Dubber Narrows Losses Amid 9% Revenue Growth but Faces Contract and Fund Recovery Hurdles
Dubber Corporation Limited reported a 9% increase in revenue to $42.19 million for FY25, alongside a significant reduction in net loss. However, challenges remain with a major contract non-renewal and ongoing efforts to recover $26.6 million in misused funds.
- 9% revenue growth to $42.19 million in FY25
- Net loss narrowed by 18% to $33.31 million, excluding impairments loss improved 42%
- Strong 29% revenue growth in Americas segment
- Non-renewal of VMO2 contract impacts future revenue
- Ongoing legal proceedings to recover $26.6 million in misused funds
Financial Performance Overview
Dubber Corporation Limited has reported a 9% increase in revenue for the 12 months ended 30 June 2025, reaching $42.19 million, up from $38.66 million the previous year. This growth was driven primarily by a 29% surge in the Americas segment and modest increases in Europe and Rest of World regions. Despite this top-line improvement, the company recorded a net loss of $33.31 million, which, while substantial, represents an 18% improvement compared to the prior year.
Notably, the reported loss includes significant non-cash impairments of goodwill and intangible assets totaling $17.51 million. When excluding these impairments, the underlying loss after tax improved by 42%, reflecting operational efficiencies and cost reductions.
Segment Performance and Operational Highlights
The Americas segment was a standout performer, with revenues climbing 29% to nearly $12 million, fueled by increased adoption of Dubber’s AI-enabled recording products among major partners such as Cisco and Microsoft. Europe saw a modest 2% revenue increase, supported by favourable foreign exchange movements and steady volumes from key communication service providers, despite some legacy contract renewals at lower rates. The Rest of World segment grew 8%, reflecting incremental volume gains across various markets.
Cost management was a key theme, with direct costs decreasing by 8% and salaries and related expenses down 24%, thanks to a lower average headcount and operational optimizations. These efficiencies contributed to a gross margin improvement from 65% to 70% year-on-year. However, share-based payments increased by 32%, largely due to new long-term incentive awards for the incoming CEO.
Impairments and Contract Challenges
Dubber recorded goodwill impairments of $10.59 million and intangible asset impairments of $6.93 million, primarily related to the Europe segment’s Aeriandi acquisition and the loss of a major customer, VMO2, which did not renew its mobile voice recording contract. This contract loss is expected to impact FY26 revenue and gross margins, prompting the company to implement further cost reduction measures.
Cashflow and Capital Raising
The company achieved underlying run-rate cashflow breakeven in June 2025, a significant milestone after years of losses. Operating cash receipts increased 11% to $44.35 million, while net cash outflows from operating activities declined by 5%. Dubber also raised $25 million in capital during the year, bolstering its cash position to $10.86 million at year-end, with an additional $5 million committed loan facility available.
Ongoing Legal and Recovery Efforts
Dubber continues to grapple with the fallout from the alleged misuse of $26.6 million in company funds linked to its former CEO and a third-party trustee. The company has initiated legal proceedings and is cooperating with regulatory investigations, including ASIC. While these efforts are in early stages and outcomes remain uncertain, no recoveries have yet been recognised in the financial statements.
Outlook and Strategic Focus
Looking ahead to FY26, Dubber aims to return to positive cashflow by expanding its communication service provider (CSP) partner base, enhancing product offerings, particularly AI-enabled solutions, and continuing cost efficiencies, including exiting surplus office leases. The company acknowledges the revenue impact from the VMO2 contract loss but remains focused on leveraging its integrated technology platform and growing its footprint across key markets.
Bottom Line?
Dubber’s FY25 results show progress in revenue growth and cost control, but the path to sustained profitability hinges on contract renewals and successful recovery of misused funds.
Questions in the middle?
- How will the loss of the VMO2 contract affect Dubber’s revenue trajectory in FY26 and beyond?
- What is the timeline and likelihood of recovering the $26.6 million in misused funds?
- Can Dubber sustain its improved cashflow breakeven and translate it into profitability?