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TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough tha

by tqi 2y ago

TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.

jordanb 2y ago
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
dsnr 2y ago
> enter a sort of maintenance mode There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
- bravetraveler 2y ago
  Providing goods/services. Perhaps the qualifier "being publicly traded" will help
  - bink 2y ago
    I think the question is more for investors. If the company isn't growing and isn't paying a dividend, why would I buy shares?
    - bravetraveler 2y ago
      I bring attention the qualifier; if it's not performing and likely won't be, why is it traded? A company that is relatively stable and holds no grand world-domination-to-feed-shareholder plans is still nice
      - deleted 2y ago
        [deleted]
    - ryanalam 2y ago
      In that instance you’d be looking for free cash flow, and Dropbox has a lot of it. https://investors.dropbox.com/static-files/df1fe33d-3995-4528-a9c2-38004195c6fc https://investors.dropbox.com/static-files/df1fe33d-3995-452...
      - HDThoreaun 2y ago
        If its not being returned to shareholders its worthless
alephnerd 2y ago
> pretty fair earnings multiple at the moment (~4X). Dropbox's EBIDTA is 14.67, but most Software Companies tend to have an EBIDTA of 28. Dropbox is significantly underperforming compared to their peers. Furthermore, cloud file storage has become commodified and Dropbox missed the DLP, DSPM, and AI Search train. > Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode Absolutely not. If you do not innovate as a software company, you risk becoming commodified. And if BUs within a company fails to execute on their innovation or GTM strategy, they will be let go.
rsync 2y ago
"Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost?" Yes, absolutely. There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to. There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again. This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.

by tqi 2y ago

jordanb 2y ago

Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"

dsnr 2y ago

> enter a sort of maintenance mode There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?

bravetraveler 2y ago
Providing goods/services. Perhaps the qualifier "being publicly traded" will help
- bink 2y ago
  I think the question is more for investors. If the company isn't growing and isn't paying a dividend, why would I buy shares?
  - bravetraveler 2y ago
    I bring attention the qualifier; if it's not performing and likely won't be, why is it traded? A company that is relatively stable and holds no grand world-domination-to-feed-shareholder plans is still nice
    - deleted 2y ago
      [deleted]
  - ryanalam 2y ago
    In that instance you’d be looking for free cash flow, and Dropbox has a lot of it. https://investors.dropbox.com/static-files/df1fe33d-3995-4528-a9c2-38004195c6fc https://investors.dropbox.com/static-files/df1fe33d-3995-452...
    - HDThoreaun 2y ago
      If its not being returned to shareholders its worthless

alephnerd 2y ago

> pretty fair earnings multiple at the moment (~4X). Dropbox's EBIDTA is 14.67, but most Software Companies tend to have an EBIDTA of 28. Dropbox is significantly underperforming compared to their peers. Furthermore, cloud file storage has become commodified and Dropbox missed the DLP, DSPM, and AI Search train. > Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode Absolutely not. If you do not innovate as a software company, you risk becoming commodified. And if BUs within a company fails to execute on their innovation or GTM strategy, they will be let go.

rsync 2y ago

"Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost?" Yes, absolutely. There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to. There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again. This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.