On 30 January 2019, Dropsuite Limited (ASX: DSE) has announced its quarterly activities report. The company has announced a solid financial performance for the December quarter.
Operations Update: The company has confirmed that December Paid User numbers have stabilized at circa 350,000. The company has reported approx. 40x growth in revenue. This growth in revenue is from its Email Backup and archiving solutions from December 2017 to December 2018. The top line from this solution is more than 30% of total December 2018 revenue.
The company has established its products in new distribution channels and provides industry-leading support in Email backup and Archiving. Dropsuite’s Discovery and Recovery solutions posted at scale to power any organization’s IT defenses. Through these solutions, brand recognition soared from less than 5% in 2017 to ~30% by late 2018. This happened due to minimal marketing expenditure, and it reflected the company’s growing appeal as a dependable and trusted SaaS business.
The company has already mentioned in their Operations Update on 11 January 2019, that Dropsuite’s largest Website Backup partner will be progressively migrating a portion of their users from Dropsuite’s website backup platform to an in-house platform over 12 months or longer. The company will closely monitor the situation. The company has added new partners and users, so it is expected that the company will comfortably absorb this migration. Despite this incident, the company maintains a good relationship with the partner with continuous business and further joint development initiatives.
Product Update: The company has witnessed the hyper-growth in Email and Backup and archiving product in the last 12 months. The company has created a useable Email Backup solution, and this software is compatible with any email platform. This software can process billions of objects or files, all done seamlessly in the Cloud.
The team has completed a total user interface, and now the company has introduced the updated security features for Microsoft Office 365. These updated security features will allow partners and users to effortlessly safeguard 100% of the Office 365 applications.
December Quarter Update: Cash receipts for the December quarter was approx. $1.8 million. This happened due to the revenue contribution from the Dropsuite’s South American partner that added an added many Paid Users prior to the reported deactivation.
The company’s Topline for the Q4 amounted to $1,381,693, (over the prior quarter which was $754,358).
As at 31 December 2018, ARR (Annualized Recurring Revenue) exceeded $4.6 million. It’s a pleasing reflection of the stable recurring monthly revenue base the Company is steadily building.
Q1 2019 Outlook: The company is anticipating that Q1 2019 cash receipts will be lower than Q4 2018. The company will focus on larger size end clients especially with the previously mentioned product enhancements. The company’s Q1 sales pipeline is in great shape, and currently, they are in advanced negotiations with various new partners. The company is well-funded with cash at bank of ~ $ 3.5 million.
Stock performance: The shares of Dropsuite Ltd closed the day’s session at A$0.033 (30 January 2019), up by 17.857%. The company has 480.25 million outstanding shares with the market capitalization of circa $13.45 million. During the last year, DSE delivered the negative return of 54.84.
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