Dubber Guarantees $1.4M Revenue from Virgin Media O2, Targets $4M Cost Savings
Dubber Corporation has confirmed it will retain its key contract with Virgin Media O2, securing guaranteed revenues for FY26 while implementing significant cost reductions to return to cash flow positivity by year-end.
- Retention of Virgin Media O2 Wholesale SIP contract with guaranteed minimum revenues
- New side letter ensures AUD 1.4-1.5 million revenue for FY26
- No customer migration to new recording provider before July 1, 2025
- AUD 4 million annual cost reduction targeted by June 2025
- Plan to exit surplus London lease saving an additional AUD 1.25 million annually
Contract Stability Amid Transition
Dubber Corporation Limited has provided a reassuring update on its relationship with Virgin Media O2 (VMO2), confirming that it will retain the Wholesale SIP contract with no plans for termination. This contract forms a significant part of Dubber's revenue base, and the company has secured a new side letter guaranteeing minimum revenues between AUD 1.4 million and AUD 1.5 million for the fiscal year 2026. Notably, VMO2 has indicated that customer migration to a new recording provider will not occur before July 1, 2025, providing Dubber with a stable revenue runway in the near term.
Strategic Cost Reductions to Offset Revenue Pressure
In response to anticipated revenue adjustments linked to the VMO2 contract transition, Dubber is proactively implementing a cost reduction program aimed at cutting AUD 4 million in annual expenses by the end of the first half of FY26. These savings are expected to be achieved without compromising the company’s growth initiatives or product development efforts. Additionally, Dubber is working to exit an unfitted London real-estate lease, which currently costs approximately AUD 1.25 million per year, potentially adding further savings to the bottom line.
Financial Position and Outlook
As of March 31, 2025, Dubber reported a working capital position of AUD 16.5 million, reflecting a solid balance sheet. The company anticipates maintaining at least AUD 12 million in available working capital, assuming it achieves run-rate cash flow positivity by December 2025. This target is based on underlying cash flow metrics that exclude certain historic tax liabilities and non-recurring costs. Importantly, the board has indicated no current intention to raise additional capital for working capital purposes, signaling confidence in the company’s financial trajectory.
Growth Prospects and Market Position
Despite the challenges posed by contract transitions, Dubber maintains a healthy sales pipeline with multiple significant opportunities, including engagements with major global brands. The company continues to position itself as a leader in conversational intelligence and unified recording solutions, embedded within over 230 communications service provider networks worldwide. This market leadership underpins its strategic focus on innovation and customer retention.
Looking Ahead
While the immediate outlook is cautiously optimistic, the final details of the customer migration plan with VMO2 remain in draft form, leaving some uncertainty around future revenue streams. Dubber’s ability to execute its cost-saving initiatives and maintain strong sales momentum will be critical to sustaining its path back to profitability and cash flow positivity.
Bottom Line?
Dubber’s decisive cost cuts and contract assurances set the stage for a pivotal turnaround by year-end.
Questions in the middle?
- How will the final customer migration plan with Virgin Media O2 impact Dubber’s revenues beyond FY26?
- What are the risks and timelines associated with exiting the London lease and realizing those savings?
- Can Dubber sustain growth momentum while implementing significant cost reductions?