All right. Good morning, everybody, welcome to Dropsuite's Fourth Quarter Investor Presentation. I'm Craig Sainsbury, Investor Relations. With me today we have Charif El-Ansari, the CEO, and Bill Kyriacou, the CFO. Before I hand over to Charif, just a little bit of housekeeping. There will be a Q&A session at the end of the presentation. Please just type your question into the Q&A facility on the bottom of the Zoom screen. I'll read that out to both Bill and Charif. With that, Charif, I will hand across to you. Charif, you're on mute. Thank you, Craig, thank you everyone joining us and taking time out of your busy day. I'm very thrilled to present our Q4 results to the attendees. Just a short introduction first. Dropsuite is a backup leader. We are a partner-built company offering backup and recovery solutions in the cloud for businesses big and small. We are operating as a mission-critical solution for many companies and our partners, of course. We're seeing, and continue to see, meaningful macro tailwinds driving the growth from cybersecurity and ransomware to regulation to the nonstop move to the cloud and into SaaS applications. I mean, a typical small business is running not less than 20 SaaS applications, and many of those definitely require some added data protection and backup. We continue to lead and offering premium, highly featured products, and we've been voted, number one Microsoft 365 Backup provider by SoftwareReviews. We also continue to grow. We're approaching 1 million users in more than 100 countries with specific focus on OECD countries like the U.S., Australia, Canada, et cetera. We continue reinvesting in the team. We have now north of 80 people. We've built a phenomenal culture in the company, and we continue adding bench strength, as we've done in 2022. In 2022, in October, we also introduced and onboarded a phenomenal sales and marketing executive by the name of Eric Roach, who's taking over channel sales and marketing globally. He's been doing an amazing job, even though he's been in the job for less than three months. Lastly, and very importantly, we have built a truly recurring and scalable revenue business model that continues to really tick upwards in the right direction while we are achieving positive cash flow and profitability. The advantage that we continue carving in the market really revolves around two sides of the same coin. On the one side, you've got delivering a phenomenal partner integration where we are integrating our products into the workflows and into the systems, into the ERPs of the partners. On the other side of the coin, we deliver an exceptional user experience in terms of the quality of the product, the features, the fact that we are extremely unique in our search capabilities, and the fact that we combine backup and compliance features into one product. Everything is delivered in a cutting-edge cloud platform that's available in 14 different data centers globally, and of course, delivered by a highly responsive and skilled team that is working globally for Dropsuite and its stakeholders. With that, I'm gonna ask Bill to cover our strong Q4 results, and then I will move my second section after Bill delivers the financials. Thank you. Thank you, Charif and Craig. Thanks to everybody for your time today. In the financial overview, I'll present our Q4 metrics, cash flow, year-to-date metrics, and operating leverage. As we exit December, annual recurring revenue grew by 10% on prior quarter, 58% YoY on a constant currency basis. AUD ARR growth for December was slightly hindered by depreciation of the USD/AUD pairing. Therefore, the AUD growth was 9% QoQ and 67% PCP. Our paid user seats at the end of 2022 stood at 935,000, which represents a 44% YoY growth. We added 63,000 gross paid users in the quarter, which was slightly offset by the deactivation of 11,000 seats from a low ARPU legacy hosting partners end users. Our monthly ARPU grew 4% quarter-on-quarter and 9% year-on-year on a constant currency basis, with a continued mix shift to higher priced, higher featured products, with some benefit coming from the deactivation of the said, low ARPU 11,000 seats. Our gross margin pleasingly improved 4 percentage points in December quarter and up 8 percentage points from the March quarter. The engineering team made great progress in the quarter with a range of cost mitigation measures and cloud scaling initiatives. These included upgrading search for better performance and optimizing for lower storage cost tiers within AWS. We expect 2023 gross margin to operate in a similar range to the FY22 gross margin, excluding any FX impacts from USD currency movements. Our direct transacting partners have increased 4% on prior quarter to 491 transacting partners, and we now have over 3,000 indirect MSP partners. Our revenue churn remains consistently low at sub 3% on a annual partner revenue churn basis. This includes the loss of the low ARPU legacy hosting end users we touched on earlier. We are pleased to report a third consecutive cash flow positive quarter in December, with positive operating cash flow of just shy of AUD 450,000 for the quarter, bringing the 2022 operating cash generated to AUD 930,000 for the year, up 260% on 2021 at AUD 260,000. We also note, the AUD 930,000 includes AUD 272,000 of due diligence payments that we made in Q1 of 2022. Cash receipts for Q4 grew 8% on the prior quarter. The lower cash receipts growth was off the back of a very strong cash collections quarter in the prior quarter. There was some effect of the USD AUD depreciating in the last two months of the quarter on the USD receipts that we received. Our DSO KPIs remain steady against the year end average, and we don't see any concerns with delays or any risk of doubtful debts. Our total cash payments to suppliers increased in the December quarter by 14%. In September, it increased by more than 20%. The December increase is largely around wages and salaries increases, incorporating new starters and staff training. We also had historically high Q4 marketing spend for the quarter, along with IT tooling expenses. Payments for cost of sales in the quarter grew by only 4% against prior quarter. September increased 14%. This is due to the benefits of our lower search and storage costs from our focus on gross margin improvements, leading to lower cash payments in Q4. We do have a natural cash hedge for USD cost of sales, US salaries, and supplier payments, as the majority of our cash receipts are collected in USD. December quarter was another positive operating cash flow quarter, our third consecutive positive quarter of the year. The actual operating cash flow for the full year 2022 was AUD 930,000, up from AUD 260,000 in 2021. As we mentioned, this includes AUD 272,000 of due diligence payments made earlier in the year. We do reaffirm our outlook for positive operating cash flow for 2023, though we note Q1 has historically been a higher cash outflow quarter. We continue to improve our operating leverage. Whilst we continue to invest in adding FTE, bench strength, and capabilities and improve our gross margins, we are increasing our cost base at a lower percentage than our ARR increases, which is improving our operating leverage and allows us to invest in new product innovation and improve our current processes. When we apply the Rule of 40, Dropsuite sits above 80 for the full year 2022, up from mid-60s in 2021, and we continue to outperform compared to our peers in the SaaS market. Thank you, Charif. Back to you. Thank you, Bill. Just like the theme of 2022 was growth and reinvestment in growth while staying cash flow positive, we believe we have the right flywheel framework in terms of growth and investment and future-proofing Dropsuite. Here it's gonna be the same type of strategy where we continue growing our ARR at a meaningful rate, and then we continue reinvesting prudently while staying cash flow positive and profitable in growth. The reason why we're doing this is pretty straightforward. We talked about significant macro tailwinds, that we expect them to continue to happen in the foreseeable future. We continue leading with our products, with our team. We continue growing our partner network and serving a large addressable market while building a phenomenal team and a phenomenal culture in the company. Just as a case in point, we have north of 3,000 transacting partners, but that only represents barely 2% of the total addressable market of these MSPs transacting mostly in OECD countries. With our model, we're able to deliver, as Bill mentioned, meaningful operational leverage, where we can scale across sales, marketing, and support. Through our partners, we're delivering first line of support, billing, provisioning, et cetera, while we focus and continue focusing on growing our partner, our product and also delivering a phenomenal partner and end user experience. We also, as we mentioned, continue expanding our product portfolio. One is strengthening our existing product, but we're also introducing new products. Our latest product that has been introduced towards the end of 2022, is QuickBooks Backup for a company called Intuit, which is basically a much larger version of Xero, which I'm sure many of the attendees on the call are very familiar with. QuickBooks Online is the number one accounting software provider for small and medium businesses in the United States and Canada. We have launched the product in beta, and we expect to start monetizing the product in late March, early April. The reason why we picked and chose this product early last year to start building it is because we are timing the launch of this product with Intuit's own foray into the managed service provider market. We are really excited about the product. We're also excited about the partners being happy and looking forward to adding more data protection and more revenue streams for their business. At the same time, we expect this to steadily grow over time. We don't expect a big bang impact on the ARR, just to manage everybody's expectations on the call. It's also important to note that the market here is not as big as Microsoft 365. At the same time, it's really important that we choose products that resonate with the SMB community as well as with our growing partner network, especially in North America, Europe, and to a certain extent, Australia and New Zealand. The growth strategy remains the same. Our ambition to grow within 2 times faster, or 2x than the overall market, of backup and recovery in the cloud. The market is growing at about 20%-25% per annum. We want to grow at about 2x that. The way we deliver this growth is by growing our existing organic business, which continues to have a lot of headroom to grow. One very telling statistic, aside from what we mentioned in terms of the... our penetration in the MSP community, which is barely 2%. When you look at the amount or the number of SMBs who are protected, with Office 365 backup, which is our core product, as well as Google Workspace backup, it is not going to be more than 15%. Still a lot of room to grow from here. New product innovation, and a prime example of this is QuickBooks Online Backup, which we launched, and as I said, monetization will start in calendar Q2, or early calendar Q2. We continue sifting the market for high conviction, accretive acquisitions. We're having several of those that we are in discussions with. At the same time, we continue looking for high conviction, and we want to have full conviction, actually, before we deliver any acquisitions. The simple reason is our organic growth is so healthy, the team culture and the engagement is really phenomenal in the company. We're introducing new products through our existing team with QuickBooks Online. We're really being picky before we end up deciding on which company we want to acquire in the foreseeable future. To conclude this presentation, as usual, we continue having very sunny outlook in 2023. We continue seeing the tailwinds, continue having a leading position in terms of the quality of the products that are being sold at a premium versus competition, and also growing faster than the competition. Continue growing the bench strength in the team, continue advancing high conviction accretive acquisitions, continue growing at about 2x of the market in terms of annualized recurring revenue. I want to reaffirm reconfirm our guidance for, in terms of profitability and cash flow for 2023, saying that it's going to be positive, and it's gonna be within the range of 2022, given the amount of opportunities we see in terms of reinvestment to continue driving this very healthy growth and really going way above the Rule of 40 that Bill mentioned earlier. With this, we conclude our presentations, and we'd be delighted to answer any of your questions. Thank you, and over to you, Craig. Thanks, Charif. Thanks, Bill. Just a reminder, please use the Q&A facility at the bottom of the screen to lodge your question. Few questions coming in on margin, Charif and Bill. First one was, it seems that the gross margin was helped by optimizing, storage costs, and there's two questions around that. Is that optimization complete, and is there more to go? The second part of the question is: how does Dropsuite weigh up the cost reduction versus the reduced access and flexibility for clients? You wanna answer the first question, Bill? I'll, answer the second question. Thanks, Charif. With regards to the first question in regards to optimizing, we believe that we've optimized a significant amount in 2022. There won't be any material changes to the optimization going forward. We've completed the search optimization. We're still looking at storage tiers and the like, so we don't envisage any material uplift in gross margin. We reaffirm that it will be within that 2022 range. To answer the second question, we mentioned earlier how our positioning of the product is premium. Our pricing is premium. Anything we do when it comes to cost optimizations, rule number one is to never impact the user experience. That will be continuing our focus, because we cannot, on the one hand, say we are a premium product, at the same time we start cutting corners and impacting negatively the user experience. Anything we do in the future, and we still have some ideas and some plans on continuous optimization, it's going to be about keeping the user experience intact. In fact, if you look at the search optimization that we did in Q4, which was a major driver for the gross margin improvement, it actually improved the user experience because it made our search even faster than it used to be. Thank you. next question on margins was, strong improvement in margins over 2022, started around the low 60s, ended up around 70%. Is there any seasonality, through the various quarters that we should be aware of in terms of margins? That's a good question. There is no seasonality for the most part. It's more about optimization and about scaling the cloud. Thank you. Next one, again, just came back on terms of, clarifying why you expect gross margins to fall from the Q4 levels of 70%. You said that range, why would you expect the margins to fall? Yeah. Remember that we have 14 data centers, this might grow in the future as well. We have to continue adding capacity for our new users and for storage. On the one hand, we continue adding storage and capacity across 14 different data centers. Even within each individual data center, we have to continue adding what we call clusters, which is a combination of servers and databases to continue adding the growth. That's what will push the gross margin downwards. On the other side, as we scale the cloud, as we introduce new compression capabilities, as we introduce maybe different storage tiers, as we introduce probably better price, as we have better pricing from Amazon, as we look at further ways to optimize the cloud, we also expect to see gross margin improvements. It's a bit of a yin and yang here. As you probably know, most of the people on the call know that we tend to be conservative on giving our numbers and wanna make sure that we manage expectations. Hence our conservative view is to say it's gonna be roughly along the same lines of 2022. Thank you. Moving away from margins to users now. Several questions coming in around the same theme, which were users increased by 49,000 over the quarter, which is one of the softest quarters of new additions that Dropsuite has had in a while. Can you please just talk through that, and in particular with respect to the 63,000 new users that came on, but some of the churn that was sitting there? Bill, over to you. Thanks, thanks, Charif. With the 63,000 new adds and paid seats, this is in line with our expectations. We've grown more than 300,000 users in the 2022 year itself. The churn of the 11,000 we mentioned was from one low ARPU legacy hosting partner in that sense. There was some smaller churn outside of that major partner there. When we look at the actual ARR impact, it is very immaterial on both of those being low ARPU paid seats that have been deactivated. Thank you. follow-up question on that one was, are there any macro headwinds at the moment or all through the quarter that you saw that just delivered, I guess, a slower level of users than you delivered in the third quarter? Yeah. We haven't seen any recession impacting us, and actually it's one of the things that we continue asking our MSP partners, since they are the ones who are spending most of the time with the SMBs, the small and medium business clients. We continue to see a very resilient channel. I even went back all the way to talk to people who were in the industry in 2008, with the global financial crisis that hit us, which is way stronger than what we're seeing today, in terms of headwinds. Even in that dark times, especially for many of the people attending on this call on the financial side, even on those very tough times, the MSP industry simply slowed down the growth, and there was no impact, real impact in terms of deterioration or negative growth in that industry. We feel very fortunate to be operating in this industry that's growing at a much faster rate than the rate of the overall growth in technology costs. It's growing at about 12%, 13% per annum. That's something that gives me a lot of peace of mind. That said, because we are doing reinvestments and there are certain areas where we can pull back, if we need to, we continue watching these trends, and we will pull back on any reinvestments if we see any slowdown that causes us to reconsider. At the moment, we don't see any of those happening in our business. Thanks. next question, there's two on acquisitions. first one is: Where are you seeing the acquisition opportunities, in terms of geography, and will they expand your product offering? The second question on acquisition is: Can you provide any update on timing? Yes. To answer the first question, we in our 4 E commentary that we launched last week, we said that we converted a certain amount of Australian dollars into US dollars. That should give a good hint in terms of where is the number one geography of focus. We tend to see, and I would say unsurprisingly, the United States tends to be the most rich in terms of SaaS companies that are enticing and interesting for us to pursue in terms of acquisitions. In terms of types of acquisitions, I want to reiterate that we are not looking to acquire companies who are offering QuickBooks Online Backup or Office 365 backup. Basically buying users, we're not looking for that. We are looking for solutions that will be complementary to what we're offering. This could be in areas of archiving and compliance, in data governance, in how to manage the different the 20 and more SaaS applications per small and medium business. These are the areas that we're looking for. The reason why we are looking at these complementary solutions is because we talked about the fact that we have north of 3,000 transacting partners. The idea here is to cross-sell and increase the share of wallet with the growing base of partners, especially in OECD countries. To answer your second question, the timing is still up in the air. I would say that we always avoid to put ourselves in a corner and put a date together, because the minute you start doing this, you start becoming irrational, and you start most likely making mistakes in capital allocation and capital decisions. We're gonna continue taking our time in identifying and then pursuing and then doing due diligence on companies in the foreseeable future without giving timelines. Thank you. Next question is, big build out of the senior management team, in 2022 with some really good hires. Can you please provide some perspective on headcount plans for 2023? Yeah. I mean, the first thing is that we're almost finishing rounding up the executive team. There's one more executive hire who's joining us tomorrow in the United States, and with that, we would have concluded the executive hiring, at least in terms of the CEO direct reports, the C-level. In terms of headcount, we expect to grow overall our operating expenditures in a way that continues to deliver profitability and cash flow. In terms of the exact number, I don't have the number in front of me, but in terms of reinvestment in headcount and in capabilities, there's a couple of themes that are worth highlighting. One is we need to continue growing our sales headcount and increase our coverage in select OECD countries like Australia, Singapore, North America and Europe. We need to continue enhancing our engineering and product team and increase the level of specialization in the team. In terms of, for example, we just finished building a data team that is focused on providing additional insights and reporting to our partners and end clients. This requires us a different level of competencies and skills that we'll be, in part, getting from inside the company, but also in other part, hiring externally. As the company grows, there's gonna be a continued focus on specialization to be able to deliver solutions at scale to north of 1 million users in the foreseeable future. Thanks, Charif. Next question is a bit of a one on outlook. The exit 2022 rate was an impressive 67% up year-on-year. First part of the question, what are you seeing in signs of your forward pipeline for 2023? Second part of that question is when you're talking with your existing partners, are they giving you any feedback from what their pipeline is looking like? Yeah. I mean, the first thing to note is that I really encourage everyone to ignore the 6%-7% and really focus on constant currency or US dollar growth, which is closer to 60%. The reason why I say that is because we don't know how the Australian dollar is going to behave in the foreseeable future, right? It fluctuates like crazy. We always look at constant currency. This is just a, you know, a side feedback to everybody on the call to look at the constant currency growth. In terms of our funnel and our outlook, we have an optimistic view on our annualized recurring revenue growth in 2023. While we don't give exact guidance, we have mentioned repeatedly that we expect to grow, and I have expectations of the team, and the board has expectations of me to grow at about 2x that of the market, which is growing at about 24% per annum. Thank you. Couple of questions now around QuickBooks Online. You've announced the positive beta trials, and it looks like you're targeting some critical application data here. Can you comment on the market opportunity that you see with QuickBooks Online? Why do you think Dropsuite partners will be successful, adding QuickBooks Online back up to their portfolio of products? In terms of the addressable market, QuickBooks sells its solution to about 8 million small and medium business. Many of those don't have only one license, so they might have two or three licenses as well, right? In terms of the market, you're talking about, let's say, about 20 million licenses that are sold every that are the install base of QuickBooks Online slash Intuit. So that's the overall market. The reason why we have launched QuickBooks Online Backup is because, one, Intuit itself is entering the MSP market, and it's calling it one of their five big bets for 2023. That's public information. You can see it on Intuit's shareholder communication. The second reason is the MSPs themselves are very experienced with QuickBooks themselves, because I can assure you, in the U.S. and Canada, 80% of MSPs are themselves using QuickBooks Online. The third reason is revolving around the importance of protecting critical data, including accounting and financial information. That will also add layers of annual as recurring revenue, not only for us, but also for the MSP partner who would be able to add another service to their stack of services that they're offering to the small and medium business. A couple of notes on the product. From our perspective, it will be gross margin enhancing. It will also be ARPU enhancing, subject to the amount of mix that we expect to get towards the end of 2023 and beyond. Thank you. Next question around that is, where do you expect the ARPU to be for QuickBooks Online? If you can't give an exact figure, do you think it'll be sort of enhancing for your ARPU or slightly lower than the existing group ARPU level? I would say from a unit perspective, right? When you look at the one license or one SKU of QuickBooks Online Backup, it wouldn't be materially higher than our current ARPU. However, the name of the game is mix, because the higher the mix, the more positive impact is we're gonna have on the ARPU and vice versa. Right now, I believe it's still too early days to give an outlook on how much impact we're gonna see on gross margin and ARPU with the launch of QuickBooks Online Backup. Thank you. Just one for Bill here on the seasonality of cash flow. Can you just talk about the seasonality of cash flow through the four quarters of the year? If Dropsuite is cash flow positive, will that mean that you can cease to lodge 4Cs going forward? Thanks for the questions. I'll take the first one, what the expectations are of the upcoming Q1 cash outflow and the seasonality there. Historically, Q1 has been a higher cash outflow due to annual payments that we're pushing out. These include insurances, annual insurances in Australia and Singapore. They also include potential annual staff bonuses, annual software subscriptions that are paid out in Q1 of each year. We also have in Q1 2023 a payment of our Indonesia rent for the office in Indonesia as well. In Indonesia, they do a two-year upfront payment, we've got that coming in Q1 as well. For those factors, that's why we state to the market we'll again have a historically high cash outflow where, from that sense. The second question around potentially ceasing to lodge 4Cs if we are cash flow positive for that fourth consecutive quarter. This is still to be determined at board level. If we were, if it was to be the case that we would cease providing a 4C, we would still provide a quarterly update with regards to a business update for the business. I'm sure in the again, the quote, unquote, "worst case scenario" that we don't lodge a 4C, even if we don't, we're still gonna provide color on the cash flow. One thing that we want to continue doing, not just on cash flow, is to continue providing our shareholders and investors the same set of metrics, good or bad, every single quarter to ensure everybody can track our business in the most transparent way possible. That's not going to change whether we lodge a 4C or not. Thank you. next question: Are you seeing genuine increase in demand or inbound interest on the back of the increased level of cybersecurity issues that we've seen globally over the course of 2022? If you have been, are you able to quantify how strong that increase in inbound activity has been? Keep in mind that I'm sure the person asking the question is based in Australia because these cybersecurity trends and the subsequent queries have been growing substantially since 2019. 2022 was high profile in Australia with Optus, and there was one more in healthcare which, forgive me, I can't remember the name. But this is one of the major tailwinds that have been taking us and pushing us forward in terms of growth, I would say since 2019. Since we saw the flurry of ransomware activities that really started rearing its ugly face since 2019. That trend hasn't stopped, and we don't expect it to stop in the foreseeable future. It's akin to an arms race between the good guys and the bad guys. We see improvements and strengthening of cybersecurity. On the other hand, we see the web criminals and cybercriminals improving their capabilities to hack because it's such a profitable business. This is where I continue to be really optimistic about backup, the increasing importance of backup as a core component of any company's security posture. Because the most, one of the most popular adages is that It's not about if, it's about when you're going to be hacked or have data protection issue. With backup, you're able to protect yourself even if you have a data hack, because you're taking your data, you're encrypting it, putting it in an entirely different cloud, and having it ready for recovery whenever something like this happens. Thank you. Two more questions that are left in the queue at the moment. Can you comment on the government market? Are you making any progress, with federal government here in Australia and overseas? Is that a big target market for the organization? We are specifically focused on the US government market. Let me be clear what I mean by market. We are a company that is focused on small and medium businesses, and over the last couple of years, we've made some meaningful inroads in the mid-enterprise market. There are many definitions. In our case, we're defining mid-enterprise as sub 5,000 users, so between 500 and 5,000 users. Our focus on the government cloud business in the U.S. is not about getting a Department of Defense working with us. That's way too enterprise for us and requires a different set of capabilities. What we're focusing on is state and local government. What we're focused on, this is a very big market, are the vendors who are selling to the U.S. government. If you are a vendor, you cannot servicing the U.S. government, even if you're five employees or 500 or 5,000, you have to have that data in a government-sanctioned data center that's typically in the Virginia, Washington D.C. area. What we've done in 2022, and we announced this earlier, is that we now have a fully functional government cloud offering for Microsoft 365 Backup. We expect monetization also to happen in 2023, and that will be a key focus area for us in 2023 and beyond. We can't hear you, Craig. Thanks, Charif. Yeah. Last question, This is back on QuickBooks. There's over 5 million QuickBooks users worldwide. What sort of percentage of that are you're hoping to target? Yeah. I mean, I think the number is a bit higher if you add the desktop, that, the QuickBooks Desktop that's also moving to the cloud, so it becomes 8 million. I would say that is what I call the total addressable market. As Intuit enters the MSP market, we are looking to see traction from Intuit, enhanced traction for QuickBooks Online Backup. In terms of numbers, I think it's a bit too early to give an outlook or an aspirational attach to those. I think Q2 will be a very interesting quarter for us to look at the traction and try to make some conclusions around the aspiration attach, and also the impact on ARR, ARPU, and gross margin. Excellent. Well, Charif, Bill, that's the end of the questions for today. Charif, I'll just hand back to you for any closing remarks. I want to thank everybody who joined us today, taking time out of your busy day to join the call. I just want to reaffirm our optimism for growth, for success. We are buoyed by strong market tailwinds. We continue building a phenomenal team with strong benchmark, and we expect 2023 to be another solid year. With that, I thank everyone for joining us, and until next time. Thank you.