Call recording and voice intelligence software Dubber (ASX: DUB), boasting major clients like Telstra, Microsoft, Cisco and Optus, is pushing its AI tech and knowledge to recover from its intense cash burn in FY23.
Pointing to its wins, the Company mentioned that Dubber’s platform was now a part of Telstra and Optus networks. By the end of FY23, Telstra had started using Dubber for its TiPT service—Telstra’s comprehensive cloud calling platform, and Dubber was also integrated into the Optus mobile network. Dubber expects to start seeing the results of these integrations from 2024 and beyond.
Dubber experienced a 38% increase in its US revenues. This growth was partly attributed to Cisco, a key partner, which progressively activated more Webex-Cloud (its native call recording tool) users throughout the year. Additionally, Dubber’s premium recording products gained traction among Cisco users. Moreover, there was a continued expansion of Microsoft Teams Service Provider needs in this region.
In Europe, Dubber revenues grew by 21% in the UK. Migration of Vodafone’s recording customer base from a legacy service commenced in H2 FY23, with the full benefit to be realised in FY24.
Finally, in its bid to take advantage of the current artificial intelligence (AI) boom, the Company launched Dubber Moments, for AI-driven conversation insights. It tracks complaints, abuses and so on to help companies figure out root causes.
In FY23, its net loss was $70 million against a revenue of $30 million. The Company’s cash burn stood at $50.2 million compared to customer receipts of $36.1 million. In FY23, salaries and other related expenses were up 31% to $57 million.
To initiate cost savings, the Group undertook a restructuring, comprising layoffs, and so, in FY24, it expects overall salaries and related expenses to be lower.
If that wasn’t enough, shareholders’ dwindling confidence—especially after Dubber got caught in the Silicon Valley Bank collapse and its CFO resigned after misquoting the Company revenue—sent its share price tumbling from $0.73 in September 2022 to $0.12 in September 2023.
Plus, its reported cash balance at the end of FY23 was $2.9 million, down from FY22’s $54.3 million. Still, its proforma cash balance was $42.5 million.
Come FY24, Dubber forecasts its revenue to reach $45 million, a nearly 50% increase on its FY23 number. It plans on entering FY25 with an annualised run rate in excess of $50 million. Quarterly operating costs for Q1 FY24 are expected to be approximately $18 million, and net operating cash outflow is set to be in a range of $8 million to $10 million, significantly down from the current $50 million.
As Dubber onboards the AI bandwagon, is it just to avoid FOMO or will it stay to innovate? Perhaps the global ambassadorship of F1 racer Oscar Piastri and his impact will act as the determiner.
Alinda is a Business Reporter for The Sentiment
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