{"id":339408,"date":"2017-04-27T06:30:26","date_gmt":"2017-04-26T22:30:26","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1482058"},"modified":"2017-04-27T06:30:26","modified_gmt":"2017-04-26T22:30:26","slug":"dropbox-really-wants-us-to-know-its-finances-are-healthy","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/dropbox-really-wants-us-to-know-its-finances-are-healthy\/","title":{"rendered":"Dropbox really wants us to know its finances are healthy"},"content":{"rendered":"

<\/p>\n

We\u2019re healthy enough to IPO but we\u2019re not going to just yet \u2014 that was the subtext of an interview that Dropbox CEO\u00a0Drew Houston had on Bloomberg<\/a> earlier this afternoon. Houston asserted, for the first time, Dropbox is profitable on an EBITDA basis.<\/p>\n

EBITDA (earnings before interest, tax, depreciation and amortization) is a financial metric typically used to compare businesses. It strips away financial variables like taxes to give a clearer picture of performance.<\/p>\n

Dropbox\u00a0has repeatedly dropped financial breadcrumbs to set the tone for conversations about the unicorn\u2019s health in advance of an\u00a0S-1 filing for IPO. Back in January,\u00a0Houston claimed a $1 billion revenue run rate<\/a> and even bragged that an analyst report showed Dropbox\u2019s growth outpacing that of Salesforce.<\/p>\n

A late-2017 Dropbox IPO has been rumored<\/a> for some time now, though\u00a02018 would not be out of the question. Bloomberg\u00a0reported<\/a> back in March that Dropbox had secured a $600 million credit line<\/a> from\u00a0JPMorgan, Bank of America, Deutsche Bank, Goldman Sachs, Macquarie and Royal Bank of Canada.<\/p>\n

Taking on debt\u00a0was\u00a0yet another healthy\u00a0financial sign for the cash flow positive company.\u00a0Houston was able to get cash without giving up equity, a statement of financial confidence from all of the banks involved.<\/p>\n

Adding\u00a0profitability on an\u00a0EBITDA basis is a good thing, but the company still has a pretty big mountain to summit. Dropbox was valued at $10 billion back in\u00a02014, a figure that is universally contentious. Even at $1 billion in revenue, that valuation is difficult to justify.<\/p>\n

Healthy financial milestones sugarcoat the conversation temporarily, but eventually\u00a0Houston is going to have to step into the public markets. At that point nobody will care how fast Dropbox grew its revenue back in the day. The question will be whether\u00a0Dropbox is a company that can eventually sustain $10 billion in yearly revenue.<\/p>\n

Featured Image: Bloomberg \/ Contributor\/Getty Images<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" Healthy financial milestones sugarcoat the conversation temporarily, but eventually Drew Houston is going to have to step into the public markets. At that point nobody will care how fast Dropbox grew its revenue back in the day. The question will be whether Dropbox is a company that can eventually sustain $10 billion in yearly revenue. Read More<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

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