Dropbox Inc. (NASDAQ: DBX) suffered a 7.53% plunge during the 24-hour period leading up to Friday's pre-market session, as the cloud storage and collaboration platform faced significant challenges in its earnings report and outlook.

In its fourth-quarter earnings call, Dropbox disclosed several adverse factors that weighed on investor sentiment:

• The company is experiencing an accelerated decline in paying users, with a projected reduction of approximately 300,000 users in 2025.
• Dropbox's teams business is facing elevated churn and downsell pressure, leading to growth headwinds.
• Pricing sensitivity and a reduced outbound sales force have further impacted the teams business.
• Strategic decisions regarding FormSwift and foreign exchange headwinds are expected to create a 1.5% headwind to revenue growth in 2025.

Despite these challenges, Dropbox reported a 23% year-over-year growth in free cash flow per share for the fourth quarter and successfully reduced its diluted share count by 12.5 million shares through share repurchases. The company is also focusing on scaling its Dash product, which has received positive customer reception and exceeded sales goals in Q4.