Dropbox falls as charge on real estate in shift to remote leads to wider quarterly net loss
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- Dropbox fell as much as 5% on Friday after turning in a fourth-quarter net loss of $346 million.
- The company took a quarterly charge on real-estate assets following its shift to remote work during the COVID-19 outbreak.
- Dropbox’s adjusted earnings of $0.28 per share beat expectations of $0.24 per share.
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Dropbox stock fell as much as 5% Friday, with the cloud-storage provider turning in a fourth-quarter net loss as a shift to remote work led to a charge related to real estate.
The company’s net loss was $345.8 million, wider than its loss of $6.6 million a year ago and a swing from profit of $32.7 million in the third quarter.
Shares of Dropbox fell as much as nearly 5% to $23.31. It’s added on nearly 10% during the year and 8.5% over the last 12 months.
Dropbox recorded a non-recurring impairment charge of $398.2 million in the fourth quarter for “right-of-use and other lease related assets.”
The charge stems from its reassessment of real estate assets, which will include subleasing some of its space. In October, the San Francisco-based company said employees working remotely “will be the primary experience” and “the day-to-day default for individual work” under its “Virtual First” program.
Dropbox acknowledged the “abrupt shift” to remote work in 2020 during which numerous companies transitioned to work outside of offices because of the COVID-19 pandemic.
The impairment charge was not part of its adjusted earnings, which came in at $0.28 per share compared with $0.16 a year earlier. Analysts, on average, had expected earnings of $0.24 per share.
Revenue climbed to $504.1 million from $446 million a year earlier, surpassing Wall Street’s target of $498 million.
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