware;
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our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of Class A common stock; and
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advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
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Base period
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||||||||||||||||||
Company Index
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3/23/2018
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3/31/2018
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6/30/2018
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9/30/2018
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12/31/2018
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3/31/2019
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6/30/2019
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9/30/2019
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12/31/2019
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Dropbox, Inc. Class A
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$
|
100
|
|
$
|
110
|
|
$
|
114
|
|
$
|
94
|
|
$
|
72
|
|
$
|
77
|
|
$
|
88
|
|
$
|
71
|
|
$
|
63
|
|
S&P 500 Index
|
100
|
|
102
|
|
105
|
|
113
|
|
97
|
|
110
|
|
114
|
|
115
|
|
125
|
|
|||||||||
NASDAQ Computer Index
|
100
|
|
101
|
|
109
|
|
117
|
|
95
|
|
113
|
|
117
|
|
123
|
|
143
|
|
|
Year ended December 31,
|
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2019
|
|
2018
|
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2017
|
||||||
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|
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(In millions except for per share amounts)
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Revenue
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$
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1,661.3
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$
|
1,391.7
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$
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1,106.8
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|
Cost of revenue(1)
|
411.0
|
|
|
394.7
|
|
|
368.9
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|
|||
Gross profit
|
1,250.3
|
|
|
997.0
|
|
|
737.9
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|
|||
Operating expenses:(1)
|
|
|
|
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|
||||||
Research and development
|
662.1
|
|
|
768.2
|
|
|
380.3
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|
|||
Sales and marketing
|
423.3
|
|
|
439.6
|
|
|
314.0
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|
|||
General and administrative
|
245.4
|
|
|
283.2
|
|
|
157.3
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|
|||
Total operating expenses
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1,330.8
|
|
|
1,491.0
|
|
|
851.6
|
|
|||
Loss from operations
|
(80.5
|
)
|
|
(494.0
|
)
|
|
(113.7
|
)
|
|||
Interest income (expense), net
|
12.5
|
|
|
7.1
|
|
|
(11.0
|
)
|
|||
Other income (expense), net
|
16.0
|
|
|
6.8
|
|
|
13.2
|
|
|||
Loss before income taxes
|
(52.0
|
)
|
|
(480.1
|
)
|
|
(111.5
|
)
|
|||
Benefit from (provision for) income taxes
|
(0.7
|
)
|
|
(4.8
|
)
|
|
(0.2
|
)
|
|||
Net loss
|
$
|
(52.7
|
)
|
|
$
|
(484.9
|
)
|
|
$
|
(111.7
|
)
|
Net loss per share attributable to common stockholders, basic and diluted(2)
|
$
|
(0.13
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(0.57
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
411.6
|
|
|
358.6
|
|
|
195.9
|
|
(1)
|
Includes stock-based compensation as follows:
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of revenue
|
$
|
15.8
|
|
|
$
|
47.0
|
|
|
$
|
12.2
|
|
Research and development
|
147.6
|
|
|
368.2
|
|
|
93.1
|
|
|||
Sales and marketing
|
31.4
|
|
|
94.3
|
|
|
33.7
|
|
|||
General and administrative
|
66.4
|
|
|
140.6
|
|
|
25.6
|
|
|||
Total stock-based compensation(3)
|
$
|
261.2
|
|
|
$
|
650.1
|
|
|
$
|
164.6
|
|
(2)
|
See Note 13, “Net Loss Per Share” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for an explanation of the method used to calculate basic and diluted net loss per share attributable to common stockholders.
|
(3)
|
During the year ended December 31, 2018, the Company recognized the cumulative unrecognized stock-based compensation of $418.7 million related to our two-tier restricted stock units ("RSUs") upon the effectiveness of our registration statement for our Initial Public Offering ("IPO"). Refer to "Significant Impacts of Stock-Based Compensation" included elsewhere in this Annual Report on Form 10-K for further information.
|
|
As of December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cash, cash equivalents, and short-term investments
|
$
|
1,159.0
|
|
|
$
|
1,089.3
|
|
|
$
|
430.0
|
|
Working capital
|
228.4
|
|
|
372.7
|
|
|
(220.3
|
)
|
|||
Property and equipment, net
|
445.3
|
|
|
310.6
|
|
|
341.9
|
|
|||
Total assets
|
2,699.2
|
|
|
1,694.1
|
|
|
1,019.9
|
|
|||
Deferred revenue, current and non-current
|
559.1
|
|
|
485.6
|
|
|
419.2
|
|
|||
Operating lease liability, current and non current(1)
|
791.8
|
|
|
—
|
|
|
—
|
|
|||
Finance lease liability, current and non current
|
214.9
|
|
|
163.7
|
|
|
174.3
|
|
|||
Total stockholders’ equity
|
808.4
|
|
|
676.8
|
|
|
102.9
|
|
(1)
|
Includes the impact of the Company's adoption of ASU No. 2016-02, Leases (Topic 842). See Note 1, "Description of the Business and Summary of Significant Accounting Policies" and Note 9, "Leases" for further details.
|
|
As of March 31, 2018
|
As of June 30, 2018
|
As of September 30, 2018
|
As of December 31, 2018
|
As of March 31, 2019
|
As of June 30, 2019
|
As of September 30, 2019
|
As of December 31, 2019
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||||||
Total ARR
|
$
|
1,307
|
|
$
|
1,396
|
|
$
|
1,461
|
|
$
|
1,530
|
|
$
|
1,600
|
|
$
|
1,651
|
|
$
|
1,766
|
|
$
|
1,820
|
|
Constant Currency
|
As of March 31, 2018
|
As of June 30, 2018
|
As of September 30, 2018
|
As of December 31, 2018
|
As of March 31, 2019
|
As of June 30, 2019
|
As of September 30, 2019
|
As of December 31, 2019
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||||||
Total ARR
|
$
|
1,296
|
|
$
|
1,385
|
|
$
|
1,449
|
|
$
|
1,518
|
|
$
|
1,600
|
|
$
|
1,651
|
|
$
|
1,766
|
|
$
|
1,820
|
|
|
As of December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|||
|
(In millions)
|
|||||||
Paying users
|
14.3
|
|
|
12.7
|
|
|
11.0
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
ARPU
|
$
|
123.07
|
|
|
$
|
117.64
|
|
|
$
|
111.91
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
528.5
|
|
|
$
|
425.4
|
|
|
$
|
330.3
|
|
Capital expenditures
|
(136.1
|
)
|
|
(63.0
|
)
|
|
(25.3
|
)
|
|||
Free cash flow
|
$
|
392.4
|
|
|
$
|
362.4
|
|
|
$
|
305.0
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Revenue
|
$
|
1,661.3
|
|
|
$
|
1,391.7
|
|
|
$
|
1,106.8
|
|
Cost of revenue(1)
|
411.0
|
|
|
394.7
|
|
|
368.9
|
|
|||
Gross profit
|
1,250.3
|
|
|
997.0
|
|
|
737.9
|
|
|||
Operating expenses:(1)
|
|
|
|
|
|
||||||
Research and development
|
662.1
|
|
|
768.2
|
|
|
380.3
|
|
|||
Sales and marketing
|
423.3
|
|
|
439.6
|
|
|
314.0
|
|
|||
General and administrative
|
245.4
|
|
|
283.2
|
|
|
157.3
|
|
|||
Total operating expenses
|
1,330.8
|
|
|
1,491.0
|
|
|
851.6
|
|
|||
Loss from operations
|
(80.5
|
)
|
|
(494.0
|
)
|
|
(113.7
|
)
|
|||
Interest income (expense), net
|
12.5
|
|
|
7.1
|
|
|
(11.0
|
)
|
|||
Other income (expense), net
|
16.0
|
|
|
6.8
|
|
|
13.2
|
|
|||
Loss before income taxes
|
(52.0
|
)
|
|
(480.1
|
)
|
|
(111.5
|
)
|
|||
Benefit from (provision for) income taxes
|
(0.7
|
)
|
|
(4.8
|
)
|
|
(0.2
|
)
|
|||
Net loss
|
$
|
(52.7
|
)
|
|
$
|
(484.9
|
)
|
|
$
|
(111.7
|
)
|
(1)
|
Includes stock-based compensation as follows:
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of revenue
|
$
|
15.8
|
|
|
$
|
47.0
|
|
|
$
|
12.2
|
|
Research and development
|
147.6
|
|
|
368.2
|
|
|
93.1
|
|
|||
Sales and marketing
|
31.4
|
|
|
94.3
|
|
|
33.7
|
|
|||
General and administrative
|
66.4
|
|
|
140.6
|
|
|
25.6
|
|
|||
Total stock-based compensation(2)
|
$
|
261.2
|
|
|
$
|
650.1
|
|
|
$
|
164.6
|
|
(2)
|
Upon the effectiveness of the registration statement for our initial public offering, which was March 22, 2018, the liquidity event-related performance vesting condition associated with our two-tier RSUs was satisfied. During the year ended December 31, 2018, we recognized the cumulative unrecognized stock-based compensation of $418.7 million. See "Significant Impacts of Stock Based Compensation" for further information regarding our equity arrangements.
|
|
Year ended
December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(In millions)
|
|
|
|
|
|||||||||
Revenue
|
$
|
1,661.3
|
|
|
$
|
1,391.7
|
|
|
$
|
269.6
|
|
|
19
|
%
|
|
Year ended
December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(In millions)
|
|
|
|
|
|||||||||
Research and development
|
$
|
662.1
|
|
|
$
|
768.2
|
|
|
$
|
(106.1
|
)
|
|
(14
|
)%
|
|
Year ended
December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(In millions)
|
|
|
|
|
|||||||||
Sales and marketing
|
$
|
423.3
|
|
|
$
|
439.6
|
|
|
$
|
(16.3
|
)
|
|
(4
|
)%
|
|
Year ended
December 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(In millions)
|
|
|
|
|
|||||||||
General and administrative
|
$
|
245.4
|
|
|
$
|
283.2
|
|
|
$
|
(37.8
|
)
|
|
(13
|
)%
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
446.0
|
|
|
$
|
428.2
|
|
|
$
|
401.5
|
|
|
$
|
385.6
|
|
|
$
|
375.9
|
|
|
$
|
360.3
|
|
|
$
|
339.2
|
|
|
$
|
316.3
|
|
Cost of revenue(1)
|
104.9
|
|
|
104.8
|
|
|
102.9
|
|
|
98.4
|
|
|
94.4
|
|
|
90.2
|
|
|
89.5
|
|
|
120.6
|
|
||||||||
Gross profit
|
341.1
|
|
|
323.4
|
|
|
298.6
|
|
|
287.2
|
|
|
281.5
|
|
|
270.1
|
|
|
249.7
|
|
|
195.7
|
|
||||||||
Operating expenses:(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
176.9
|
|
|
172.8
|
|
|
162.4
|
|
|
150.0
|
|
|
136.8
|
|
|
133.2
|
|
|
119.7
|
|
|
378.5
|
|
||||||||
Sales and marketing
|
106.3
|
|
|
108.2
|
|
|
107.3
|
|
|
101.5
|
|
|
100.2
|
|
|
95.0
|
|
|
87.4
|
|
|
157.0
|
|
||||||||
General and administrative
|
64.5
|
|
|
61.0
|
|
|
62.9
|
|
|
57.0
|
|
|
56.5
|
|
|
50.8
|
|
|
49.8
|
|
|
126.1
|
|
||||||||
Total operating expenses
|
347.7
|
|
|
342.0
|
|
|
332.6
|
|
|
308.5
|
|
|
293.5
|
|
|
279.0
|
|
|
256.9
|
|
|
661.6
|
|
||||||||
Loss from operations
|
$
|
(6.6
|
)
|
|
$
|
(18.6
|
)
|
|
$
|
(34.0
|
)
|
|
$
|
(21.3
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(465.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss
|
$
|
(6.6
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
(21.4
|
)
|
|
$
|
(7.7
|
)
|
|
$
|
(9.5
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(465.5
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.13
|
)
|
(1)
|
Includes stock-based compensation as follows:
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
$
|
4.0
|
|
|
$
|
4.1
|
|
|
$
|
4.7
|
|
|
$
|
3.0
|
|
|
$
|
3.1
|
|
|
$
|
3.2
|
|
|
$
|
2.9
|
|
|
$
|
37.8
|
|
Research and development
|
40.5
|
|
|
38.9
|
|
|
37.7
|
|
|
30.5
|
|
|
29.2
|
|
|
28.2
|
|
|
27.9
|
|
|
282.9
|
|
||||||||
Sales and marketing
|
7.8
|
|
|
7.7
|
|
|
8.8
|
|
|
7.1
|
|
|
5.9
|
|
|
8.1
|
|
|
7.9
|
|
|
72.4
|
|
||||||||
General and administrative
|
17.0
|
|
|
17.5
|
|
|
16.9
|
|
|
15.0
|
|
|
15.3
|
|
|
15.5
|
|
|
16.4
|
|
|
93.4
|
|
||||||||
Total stock-based compensation(2)(3)
|
$
|
69.3
|
|
|
$
|
68.2
|
|
|
$
|
68.1
|
|
|
$
|
55.6
|
|
|
$
|
53.5
|
|
|
$
|
55.0
|
|
|
$
|
55.1
|
|
|
$
|
486.5
|
|
(2)
|
During the three months ended March 31, 2018 we recognized the cumulative unrecognized stock-based compensation of $418.7 million related to our two-tier RSUs upon the effectiveness of our registration statement for our IPO. During the quarter, we also released 26.8 million shares of common stock underlying the vested two-tier RSUs, and as a result recorded $13.9 million in employer related payroll tax expenses associated with these same awards. Refer to "Significant Impacts of Stock-Based Compensation" included elsewhere in this Annual Report on Form 10-K for further information.
|
(3)
|
During the year ended December 31, 2017, our Board of Directors voted to approve a modification of vesting schedules for certain unvested one-tier and two-tier RSUs to align the vesting schedules for all RSUs to vest once per quarter. As a result, we recognized an incremental $10.0 million in stock-based compensation during the three months ended March 31, 2018. Refer to "Significant Impacts of Stock-Based Compensation" included elsewhere in this Annual Report on Form 10-K for further information.
|
|
Three months ended
|
||||||||||||||||||||||
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(As a % of revenue)
|
||||||||||||||||||||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
24
|
|
|
24
|
|
|
26
|
|
|
26
|
|
|
25
|
|
|
25
|
|
|
26
|
|
|
38
|
|
Gross profit
|
76
|
|
|
76
|
|
|
74
|
|
|
74
|
|
|
75
|
|
|
75
|
|
|
74
|
|
|
62
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
40
|
|
|
40
|
|
|
40
|
|
|
39
|
|
|
36
|
|
|
37
|
|
|
35
|
|
|
120
|
|
Sales and marketing
|
24
|
|
|
25
|
|
|
27
|
|
|
26
|
|
|
27
|
|
|
26
|
|
|
26
|
|
|
50
|
|
General and administrative
|
14
|
|
|
14
|
|
|
16
|
|
|
15
|
|
|
15
|
|
|
14
|
|
|
15
|
|
|
40
|
|
Total operating expenses
|
78
|
|
|
80
|
|
|
83
|
|
|
80
|
|
|
78
|
|
|
77
|
|
|
76
|
|
|
209
|
|
Loss from operations
|
(1
|
)%
|
|
(4
|
)%
|
|
(8
|
)%
|
|
(6
|
)%
|
|
(3
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(147
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net Loss
|
(1
|
)%
|
|
(4
|
)%
|
|
(5
|
)%
|
|
(2
|
)%
|
|
(3
|
)%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
(147
|
)%
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Net cash provided by operating activities
|
$
|
528.5
|
|
|
$
|
425.4
|
|
Net cash used in investing activities
|
(320.0
|
)
|
|
(633.8
|
)
|
||
Net cash (used in) provided by financing activities
|
(176.7
|
)
|
|
300.8
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
0.2
|
|
|
(3.1
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
32.0
|
|
|
$
|
89.3
|
|
|
Total
|
|
Less than
1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than
5 years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Operating lease commitments(1)
|
$
|
1,155.7
|
|
|
$
|
119.5
|
|
|
$
|
224.5
|
|
|
$
|
175.5
|
|
|
$
|
636.2
|
|
Finance lease commitments(2)
|
229.0
|
|
|
84.1
|
|
|
123.7
|
|
|
21.2
|
|
|
-
|
|
|||||
Other commitments(3)
|
73.3
|
|
|
48.8
|
|
|
7.4
|
|
|
0.4
|
|
|
16.7
|
|
|||||
Total contractual obligations
|
$
|
1,458.0
|
|
|
$
|
252.4
|
|
|
$
|
355.6
|
|
|
$
|
197.1
|
|
|
$
|
652.9
|
|
(1)
|
Consists of future non-cancelable minimum rental payments under operating leases for our offices and datacenters, excluding rent payments from our sub-tenants and variable operating expenses. As of December 31, 2019, we are entitled to non-cancelable rent payments from our sub-tenants of $33.5 million, which will be collected over the next 3 years.
|
(2)
|
Consists of future non-cancelable minimum rental payments under finance leases primarily for our infrastructure.
|
(3)
|
Consists of commitments to third-party vendors for services related to our infrastructure, infrastructure warranty contracts, asset retirement obligations for office modifications, and a note payable related to financing of our infrastructure.
|
•
|
One-tier RSUs, which have a service-based vesting condition over a four-year period. These awards typically have a cliff vesting period of one year and continue to vest quarterly thereafter. We recognize compensation expense associated with one-tier RSUs ratably on a straight-line basis over the requisite service period.
|
•
|
Two-tier RSUs, which have both a service-based vesting condition and a liquidity event-related performance vesting condition. These awards typically have a service-based vesting period of four years with a cliff vesting period of one year and continue to vest monthly thereafter. Upon satisfaction of the Performance Vesting Condition, these awards vest quarterly. The Performance Vesting Condition was satisfied upon the effectiveness of the registration statement related to our IPO. Our last grant date for two-tier RSUs was May 2015. We recognize compensation expense associated with two-tier RSUs using the accelerated attribution method over the requisite service period.
|
Company Stock Price
Target
|
|
Shares Eligible to Vest for
Mr. Houston
|
|
Shares Eligible to Vest
for Mr. Ferdowsi
|
|
|
|
|
|
$30.00
|
|
2,066,667
|
|
880,000
|
$37.50
|
|
1,033,334
|
|
440,000
|
$45.00
|
|
1,033,334
|
|
440,000
|
$52.50
|
|
1,033,333
|
|
440,000
|
$60.00
|
|
1,033,333
|
|
440,000
|
$67.50
|
|
1,033,333
|
|
440,000
|
$75.00
|
|
1,033,333
|
|
440,000
|
$82.50
|
|
1,033,333
|
|
440,000
|
$90.00
|
|
1,033,333
|
|
440,000
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation
|
|
|
|
Page
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for revenue from contracts with customers. For example, with the assistance of IT professionals, we tested the controls over the initiation and billing of new and recurring subscriptions, the provisioning of customers, and the Company’s cash to billings reconciliation process. We also tested the controls related to the key application interfaces between the provisioning, billing, and accounting systems, which included controls related to access to the relevant applications and data and changes to the relevant systems and interfaces, as well as controls over the configuration of the relevant applications.
To test the Company’s accounting for revenue from contracts with customers, we performed substantive audit procedures that included, among others, testing on a sample basis the completeness and accuracy of the underlying data within the Company’s billing system, performing data analytics by extracting data from the system to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts, tracing a sample of sales transactions to source data, and testing a sample of cash to billings reconciliations.
|
|
Accounting for Acquisition of JN Projects, Inc. (d/b/a HelloSign)
|
Description of the Matter
|
As disclosed in Note 5 to the consolidated financial statements, on February 8, 2019, the Company completed its acquisition of JN Projects, Inc. (d/b/a HelloSign) for cash consideration of $177.9 million. The transaction was accounted for as a business combination in accordance with ASC 805.
Auditing the Company's accounting for its acquisition of HelloSign was complex due to the significant estimation required by management to determine the fair value of the acquired customer relationship ($20.5 million) and developed technology ($19.6 million) intangible assets. The Company applied the multi-period excess earnings method to value the customer relationship intangible asset and applied the replacement cost method to value the developed technology intangible asset. These methods required the development of certain key assumptions, including discount rates, projected revenue growth rates, customer attrition rates, and costs to recreate technology. Additionally, the Company’s estimation of projected market-participant synergies involved significant judgment. These assumptions, taken together, have a significant effect on the estimated fair value of the acquired intangible assets, and could be impacted by future economic and market conditions.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for business combinations. For example, we tested the controls over the recognition and determination of the fair value of acquired intangible assets, including the development and review of the valuation models and underlying assumptions used to develop such estimates.
We reviewed historical results and performed inquiries to validate the completeness of the identified intangible assets. To test the fair value of the customer relationship and developed technology intangible assets, we performed substantive audit procedures that included, among others, involving our valuation specialists to assist with our evaluation of the Company’s selection of valuation methodologies, testing the significant assumptions used to develop the prospective financial information, and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions to current industry, market and economic trends, and to the historical results of the acquired business. Specifically, when assessing the key assumptions, we focused on discount rates, projected revenue growth rates, customer attrition rates, and costs to recreate technology.
|
/s/ Ernst & Young LLP
|
|
We have served as the Company’s auditor since 2013.
|
|
San Francisco, California
|
February 21, 2020
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
551.3
|
|
|
$
|
519.3
|
|
Short-term investments
|
607.7
|
|
|
570.0
|
|
||
Trade and other receivables, net
|
36.7
|
|
|
28.6
|
|
||
Prepaid expenses and other current assets
|
47.5
|
|
|
92.3
|
|
||
Total current assets
|
1,243.2
|
|
|
1,210.2
|
|
||
Property and equipment, net
|
445.3
|
|
|
310.6
|
|
||
Operating lease right-of-use asset
|
657.9
|
|
|
—
|
|
||
Intangible assets, net
|
47.4
|
|
|
14.7
|
|
||
Goodwill
|
234.5
|
|
|
96.5
|
|
||
Other assets
|
70.9
|
|
|
62.1
|
|
||
Total assets
|
$
|
2,699.2
|
|
|
$
|
1,694.1
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
40.7
|
|
|
$
|
33.3
|
|
Accrued and other current liabilities
|
161.9
|
|
|
164.5
|
|
||
Accrued compensation and benefits
|
101.4
|
|
|
80.9
|
|
||
Operating lease liability
|
79.9
|
|
|
—
|
|
||
Finance lease obligation
|
76.7
|
|
|
73.8
|
|
||
Deferred revenue
|
554.2
|
|
|
485.0
|
|
||
Total current liabilities
|
1,014.8
|
|
|
837.5
|
|
||
Operating lease liability, non-current
|
711.9
|
|
|
—
|
|
||
Finance lease liability, non-current
|
138.2
|
|
|
89.9
|
|
||
Other non-current liabilities
|
25.9
|
|
|
89.9
|
|
||
Total liabilities
|
1,890.8
|
|
|
1,017.3
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Convertible preferred stock, $0.00001 par value; no shares authorized, issued and outstanding as of December 31, 2019; no shares authorized, issued and outstanding as of December 31, 2018
|
|
|
|
—
|
|
||
Preferred stock, $0.00001 par value; 240.0 shares authorized and no shares issued and outstanding as of December 31, 2019; 240.0 shares authorized and no shares issued and outstanding as of December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value; Class A common stock - 2,400.0 shares authorized and 255.8 shares issued and outstanding as of December 31, 2019; 2,400.0 shares authorized and 211.0 shares issued and outstanding as of December 31, 2018; Class B common stock - 475.0 shares authorized and 161.2 shares issued and outstanding as of December 31, 2019; 475.0 shares authorized and 198.6 issued and outstanding as of December 31, 2018; Class C common stock - 800.0 shares authorized and no shares issued and outstanding as of December 31, 2019 and as of December 31, 2018
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
2,531.3
|
|
|
2,337.5
|
|
||
Accumulated deficit
|
(1,726.2
|
)
|
|
(1,659.5
|
)
|
||
Accumulated other comprehensive income (loss)
|
3.3
|
|
|
(1.2
|
)
|
||
Total stockholders’ equity
|
808.4
|
|
|
676.8
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,699.2
|
|
|
$
|
1,694.1
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
1,661.3
|
|
|
$
|
1,391.7
|
|
|
$
|
1,106.8
|
|
Cost of revenue(1)
|
411.0
|
|
|
394.7
|
|
|
368.9
|
|
|||
Gross profit
|
1,250.3
|
|
|
997.0
|
|
|
737.9
|
|
|||
Operating expenses(1)(2):
|
|
|
|
|
|
||||||
Research and development
|
662.1
|
|
|
768.2
|
|
|
380.3
|
|
|||
Sales and marketing
|
423.3
|
|
|
439.6
|
|
|
314.0
|
|
|||
General and administrative(3)
|
245.4
|
|
|
283.2
|
|
|
157.3
|
|
|||
Total operating expenses
|
1,330.8
|
|
|
1,491.0
|
|
|
851.6
|
|
|||
Loss from operations
|
(80.5
|
)
|
|
(494.0
|
)
|
|
(113.7
|
)
|
|||
Interest income (expense), net
|
12.5
|
|
|
7.1
|
|
|
(11.0
|
)
|
|||
Other income (expense), net
|
16.0
|
|
|
6.8
|
|
|
13.2
|
|
|||
Loss before income taxes
|
(52.0
|
)
|
|
(480.1
|
)
|
|
(111.5
|
)
|
|||
Benefit from (provision for) income taxes
|
(0.7
|
)
|
|
(4.8
|
)
|
|
(0.2
|
)
|
|||
Net loss
|
$
|
(52.7
|
)
|
|
$
|
(484.9
|
)
|
|
$
|
(111.7
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.13
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(0.57
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
411.6
|
|
|
358.6
|
|
|
195.9
|
|
(1)
|
Includes stock-based compensation as follows (in millions):
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenue
|
$
|
15.8
|
|
|
$
|
47.0
|
|
|
$
|
12.2
|
|
Research and development
|
147.6
|
|
|
368.2
|
|
|
93.1
|
|
|||
Sales and marketing
|
31.4
|
|
|
94.3
|
|
|
33.7
|
|
|||
General and administrative
|
66.4
|
|
|
140.6
|
|
|
25.6
|
|
(2)
|
During the year ended December 31, 2018, the Company recognized the cumulative unrecognized stock-based compensation of $418.7 million related to the two-tier restricted stock units upon the effectiveness of the Company's registration statement for its initial public offering. See Note 1, "Description of the Business and Summary of Significant Accounting Policies" for further details.
|
(3)
|
During the year ended the year ended December 31, 2017, general and administrative expense includes $9.4 million for a non-cash charitable contribution and $1.9 million of cash contributions to the Dropbox Charitable Foundation, a related party. See Note 15, "Related Party Transactions" for further details.
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(52.7
|
)
|
|
$
|
(484.9
|
)
|
|
$
|
(111.7
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in foreign currency translation adjustments
|
2.9
|
|
|
(4.9
|
)
|
|
5.2
|
|
|||
Change in net unrealized losses on short-term investments
|
1.6
|
|
|
(0.5
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss), net of tax
|
$
|
4.5
|
|
|
$
|
(5.4
|
)
|
|
$
|
5.2
|
|
Comprehensive loss
|
$
|
(48.2
|
)
|
|
$
|
(490.3
|
)
|
|
$
|
(106.5
|
)
|
|
Convertible
preferred stock
|
|
Class A and Class B common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
stockholders’
equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2016
|
147.6
|
|
|
$
|
615.3
|
|
|
187.1
|
|
|
$
|
—
|
|
|
$
|
446.0
|
|
|
$
|
(937.5
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
122.8
|
|
Cumulative-effect adjustment from adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Release of restricted stock units
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
RSUs repurchased for tax withholdings on release of restricted stock
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
—
|
|
|
(87.9
|
)
|
|
—
|
|
|
—
|
|
|
(87.9
|
)
|
||||||
Donation of common stock to charitable foundation
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
||||||
Exercise of stock options and awards
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
Repurchase of unvested common stock (related to early exercised stock options)
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164.6
|
|
|
—
|
|
|
—
|
|
|
164.6
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
5.2
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111.7
|
)
|
|
—
|
|
|
(111.7
|
)
|
||||||
Balance at December 31, 2017
|
147.6
|
|
|
615.3
|
|
|
196.8
|
|
|
—
|
|
|
533.1
|
|
|
(1,049.7
|
)
|
|
4.2
|
|
|
102.9
|
|
||||||
Release of restricted stock units
|
—
|
|
|
—
|
|
|
40.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
RSUs repurchased for tax withholdings on release of restricted stock
|
—
|
|
|
—
|
|
|
(15.6
|
)
|
|
—
|
|
|
(226.9
|
)
|
|
(124.9
|
)
|
|
—
|
|
|
(351.8
|
)
|
||||||
Conversion of preferred stock to common stock in connection with initial public offering
|
(147.6
|
)
|
|
(615.3
|
)
|
|
147.6
|
|
|
—
|
|
|
615.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock in connection with initial public offering and private placement, net of underwriters' discounts and commissions and issuance costs
|
—
|
|
|
—
|
|
|
37.0
|
|
|
—
|
|
|
739.7
|
|
|
—
|
|
|
—
|
|
|
739.7
|
|
||||||
Exercise of stock options and awards
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
26.2
|
|
|
—
|
|
|
—
|
|
|
26.2
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
650.1
|
|
|
—
|
|
|
—
|
|
|
650.1
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
(5.4
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(484.9
|
)
|
|
—
|
|
|
(484.9
|
)
|
||||||
Balance at December 31, 2018
|
—
|
|
|
—
|
|
|
409.6
|
|
|
—
|
|
|
2,337.5
|
|
|
(1,659.5
|
)
|
|
(1.2
|
)
|
|
676.8
|
|
||||||
Cumulative-effect from adoption of ASC 842
|
|
|
|
|
|
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||||||||
Release of restricted stock units
|
—
|
|
|
—
|
|
|
11.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
RSUs repurchased for tax withholdings on release of restricted stock
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(70.4
|
)
|
|
(15.0
|
)
|
|
—
|
|
|
(85.4
|
)
|
Exercise of stock options and awards
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
||||||
Assumed stock options in connection with acquisition
|
|
|
|
|
|
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261.2
|
|
|
—
|
|
|
—
|
|
|
261.2
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
4.5
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.7
|
)
|
|
—
|
|
|
(52.7
|
)
|
||||||
Balance at December 31, 2019
|
—
|
|
|
$
|
—
|
|
|
417.0
|
|
|
$
|
—
|
|
|
$
|
2,531.3
|
|
|
$
|
(1,726.2
|
)
|
|
$
|
3.3
|
|
|
$
|
808.4
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flow from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(52.7
|
)
|
|
$
|
(484.9
|
)
|
|
$
|
(111.7
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
173.5
|
|
|
166.8
|
|
|
181.8
|
|
|||
Stock-based compensation
|
261.2
|
|
|
650.1
|
|
|
164.6
|
|
|||
Amortization of deferred commissions
|
17.5
|
|
|
12.1
|
|
|
6.6
|
|
|||
Donation of common stock to charitable foundation
|
—
|
|
|
—
|
|
|
9.4
|
|
|||
Other
|
(16.6
|
)
|
|
(1.9
|
)
|
|
(1.7
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Trade and other receivables, net
|
(7.5
|
)
|
|
0.1
|
|
|
(14.4
|
)
|
|||
Prepaid expenses and other current assets
|
(18.2
|
)
|
|
(47.9
|
)
|
|
(18.2
|
)
|
|||
Other assets
|
61.2
|
|
|
(11.2
|
)
|
|
(10.6
|
)
|
|||
Accounts payable
|
6.4
|
|
|
(1.7
|
)
|
|
16.2
|
|
|||
Accrued and other current liabilities
|
23.0
|
|
|
40.3
|
|
|
34.0
|
|
|||
Accrued compensation and benefits
|
19.1
|
|
|
25.0
|
|
|
14.4
|
|
|||
Deferred revenue
|
68.7
|
|
|
66.4
|
|
|
64.3
|
|
|||
Other non-current liabilities
|
(62.4
|
)
|
|
12.2
|
|
|
(4.4
|
)
|
|||
Tenant improvement allowance reimbursement
|
55.3
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
528.5
|
|
|
425.4
|
|
|
330.3
|
|
|||
Cash flow from investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(136.1
|
)
|
|
(63.0
|
)
|
|
(25.3
|
)
|
|||
Purchase of intangible assets
|
(1.7
|
)
|
|
(3.0
|
)
|
|
(0.8
|
)
|
|||
Business combinations, net of cash acquired
|
(173.9
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of short-term investments
|
(775.4
|
)
|
|
(850.4
|
)
|
|
—
|
|
|||
Proceeds from maturities of short-term investments
|
294.8
|
|
|
212.4
|
|
|
—
|
|
|||
Proceeds from sales of short-term investments
|
456.1
|
|
|
71.2
|
|
|
—
|
|
|||
Other
|
16.2
|
|
|
(1.0
|
)
|
|
2.2
|
|
|||
Net cash used in investing activities
|
(320.0
|
)
|
|
(633.8
|
)
|
|
(23.9
|
)
|
|||
Cash flow from financing activities
|
|
|
|
|
|
||||||
Proceeds from initial public offering and private placement, net of underwriters' discounts and commissions
|
—
|
|
|
746.6
|
|
|
—
|
|
|||
Payments of deferred offering costs
|
—
|
|
|
(4.5
|
)
|
|
(2.5
|
)
|
|||
Shares repurchased for tax withholdings on release of restricted stock
|
(85.4
|
)
|
|
(351.9
|
)
|
|
(87.9
|
)
|
|||
Proceeds from issuance of common stock, net of repurchases
|
2.2
|
|
|
26.2
|
|
|
0.5
|
|
|||
Principal payments on finance lease obligations(1)
|
(92.9
|
)
|
|
(109.1
|
)
|
|
(133.0
|
)
|
|||
Other
|
(0.6
|
)
|
|
(6.5
|
)
|
|
(8.8
|
)
|
|||
Net cash (used in) provided by financing activities
|
(176.7
|
)
|
|
300.8
|
|
|
(231.7
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
0.2
|
|
|
(3.1
|
)
|
|
2.6
|
|
|||
Change in cash and cash equivalents
|
32.0
|
|
|
89.3
|
|
|
77.3
|
|
|||
Cash and cash equivalents—beginning of period
|
519.3
|
|
|
430.0
|
|
|
352.7
|
|
|||
Cash and cash equivalents—end of period
|
$
|
551.3
|
|
|
$
|
519.3
|
|
|
$
|
430.0
|
|
Supplemental cash flow data:
|
|
|
|
|
|
(1)
|
Includes amounts attributable to related party transactions. See Note 15, "Related Party Transactions" for further details.
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, the Company satisfies a performance obligation
|
•
|
One-tier RSUs, which have a service-based vesting condition over a four-year period. These awards typically have a cliff vesting period of one year and continue to vest quarterly thereafter. The Company began granting one-tier RSUs under its 2008 Plan in August 2015, and it continues to grant one-tier RSUs under its 2018 Plan. The Company recognizes compensation expense associated with one-tier RSUs ratably on a straight-line basis over the requisite service period and accounts for forfeitures in the period in which they occur.
|
•
|
Two-tier RSUs, which had both a service-based vesting condition and a Performance Vesting Condition. The Performance Vesting Condition was satisfied on the effectiveness of the registration statement related to the Company's IPO. Prior to August 2015, the Company granted two-tier RSUs under the 2008 Plan. The last grant date for two-tier RSUs was in May 2015. The Company recognized compensation expense associated with two-tier RSUs using the accelerated attribution method over the requisite service period.
|
|
|
|
Property and equipment
|
|
Useful life
|
Buildings
|
|
20 to 30 years
|
Datacenter and other computer equipment
|
|
3 to 5 years
|
Office equipment and other
|
|
3 to 7 years
|
Leasehold improvements
|
|
Lesser of estimated useful life or remaining lease term
|
|
Amortized cost
|
|
Unrealized gain
|
|
Unrealized loss
|
|
Estimated fair value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
105.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105.0
|
|
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
444.3
|
|
|
—
|
|
|
—
|
|
|
444.3
|
|
||||
Commercial paper
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
||||
Total cash and cash equivalents
|
$
|
551.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
551.3
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
285.5
|
|
|
1.2
|
|
|
(0.1
|
)
|
|
286.6
|
|
||||
U.S. Treasury securities
|
171.0
|
|
|
0.3
|
|
|
—
|
|
|
171.3
|
|
||||
Asset backed securities
|
53.8
|
|
|
—
|
|
|
—
|
|
|
53.8
|
|
||||
Certificates of deposit
|
38.2
|
|
|
—
|
|
|
—
|
|
|
38.2
|
|
||||
U.S. agency obligations
|
27.2
|
|
|
—
|
|
|
—
|
|
|
27.2
|
|
||||
Commercial paper
|
24.2
|
|
|
—
|
|
|
—
|
|
|
24.2
|
|
||||
Supranational securities
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
||||
Municipal securities
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||
Total short-term investments
|
606.3
|
|
|
1.5
|
|
|
(0.1
|
)
|
|
607.7
|
|
||||
Total
|
$
|
1,157.6
|
|
|
$
|
1.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
1,159.0
|
|
|
Amortized cost
|
|
Unrealized gain
|
|
Unrealized loss
|
|
Estimated fair value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
103.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103.0
|
|
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
355.5
|
|
|
—
|
|
|
—
|
|
|
355.5
|
|
||||
Commercial paper
|
27.4
|
|
|
—
|
|
|
—
|
|
|
27.4
|
|
||||
U.S. Treasury securities
|
33.4
|
|
|
|
|
|
|
33.4
|
|
||||||
Total cash and cash equivalents
|
$
|
519.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
519.3
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
269.6
|
|
|
0.1
|
|
|
(0.5
|
)
|
|
269.2
|
|
||||
U.S. Treasury securities
|
176
|
|
|
—
|
|
|
(0.1
|
)
|
|
175.9
|
|
||||
Certificates of deposit
|
70.6
|
|
|
—
|
|
|
—
|
|
|
70.6
|
|
||||
U.S. agency obligations
|
37.1
|
|
|
—
|
|
|
—
|
|
|
37.1
|
|
||||
Commercial paper
|
17.2
|
|
|
—
|
|
|
—
|
|
|
17.2
|
|
||||
Total short-term investments
|
570.5
|
|
|
0.1
|
|
|
(0.6
|
)
|
|
570.0
|
|
||||
Total
|
$
|
1,089.8
|
|
|
$
|
0.1
|
|
|
$
|
(0.6
|
)
|
|
$
|
1,089.3
|
|
|
Amortized cost
|
|
Estimated fair value
|
||||
|
|
|
|
||||
Due within one year
|
$
|
275.9
|
|
|
$
|
276.5
|
|
Due between one to three years
|
310.7
|
|
|
311.5
|
|
||
Due after three years
|
19.7
|
|
|
19.7
|
|
||
Total
|
$
|
606.3
|
|
|
$
|
607.7
|
|
|
As of December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
444.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
444.3
|
|
Commercial paper
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
||||
Total Cash Equivalents
|
$
|
444.3
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
446.3
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
—
|
|
|
286.6
|
|
|
—
|
|
|
286.6
|
|
||||
U.S. Treasury securities
|
—
|
|
|
171.3
|
|
|
—
|
|
|
171.3
|
|
||||
Certificates of deposit
|
—
|
|
|
38.2
|
|
|
—
|
|
|
38.2
|
|
||||
Asset-backed securities
|
—
|
|
|
53.8
|
|
|
—
|
|
|
53.8
|
|
||||
Commercial paper
|
—
|
|
|
24.2
|
|
|
—
|
|
|
24.2
|
|
||||
U.S. agency obligations
|
—
|
|
|
27.2
|
|
|
—
|
|
|
27.2
|
|
||||
Supranational securities
|
—
|
|
|
4.0
|
|
|
—
|
|
|
4.0
|
|
||||
Municipal securities
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
||||
Total short-term investments
|
—
|
|
|
607.7
|
|
|
—
|
|
|
607.7
|
|
||||
Equity Investments
|
9.8
|
|
|
—
|
|
|
—
|
|
|
9.8
|
|
||||
Total
|
$
|
454.1
|
|
|
$
|
609.7
|
|
|
$
|
—
|
|
|
$
|
1,063.8
|
|
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
355.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
355.5
|
|
U.S Treasury securities
|
—
|
|
|
33.4
|
|
|
|
|
33.4
|
|
|||||
Commercial paper
|
—
|
|
|
27.4
|
|
|
—
|
|
|
27.4
|
|
||||
Total Cash Equivalents
|
$
|
355.5
|
|
|
$
|
60.8
|
|
|
$
|
—
|
|
|
$
|
416.3
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate notes and obligations
|
—
|
|
|
269.2
|
|
|
—
|
|
|
269.2
|
|
||||
U.S. Treasury securities
|
—
|
|
|
175.9
|
|
|
—
|
|
|
175.9
|
|
||||
Certificates of deposit
|
—
|
|
|
70.6
|
|
|
—
|
|
|
70.6
|
|
||||
U.S agency obligations
|
—
|
|
|
37.1
|
|
|
—
|
|
|
37.1
|
|
||||
Commercial paper
|
|
|
17.2
|
|
|
|
|
17.2
|
|
||||||
Total short-term investments
|
—
|
|
|
570.0
|
|
|
—
|
|
|
570.0
|
|
||||
Total
|
$
|
355.5
|
|
|
$
|
630.8
|
|
|
$
|
—
|
|
|
$
|
986.3
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Datacenter and other computer equipment
|
$
|
749.3
|
|
|
$
|
667.4
|
|
Furniture and fixtures
|
35.5
|
|
|
23.8
|
|
||
Leasehold improvements
|
211.4
|
|
|
150.5
|
|
||
Construction in progress
|
36.3
|
|
|
32.8
|
|
||
Total property and equipment
|
1,032.5
|
|
|
874.5
|
|
||
Accumulated depreciation and amortization
|
(587.2
|
)
|
|
(563.9
|
)
|
||
Property and equipment, net
|
$
|
445.3
|
|
|
$
|
310.6
|
|
|
Purchase consideration
|
||
Cash paid to common and preferred stockholders and vested option holders
|
$
|
175.2
|
|
Transaction costs paid by Dropbox on behalf of HelloSign
|
2.4
|
|
|
Fair value of assumed HelloSign options attributable to pre-combination services (1)
|
0.8
|
|
|
Purchase price adjustments
|
(0.5
|
)
|
|
Total purchase consideration
|
$
|
177.9
|
|
Assets acquired:
|
|
||
Cash and cash equivalents
|
$
|
5.5
|
|
Short-term investments
|
7.8
|
|
|
Acquisition-related intangible assets
|
44.6
|
|
|
Accounts receivable, prepaid and other assets
|
5.0
|
|
|
Total assets acquired
|
$
|
62.9
|
|
|
|
||
Liabilities assumed:
|
|
||
Accounts payable, accrued and other liabilities
|
$
|
6.3
|
|
Deferred revenue
|
4.8
|
|
|
Deferred tax liability
|
6.9
|
|
|
Total liabilities assumed
|
18.0
|
|
|
Net assets acquired, excluding goodwill
|
44.9
|
|
|
Total purchase consideration
|
177.9
|
|
|
Estimated goodwill (2)
|
$
|
133.0
|
|
|
Estimated fair values
|
|
Estimated weighted average useful lives
(In years)
|
||
Customer relationships
|
$
|
20.5
|
|
|
4.9
|
Developed technology
|
19.6
|
|
|
5.0
|
|
Trade name
|
4.5
|
|
|
5.0
|
|
Total acquisition-related intangible assets
|
$
|
44.6
|
|
|
|
|
|
As of December 31,
|
|
Weighted-
average remaining useful life (In years) |
||||||
|
|
2019
|
|
2018
|
|
|
||||
Developed technology
|
|
$
|
25.8
|
|
|
$
|
47.0
|
|
|
4.0
|
Customer relationships
|
|
20.5
|
|
|
0.0
|
|
|
4.1
|
||
Software
|
|
20.0
|
|
|
19.2
|
|
|
1.7
|
||
Patents
|
|
13.0
|
|
|
13.0
|
|
|
7.6
|
||
Assembled workforce in asset acquisitions
|
|
12.6
|
|
|
12.6
|
|
|
1.0
|
||
Licenses
|
|
4.6
|
|
|
4.6
|
|
|
1.5
|
||
Trademarks and trade names
|
|
5.2
|
|
|
0.7
|
|
|
4.1
|
||
Other
|
|
3.3
|
|
|
3.3
|
|
|
5.6
|
||
Total intangibles
|
|
105.0
|
|
|
100.4
|
|
|
|
||
Accumulated amortization
|
|
(57.6
|
)
|
|
(85.7
|
)
|
|
|
||
Intangible assets, net
|
|
$
|
47.4
|
|
|
$
|
14.7
|
|
|
|
|
|
||
2020
|
$
|
13.9
|
|
2021
|
11.6
|
|
|
2022
|
8.3
|
|
|
2023
|
7.7
|
|
|
2024
|
3.3
|
|
|
Thereafter
|
2.6
|
|
|
Total
|
$
|
47.4
|
|
Balance at December 31, 2018
|
$
|
96.5
|
|
HelloSign acquisition
|
133.0
|
|
|
Other acquisition
|
2.4
|
|
|
Effect of foreign currency translation
|
2.6
|
|
|
Balance at December 31, 2019
|
$
|
234.5
|
|
|
Year ended December 31,
|
||
|
2019
|
|
2018
|
Operating lease cost (1)
|
103.2
|
|
85.9
|
Finance lease cost:
|
|
|
|
Amortization of assets under finance lease
|
80.3
|
|
87.6
|
Interest
|
9.2
|
|
8.0
|
Total finance lease cost
|
89.5
|
|
95.6
|
|
|
Year ended December 31, 2019
|
||
Supplemental Cash Flow Information:
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Payments for operating leases included in cash from operating activities
|
|
$
|
102.8
|
|
Payments for finance leases included in cash from operating activities
|
|
9.2
|
|
|
Payments for finance leases included in cash from financing activities
|
|
92.9
|
|
|
Assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases(2)
|
|
297.0
|
|
|
Finance leases
|
|
$
|
144.1
|
|
|
|
As of December 31, 2019
|
|
|
|
|
|
Weighted Average Remaining Lease Term (in years)
|
|
|
|
Operating leases
|
|
11.3
|
|
Finance leases
|
|
3.0
|
|
|
|
|
|
Weighted Average Discount Rate
|
|
|
|
Operating leases
|
|
4.3
|
%
|
Finance leases
|
|
4.3
|
%
|
|
|
|
Year ending December 31,
|
Operating leases(1)
|
|
Finance leases
|
||||
2020
|
$
|
115.9
|
|
|
$
|
84.1
|
|
2021
|
108.0
|
|
|
68.9
|
|
||
2022
|
98.2
|
|
|
54.8
|
|
||
2023
|
82.0
|
|
|
21.1
|
|
||
2024
|
74.2
|
|
|
0.1
|
|
||
Thereafter
|
583.0
|
|
|
0.0
|
|
||
Total future minimum lease payments
|
1,061.3
|
|
|
229.0
|
|
||
Less imputed interest
|
(250.2
|
)
|
|
(14.1
|
)
|
||
Less tenant incentive receivables
|
(19.3
|
)
|
|
—
|
|
||
Total liability
|
$
|
791.8
|
|
|
$
|
214.9
|
|
Note 10.
|
Commitments and Contingencies
|
|
|
Finance
lease
commitments
|
|
Operating lease commitments(1)
|
|
Other
commitments(2)
|
||||||
Year ended December 31:
|
|
|
|
|
|
|
||||||
2020
|
|
$
|
84.1
|
|
|
$
|
119.5
|
|
|
$
|
48.8
|
|
2021
|
|
68.9
|
|
|
116.4
|
|
|
6.7
|
|
|||
2022
|
|
54.8
|
|
|
108.1
|
|
|
0.7
|
|
|||
2023
|
|
21.1
|
|
|
91.6
|
|
|
0.4
|
|
|||
2024
|
|
0.1
|
|
|
83.9
|
|
|
—
|
|
|||
Thereafter
|
|
—
|
|
|
636.2
|
|
|
16.7
|
|
|||
Future minimum payments
|
|
229.0
|
|
|
$
|
1,155.7
|
|
|
$
|
73.3
|
|
|
Less interest and taxes
|
|
(14.1
|
)
|
|
|
|
|
|||||
Less current portion of the present value of minimum lease payments
|
|
(76.7
|
)
|
|
|
|
|
|||||
Financing lease obligations, net of current portion
|
|
$
|
138.2
|
|
|
|
|
|
Note 11.
|
Accrued and Other Current Liabilities
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Non-income taxes payable
|
$
|
92.2
|
|
|
$
|
75.7
|
|
Accrued legal and other external fees
|
29.2
|
|
|
28.1
|
|
||
Deferred rent
|
—
|
|
|
41.0
|
|
||
Other accrued and current liabilities
|
40.5
|
|
|
19.7
|
|
||
Total accrued and other current liabilities
|
$
|
161.9
|
|
|
$
|
164.5
|
|
|
|
|
Options outstanding
|
Restricted stock
outstanding
|
|||||||||||||||
|
Number of
shares
available for
issuance
under the
Plans
|
|
Number of
shares
outstanding
under the
Plans
|
|
Weighted-
average
exercise
price
per share
|
|
Weighted-
average
remaining
contractual
term
(In years)
|
Aggregate Intrinsic Value
|
Number of
Plan
shares
outstanding
|
|
Weighted-
average
grant date
fair value
per share
|
||||||||
Balance at December 31, 2017
|
9.0
|
|
|
5.0
|
|
|
$
|
10.52
|
|
|
5.5
|
|
54.9
|
|
|
$
|
15.6
|
|
|
Reserved for issuance under the 2018 Plan
|
41.4
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Additional shares authorized
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Options exercised and RSUs released
|
—
|
|
|
(3.4
|
)
|
|
$
|
7.75
|
|
|
|
|
(40.4
|
)
|
|
15.42
|
|
||
Options and RSUs canceled
|
6.0
|
|
|
(0.3
|
)
|
|
$
|
22.90
|
|
|
|
|
(5.7
|
)
|
|
16.78
|
|
||
Shares repurchased for tax withholdings on release of restricted stock
|
15.6
|
|
|
|
|
|
|
|
|
|
|
15.45
|
|
||||||
Restricted stock granted
|
(16.2
|
)
|
|
|
|
|
|
|
|
16.2
|
|
|
20.26
|
|
|||||
Balance at December 31, 2018
|
57.1
|
|
|
1.3
|
|
|
$
|
14.68
|
|
|
5.0
|
9.1
|
|
25.0
|
|
|
$
|
18.68
|
|
Additional shares authorized
|
21.2
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||
Stock options assumed
|
0.9
|
|
|
0.9
|
|
|
6.02
|
|
|
|
|
—
|
|
|
—
|
|
|||
Options exercised and RSUs released
|
—
|
|
|
(0.3
|
)
|
|
6.82
|
|
|
|
|
(11.2
|
)
|
|
19.01
|
|
|||
Options and RSUs canceled
|
7.1
|
|
|
(0.2
|
)
|
|
18.89
|
|
|
|
|
(6.9
|
)
|
|
19.32
|
|
|||
Shares repurchased for tax withholdings on release of restricted stock
|
4.1
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
18.87
|
|
|||
Restricted stock, awards and options granted
|
(24.2
|
)
|
|
0.3
|
|
|
23.09
|
|
|
|
|
23.8
|
|
|
21.34
|
|
|||
Balance as of December 31, 2019
|
66.2
|
|
|
2.0
|
|
|
$
|
12.28
|
|
|
6.5
|
16.40
|
|
30.7
|
|
|
$
|
20.48
|
|
Vested at December 31, 2019
|
|
|
1.3
|
|
|
$
|
16.01
|
|
|
5.4
|
7.90
|
|
—
|
|
|
$
|
—
|
|
|
Unvested at December 31, 2019
|
|
|
0.7
|
|
|
$
|
5.76
|
|
|
|
8.50
|
|
30.7
|
|
|
$
|
20.48
|
|
|
|
Year ended
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Intrinsic value of options exercised
|
|
$
|
5.3
|
|
|
$
|
59.0
|
|
Expected volatility
|
51.6
|
%
|
Expected term (in years)
|
3.4 - 7.0
|
|
Risk-free interest rate
|
2.42% - 2.51%
|
|
Dividend yield
|
—
|
%
|
|
Year ended December 31,
|
|||||||||||||||||||||
|
2019
|
|
2018
|
2017
|
||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
Class A
|
|
Class B
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss attributable to common stockholders
|
$
|
(30.3
|
)
|
|
$
|
(22.4
|
)
|
|
$
|
(138.7
|
)
|
|
$
|
(346.2
|
)
|
$
|
(3.6
|
)
|
|
$
|
(108.1
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average number of common shares outstanding used in computing basic and diluted net loss per common share
|
236.8
|
|
|
174.8
|
|
|
102.6
|
|
|
256.0
|
|
6.3
|
|
|
189.6
|
|
||||||
Net loss per common share, basic and diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(1.35
|
)
|
$
|
(0.57
|
)
|
|
$
|
(0.57
|
)
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
2017
|
|||
Convertible preferred stock
|
—
|
|
|
—
|
|
147.6
|
|
Restricted stock units
|
28.9
|
|
|
35.0
|
|
52.7
|
|
Restricted stock awards
|
0.4
|
|
|
—
|
|
0.0
|
|
Options to purchase shares of common stock
|
1.9
|
|
|
4.0
|
|
5.1
|
|
Co-Founder Grants
|
14.7
|
|
|
14.7
|
|
0.8
|
|
Shares subject to repurchase from early-exercised options and unvested restricted stock
|
—
|
|
|
0.1
|
|
0.2
|
|
Total
|
45.9
|
|
|
53.8
|
|
206.4
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
|
$
|
(98.8
|
)
|
|
$
|
(497.1
|
)
|
|
$
|
(76.9
|
)
|
Foreign
|
|
46.8
|
|
|
17.0
|
|
|
(34.6
|
)
|
|||
Loss before income taxes
|
|
$
|
(52.0
|
)
|
|
$
|
(480.1
|
)
|
|
$
|
(111.5
|
)
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
State
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Foreign
|
|
(7.7
|
)
|
|
(4.6
|
)
|
|
(2.3
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
6.6
|
|
|
—
|
|
|
1.4
|
|
|||
State
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
|
0.3
|
|
|
0.1
|
|
|
0.9
|
|
|||
Benefit from (provision for) income taxes
|
|
$
|
(0.7
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(0.2
|
)
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Tax benefit at federal statutory rate
|
|
$
|
10.9
|
|
|
$
|
100.8
|
|
|
$
|
37.9
|
|
State taxes, net of federal benefit
|
|
2.4
|
|
|
10.7
|
|
|
1.7
|
|
|||
Foreign rate differential
|
|
(0.9
|
)
|
|
1.8
|
|
|
(12.3
|
)
|
|||
Research and other credits
|
|
30.2
|
|
|
86.5
|
|
|
25.4
|
|
|||
Non-deductible compensation
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|||
Meals & entertainment
|
|
(2.5
|
)
|
|
(2.2
|
)
|
|
(0.2
|
)
|
|||
Permanent differences
|
|
(2.1
|
)
|
|
(16.2
|
)
|
|
(8.8
|
)
|
|||
Tax Cuts and Jobs Act impact
|
|
—
|
|
|
—
|
|
|
(61.7
|
)
|
|||
Change in valuation allowance
|
|
(32.2
|
)
|
|
(240.7
|
)
|
|
38.9
|
|
|||
Stock-based compensation
|
|
1.8
|
|
|
57.3
|
|
|
(20.1
|
)
|
|||
Other non-deductible items
|
|
(4.9
|
)
|
|
(2.8
|
)
|
|
(1.0
|
)
|
|||
Benefit from (provision for) income taxes
|
|
$
|
(0.7
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(0.2
|
)
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
257.2
|
|
|
$
|
264.8
|
|
Research credit carryforwards
|
|
188.6
|
|
|
157.3
|
|
||
Stock-based compensation
|
|
29.3
|
|
|
11.1
|
|
||
Accruals and reserves
|
|
32.3
|
|
|
42.0
|
|
||
Fixed assets and intangible assets
|
|
—
|
|
|
0.7
|
|
||
Lease liability
|
|
189.8
|
|
|
—
|
|
||
Other
|
|
1.0
|
|
|
1.1
|
|
||
Gross deferred tax assets
|
|
698.2
|
|
|
477.0
|
|
||
Valuation allowance
|
|
(510.8
|
)
|
|
(476.0
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
|
187.4
|
|
|
1.0
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets and intangible assets
|
|
13.1
|
|
|
—
|
|
||
Right of use assets
|
|
172.7
|
|
|
—
|
|
||
Other
|
|
0.3
|
|
|
—
|
|
||
Total deferred tax liability
|
|
186.1
|
|
|
—
|
|
||
Net deferred tax assets
|
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance of gross unrecognized tax benefits at the beginning of the fiscal year
|
|
$
|
59.8
|
|
|
$
|
25.6
|
|
|
$
|
15.7
|
|
Gross increases related to prior period tax positions
|
|
0.1
|
|
|
1.1
|
|
|
—
|
|
|||
Gross increases related to current period tax positions
|
|
14.6
|
|
|
33.1
|
|
|
9.9
|
|
|||
Balance of gross unrecognized tax benefits at the end of the fiscal year
|
|
$
|
74.5
|
|
|
$
|
59.8
|
|
|
$
|
25.6
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
United States
|
|
$
|
431.9
|
|
|
$
|
293.6
|
|
International(1)
|
|
13.4
|
|
|
17.0
|
|
||
Total property and equipment, net
|
|
$
|
445.3
|
|
|
$
|
310.6
|
|
(1)
|
No single country other than the United States had a property and equipment balance greater than 10% of total property and equipment, net, as of December 31, 2019 and 2018.
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
854.1
|
|
|
$
|
706.5
|
|
|
$
|
575.7
|
|
International(1)
|
807.2
|
|
|
685.2
|
|
|
531.1
|
|
|||
Total revenue
|
$
|
1,661.3
|
|
|
$
|
1,391.7
|
|
|
$
|
1,106.8
|
|
(1)
|
No single country outside of the United States accounted for more than 10 percent of total revenue during the years ended December 31, 2019, 2018, and 2017
|
(a)
|
Financial statements
|
(b)
|
Financial statement schedules.
|
(c)
|
Exhibits
|
|
|
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filed with SEC
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
10-Q
|
|
001-38434
|
|
3.2
|
|
May 11, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
10-Q
|
|
001-38434
|
|
3.3
|
|
May 11, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
S-1/A
|
|
333-223182
|
|
4.1
|
|
March 12, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|
S-1
|
|
333-223182
|
|
4.2
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
|
10-Q
|
|
001-38434
|
|
4.3
|
|
May 11, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1+
|
|
|
S-1
|
|
333-223182
|
|
10.1
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2+
|
|
|
S-1/A
|
|
333-223182
|
|
10.2
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3+
|
|
|
S-1/A
|
|
333-223182
|
|
10.3
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4+
|
|
|
S-1/A
|
|
333-223182
|
|
10.4
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5+
|
|
|
S-1/A
|
|
333-223182
|
|
10.5
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6+
|
|
|
S-1/A
|
|
333-223182
|
|
10.6
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7+
|
|
|
S-1/A
|
|
333-223182
|
|
10.7
|
|
March 21, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8+
|
|
|
S-1
|
|
333-223182
|
|
10.8
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9+
|
|
|
S-1
|
|
333-223182
|
|
10.9
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10+
|
|
|
S-1
|
|
333-223182
|
|
10.10
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filed with SEC
|
10.11*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12+
|
|
|
S-1/A
|
|
333-223182
|
|
10.12
|
|
March 12, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13+
|
|
|
S-1/A
|
|
333-223182
|
|
10.13
|
|
March 12, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
|
S-1
|
|
333-223182
|
|
10.19
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
|
10-Q
|
|
001-38434
|
|
10.2
|
|
August 10, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20
|
|
|
S-1
|
|
333-223182
|
|
10.20
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21
|
|
|
S-1
|
|
333-223182
|
|
10.21
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22*+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.1*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filed with SEC
|
31.2*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.
|
|
The following financial statements from the Company's Annual Report on Form 10-K for the quarter ended December 31, 2019, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statement of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statement of Cash Flows, (v) Condensed Consolidated Statements of Stockholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104.
|
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Filed herewith.
|
+
|
Indicates management contract or compensatory plan.
|
†
|
The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Dropbox, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
|
|
|
|
DROPBOX, INC.
|
||
|
|
|
By:
|
|
/s/ Andrew W. Houston
|
|
|
Andrew W. Houston
|
|
|
Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Andrew W. Houston
Andrew W. Houston
|
|
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
|
February 21, 2020
|
|
|
|
||
/s/ Ajay V. Vashee
Ajay V. Vashee
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
February 21, 2020
|
|
|
|
||
/s/ Timothy J. Regan
Timothy J. Regan
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
February 21, 2020
|
|
|
|
||
/s/ Donald W. Blair
Donald W. Blair
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ Lisa Campbell
Lisa Campbell
|
|
Director
|
|
February 21, 2020
|
|
|
|
|
|
/s/ Arash Ferdowsi
Arash Ferdowsi
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ Paul E. Jacobs
Paul E. Jacobs
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ Robert J. Mylod Jr.
Robert J. Mylod, Jr.
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ Karen A. Peacock
Karen A. Peacock
|
|
Director
|
|
February 21, 2020
|
|
|
|
|
|
/s/ Condoleezza Rice
Condoleezza Rice
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ R. Bryan Schreier
R. Bryan Schreier
|
|
Director
|
|
February 21, 2020
|
|
|
|
||
/s/ Margaret C. Whitman
Margaret C. Whitman
|
|
Director
|
|
February 21, 2020
|
•
|
2,400,000,000 shares are designated as Class A common stock;
|
•
|
475,000,000 shares are designated as Class B common stock;
|
•
|
800,000,000 shares are designated as Class C common stock; and
|
•
|
240,000,000 shares are designated as preferred stock.
|
•
|
if we were to seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of a class of stock, then that class would be required to vote separately to approve the proposed amendment; and
|
•
|
if we were to seek to amend our amended and restated certificate of incorporation in a manner that alters or changes the powers, preferences, or special rights of a class of stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.
|
•
|
amend or modify any provision of the amended and restated certificate of incorporation inconsistent with, or otherwise alter, any provision of amended and restated certificate of incorporation to modify the voting, conversion or other rights, powers, preferences, privileges or restrictions of the Class B common stock;
|
•
|
reclassify any outstanding shares of Class A common stock or Class C common stock into shares having rights as to dividends or liquidation that are senior to the Class B common stock or, in the case of Class A common stock, the right to have more than one vote for each share thereof and, in the case of Class C common stock, the right to have any vote for any share thereof, except as required by law;
|
•
|
subject to certain exceptions, issue any shares of Class B common stock;
|
•
|
authorize, or issue any shares of, any class or series of capital stock of the Company having the right to more than vote for each share thereof; or
|
•
|
consummate a Liquidation Event (as defined in the amended and restated certificate of incorporation).
|
•
|
the transaction was approved by the board of directors prior to the time that the stockholder became an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
•
|
at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
1.
|
Compensation.
|
/s/ Olivia Nottebohm
Olivia Nottebohm
|
1/25/2020
Date Signed
|
1.
|
Compensation.
|
/s/ Bharat Mediratta
Bharat Mediratta
|
9/30/2019
Date Signed
|
|
|
1.
|
Compensation.
|
/s/ Timothy Young
Timothy Young
|
9/28/2019
Date Signed
|
1.
|
CASH COMPENSATION
|
2.
|
EQUITY COMPENSATION
|
3.
|
CHANGE IN CONTROL
|
4.
|
ANNUAL COMPENSATION LIMIT
|
5.
|
TRAVEL EXPENSES
|
6.
|
ADDITIONAL PROVISIONS
|
7.
|
ADJUSTMENTS
|
8.
|
SECTION 409A
|
9.
|
STOCKHOLDER APPROVAL
|
10.
|
REVISIONS
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
Dropbox Canada Limited
|
British Columbia
|
Dropbox Holding, LLC
|
Delaware
|
Orcinus Holdings, LLC
|
Delaware
|
CloudOn, Inc.
|
Delaware
|
CloudOn, Ltd.
|
Israel
|
Dropbox Australia Pty Ltd.
|
Australia
|
Dropbox France S.A.S
|
France
|
Dropbox Germany GmbH
|
Germany
|
Dropbox International Unlimited Company
|
Ireland
|
Dropbox Japan KK
|
Japan
|
Dropbox Mexico S. de R.L. de C.V
|
Mexico
|
Dropbox Netherlands B.V.
|
Netherlands
|
Dropbox Singapore Pte. Ltd.
|
Singapore
|
Dropbox Sweden AB
|
Sweden
|
Dropbox UK Online Ltd.
|
United Kingdom
|
Dropbox UK Online Ltd. Zweigniederlassung Hamburg
|
Germany
|
JN Projects, Inc. (d/b/a HelloSign)
|
Delaware
|
Valt Inc.
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-223863) of Dropbox, Inc., pertaining to the 2008 Equity Incentive Plan of Dropbox, Inc., 2017 Equity Incentive Plan of Dropbox, Inc., 2018 Equity Incentive Plan of Dropbox, Inc., and 2018 Employee Stock Purchase Plan of Dropbox, Inc.,
|
(2)
|
Registration Statement (Form S-8 No. 333-229842) of Dropbox, Inc., pertaining to the 2018 Equity Incentive Plan of Dropbox, Inc., and
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(3)
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Registration Statement (Form S-8 No. 333-229924) of Dropbox, Inc., pertaining to the 2011 Equity Incentive Plan of JN Projects, Inc.;
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1.
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I have reviewed this Quarterly Report on Form 10-K of Dropbox, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(c)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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DROPBOX, INC.
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|
|
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By:
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/s/ Andrew W. Houston
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Name:
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Andrew W. Houston
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Title:
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Chief Executive Officer
(Principal Executive Officer)
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1.
|
I have reviewed this Quarterly Report on Form 10-K of Dropbox, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(c)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
DROPBOX, INC.
|
|
|
|
|
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By:
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/s/ Ajay V. Vashee
|
|
Name:
|
Ajay V. Vashee
|
|
Title:
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Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The Company’s Annual Report on Form 10-K for the year ended December 31, 2019, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
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2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
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/s/ Andrew W. Houston
|
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Andrew W. Houston
|
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Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
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/s/ Ajay V. Vashee
|
|
Ajay V. Vashee
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|