The Pulse
Dropbox Plans About $350 Million Tigris Deal for AI Infrastructure
Dropbox reported third-quarter revenue of $637.3 million and announced an agreement to acquire Tigris Data for about $350 million in cash. The company also introduced DBX Agent Cloud, an infrastructure business for companies and developers
AI.info Team · Written with AI · fact-checked ·
An Approximately $350 Million Agreement for Tigris
Dropbox announced on November 5, 2026, an agreement to acquire Tigris Data Inc. for approximately $350.0 million in cash, subject to customary purchase price adjustments. The company expects the acquisition to close in the fourth quarter of 2026, subject to customary closing conditions. Dropbox describes Tigris as a globally distributed object storage platform.
The announcement came alongside the introduction of DBX Agent Cloud, a new infrastructure business for companies and developers building AI applications. The offering starts with standalone, S3-compatible object storage and is expected to expand over time to include filesystem and content-processing capabilities.
Revenue and Annual Recurring Revenue
For the quarter ended September 30, 2026, Dropbox reported revenue of $637.3 million, an increase of 0.5% year over year. Excluding FormSwift, revenue grew 1.0%; on a constant-currency basis, revenue excluding FormSwift increased 0.2%. Total annual recurring revenue, or ARR, reached $2.555 billion, up 0.8% year over year.
Excluding FormSwift, total ARR grew 1.9%, or 0.4% on a constant-currency basis. Total ARR on a constant-currency basis decreased $10.4 million quarter over quarter, which the company attributed to completing the FormSwift wind-down at the end of the quarter. Excluding FormSwift, ARR increased $4.7 million quarter over quarter.
Dropbox had 18.20 million paying users, compared with 18.07 million in the third quarter of 2025. Paying users increased by 20,000 from the prior quarter, largely due to growth in the Simple plan and slight growth in the Teams plan, offset by the FormSwift wind-down. Average revenue per paying user was $138.76, compared with $139.07 a year earlier.
Margins, Earnings and Cash Flow
GAAP gross margin was 80.6%, compared with 79.8% a year earlier. Non-GAAP gross margin was 81.8%, up from 81.4%. GAAP operating margin was 27.5%, flat year over year, while non-GAAP operating margin rose to 42.2% from 41.1%.
GAAP net income was $116.1 million, compared with $123.8 million in the third quarter of 2025. Non-GAAP net income was $197.8 million, compared with $196.7 million. GAAP diluted net income per share was $0.52, versus $0.47; non-GAAP diluted net income per share was $0.88, versus $0.74.
Net cash provided by operating activities totaled $259.2 million, down from $302.1 million a year earlier. Unlevered free cash flow was $303.9 million, compared with $314.2 million. Cash, cash equivalents and short-term investments totaled $1.142 billion at the end of the quarter.
Product Announcements
Dropbox also launched a new Dropbox experience on November 5 that lets customers find, understand, create and edit content directly in Dropbox. The company said it has more than 700 million registered users across approximately 180 countries.
“Q3 was another beat-and-raise quarter, with revenue growth excluding FormSwift and non-GAAP operating margin both ahead of our guidance, marking our fifth consecutive quarter of year-over-year revenue growth excluding FormSwift,” said Ashraf Alkarmi, co-Chief Executive Officer of Dropbox. “We’re executing on our strategy to become the trusted, independent content foundation for the AI era, and I’m excited about the opportunity in front of us. We’re making our customers’ content smarter and more useful by connecting Dropbox to the AI tools they already use. And with DBX Agent Cloud and our agreement to acquire Tigris, we’re putting the infrastructure we’ve built over nearly two decades to work for companies building AI applications, opening a new avenue for growth.”