Dubber’s Cash Flow Breakeven Target Hinges on Cost Cuts Amid Ongoing Investigations

Financial Performance and Cash Flow Progress

Dubber Corporation Limited has delivered a solid financial performance in the third quarter of fiscal year 2025, reporting revenues of $11.0 million, up 6% from the previous quarter and 14% higher than the prior corresponding period. This growth reflects continued momentum in recurring revenue streams, which stood at $10.7 million for the quarter, underpinning an annualised recurring revenue run-rate of $43.2 million.

Cost management remains a key focus, with total cash-based costs reduced by 7% quarter-on-quarter to an annualised run-rate of $45.6 million. Operating cash-based costs, excluding direct costs, decreased by 9%, driven by efficiency gains across salaries, general and administrative expenses, and property leases. Notably, the company exited its Sydney and Brisbane office leases during the quarter and is progressing plans to exit a surplus London lease, targeting annualised savings of approximately AUD 1.3 million.

Path to Operating Cash Flow Breakeven

Dubber is targeting operating cash flow monthly run-rate breakeven by June 2025, a milestone that would mark a significant step toward sustainable profitability. The normalised operating cash outflow improved to $1.4 million in Q3 FY25, excluding one-off payments such as the $6.8 million historic Australian Taxation Office (ATO) liabilities settled in January 2025. The company’s available funds at quarter-end totalled $16.5 million, comprising $11.5 million in cash and an undrawn $5 million loan facility with Thorney Investment Group, which remains available to support liquidity if needed.

Management’s confidence in achieving breakeven is supported by ongoing cost reduction initiatives and revenue growth strategies, including enhanced partner engagement and product innovation. The company’s board renewal, highlighted by the appointment of Ted Pretty as Chairman, and a binding commitment by board and senior management to purchase approximately $1 million in shares (subject to shareholder approval), signal strong internal alignment and confidence in the company’s trajectory.

Operational Highlights and Strategic Initiatives

Operationally, Dubber continues to expand its Communications Service Provider (CSP) partner network, increasing to over 235 partners as of 31 March 2025. This expansion supports the company’s strategy to deepen penetration with existing partners while onboarding new ones. The company also reported strong customer engagement with Vodafone’s MS Teams Phone Mobile, a key product gaining traction in the market.

Product evolution remains a priority, with ongoing enhancements to the Dubber platform’s user interface and the rollout of new AI-enabled solutions such as Dubber Trends and Dubber Moments. These innovations are expected to contribute to improved gross margins, which reached 72% in Q3 FY25, reflecting operational efficiencies and reduced platform costs.

Governance and Investigations

Dubber continues to address legacy issues, including the ongoing ASIC investigation into alleged misuse of funds. A board sub-committee has been appointed to oversee recovery efforts, and the company remains engaged with the Victorian Legal Services Board Fidelity Fund regarding potential claims. While recovery outcomes remain uncertain in timing and quantum, the company’s transparent handling of these matters is a positive governance signal.

Looking ahead, Dubber’s FY25 focus areas include driving sales growth through targeted marketing and partner enablement, advancing product development with AI capabilities, and maintaining disciplined cost control to support the path to cash flow breakeven.