Page 1

Dropsuite Quarterly activities report and Appendix 4C Highlights of a solid June Quarter • • • • • • Annual recurring revenue ( ARR * ) continues to track up to $ 6.74m at quarter end - a 13 % increase on the prior quarter and 70 % on previous corresponding period ( PCP ) on a constant currency basis¹ Cash receipts up 17 % to $ 1.46m ( Q1 2020 : $ 1.24m ) ; normalized cash receipts up 28 % on prior quarter to $ 1.59m ; DSE ended the quarter with $ 3.02m cash and is well funded Excellent gross margin improvement to 69 % in June ( Mar'20 : 63 % ) Total paid users up 9 % quarter - on - quarter to 343,000 ( Mar'20 : 314,000 ) June Average Revenue Per User ( ARPU ) increases to $ 1.64 – up 4 % on prior quarter and 25 % on PCP Well - placed for continued steady revenue growth for remainder of CY2020 with COVID - 19 minimally impacting operations only For personal use 21 July 2020 : Global cloud backup and archiving software provider Dropsuite Limited ( ASX : DSE ) ( “ Dropsuite ” or the " Company " ) is pleased to provide this business activities and cash flow report ( Appendix 4C ) for the three - month period ending 30 June 2020 . By almost every measure , the Company performed exceptionally well during the period particularly given the challenging macro environment . This is testament to the dependability and stickiness of our market - leading SaaS products , the quality of our partners and the hard work and commitment from our team . Appendix 4C Commentary Financial overview ARR continues to be a key measure of Dropsuite's performance and this continued to track up favourably at the end of the quarter to $ 6.74m , up from ~ $ 5.94m ( 13 % ) in the prior quarter and up 70 % on the previous corresponding period on a constant currency basis ( which will now be used as the basis for reporting on ARR trending ) . This is now the fifth consecutive quarter of ARR growth as partners continue to successfully market and sell our leading cloud backup platform to their end users . Annualised Revenue Run Rate ( $ M ) Constant Currency ( June 2020 ) $ 6.74 $ 5.94 $ 5.30 $ 4.37 $ 3.96 Jun - 19 Sep - 19 Dec - 19 Table 1 : ARR growth for the 12 months ending 30 June 2020 Mar - 20 Jun - 20 1 DSE will report ARR trends on a constant currency basis given the vast majority of its revenue is earned overseas . Using a constant currency exchange rate eliminates the effect of currency fluctuations and enables DSE to demonstrate to investors how the Company performs independent of currency fluctuations .