Dropbox's (DBX) management still believes growth in its core business is the main directive, RBC Capital Markets said in a note emailed Thursday after hosting investor meetings with senior Dropbox executives.

The investment firm said that Dropbox has seen "meaningful progress across funnel optimization, retention, and AI integration."

The company's "pricing and packaging have been simplified to better align price to value, early churn identifiers are being deployed to reduce attrition," the note said, adding the growth of its Teams product has also "flipped positive" for the first time in more than two years.

RBC noted that the company still has some work ahead, but that its "management indicated these improvements are durable [with] a healthy runway ahead."

Meanwhile, the company is also testing projects with AI-automated workflows, RBC said, adding the company's management presented a strategy to manage workflows for content-heavy verticals via agentic and AI features. "Management is optimistic these capabilities will drive conversion and incremental monetization," the note said.

RBC kept Dropbox's outperform rating and $42 price target.

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