Dropbox, Inc.

Good day and thank you for standing by. Welcome to the Q1 2026 Dropbox earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. I would now like to hand the conference over to your speaker today, Sarah Shuba, Chief Accounting Officer and Head of Investor Relations.

Good afternoon, and welcome to Dropbox's first quarter 2026 earnings call. As a reminder, we will discuss non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings release and our earnings presentation posted on our IR website at investors.dropbox.com. We will also make forward-looking statements on this call, including statements about our future outlook for our second quarter and fiscal year 2026, as well as our expectations regarding our business, assets, strategies, and the macroeconomic environment. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent report on Form 10-K and forthcoming report on Form 10-Q. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements except as required by law. I will now turn the call over to Dropbox's CEO and co-founder, Drew Houston.

Thanks, Sarah, and good afternoon, everyone. Welcome to our Q1 2026 earnings call. Joining me today is Ross Tenenbaum, our Chief Financial Officer. I'll start with our business and product highlights from the quarter, and then Ross will review our Q1 financial results and our outlook. Let's get started. We delivered a strong start to the year, exceeding the high end of our guidance across revenue and operating margin, with year-over-year revenue growth of 2%, excluding FormSwift, and unlevered free cash flow margin of 38%. On our Q4 call, I said that our goal in the core business is not just to maintain it, but to bend the curve back towards sustainable growth. I continue to be very impressed by Ashraf Alkarmi, who we hired in 2024 to lead our entire core business. Ashraf's an outstanding leader who's built a strong and talented bench, and together they've been rapidly improving the core business to drive sustainable growth. Last quarter, we saw steady growth across our individual's business as a result of the core team's consistent execution and their focused strategy, alongside funnel and product quality improvements to stabilize the team's business with the ultimate goal of positive net license growth. Now, we're encouraged by our Q1 performance as we continue to build on that momentum. With that, I'll turn to the key drivers within the core business. Within individuals, retention remains an important near-term revenue lever, and in Q1, we continue to focus on targeted retention interventions, including improvements to prompts for mobile users, loss aversion messaging, and targeted price promotions for recently canceled customers. And given the growth of mobile as a purchasing channel, we were encouraged to see that these efforts drove our mobile churn rate down mid single digit percentage points. We also made progress monetizing basic users through targeted promotions for additional storage, driving a 50% improvement in conversion among those targeted users nearing or exceeding their storage limits. For teams, one of the clearest signals we're seeing is that practical funnel improvements can drive meaningful results. In Q1, that included continued progress on pricing and packaging simplification, a more unified checkout experience, credit card trials, and onboarding and activation improvements. We also continued to make foundational improvements to the core FSS experience. We strengthened the reliability, performance, and scalability of sync and uploads. We made the experience simpler and more intuitive across desktop, web, and mobile, and we're testing new media collaboration tools with streamlined review workflows, leveraging our AI-powered tools. Taken together, these results reinforce our view that there are still meaningful levers inside the core business to steadily improve its long-term trajectory, and that the changes we're making are starting to show up more clearly in our results. Now on to Dash. Dash and Dropbox represents our evolution from file storage to AI-powered content management. We're bringing together customers' content from across Dropbox and other major cloud apps into a single, content-forward experience, making it easier to find, organize, and share work wherever it lives. With semantic search, AI-powered organization, and stacks for curation and sharing, Dash extends Dropbox from a file system into a system for all your cloud content. This direction offers a more seamless product experience and upgrade path with Dash for our existing base, rather than a separate surface for customers to adjust to or learn about. In Q1, we expanded the rollout of Dash and Dropbox and plan to significantly expand access to our base throughout the remainder of 2026. And while adoption is still early, we're encouraged by repeat engagement with Dash's AI features, with more than 30% of weekly engaged users using those features again the following week, and more than 50% of monthly engaged users using them again the following month. And we're seeing stable retention patterns even as we expand beyond our initial target customers and we onboard new cohorts. Dash inside Dropbox will increasingly be our primary vehicle for scaling AI across Dropbox. As we've shared previously, we've also been evolving our standalone experience for customers who don't use Dropbox today. And that work has helped us refine our onboarding and activation and new features, unlocking future greenfield growth opportunities. Dash is differentiated by its ability to bring together deep business context across work content and cloud apps, paired with core AI capabilities like search and chat. To support this, we've built what we call our context engine, which is our proprietary AI infrastructure that gathers context across all your contents and apps and connects it to leading AI models to enable faster, more accurate, and more useful results. As we've expanded access, we're seeing the strongest momentum when these capabilities are integrated directly into the core Dropbox experience. As a result, we're prioritizing bringing DASH learnings and AI features into existing Dropbox surfaces. This approach improves the customer experience while also increasing focus and efficiency across our teams. We're also increasingly excited by the signal we're seeing in our emerging data security solution, which we call Dropbox Protect. As AI adoption grows, so does concern around governance, visibility, and control, and we're seeing that demand resonate clearly with IT and security buyers. That's why Protect fits naturally into our broader platform story. The same indexing and context engine we're building to improve search and knowledge work can also improve security posture and governance. In other words, our platform investment supports both productivity and protection. And over time, that has the potential to expand our addressable market and strengthen the return on the broader platform work we're already doing as we seek to position Dropbox as a leading provider that can help customers find, organize, share, and protect their content in one place. To wrap up, Q1 was an encouraging step in our effort to bend the curve and core. The changes we've made are beginning to translate to our financial results, and in Dash and Protect, we're continuing to see healthy customer signal and learnings to reinforce our conviction and the opportunity ahead. With that, I'll turn it over to Ross.