Dropsuite reports big hike in recurring revenue

Melbourne-headquartered cloud backup provider Dropsuite has achieved record annual recurring revenue (ARR) of $53.6 million in the first quarter of 2025.

The ASX-listed company recorded a 37 per cent increase in ARR compared to the same period last year on a constant currency basis, while its paid user count jumped by 45 per cent to 1.79 million users.

Dropsuite added 144,000 new seats during the quarter, which the company attributed to strong growth from existing and new partners, as well as significant uptake of its recently launched Bring Your Own Storage (BYOS) offering.

"Amid rising global cyber threats, tighter data regulations, and our expanding presence in the IT channel, Dropsuite delivered another quarter of record growth in Q1 2025," Charif El Ansari, chief executive of Dropsuite, said.

Product gross margins were 69 per cent and churn remained below three per cent.

Monthly average revenue per user (ARPU) saw a modest decline of two per cent to $2.49, which the company linked to its newer BYOS service that delivers lower revenue per seat but maintains profit margins through reduced costs.

Cash reserves stood at $28 million at the end of March 2025 with no debt, despite transaction costs of $460,000 associated with the NinjaOne scheme.

In January this year, NinjaOne said it would buy Dropsuite for $402 million.

During the quarter, Dropsuite rolled out its new Azure Entra ID Backup service to numerous partners.

The service supports Microsoft's cloud-based identity and access management solution, which handles authentication and authorisation across Microsoft products.

The company also enhanced its integration capabilities through partnerships with professional services automation platforms HaloPSA and SuperOps, aiming to provide a more seamless experience for managed service providers (MSPs).

The company plans additional investment in research and development to drive product innovation while maintaining positive cash flow and profitability for the 2025 financial year, excluding acquisition transaction costs.

Dropsuite positions itself as the backup vendor of choice for IT service providers globally, with a platform that enables businesses to backup, recover and protect critical information in the cloud.