Dropbox, Inc. (DBX) Earnings Call Transcript & Summary

Okay. Good morning. Welcome, everyone. I am Mark Murphy, software analyst with JPMorgan. And it is a great pleasure to be here today with Dropbox CEO, Drew Houston; and CFO, Tim Regan. Gentlemen, thank you so much for joining us.

Thanks for having us.

Great to be here.

All right. We really appreciate it. I want to mention as well for the audience, you should have the ability to ask a question. [Operator Instructions] But before we do, Drew and Tim, maybe you could just spend a quick moment with a very brief introduction of yourselves and the company.

I'm Drew Houston, Co-Founder and CEO. Started Dropbox, I think we had our [ 14th ] birthday May 8.

Happy birthday.

And I'm Tim Regan, I'm the CFO. I took over the CFO role back in September of last year. I have been with Dropbox for about 4.5 years. I was the Chief Accounting Officer before being the CFO.

Excellent. So let's dive right in. I want to start with a big picture question that obviously has been very top of mind for investors. It will continue to be so, which is, in retrospect, when you look back on it, what do you think was the impact that Dropbox saw from COVID? From the pandemic? And then how do you see the reopening process of the economy? Post COVID, how is that going to look for Dropbox? And part of what I'm trying to understand is, do you think that reopening is somewhat of a tailwind, right? It could be improving SMB Health? You could have more maybe tooling that's needed for hybrid work?

Sure. Kind of all of the above. I mean it's been quite a year through COVID, but we've seen a lot of strengths in our core business. And we helped a lot of our customers with the transition to remote work when lockdown started. And if you think about it, a lot of our customers have been turning to Dropbox since the beginning to be able to work more flexibly, work from anywhere, work across any platform. So our customers have needed Dropbox before lockdown, they need it during, need it after. And we've also seen a big tailwind for HelloSign, as many of our customers started adopting e-signature for the first time, and we've been growing our product portfolio pretty significantly. And then as we look towards reopening, we're seeing just about every company asking the same questions and rethinking how they operate. We're seeing even some of the most traditional companies moving towards some kind of hybrid model. And I think that's a really big deal. I think it's one of the -- that shift to distributed work is one of the largest changes to knowledge work since that term was invented. And I think we'll look back on that shift and consider it as significant as we move to cloud or to mobile. And if you think about your own experience, I think we're all pleasantly surprised with how we were able to cobble things together and make working from home a tolerable experience. But it's kind of also this like forced buggy beta test of what that could be. So it can be the -- working from home can be really distracting, fragmenting, exhausting experience when you're sitting on 10 hours of Zoom calls, and even Zoom wasn't designed for that. So we believe new working models need new tools, and there's a lot more we can do for our customers to help. And the way I look at it is we're in a strong position, a huge opportunity. We have products people need, sustainable business model, a healthy balance sheet.

I like this vision of the buggy beta test, and it's had a lot of moments where the dog is barking in the background or we lose a connection. So I can definitely relate to that. So Drew, maybe we can -- taking it a step further back, I guess, from the immediate reopening, you've spent a lot of time talking about the future of work. You've had a very strong vision around that. In the midterm and long term, how do you see this concept of the future of work and Dropbox is positioned? And then what do you think this larger collaboration opportunity is going to look like for Dropbox?

Sure. Well, as I said, a huge opportunity for us, this shift to remote work. I mean it's really -- and more -- really, it's hard to point to a better time in history to be building and selling collaboration software for distributed work. So in our core business, there's a huge need for one organized place for individuals and their -- and teams to be able to easily and safely organize their content. You think about what's one thing you lose when you're not physically together? You lose a lot of context, right? You don't have the watercooler conversations and so on. And so the way you organize your team's knowledge in a hybrid or remote environment needs to evolve, and we see Dropbox is playing a big role there. So lots of opportunity to continue improving both the experience at work and then the experience more broadly in ways that drive conversion and retention. And recent examples of that include things, new products like transfer, passwords, features like Vault, new SKUs like our family plan. See a lot more to do in the core. And we're also driving growth from a broader portfolio of products in addition to the core business. You think about the content in Dropbox, there are a lot of workflows that revolve around it. So HelloSign, eSignature, one of our fastest-growing businesses. We just bought a company called DocSend to further extend our capabilities in document workflow. Another -- a number of other organic efforts like Dropbox Spaces, like how do you organize content around meetings and projects. And we'll continue to grow the portfolio through M&A and distribute these products to our 50 million subscribers, several hundred million [ rev ] for users. And as our first quarter results demonstrated a few weeks ago, there's a lot of opportunity.

So Drew, you've had this whole sequencing of a number of these pragmatic intelligent moves, strategies. You just touched on about 7 or 8 of them in a row right there. And I want to come back to that because it feels to me like the business is being run a lot more pragmatically and frankly, with incredible resilience and stability right throughout this pandemic. I want to come back to that. But since you just mentioned DocSend, that's probably the one that the audience is the least familiar with, actually. And I want to learn more about that. We had gone in, we had taken a look at this. I noticed it gets 4.7 stars on G2 crowd. There are a lot of reviews. And that's a very strong assessment. And I understand that people who use it, you can actually see who accessed a document, right? And how much time they spend in it. It's a fascinating concept to think about. So how do you see DocSend fitting into this broader portfolio that Dropbox has? And what's that opportunity going to look like with DocSend?

Sure. Well, I'll start with DocSend, and I'll talk about the portfolio more broadly. So in March, we bought DocSend, and they -- DocSend helps customers manage and share their business-critical documents and gives powerful engagement analytics. So basically giving business leaders more control and visibility. For Dropbox, this is an expansion opportunity, so we can do more for our customers. It's really popular in financial services with entrepreneurs. There's a bunch of different segments and use cases where DocSend is really strong. And we can help DocSend. We can help accelerate their growth. We can help them reach a larger audience. And then we see a bigger opportunity. When you take Dropbox and you add DocSend and HelloSign, we start to have a complete end-to-end workflow for a contract, for example. So you might start with a contract in Dropbox, might send it out for feedback in DocSend and then send it out for signature in HelloSign. So you can imagine all the friction being taken out of that. So we have one seamless flow. So this continues to move -- the acquisition continues to move us along the path of becoming a multiproduct company with functionality that revolves around our core strength in content, and these are all large and growing markets.

Yes. Actually, we've bumped into customers who have said exactly that, that they like seeing the synergies there. The most recent comment I recall is that synergy between DocSend and the eSignature capabilities. So I want to talk about your broader strategic opportunity for a moment. And so the question is, do you feel like you have the bandwidth to execute on more of both what you're doing organically because you've been doing a lot there, and then inorganic, the way you've had some of these, I think, very pragmatic and very accretive tuck-ins. So how do you balance this going forward? Just what you're developing organically, some big R&D budget and then the future M&A?

Mark, I can jump in, and Drew, feel free to tack on. So a short answer, Mark, yes, we have the ability to pursue both organic and inorganic growth. And to your point, we are investing heavily on the organic side. A lot of the things that Drew mentioned, our engineering team have been very productive recently, including launching new features, such as Passwords and Vault and computer backup, introducing new SKUs, such as a family plan and our stand-alone transfer SKU, making HelloSign available in international markets and bundling HelloSign with our professional SKU. We've also optimized our self-serve engine to make the onboarding experience more intuitive and to really drive users towards the plan best suited to meet their needs. And the team has some other early-stage ideas that we're very excited about. Then on the M&A side, of course, we recently added DocSend, as Drew just talked about. So going forward, we will continue to invest where we see the right opportunities in new and adjacent areas. And we'll assess that build versus buy decision, considering things like our level of internal expertise and capability, valuations and expected rates of return. But ultimately, we have a big opportunity to capitalize on our 700 million registered user base and our platform. And we'll leverage the strong balance sheet we have and our ability to generate cash flow to pursue the best ideas.

Okay. So that 700 million strong user base has been contributing pretty well. In fact, we go back and we look, that monetization engine, it looked like Tim it was working pretty well in Q1. That was a strong quarter in terms of top line. You also had record margins. And clearly, we think that that's very important. Could you just speak to some of the drivers of upside? What was it that was humming together pretty well in the March quarter? And then what is it that was causing you to increase the guidance?

Yes. So sure, we had a great Q1, a revenue of $512 million, beat the top end of guidance. And we also beat on margins, to your point, driving record operating margins of 29%. And so for the full year, we did raise our revenue guidance to 11% year-over-year. This is driven both by DocSend and the strength that we're seeing in our organic business. Certainly includes contributions from our professional SKU, which is growing more than 30% year-over-year. And HelloSign, where we're seeing eSignature requests grow by more than 70% year-over-year. And our new family plan is also doing really well. As far as operating margins, we guided to margins of 27% to 28% this year. Some of the key drivers, again, the progress we're making on our revenue initiatives, and we've been placing a significant emphasis on increasing our operational discipline, where we have reduced our headcount costs by streamlining our workforce and by hiring in lower-cost locations. And we've also reduced our facilities costs. And we continue to implement numerous other efficiencies throughout the business. But all this said, we remain focused on balancing growth and profitability. And we definitely plan to invest in growth areas, such as DocSend and HelloSign through headcount and marketing initiatives throughout the year.

Okay. That's pretty amazing to have that Pro SKU growing over 30% like that at this stage and in this environment. I wanted to ask you, but there's another element of the story that's happening, Tim, financially, which is what you're doing with the buyback, right? So it has been aggressive. And so you're one of the few companies -- you've got the share count coming down, while the margins are exploding. So the EPS growth is strong, the cash flow per share growth is strong. And that's had some implications as well on the balance sheet, right? Can you just speak to some of those efforts with the buybacks and the balance sheet?

Yes. So sure. So let me start with buybacks. We're obviously excited about our strategic plans, and we think that repurchasing our shares is an efficient use of capital. So we spent about $430 million in Q1 repurchasing roughly 19 million shares and exhausting our $600 million authorization we announced at the start of last year. And we also bought back roughly $200 million in shares as part of our capital raise, which was on top of our announced programs. So as a result, as of the end of the quarter, we have about $970 million remaining on the $1 billion authorization we announced during our February call. And we plan to allocate a significant portion of our annual free cash flow to share repurchases, still with the intention of reducing our share count. And then as you mentioned, in addition, in Q1, we raised about $1.4 billion through a convertible debt deal. This does carry a 0% interest rate. And after adding a bond hedge and warrant, has a 100% conversion premium. So this gives us a lot of options and allows us to support organic growth initiatives, pursue M&A and return capital to shareholders through our share repurchase program. Ultimately, we do think that both the buyback program and the convert speak to our commitment to generating shareholder value and to driving towards our long-term financial targets.

Okay. It's great to understand a little better the flexibility that you have in all those areas. Drew, I wanted to come back to you for a moment and just to make sure we're really covering the core product because you had mentioned some of the new packaging that Dropbox is executed on and some of the new product offerings that you referenced going back to the Q1 earnings call. The -- what was jumping out at me was you had comments about the family plan contributing well. You have a passwords product. I think there was mention of a freemium basic version. What is the thinking here? Can you help us connect the dots on all that? And how is it going with the packaging?

Sure. So a couple of things here, which these are all good examples. So first is offering value beyond storage. So you think about passwords, being able to have all your passwords in Dropbox, and then being able to -- the portfolio beyond like HelloSign, DocSend, these are all value props beyond just storage and sharing. Second is driving better conversion and taking advantage of that enormous free base that we have, so for user base. So as Tim said, we have several hundred million registered free users. Huge opportunity. We'll continue -- we've had a lot of success driving them to the standard Dropbox plans, but we're also creating a broader menu of new subscription options and entry points and optimizing pricing and packaging in many ways. So Dropbox Transfer is an example of a standalone SKU that we launched in Q1, a central point for customers who might just need to start by sending large files and then expand to more use of the platform more broadly. Second, we have -- we just launched a new bundled professional and HelloSign SKU. So driving adoption of HelloSign into our base through bundling. And then more broadly, it's having more paid products on our platform, things like HelloSign, DocSend, offering users more value beyond storage. And there's -- and these are just -- we're just scratching the surface of some of the things we're doing here. But it is a bit more of a portfolio approach. And I think that when I -- in conversations with investors over the last quarter or 2, I think they really appreciated how we're governing the portfolio. And we have this core business, which is really scalable and profitable. We're driving steady improvements. We have these growth-stage businesses like HelloSign and these natural adjacencies, workflows around content. And then we have a pipeline of earlier-stage products like Dropbox Spaces and others we'll be sharing more around soon.

Okay. So we're hearing this portfolio approach the -- how do you think about within that, where you might still have white spaces, right? Do you hear from customers much feedback on unsolved problems or white space, maybe where you can develop something new that just is -- will surprise us and doesn't exist today?

Yes. I mean there is no shortage of or there's no shortage of pain points with the modern collaboration experience, especially as you shift to working from home. One theme I meant to mention before is just the blurred lines between home and work. right? We're all -- I think we're experiencing that in maybe the most experience -- or the most extreme way you can imagine, right, where the boundaries between home and work are, in this case, like literally dissolved. And so one of Dropbox' strengths is that we help you straddle that blurred line between home and work and separate your content but also make it easy to manage both together. That's one of the reasons why we continue to invest in things like the family plan and these individual products because they help drive crossover and retention to your working life as well. But the strategy, overall, is pretty straightforward as far as how we think about the landscape and growth opportunities. So first, it starts with your content. Helping you store and organize it. There are a lot of kind of steady improvements that we're making, and we listed a bunch of examples of those, things like pricing and packaging, adding more features. And there's some transformative opportunities in the core businesses, too. When you think about the 2021 version of the problem we're solving, like helping you have all your stuff across all the different platforms, there's a lot more complexity that didn't exist when we started the company. And now there's a new challenge, like I got -- I still have files, got to organize my files, but I have all these different kinds of cloud content. So how do you organize the team's knowledge? How do I keep track of my -- not just like files, my Google Docs, my Airtables, my Figma docs. One challenge we had is that we have like 10 search boxes when we really should have 1. These are universal problems, very difficult. And the reason these problems persist is because, one, there are all these different ecosystems that are each building their own kind of walled gardens and not integrating. And then second, it's a big -- there's all these point solutions. And so this -- that creates a big opportunity for Dropbox to work across all the different ecosystems, tie all these things together, wrap our arms around all your cloud content and not just your files. So that's a universal problem something everybody has. But finding more ways to get all of your content into Dropbox. And then the second is workflows. So we all have a lot of things we need to do with our content. So we think about what are the different verbs you need to do with your content in addition to storage and sharing and thinking and signing in with HelloSign and there's a bunch of others around that. And then finally, we're starting to see a lot of different shifts in behavior over the last 18 months in addition to the move to remote work. So we've seen -- we've been seeing the rise of the creator economy, more freelancers, accelerated shifts of businesses to the cloud. And we can see these trends reflected in engagement patterns on our platform. So there's a lot more rich media, more video content being added on the platform, a lot of increased growth in our professional SKU, expansion within SMBs and higher demand for these new workflows around content. So we see room for improvement in all these areas, and we think that owning your content is a really strategic place to be. There's a lot of natural adjacencies. When you think about often the workflow around content starts in Dropbox gives you an advantage, much like an operating system or a home screen. And so we're expanding into both natural adjacencies and things that are a little further out. But again, hard to point to a better time in history to be building and selling collaboration software for distributed work.

So is that -- that's an interesting comment you tucked in there. You're relating kind of some of the growth in the Pro SKU or the Pro usage to this, I think you called it the creator economy, this concept of more freelancers in the world today. Is that a prototype package?

Yes. We think -- we believe so. When we talk to our customers, that's certainly a pattern we're seeing. And then one of our strengths of our business model is that it's self-serve and it's viral, right? So we can profitably acquire a lot of these freelancers, these small businesses, very small businesses in a way that most other businesses can't because we have this product that's really simple, easy to use. Just download it and get using it, and then it expands virally if you're sharing.

Yes. And thus, the high margins and the huge free cash flow production. So we have had a few questions kind of come pouring in here. And let me try to at least pose one of these to you, which is, do you have any thoughts on win rates or trends in RFPs when you run up against Office 365, Microsoft and Google? And has this changed versus 1 to 2 years ago?

I can start. It's been pretty stable. We certainly search -- serve larger customers. I mean, one of our -- the strengths of our model, or one of the other strengths of having a self-serve environment models, you land in organizations of all sizes. And because it's a viral motion, it's free. You actually -- it's a very cheap way of reaching customers. And so -- I mean, interesting -- so as far as what are the wins rates among larger customers, it's been pretty stable. I didn't really -- I wouldn't say there's been major changes in the dynamics there. But interestingly, with our self-serve model or when we're going after a freelancer, they just start using Dropbox and they're not comparison shopping. So actually, it's a much less competitive situation than you think, and it's a little bit different dynamics than kind of classic enterprise software. And so to be clear, we still have large customers. We serve them well. We land -- or we have really efficient targeted model for acquiring larger customers, but the vast majority of our audience adopt Dropbox in a self-serve way.

Right. Okay. So here's another question that came in, and I'm trying to understand and paraphrase as I read it. But the spirit of it, it goes back to this idea of having 700 million users, right? And the -- I guess, the latent value of that type of base. And so this question is saying that consumer ad businesses that have 700 million users that some of these have market caps that are over $100 billion. And this question is, should Dropbox elegantly weave in content-centric consumer ad revenue streams? There's an interesting thought. What do you think about this? Is there any opportunity in advertising?

Well, I think we -- well, we have to be -- one of our big differentiators against some of the other consumer platforms is the fact that our business model is really aligned with your privacy, right? So the fact that we don't have ads is actually a big benefit or a big differentiator for a lot of our customers. So we probably would not -- and then it's also something we have to be really careful about. Obviously, the stuff you're putting in Dropbox is your most important [indiscernible] , like private personal information, work information, and so you have to be really careful and thoughtful about how you monetize that. So I don't think you'll see us advertising against the stuff in your Dropbox, for example. But we are a natural -- but there are other models you can use. I mean, one is just we have a broader portfolio of products, more subscriptions we can offer, connecting you -- connecting our -- the giant base of users with our products, other companies' products. There's opportunity there in the future. And then I think there are other business models that are interesting. So helping -- a lot of our customers, you think about those freelancers, or people who are starting a business often need to monetize digital content. So there's different things like that where -- so both in terms of the different kinds of business models and then different entry points, that's certainly something we've been focused on, and better migrating our free base to paid or monetizable estates.

Okay. But it sounds like...

But maybe just -- sorry, Mark, just to quickly add on to that. I think Drew touched on the main issues as far as privacy and wanting our users to have a seamless, easy-to-use, non-interrupted experience. Well, we clearly are focused on monetizing our free base, where we have introduced new functionality and features recently as far as we introduced passwords to our free plan, where users now get 50 free passwords before they hit a pay wall as we continue to migrate users from free to paid. So that was one thing we recently did. Another was we introduced our transfer SKU at a lower price point. So we carved it out of our Plus SKU and introduced this transfer job to be done specifically to our free base. We try to introduce them to that specific level of functionality, get them acquainted with what Dropbox can do for them. And then hopefully, that springboards them into one of our paid SKUs. So we are experimenting with everything we can to migrate users from free to paid.

Okay. So the monetization engine is in full effect. It's just that you're maintaining the purity and the privacy that Dropbox is known for? Is that a fair way of summing that up?

Yes, that's the first priority.

Yes.

Again, customers trust us with their most important information. And privacy and trust is a big differentiator for us.

Any thoughts on the demand environment overall? I think we touched on it a bit, but just as you see it today, just anything quick. Improving? Degrading? Headwinds or tailwinds in certain geographies or segments?

I can start, Drew. Feel free to jump in. Drew has obviously talked about the demand we're seeing on that freelancer side Pro SKU, that being up 30%. One of the factors behind that is -- I talked about this a little bit, the self-serve engine, where now if you go to our homepage, in the past, we had heavily slanted towards introducing users to our teams products. Now we also make it easier to find our family plan, make it easier to find our professional SKU, and that's helping to drive some of the tailwinds we're seeing on those SKUs. And then of course, again, getting back to the demand question, eSignature, that's up 75%. Really, as we pursue that opportunity, think about COVID, it's really hard to do pen and paper signatures. So we've really seen an acceleration on that. And maybe as far as locations, that's where we're leaning into international, particularly for HelloSign, right, as e-signature is more nascent in the international markets. And that's where we introduced HelloSign to 21 languages last year, and we're leaning into that further with headcounts and marketing initiatives this year. So those are a few points that we're pursuing this year.

And we're pursuing adjacencies, again, that are -- and our customers are pulling us in directions that are a little bit different from what you see with OneDrive or Google Drive, for example. So adjacencies like eSignature, sharing and document analytics, those are things you don't see in those products. As we get more creative people on our platform, the ability to -- whose workflows revolve around large files, our advantage in technical excellence in syncing, being able to handle large files really smoothly, is a big differentiator. So being pulled into more creative roles in the company, so you think designers, marketers, other folks, and then there's a lot we can do around video workflows. So we're finding that we're -- that a lot of our differentiators, when we segment our customers, a lot of our specific differentiators around again, handling rich media well or these other adjacencies like eSignature are pulling us in a different direction than what we're seeing with the Office -- or with the bundled offerings from the Office suites.

Okay. Understood. So now, and Drew, I wanted to go back to a comment you had made earlier. You said something along the lines of distributed work is as significant as some of the other major technology shifts. The lines are blurring, right, between work and home. And there's this opportunity for Dropbox. And I think we're -- we've started to understand what that can mean to some of your customers. As well, you had years of a headquarters build-out, you've started subleasing it and you've got this virtual-first work policy. I think you've been one of the clearest software companies in terms of where you're going with that and what that landing point is going to look like. You've talked about the elimination of basically -- maybe I'm oversimplifying, but maybe about 80% of the real estate footprint. Do we think -- so is Dropbox going to emerge as just a structurally more profitable business as well because of that, because of this virtual first policy?

So I can start, Drew, then feel free to jump in. So yes, the strategy will strengthen our financial engine. We expect the move to Virtual First to be a significant positive to our financials over time, really as we enter into subleases and also hire in low-cost locations. And we continue to estimate that this strategy may generate in excess of $800 million in cash flows over the course of our leases, which do range in duration between 13 and 15 years. The ultimate amount and timing of the benefits does depend on the subleases we execute. But so far, we've signed 2 subleases in San Francisco and another in Seattle. And we're seeing really good traction with our international locations. And then on the hiring side, we've also seen our workforce start migrating from high-cost to low-cost locations. So again, this strategy will bring several financial benefits.

And so correct me if I'm wrong, Tim, but that's profitability potential and cash flow potential that we haven't exactly seen that already in the P&L. That's something that's mostly out there in the future, correct?

It's on its way. With these leases, there tends to be a free rent period at the start. And so we are working into that from a subleasing perspective. And then the workforce migration is really in its early infancy as well. So both are on the way.

Yes. And I just want to add that -- so the number of financial benefits, there's a number of benefits for recruiting, being able to access new pools of talent. But a big part of the motivation for this didn't start there. It's really about our customers and how do we help our customers transition to this new way of working. And I think the first inning was when lockdown happened. But then as we reopened, all the -- every company is asking the same questions. And we think we can both help with our products and then also just the operating models that we've chosen and we've started to open source a little bit. So we have a model we're calling Virtual First. And I think we're finding that remote work has a lot of benefits, but there's no substitute for the in-person experience. And I think that's something we're all excited about reintroducing after lockdown. But the question we ask ourselves is like how do we get the best of both of these worlds? Because there's a lot of great things about the flexibility you get with remote work, but then as far as building a team or culture or relationships, it's a lot harder to do that over Zoom. So what we're doing is individual -- like focused individual work happens at home, and then we're turning the office into a convening and collaborative space that we call Dropbox Studios. And I think that separation is pretty important because I think a lot of how companies are trying to answer that question right now, or if you do a survey of any of your employees, what they'll say is like, oh, let's just go back to the office, go back to the way things were before, but come in like 2, 3 days a week as kind of a compromise. And I think that has a lot of issues because I think that risks getting kind of a worst of both world situation because the office is for community, you go into the office, but then if 2/3 of the people aren't there, that's a problem. And then think about what are the other 1/3 doing? They're on Zoom calls for the people who were at home. And so suddenly that's a problem. And then you don't have the flexibility because you have to be in the office a couple of days a week. So you're still commuting. You're still not getting a lot of the benefit. So we're thinking about how do you -- if we can make the tool and if you're going to make the remote experience more efficient or better, maybe you wouldn't need to be physically together, and so maybe you can give people more flexibility. But one way or another, we wanted to lean a lot harder than we might have needed to or decided to, in general, because it's been really helpful to be able to live in the future and sort of experience all these pain points ourselves. And I think back to starting the company in 2007, I was like that guy who had a bunch of PCs and a laptop and a Linux server under my desk, and I had multiple machines. And syncing things was like a kind of early adopter kind of propeller head problem. But then because I was sort of living in that future when the -- is sort of the right place, right time when, suddenly, with the iPhone or the smartphone, this -- like having multiple devices became a mainstream problem. And suddenly, how do I get to my stuff from each of the different devices? New problems. So we're expecting a lot of same dynamics to happen with this transition because no one knows exactly how this is all going to unfold, but a lot of the pain points that we're all experiencing with remote work being distracting or overwhelming or exhausting, I think, can be addressed with technology that hasn't been built yet. And so we think it's a really important part of positioning ourselves well for driving that transformation.

So Drew, I want to thank you. That was the perfect way of tying everything together from the beginning before you conceived Dropbox and ending with where we are today and the opportunity going forward. So thank you, Drew. Thank you, Tim, as well. We can't thank you enough for taking the time to be here with us today.

Thanks, Mark.

Awesome. Thanks, Mark. Thanks, everyone, for joining.

Take care.

See you later.