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Dropbox Dropbox Announces Third Quarter Fiscal 2021 Results November 4 , 2021 Third Quarter Revenue of $ 550.2 Million , Up 12.9 % Year - over - year GAAP and Non - GAAP Operating Income of $ 77.3 Million and $ 161.0 Million , Up 157.7 % and 43.5 % Year - over - year Net Cash Provided by Operating Activities of $ 231.5 Million and Free Cash Flow of $ 221.5 Million SAN FRANCISCO , Calif .-- ( BUSINESS WIRE ) -- Nov . 4 , 2021-- Dropbox , Inc. ( NASDAQ : DBX ) , today announced financial results for its third quarter ended September 30 , 2021 . " Q3 was another solid quarter with record free cash flow , strong revenue growth , and great progress against our strategic objectives as we focus on delivering more value to our customers and shareholders , " said Dropbox Co - Founder and Chief Executive Officer Drew Houston . " We shipped several new product experiences to help our customers with today's challenges of distributed and remote work , and I'm confident in our future as we work toward our vision of building one organized place for content and all the workflows around it . " Third Quarter Fiscal 2021 Results • Total revenue was $ 550.2 million , an increase of 12.9 % from the same period last year . On a constant currency basis , year - over - year growth would have been 10.7 % . ( 1 ) • Total ARR ended at $ 2.218 billion , an increase of $ 52.1 million quarter - over - quarter and an increase of 12.0 % year - over - year . On a constant currency basis , year - over - year growth would have been 10.4 % . ( 2 ) ● Paying users ended at 16.49 million , as compared to 15.25 million for the same period last year . Average revenue per paying user was $ 133.79 , as compared to $ 128.03 for the same period last year . • GAAP gross margin was 79.6 % , as compared to 78.8 % in the same period last year . Non - GAAP gross margin was 81.0 % , as compared to 80.0 % in the same period last year . • GAAP operating margin was 14.0 % , as compared to 6.2 % in the same period last year . Non - GAAP operating margin was 29.3 % , as compared to 23.0 % in the same period last year . • GAAP net income was $ 75.6 million , as compared to $ 32.7 million in the same period last year . Non - GAAP net income was $ 147.1 million , as compared to $ 110.2 million in the same period last year . • Net cash provided by operating activities was $ 231.5 million , as compared to $ 200.9 million in the same period last year . Free cash flow was $ 221.5 million , as compared to $ 187.0 million in the same period last year . • GAAP diluted net income per share attributable to common stockholders was $ 0.19 , as compared to $ 0.08 in the same period last year . Non - GAAP diluted net income per share attributable to common stockholders was $ 0.37 , as compared to $ 0.26 in the same period last year . ( 3 ) • Cash , cash equivalents and short - term investments ended at $ 1.929 billion . ( 1 ) We calculate constant currency revenue growth rates by applying the prior period weighted average exchange rates to current period results . ( 2 ) 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 . ( 3 ) Non - GAAP diluted net income per share attributable to common stockholders is calculated based upon 398.1 million and 419.9 million diluted weighted - average shares of common stock for the three months ended September 30 , 2021 and 2020 , respectively . Financial Outlook