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Dropbox Announces Fiscal 2021 First Quarter Results First Quarter Revenue of $ 511.6 Million , Up 12 % Year - over - year Net Cash Provided by Operating Activities of $ 115.7 Million and Free Cash Flow of $ 108.8 Million GAAP and Non - GAAP Operating Income of $ 42.5 Million and $ 148.6 Million , Up 59 % and 103 % Year - over - year SAN FRANCISCO , Calif . - May 6 , 2021 - Dropbox , Inc. ( NASDAQ : DBX ) , today announced financial results for its first quarter ended March 31 , 2021 . " We kicked off the year with a profitable Q1 , along with strong revenue growth and free cash flow , " said Dropbox Co - Founder and Chief Executive Officer Drew Houston . " We welcomed DocSend to the team , saw great momentum with HelloSign , and continued to make meaningful progress against our 2021 priorities . In this new era of distributed work , we have a big opportunity to deliver more value to our customers and shareholders , and I'm excited for what's ahead . " First Quarter Fiscal 2021 Results ( 3 ) Total revenue was $ 511.6 million , an increase of 12 % from the same period last year . On a constant currency basis , year - over - year growth would have been 11 % . ( 1 ) Total ARR ended at $ 2.112 billion , an increase of 13 % from the same period last year . On a constant currency basis , Total ARR grew $ 60.5 million quarter - over - quarter , and year - over - year growth would have been 12 % . ( ² ) Paying users ended at 15.83 million , as compared to 14.59 million for the same period last year . Average revenue per paying user was $ 132.55 , as compared to $ 126.30 for the same period last year . GAAP gross margin was 78.6 % , as compared to 77.3 % in the same period last year . Non - GAAP gross margin was 80.2 % , as compared to 78.3 % in the same period last year . GAAP operating margin was 8.3 % , as compared to 5.9 % in the same period last year . Non - GAAP operating margin was 29.1 % , as compared to 16.1 % in the same period last year . GAAP net income was $ 47.6 million , as compared to $ 39.3 million in the same period last year . Non - GAAP net income was $ 141.8 million , as compared to $ 69.8 million in the same period last year . Net cash provided by operating activities was $ 115.7 million , as compared to $ 53.3 million in the same period last year . Free cash flow was $ 108.8 million , as compared to $ 25.5 million in the same period last year . GAAP basic and diluted net income per share attributable to common stockholders was $ 0.12 , as compared to $ 0.09 in the same period last year . Non - GAAP diluted net income per share attributable to common stockholders was $ 0.35 , as compared to $ 0.17 in the same period last year . ( 3 ) Cash , cash equivalents and short - term investments ended at $ 1.916 billion . During the quarter we completed an offering for $ 1.389 billion of zero - coupon convertible senior notes , which included the exercise of the over - allotment options . This consisted of $ 695.8 million of convertible senior notes that mature in 2026 and $ 693.3 million of convertible senior notes that mature in 2028. After deducting the net costs of related hedge and warrant transactions and certain offering expenses , total net proceeds from the offering were $ 1.305 billion . ( ¹ ) We calculate constant currency revenue growth rates by applying the prior period weighted average exchange rates to current period results . ( 22 ) We calculate total annual recurring revenue ( " Total ARR " ) as the number of users who have active paid licenses for access to our platform as of the end of the period , multiplied by their annualized subscription price to our platform . We adjust our exchange rates used to calculate Total ARR on an annual basis , at the beginning of each fiscal year . We calculate constant currency Total ARR growth rates by applying the current period rate to prior period results . Non - GAAP diluted net income per share attributable to common stockholders is calculated based upon 405.4 million and 419.3 million diluted weighted - average shares of common stock for the three months ended March 31 , 2021 and 2020 , respectively .