Dropsuite

Oct 15, 2023

Dropsuite total paying users exceed 1.1 million in Q1 FY24 even as legacy partner takes 50k on exit Today, backup is everything. With data breaches and cyber attacks, every morsel of information is vulnerable. What’s more, while you may be backing up your information to Google Drive and OneDrive, even these cloud services require backup. After all, 84% of companies don’t back up their SaaS data in the US. That’s where global cloud backup and archiving software provider Dropsuite Limited (ASX: DSE) comes in. It is a cloud backup solution that emphasises initially backing up data and emails and after they are stored on the cloud. For the three months ended 30 September 2023, its annual recurring revenue (ARR) reached $33.4 million, up 10% on the prior quarter and 44% on the previous corresponding period. Dropsuite’s monthly average revenue per user (ARPU) was $2.57, up 9% quarter-on-quarter and 17% on PCP. Its product gross margin of 68% remained flat on prior quarters. The Company onboarded 35 new direct and 209 indirect transacting partners. Plus, it saw gross paid user additions of 86k, offset by the deactivation of 53k from a low ARPU legacy partner, resulting in a net increase of 33k users. CEO Charif El Ansari stated, “The growing ecosystem of cloud and SaaS-based backup continues to present a supportive macro backdrop for Dropsuite. Our business is based on independent backup services, and ease of use continues to be attractive to our direct and indirect selling partners and is now used by ~1.1 million users globally. “With the growth, motivation and experience in our team, alongside our well-capitalised balance sheet, we remain confident that the Company will continue to execute on our well-positioned strategies and create value for our shareholders.” Launched in 2011, Dropsuite is a software company focusing on data backup and email archiving on the cloud. For instance, it works with Microsoft 365 avenues like OneDrive backup to further back up the solution. The Company feels that, with rising data breaches, it helps to create more robust firewalls. The Company has been expanding its global sales footprint, improving its managed service and streamlining the support processes for end clients. In the quarter, it fully integrated and launched with TD SYNNEX, one of the largest IT Distributors globally. It also onboarded its first partners to the GovCloud storage environment. Dropsuite undertook many updates and feature enhancements to end-user products and partner portals. A legacy partner in a developing country started deactivating users, primarily due to macroeconomic challenges in the region of operation. Till now, about 89k users have rolled off DSE’s platform, and the remaining 40k users will be deactivated in the new quarter. Still, Dropsuite’s total partner churn has been below 3%. For Dropsuite, its existing partner base and growing pipeline put it in a good position to drive strong annual recurring revenue growth. The Company focuses on staying profitable and cash flow positive while continuing to invest in partner-facing and research & development functions. It also wants to look into opportunities for M&A (mergers and acquisitions), especially as data protection picks up steam across companies. Dropsuite ended the quarter with $24.6 million in cash.