File-sharing specialist Dropbox Inc. beat Wall Street’s forecast for its third-quarter financial results today.

The company reported a profit before certain costs such as stock compensation of 37 cents per share on revenue of $550.2 million, which was up 13% from the same quarter a year ago.

Analysts had been modeling earnings of just 35 cents per share on sales of $543 million, so it was a solid if not spectacular earnings beat for the company. The company’s stock fell a small fraction of a point in after-hours trading after rising a little under 1% in regular trading.

Indeed, Dropbox co-founder and Chief Executive Drew Houston (pictured) used the same word, “solid,” to describe the company’s performance, with strong revenue growth, record free cash flow and “great progress” being made against its strategic objectives.

“We shipped several new product experiences and help our customers with today’s challenges of distributed and remote work,” he said. “I’m confident in our future as we work toward our vision of building one organized place for content and all the workflows around it.”

Dropbox is in a position to facilitate distributed work because it’s one of the best-known cloud storage service providers in the enterprise with a fairly iconic name. There’s hardly an enterprise worker who doesn’t know how to use Dropbox to save files online and sync them with another device or share with another user. Companies can use Dropbox to organize large numbers of files and documents.

The COVID-19 pandemic was a natural boon for Dropbox and the company has responded by building out its toolkit. Last year it acquired DocSend Inc. to add analytics tools to its platform that can be used to track how files shared across an organization are being used by different people. That can be useful in a range of scenarios, for instance when a startup’s leadership shares a financial presentation with potential investors and may want to know if they viewed the file.

Dropbox has also boosted security, adding password protection features for sensitive documents. Users can revoke that password at any time, help to minimize the risk of data leaks in case a sensitive file is accidentally shared with the wrong people.

The updates seem to have been well received, helping Dropbox to slowly but surely expand its customer base. The company ended the quarter with 16.49 million paying users, up from 15.25 million a year ago. Dropbox is also squeezing more money out of each customer too, with its average revenue per paying user reaching $133.79, up from $128.03 last year.

Not surprisingly, that meant Dropbox’s total annual recurring revenue figure also rose, growing by a healthy 12%.

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE that Dropbox is making progress, but he believes it could be growing much faster than it currently is, given the rise of remote workers all over the world.

“Dropbox is starting to walk again, but the question is when will it start running again and grow its revenue in the high 20s to low 30s percent,” Mueller said. “That said, before you run, you do need to walk and it is good to see Dropbox picking up steam slowly at least. It has done well on the profitability side, where its net income has doubled. Dropbox will need a few more quarters like this to return to erstwhile greatness.”

For the fourth quarter, Dropbox said it’s expecting revenue in a tight range of $556 million to $559 million, the midpoint of which exceeds Wall Street’s guidance of $553.27 million.

Photo: Christophe Pelletier/Flickr