{ "docId": "019dd923-622c-750b-8b98-df3d01a8b7bd", "docSlug": "5138ae8c47fe", "documentTitle": "Dropbox, Inc. (DBX)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2020-02-06 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 20, "pageCount": 60, "prevPage": 19, "nextPage": 21, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "Uses a series of callouts to contrast company claims against the lack of formal reporting.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-df3d01a8b7bd/20", "deckHref": "/decks/019dd923-622c-750b-8b98-df3d01a8b7bd", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-df3d01a8b7bd.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-df3d01a8b7bd#slide-20", "components": [ { "bbox": { "h": 0.11, "w": 0.17, "x": 0.035, "y": 0.00337 }, "kind": "callout", "text": "Only 1 Mention of Word \"Churn\" In Dropbox's S-1 Prospectus", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e1ab907a-f49e-42bb-8039-b6bb61b1b597", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Dropbox has consistently claimed it's been stable - and even improving - throughout all periods where it has increased prices, and its core offering has become more commoditized.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0397-72dc-a888-0d9bfa937d5b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.105, "w": 0.924, "x": 0.038, "y": 0.0017800000000000001 }, "kind": "paragraph", "text": "Spruce Point approaches Dropbox's financial transparency with skepticism. Customer churn is a key metric to analyze a subscription software - yet Dropbox mentioned the word just once in its IPO prospectus - and refuses to report churn on an annual or quarterly basis. Dropbox has consistently claimed it's been stable - and even improving - throughout all periods where it has increased prices, and its core offering has become more commoditized.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2be0d8e4-30fc-42ab-b45c-f195314133f2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.75, "x": 0.21, "y": 0.00645 }, "kind": "quote", "text": "\"Our latest outlook incorporates some really positive early signals related to both conversion and churn that we're seeing. And the second thing I will say, we provided some color on churn back when we went public last year. Directionally, churn has been very stable for us since then. It did, in fact, improve across the business in Q2, so those rates have improved.\"", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "68816b83-6915-4427-8216-4ea65020953c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.75, "x": 0.21, "y": 0.0050999999999999995 }, "kind": "quote", "text": "\"And to your second question on color on churn in the quarter, we don't disclose churn on a regular basis. We did provide some color on gross retention rates as part of the IPO process. Churn for us has been stable and improving for many quarters and for a long period of time.\"", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c129296e-d04d-4e3b-9816-5ab6d46ed579", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.75, "x": 0.21, "y": 0.0078 }, "kind": "quote", "text": "\"Because we're such an important part of how our users get work done and we're mission critical to so many business workflows, our churn rates have remained very stable, in the mid-teens, since our IPO.\"", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d8d3b945-3505-4a34-923f-70f99f1f7a15", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.75, "x": 0.21, "y": 0.00337 }, "kind": "quote", "text": "As of December 31, 2017, our Annualized Net Revenue Retention for paying Dropbox Business customers was approximately 100%...", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bae0dc06-2ae6-47c8-9f45-04b478503d68", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"And to your second question on color on churn in the quarter, we don't disclose churn on a regular basis. We did provide some color on gross retention rates as part of the IPO process. Churn for us has been stable and improving for many quarters and for a long period of time.\" — CFO Vashee, Q2 2018 Conference Call; \"Our latest outlook incorporates some really positive early signals related to both conversion and churn that we're seeing. And the second thing I will say, we provided some color on churn back when we went public last year. Directionally, churn has been very stable for us since then. It did, in fact, improve across the business in Q2, so those rates have improved.\" — CFO Vashee, Q2 2019 Conference Call; \"Because we're such an important part of how our users get work done and we're mission critical to so many business workflows, our churn rates have remained very stable, in the mid-teens, since our IPO.\" — CFO Vashee, Analyst Day Sept 2019", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0397-72dc-a888-1166b8d56d00", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.045, "w": 0.373, "x": 0.314, "y": 0.055 }, "kind": "title", "text": "Churn Obfuscation", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "26ea01e1-b917-4e0c-8e27-e779deeacd33", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "fef165d0-552d-49b3-95fe-373034ba306b", "evidence": "Contrasting management quotes against the lack of formal reporting to expose obfuscation.", "confidence": 0.9 } ], "arcBeats": [ { "to": 20, "from": 6, "beatId": "07888677-4dca-4b15-b2d1-7efe27796499", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Monster", "beatSlug": "overcoming-monster-the-monster", "evidence": "The document presents various concerns and contradictions related to Dropbox's business and financials.", "position": 1, "confidence": 0.8, "parentBeatName": "Hook", "parentBeatSlug": "hook" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }