Can F1 racer Oscar Piastri save a cloud-based call recording service? Dubber (ASX: DUB) is counting on it.
Having incurred heaps of losses in the past year, the AI company has hedged its bets on star power as a way to get customers’ attention (and money). Over the past few months, Dubber has witnessed a revenue decline while also getting wrapped up in the Silicon Valley Bank collapse, with no news of its lost $1.3 million. Perhaps, Piastri is its way to save face. Even without additional commentary, shareholders have voted with their feet, dropping the DUB share price from $1.10 down to $0.20 over the past 12 months.
Dubber CEO and Managing Director, Steve McGovern, said, “Quarter 3 of FY23 has been a period of substantial change for Dubber. Significant commercial growth activities and the realisation of the Dubber Artificial Intelligence programme being delivered as a continuing suite of solutions has been underpinned by a significant re-structuring of the business to align with our strategy, significantly reducing the Company’s cost base and implementing changes at Board and Executive level.”
Neil Wilson was appointed as Chair, while Andrew Demery stepped into the CFO role. Plus, McLaren Formula 1 driver Oscar Piastri was appointed as Dubber’s global ambassador. The initiative follows nearly a year of preparation by Dubber and Piastri’s management team and takes advantage of synergies with Dubber partners such as Cisco who is a major commercial sponsor of McLaren.
What’s more, Piastri won’t just be the face of the brand but will also participate at the Company’s “executive level”. Apparently, the F1 racer is expected to “demonstrate” how insights can drive advantage to any business. Whether businesses would take a racer’s word on the inner workings of AI communication technology remains unclear.
The Company has already realised significant commercial benefits from this initiative at the Australian Formula 1 Grand Prix, which was the first event since Piastri’s role was announced. The Company sees similar opportunities around the globe as the Formula 1 season progresses.
Besides its new ambassador, the Company has been trying to improve the scope of its partnerships. Cisco Systems, for one, has announced in excess of 10 million sales of Webex Calling subscriptions, each of which will include a ‘Dubber Go’ subscription as a standard feature. This provides a substantial opportunity for growth in higher ARPU Dubber services in the coming year. The Company has also begun its UK expansion with Vodafone.
In Q3 FY23, it reported an adjusted recurring revenue of $7.4 million, up 10% on Q2 FY23 and 17% on Q3 FY22. Total adjusted revenues were up 8%. Its operating expenses were $24 million for the quarter, down from $24.6 million in Q2 FY23. Excluding one-off restructuring costs and other abnormal non-recurring items, cash costs were in the range of $20 million -$21 million for the quarter, which is only about $1 million lower than previous underlying cash cost guidance and reflects initial restructuring cost savings achieved in the quarter.
In H1 FY23, the Company’s losses shot up by 18% to over $37 million. At a time when tech companies laid off employees to cut costs, Dubber increased headcount, and salaries and related expenses increased by 40% on the prior comparative period to $27.8 million.
Dubber says it is on track to deliver over $5 million of quarterly cost savings from FY24, with $1 million achieved in Q3 FY23 and approximately $2 million of those savings expected to be realised in Q4 FY23. Further one-off cash costs relating to the restructuring of approximately $2 million are expected to be incurred in Q4 FY23.
As it aims to streamline its business model and give it a new image with Piastri, will Dubber finally be able to reclaim its position on the grid?
Alinda is a Business Reporter for The Sentiment
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