Dropbox just hit a billion-dollar milestone

Dropbox has hit a $1 billion annual run rate, an important measure of revenue, CEO Drew Houston shared at an event in San Francisco today.

Basically, the annual run rate, or ARR, measures the amount of money that the company projects it will bring in this year if current's rate of business were to continue. If Dropbox makes $250 million or more in one quarter, the company could fairly say that it has a $1 billion annual run rate by extrapolating that out for the next three quarters.

Houston also shared that Dropbox has over 500 million users, with 200,000 business customers. Most of the company's revenue is "self-serve," Houston says, meaning that it comes from customers signing up for paid plans directly via the Dropbox website and apps — not salespeople.

In June 2016, Houston announced that Dropbox was free cash flow positive (which, it should be noted, is different from "profitable"). Combined, these two factors are important milestones for the 10-year-old cloud storage company as it's reported to be considering an IPO later this year.

Still, CEO Houston insists that it's not in any rush to go public, and that its current position affords it the luxury of waiting for the right moment. "We have the flexibility to go when the timing is right for us," Houston told Business Insider in December.

Houston also used the event to launch two new Dropbox features, intended to go after the lucrative business space: Dropbox Paper, its long-in-the-works answer to Google Docs; and Dropbox Smart Sync, a feature to consolidate all your files across servers and the cloud and make it searchable.

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5. Facebook, $379.8 billion

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4. Amazon, $380.2 billion

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3. Microsoft, $468.7 billion

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2. Alphabet, $553.9 billion

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