Dropbox Inc.'s fourth-quarter 2025 revenue was dragged down by its document creation service FormSwift, which will be sunset by 2026-end as the company focuses on expanding its AI search tool, Dash.
FormSwift is expected to remain a "modest headwind" to Dropbox's revenue this year despite experiencing gradual user decline since its marketing support was stopped at the start of 2025, said CFO Ross Tennenbaum during a Feb. 19 earnings call. Dropbox acquired FormSwift in mid-December 2022 for $95.0 million.
Overall, the cloud storage provider reported revenue of $636.2 million, exceeding the high end of its guidance at $629.0 million but down from $643.6 million in the fourth quarter of 2024. Net income totaled $108.7 million, or 43 cents per share, a slight year-over-year increase from $102.8 million, or 34 cents per share. On an adjusted basis, EPS was 68 cents, down from 73 cents year over year.
The S&P Capital IQ consensus estimate for the quarter was 43 cents per share on a GAAP basis and 68 cents per share on a normalized basis.
Dropbox is working to offset the FormSwift drag with an increasing focus on Dash, regarded as "the most important evolution of the core FSS [file, sync and share] experience in years," according to co-founder, Chairman, CEO and interim President Andrew Houston.
Dash was launched in June 2023 as an AI-powered universal search service in a single bar that connects all tools, content and apps used on a daily basis. It was rolled out with Dropbox AI, a tool that uses generative AI to summarize and answer questions on content saved in Dropbox.
Dropbox is pursuing a dual strategy with Dash through its direct integration into the core file storage offering while also developing it as a stand-alone product. The company launched embedded Dash capabilities in the fourth quarter of 2025 in its Teams plans, including semantic search, chat, and stacks organization and sharing features.
"Dash and Dropbox provides an AI intelligence layer directly inside our customers' everyday workflows with minimal setup and immediate relevance," Houston said. "We're seeing solid early engagement among the initial Dash and Dropbox cohorts. In Q4, over half of these active users returned multiple days per week, which is evidence that Dash is providing value and becoming a part of user workflows."
Dropbox has begun scaling up Dash's rollout to additional customer groups to drive broader adoption and improve customer retention. It is also focused on improving engagement and adoption for Dash's stand-alone offering before monetization.
"In the first half of '26, we're focused on improving the new user experience to demonstrate connector value from first touch," Houston said.
Tennenbaum, who joined Dropbox as CFO in December 2025, expressed confidence in Dash's potential, noting that he uses it regularly in his daily work and that almost all Dropbox employees are weekly active users.
"At a minimum, I see Dash as a highly impactful evolution of our core FSS offering and believe in addition to all our other efforts, it will help attract new customers, drive upsell and reduce churn," Tennenbaum said.
Dropbox expects full-year 2026 revenue between $2.485 billion and $2.5 billion. Excluding FormSwift, this implies a roughly flat growth year over year at the midpoint, according to Tennenbaum.
"That reflects a disciplined approach as we validate execution, refine go-to-market motions and ensure that improvements translate into measurable results," he said.
Dropbox also expects a slight increase in capital expenditures in 2026 due to one-time costs associated with the build-out of its new San Francisco headquarters. The company in January executed a sublease of the remaining available square footage in its current offices, as well as an extension and expansion of an existing sublease.
This content may be AI-assisted and is composed, reviewed, edited and approved by a human at S&P Global Market Intelligence.
