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  "documentTitle": "Dropbox, Inc. (DBX)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2020-02-06 00:00:00",
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  "notes": "The slide uses a table to highlight decelerating YoY growth in paying users and stagnant conversion ratios, while attributing ARPU growth to specific pricing actions.",
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      "kind": "callout",
      "text": "In 2017, launched Dropbox Business Advanced plan. At the time of launch, grandfathered existing Dropbox Business teams into the Dropbox Business Advanced plan at their legacy price. During 2018 and early 2019, almost all of those grandfathered teams renewed at a higher price",
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      "text": "In 2019, repackaged existing Dropbox Plus plans to include additional features and, as a result, increased the price for new and existing users on this plan",
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      "text": "The conversion ratio has remained stagnant in the 2.2% - 2.3% range for almost 4 years!",
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      "text": "Paying User Growth YoY: 13.8%",
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      "text": "Spruce Point pays close attention to certain metrics, all of which bode negatively for Dropbox investors. We previously showed that Registered User growth has slowed, and in addition, Paying User growth is slowing in every single quarter. Furthermore, Dropbox has not demonstrated an ability to accelerate conversion of Registered Users to Paying Users in any meaningful way. The conversion ratio has remained stagnant in the 2.2% - 2.3% range for almost 4 years! ARPU growth has been recently supported by price increases, but given the commodity-like nature of its services, we do not believe that recent growth will be sustainable in the future.",
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      "text": "Source: Dropbox and Spruce Point analysis",
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      "text": "Table showing Registered Users, Paying Users, Paying User Growth YoY, Paying User / Registered, ARPU, and ARPU Growth YoY from 2015 to Q3 2019.",
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      "text": "Slowing Paying Users And Poor Registered User Conversion",
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