Cloud file storage pioneer Dropbox Inc. today posted fourth-quarter financial results that topped Wall Street’s expectations, but it wasn’t enough to prevent its stock from falling slightly in extended trading.

The company reported net income for the quarter of $124.6 million, a big improvement from the $345.8 million loss it posted in the same period one year ago. Earnings before certain costs such as stock compensation came to 41 cents per share, while revenue hit $565.5 million, up 12% from a year ago.

The results were better than hoped for, with Wall Street analysts looking for earnings of 37 cents per share on revenue of $557.7 million.

For its full fiscal 2021 year, Dropbox reported a net income of $335.8 million on revenue of $2.16 billion.

Dropbox co-founder and Chief Executive Drew Houston (pictured) said the company delivered a strong year and he’s especially proud of the progress his team has made in evolving its core offerings while expanding its product portfolio.

“We improved our non-GAAP operating margin by nearly 9 points, grew free cash flow by over 40% year-over-year, and delivered our first full year of GAAP profitability,” he said.

Dropbox is an iconic name in the world of cloud file storage services, with hardly an enterprise worker who doesn’t know how to use its tools to save files online and sync them with another device or share with another user. Hence, thousands of companies use Dropbox to organize large numbers of files and documents.

In more recent times, Dropbox has focused on improving its offerings, adding on analytics tools for users to track how files are shared across an organization, for example. On the security side, it has added password protection for sensitive documents, with users able to revoke a password at anytime, reducing the risk of data leaks when a file is shared with unauthorized users.

The updates seem to be appreciated, with Dropbox adding new customers consistently over the past year. It said it ended the quarter with 16.79 million paying users, up from 15.48 million one year ago. Its average revenue per user also rose to $134.78, from $130.17 a year before.

By adding more customers and squeezing additional cash out of them, Dropbox managed to grow its annual recurring revenue to $2.261 billion, up 11.8% from a year ago.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that Dropbox deserves credit for crossing the $2 billion-a-year in revenue mark, but he raised concerns that the company is not growing as fast as it could.

“Dropbox’s growth was a lackluster low teens number, which shows that the company is not fully participating in the post-pandemic future of work,” Mueller said. “The good news is that it has at least swung to achieve a substantial profit, ironically aided by its move to a work-from-home policy that resulted from the COVID pandemic. Overall, though, that business operating model means it’s set up for more growth in the future.”

Photo: Christophe Pelletier/Flickr