Dropbox Inc., the cloud file-sharing company, saw its stock rise in extended trading as it delivered strong second-quarter financial results today and solid growth across several key performance metrics.

The company reported earnings before certain costs such as stock compensation of 40 cents per share on revenue of $530.6 million, up 13.5% from a year before.

Wall Street had been looking at a profit of just 33 cents per share on revenue of $524.06 million.

Dropbox Chief Executive Drew Houston (pictured) told analysts on a call that the company delivered a standout quarter with strong revenue growth, record free cash flow and margin expansion. “Our results reflect the strength of our business model and our ability to make significant progress on our strategic objectives,” he said.

Dropbox is known for it cloud storage service that allows users to save files online and sync them any device. It’s used by companies to organize large amounts of files and documents. It provides an easy and secure way to share files and folders with other people without sending large attachments.

Dropbox’s service has come to the fore since the COVID-19 pandemic reimagined how people work, with millions around the world confined to their homes. The pandemic also prompted the company to expand its toolbox. Late last year for example in acquired a company called DocSend Inc., which added analytics tools that allow users to track how the files they share are being used by their colleagues. That can be useful in a range of scenarios, for instance when a startup’s leadership shares a financial presentation with potential investors and may want to know if they viewed the file.

DocSend also added the ability to protect documents with a password that is only shared with the intended recipients. Users can revoke access any time, which helps reduce the risk of data leaks in scenarios where a sensitive file is accidentally shared in a way it’s not supposed to.

Those new features seem to have added to Dropbox’s appeal, as the company announced a 12.2% jump in annual recurring revenue, to $2.166 billion.

The company saw strong user growth too. It announced it had 16.14 million paying users at the end of the quarter, compared to 14.96 million one year ago. It’s also squeezing more money from those customers, with its average revenue per user rising to $133.15, up from $126.88 a year ago.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE it was good to see Dropbox picking up speed at last following a subpar performance in the early days of the pandemic.

“Given that the new way of working is more digital than ever before, that should put Dropbox on a strong growth trajectory,” Mueller said. “The next quarters will be critical for Dropbox to show it can accelerate growth more and become a key player in the future of its work, as it has the potential to do, or be left behind with a more pedestrian growth rate.”

Investors at least, seem confident in the company’s ability to gain momentum, as Dropbox’s stock was up more than 4% after-hours.

Photo: WSJ Conference and Meeting Photos/Flickr