Global cloud software provider, Dropsuite Limited (ASX: DSE) provided its operations update today (i.e., 11 January 2019) in which the company disclosed that it is entering 2019 in a strong position with Annual Recurring Revenue (ARR) exceeding $4.6 million in 2018. Further, the company is expecting ARR growth in 2019 along with a continuation of its global expansion, more partner wins, and further product innovation. Following this news, the share price of the company climbed up by 30.769 percent as on 11 January 2019 (AEST 2:54 PM).
In the update, the company reaffirmed that Paid User numbers have stabilized at around 350k with ARR exceeding $4.6 million, up ~40% year-on-year. The company’s revenue from Email Backup and Archiving grew 13x in 2018, contributing over 30% in 2018 total revenue. In January 2018, the revenue from Email Backup and Archiving were only contributing 3 percent in the overall revenue. The addressable market of Email Backup and Archiving is much larger, and the company is getting solid traction in key geographies with top tier partners. Further, the company’s product and engineering teams have enhanced the customer experience, feature-set, and scalability of its products.
Earlier the company had reported that many of its the new partnerships which were launched in the third quarter of 2018 have started to earn revenue. Further, the company’s South American partner numbers have also stabilized as expected. Since its launch in November, the North American partner has added more than 5,000 higher ARPU Paid Users. As per the announcement, the company’s growth rate growth demonstrates that the company is actively de-risking its revenue base so ARR is made up of revenue contributions from a wider spread of partners and products. Further, the company’s focus on securing larger SMEs (Small and Medium Enterprises) through its partnership model is now happening and paying off.
The company also informed that its largest website backup partner had confirmed the progressive migration of a large portion of their current user base away from the Dropsuite website backup platform to an in-house platform and the company is expecting that it will comfortably absorb this migration. The company is planning to deliver its 2019 growth objectives by leveraging its existing cash position and by maintaining its tightly managed operating expenditures. The company is also expecting a significant new partnership in the first quarter of 2019. Recently, the company appointed Mr. Julian Rockett for the role of Company Secretary, following the resignation of Mr. Ivan Tatkovich. In the September 2018 quarterly reported, the company announced that one of its Latin America partner deactivated the backup service for an estimated 420k paid users who were deemed as not actively utilizing their email service.
In the last six months, the share price of DSE decreased by 76.36 percent as on 10 January 2019. DSE’s shares traded at $0.034 with a market capitalization of circa $12.49 million as on 11 January 2019 (AEST 2:54 PM).