(Reuters) - File sharing and storage company Dropbox Inc DBX.O beat Wall Street expectations for quarterly results and topped estimates for paying subscribers in its first financial report as a publicly traded company.

FILE PHOTO: The Dropbox app logo seen on a mobile phone in this illustration photo October 16, 2017. REUTERS/Thomas White/Illustration/File Photo

However, the company’s shares, which had gained 10 percent this week ahead of the earnings, slipped 4 percent in extended trading on Thursday.

The San Francisco-based company said the number of paying subscribers surged 23.7 percent to 11.5 million at the end of March, topping analysts’ average estimate of 11.3 million, according to Thomson Reuters I/B/E/S.

The company, which started as a free service to share and store photos, music and other large files, has worked to build up its enterprise software offering.

Dropbox reported average revenue per user (ARPU) of $114.3 in the first quarter, beating analysts’ estimate of $110.

“(ARPU growth) does suggest Dropbox is having success converting individual paid users to business paid users,” D.A. Davidson analyst Rishi Jaluria said.

The company, which competes with Alphabet Inc's GOOGL.O Google, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O as well as Box Inc BOX.N, forecast current-quarter revenue in the range of $328 million and $331 million.

Analysts were expecting revenue of $324.9 million.

“Today’s earnings also bode well for existing investors that are still in their lock up period,” said Minal Hasan, investor at K2 Global, a Silicon Valley-based venture capital firm that invests in startup companies.

Dropbox’s quarterly loss widened to $465.5 million, as the company accounted for IPO-related expenses.

The company had a blockbuster debut on March 23 as investors bought into the biggest technology initial public offering in more than a year, with shares closing up more than 35 percent in their first day of trading.

On an adjusted basis, the company earned 8 cents per share, beating estimates of 5 cents.

Total revenue rose 28 percent to $316.3 million, above estimates of $309.2 million.