Dropbox co-founder and CEO Drew Houston spoke at CNBC’s @Work conference in San Francisco on November 4, 2019.
Arun Nevader | CNBC
Dropbox on Thursday reported a one-time charge of $ 398.2 million in the fourth quarter to reflect the company’s move to remote work.
With the emergence of coronavirus in the United States last year, companies closed their offices and forced their employees to work from home. Some companies noted that remote work did not harm – and in some cases helped – employee productivity and satisfaction, and sought to make it more permanent. This can come at a cost to companies with considerable real estate footprints.
Dropbox, which manufactures cloud-based storage and productivity software and is known for its luxurious office space in San Francisco’s South of Market neighborhood, announced its “first” virtual remote work plan in October.
“Remote work (out of the office) will be the main experience for all employees and the day-to-day standard for individual work,” Dropbox said in a blog post. Some office space will remain for collaboration and Dropbox will sublease part of the space.
In the first, second and third quarters of 2020, Dropbox reported net profit after years of losing money. The charge for the “right to use and other lease-related assets” loss that Dropbox disclosed in its fourth quarter income statement reverses this sequence, resulting in a loss of almost $ 346 million for the company, compared to a profit of $ 33 million in the third quarter.
The charge was excluded from non-GAAP results, which reflected 28 cents in earnings per share, up from 16 cents in the same quarter a year ago, and exceeded the consensus of 24 cents per share expected by analysts polled by Refinitiv. Dropbox shares fell 1% in extended trades.
Before Dropbox committed to having its people working remotely, technology companies, including Atlassian, Twitter and Zillow, had said they would allow employees to continue working from home, even after the pandemic ended. Earlier this month, San Francisco’s biggest employer, Salesforce, said most of its employees will be in offices one to three days a week when it is safe enough to return.
In October, after thousands of its employees got used to working without being with their colleagues, Pinterest said it agreed to pay $ 89.5 million to stop renting 490,000 square feet of office space near its headquarters. in San Francisco. That way, you wouldn’t have to pay at least $ 440 million in rent.
WATCH: Dropbox CEO on ‘first virtual’ initiative for employees to work from home