SecProbe.io

Mail Stop 4561
November 7, 2017

Andrew W. Houston
Chief Executive Officer
Dropbox, Inc.
333 Brannan Street
San Francisco, CA 94107

Re: Dropbox, Inc.
Draft Registration Statement on Form S -1
Submitted October 11, 2017
  CIK No. 0001467623

Dear Mr. Houston :

We have reviewed your draft registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or  publicly  filing your registration statement on
EDGAR.  If you do not believe our comments app ly to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments  and your
amended draft registration statement or filed regis tration statement,  we may have  additional
comments.

Prospectus Summary

Our Business, page 1

1. You disclose that you serve more than 500 million registered users and 10 million paying
users, and had more than 400 million devices actively connected  to your platform in the
second quarter of 2017 .  Disclose how you define an “actively connected device” and
explain how you measured  activity for the purpose of calculating this metric.   Provide
more context by disclosing the number of active registered u sers for each period
presented.  Further, disclose the number of unique registered users and, separately, th e
number of unique paying users , as well as the relationship of each group to the  400
million actively connected devices.  In this regard, we note y our disclosure that a
majority of your registered users never convert to a paid subscription, some users have

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 2

 installed your platform on  more than one device, and some users have more than one
active license.

Our Growth Strategy, page 4

2. You estimate  that 300 million registered users “have characteristics —including certain
email domains, devices, and geographies —that make them more likely to pay over time.”
Please clarify the basis for your estimate and disclose the underlying assumptions.

Key Busin ess Metrics, page 13

3.         We note that you do not track the retention rates of your “individual users .”  Please
clarify whether you track the retention rates of your paying users.  If so,  please disclose
the retention rates regarding your paying user base as well as your customer base for each
period presented.  In this regard, we note your disclosure  on page 15 that your business
depends in part on your ability to retain paying users .

Risk Factors , page 15

4. We note the reference to the provision in your amended and restated bylaws that will
provide that certain litigation against you, your officers, or your directors may only be
brought in a state or federal court located within the State of Delaware.  You, however,
do not also refer to the provision in your amended and restated certificate of
incorporation that will provide that “the federal district courts of the United States will be
the exclusive forum for resolving any complaint asserting a cause of action arising under
the Securities Act” as disclosed on page 129.  Please include a separate risk factor that
highlights the substance of both these exclusive forum provisions.

5. Please include a separate risk factor highlighting th e conflicts of interest and required
participation of a qualified independent underwriter as a result of your underwriters
receiving a portion of the net proceeds to repay indebtedness that will be outstanding
prior to the completion of this offering.

Risks Related to Our Business and Our Industry

“We are subject to export and import control laws and regulation . . . ,” page 26

6. You disclose that in 2017 you discovered that your platform had been accessed by certain
users in countries that are the s ubject of U.S. sanctions.  Please identify those countries to
us.

7. A question and answer session about access posted on your website states that  Dropbox
does not support access to some of its services in countries including  Syria.   We also note
a rece nt news article reports that your Dublin office is focused on supporting your

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 3

 Europe, Middle East and Africa consumer and business users.  Syria and Iran, located in
the Middle East, are designated by the State Department as state sponsors of terrorism
and are subject to U.S. economic sanctions and export controls.  S udan , located in Africa,
is designated by the State Department as a state sponsor of terrorism and is subject to
U.S. export controls .  Please describe to us the nature and extent of any past, current, and
anticipated contacts with Syria, Iran and Sudan, whether through subsidiaries, partners,
integration partners, or other dir ect or indirect arrangements.  You should describe any
products, components, technology or services you have provided to  Syria, Iran or Sudan,
directly or indirectly, and any agreements, commercial arrangements or other contacts
with the governments of those countries or entities they control.

“We are an ‘emerging growth company’ and we cannot be certain if reduced . . . ,” page 34

8. You state that you could be an emerging growth company for as long as five years
following the completion of this offering but “expect not to be [one] sooner.”  Please
revise this risk factor and the related disclosure on page 6 to clarify that you would lose
your status as an emerging growth company  when and if you have annual revenues of
$1.07 billion or more.   Explain that if you no longer are eligible to be an  emerging
growth company, you would continue to be treated as such until you con summate this
offering.  Refer to Q uestion 3 of our JOBS Act FAQs.

“Our revolving credit facility provides our lenders with a first priority lien . . . ,” page 35

9. You state that your revolving credit facility is secured by substantially all your
intellectual property and certain other assets.  If material, please identify the “certain
other assets” as well as the extent to which they have been pledged as collateral.   In this
regard, the agreement provided as Exhibit 10.15 shows that you have pledged all your
equity interest in CloudOn, Inc., a wholly -owned subsidiary.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Business , page 55

10. Please  revise your overview section to address  material oppor tunities, challenges and
risks , such as those posed by competitors whose products have customarily been tailored
to suit the needs of enterprise customer s, as well as your ability to offer a new product
with business -grade tools  to independent workers .  Further , consider explaining the
impact of recent announcements regarding your business subscription pla ns on your user
conversions, upgrades , and renewals.  In this regard, we note that you permitted your
current business customers to access all the new features offered by the Advanced
product without incurring a substantial increase in pricing until their 2018 renewal.  We
also understand that customers that have been  subscribed to your Dropbox Business
product and use more than 2TB of storage space must upgrade to the Advanced plan.  See
Item 303(a) of Regulation S -K and  Section III.A of  SEC Release No. 33 -8350.

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 4

 11. You disclose that your business depends on your ability to upgrade payi ng users and to
convert registered users to paying users.  To help investors understand any  known
material  trends and uncertainties regarding your users, please  disclose  the extent to which
you have been  dependent on upgrades versus  conversions for revenue  growth .  Refer to
Item 303(a)(iii)(2) of Regulation S -K and  Section III.B.3 of  SEC Release  No. 33-8350.

Our Attractive Cohort Economics, page 58

12. You state that monthly recurring revenue tracks the total monthly subscription amount of
“all paying users” as of the end of the month.  We note, however, that “[a] majority of
[y]our customers opt for [y]our annual plans.”  Disclose the percentage of your
subscription plans that are annual.   To the extent you are including customers that opt for
your monthly plans, please revise to explain why you believe it is reasonable to assume
that you will generate recurring revenue from all such customers.  This com ment also
applies to the annualized recurring revenue statist ic that you discuss on page 60 .

Key Business Metrics, page 60

13. Please discl ose the number of customers who  are individuals and the number of
custome rs that are teams and organizations, inclu ding enterprises,  for each period
presented to provide additional context regarding your paying user metric.  Further,
provide quantitative information describing the extent to which larger companies have
multiple teams of users.  Y our disclosure states that no customer represented more than
1% of revenue in the periods presented, but tell us  whether any teams of users working
within the same organization collectively represented 10% or more of your reve nue
during any of the periods  presented .  Refer to Ite m 101(c)(1)(vii)  of Regulation S -K.

Non-GAAP Financial Measure, page 61

14. You state that free cash flow is useful in evaluating your operating performance .  You
explain , however,  that this measure  is useful information regarding cash provided by
operating activities and cash used for investments in property and equipment .  Further,
you reconcile it  to net cash provided by operating activities , which  is a measure of
liquidity.  As your non -GAAP fina ncial measure of free cash flow is explained as a
liquidity measure, please revise to remove an y indication  that it is a measure  of your
performance .  Refer to Item 10(e)(1)(i)  of Regulation S -K and Question 102.07 of our
Non-GAAP Financial Measures  Compli ance and Disclosure Interpretations .

Results of Operations, page 65

15. You indicate on page 61 that your ARPU declined for the year ended December 31, 2016
primarily due to foreign currency fluctuations and on page 80 that 23% of your sales in
2016 we re denominated in currencies other than U.S. dollars.  Please disclose the impact

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 5

 of foreign currency fluctuations on the changes in revenue, if material.  Refer to Item
303(a)(3)(i) of Regulation S -K and Section III.D of SEC Release No. 33 -6835.

Liquid ity and Capital Resources, page 71

16. Please disclose the amount of cash held overseas in order to provide an understanding of
your sources of cash and the portion of total cash and cash equivalents that are not
currently available to fund domestic opera tions without incurring taxes upon repatriation .
Refer to Item 303(a)(1) of Regulation S -K and Section IV of SEC Release No. 33-8350.

Business

Our Customers, page 89

17. You state that a large majority of individual customers use Dropbox for work , which
provides you  with an opportunity  to increase conversion to Dropb ox Business team
offerings over time.  Please disclose the number of individual customers using Dropbox
for work and explain how you calculated that statistic.  Expl ain any material dif ferences
between your contractual arrangements  at the individual, team , and organizational levels,
such as the right to cancellation.  We note your disclosure on page 62 that your
agreements are “generally” non -cancelable.

Our Competition, page 93

18. Please provide additional context regarding your competitive position.  In this regard,
explain the areas  in which you compete with  the companies  listed in your filing such as
Amazon, Apple, Atlassian, Google, and Microsoft.  To the extent that you also co mpete
with a small number of other competitors for customers using your Advanced or
Enterprise plan, please identify those companies .  Refer to Item 101(c)(1)(x) of
Regulation S -K.  Finally, you  disclose that you are  “uniquely” positioned to reimagine
the way work gets done.  Please clarify your basis for believing that you have a distinct
competitive advantage regarding the ability to innova te products for the workplace.

Legal Proceeding s, page 94

19. Please identify the name of the court in which Synchronoss Technologies, Inc. ha s
brought a claim against  you for patent infringement.  See Item 103 of Regulation S -K.

Executive Compensation, page 104

20. We note that you have provided estimated compensation expected to be paid to your
named executive officers in fiscal year 2017.   Item 402(n) of Regulation S -K requires
compensatory information for your last completed fiscal year.   Please disclose the
compensation paid to your named executive officers in fiscal year 2016.   Further, to the

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 6

 extent that yo u awarded cash bonuses to your named executive officers in fiscal year
2016, clarify any individual performance factors that were considered in determining the
cash bonus amount s payable.   Refer to Item 402(o) of Regulation S -K.  This comment
also applies to your disclosure of director compensation.   Refer to Item 402(r) of
Regulation S -K.

Certain Relationships, Related Party Transactions, and Other Transactions, page 116

21. Please disclose the names of the holders of y our capital stock who  are parties  to the
Investor Rights’ Agreement and Voting Agreement.  Refer to Item 404(a)(1) of
Regulation S -K.

Notes to Consolidated Financial Statements

Note 1. Description of the Business and Summary of Significant Accounting Policies

Unaudited pro forma balance sheet, page F -8

22. You state that the unaudited pro forma balance sheet gives effect to the assumed
conversion of the two -tier RSUs that had satisfied the Performance Vesting Condition as
of June 30, 2017.  Please revise this disclosure to clarify that t hese RSUs also met their
service -based vesting conditions as of June 30, 2017.  Also, revise Note 13 on page F -29
to provide corresponding disclosure.

Recently issued accounting pronouncements not yet adopted , page F -17

23. You state that you expect the  impact of adoption of Topic 842 to be material to total
assets and liabilities on the consolidated balance sheets.  Please quantify the impact of
adoption  to the extent that you have determined such amounts.  If you cannot reasonably
estimate the impact o f adoption, please revise to provide more specific qualitative
disclosures of the potential impact that this standard will have on your financial
statements when adopted.  Also describe the status of your process to implement the new
standard and the signi ficant implementation matters yet to be addressed.  Refer to ASC
250-10-S99-6 and SAB Topic 11.M .

Note 10. Commitments and Contingencies

Legal matters, page F -24

24. In your discussion of legal proceedings on page 94, you state that the patent infri ngement
lawsuit filed by Synchronoss Technologies, Inc. in April 2015 could have a material and
adverse impact.  However, you indicate here that the resolution of pending matters is not
likely to have a material adverse impact.  Please  reconcile these two statements and

Andrew W. Houston
Dropbox, Inc.
November 7, 2017
Page 7

 clarify  the probability of a loss being incurred.  If the amount of any reasonably possible
additional loss would be material , provide  disclosures to comply with ASC 450 -20-50.

General

25. Please supplementally provide us with copies of a ll written communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they retain copies of the c ommunications.

26. Ple