Dubber’s Path to Cashflow Breakeven Faces Legal and Revenue Challenges
Dubber Corporation Limited reported its first-ever positive net operating cashflow excluding exceptional items in Q1 FY26, supported by cost savings and a strong cash position. The company also expanded its partner network and targets operating cashflow breakeven this fiscal year.
- First positive net operating cashflow excluding exceptional items in company history
- Strong cash position of $14.5 million including undrawn $5 million loan facility
- Exited UK property leases, delivering $2 million annualised cost savings from Q2 FY26
- Revenue of $9.4 million down 7% year-on-year, underlying recurring revenue stable at $8.2 million
- New partnership with Crexendo Inc expands Communications Service Provider network to 245+ partners
Positive Operating Cashflow Marks a Turning Point
Dubber Corporation Limited has achieved a significant milestone in its financial journey, reporting positive net operating cashflow for the first time in its history during the first quarter of fiscal year 2026 (Q1 FY26), excluding exceptional cash outflows. This development signals progress in the company’s ongoing efforts to stabilize its finances and improve operational efficiency.
The company closed the quarter with a robust cash position of $14.5 million, which includes a cash balance of $9.5 million and an undrawn $5 million committed loan facility. This strong liquidity base provides Dubber with a solid runway as it pursues its strategic objectives.
Cost Savings and Operational Efficiencies Drive Improvement
One of the key contributors to the improved cashflow was the exit from UK property leases at the end of the quarter, which is expected to generate annualised savings of approximately $2 million starting from Q2 FY26. This move is part of a broader cost reduction program that includes operational efficiencies and automation initiatives across the business.
Operating cash-based costs have been steadily reduced, with an annualised direct cost run-rate of $11.4 million and a gross margin of around 70% achieved in Q1 FY26. The company’s focus on streamlining expenses and optimizing its cost structure is evident in these figures.
Revenue Trends and Partner Expansion
Reported revenue for Q1 FY26 was $9.4 million, reflecting a 7% decline compared to the prior corresponding period and a 12% decrease from the previous quarter. This decline was primarily driven by the reduction in revenues from the VMO2 contract. However, underlying recurring revenue remained steady at $8.2 million, consistent with the previous quarter when excluding VMO2 impacts.
Dubber’s Communications Service Provider (CSP) partner network continues to grow, reaching over 245 partners as of 30 September 2025, up from 240+ at the end of the prior quarter. A notable development was the signing of a new partnership agreement with Crexendo Inc, a major North American UCAS provider with over 6 million end-user licenses. This partnership, integrated with Crexendo’s Netsapiens platform, opens new channels for Dubber’s advanced call recording and AI products globally.
Strategic Focus on AI and Market Penetration
Dubber is intensifying its focus on AI-driven product offerings, aiming to upsell AI features within its existing product suite to enhance customer value. The upcoming launch of the Insight Agent, which leverages natural language search and agentic AI, is expected to unlock new revenue opportunities by delivering actionable intelligence from recorded conversations.
The company’s go-to-market strategy emphasizes deeper penetration into industry verticals, expanding CSP partnerships, and optimizing sales motions to drive revenue growth and improve average revenue per user (ARPU). Dubber also remains committed to achieving an underlying operating cashflow run-rate breakeven during FY26, balancing revenue growth with continued cost discipline.
Ongoing Legal and Regulatory Challenges
Despite these positive operational developments, Dubber continues to navigate ongoing investigations and legal proceedings related to alleged misappropriation of funds involving prior management and auditors. The Australian Securities and Investments Commission (ASIC) investigation remains active, with the company cooperating fully. Recovery of funds is being managed by a Board sub-committee, but the timing and quantum of any recoveries remain uncertain.
The company has made no current plans to raise additional capital for working capital purposes, reflecting confidence in its financial position and operational trajectory.
Bottom Line?
Dubber’s Q1 FY26 results mark a cautious but clear step toward financial stability, with AI innovation and strategic partnerships poised to shape its next growth phase.
Questions in the middle?
- How will the loss of VMO2 contract revenues be offset through new sales and AI upsell?
- What is the timeline and potential impact of ongoing ASIC investigations on Dubber’s operations?
- Can the company sustain cost savings and operational efficiencies to achieve full cashflow breakeven in FY26?