Dubber Lands $4.6m North American Deal, Cuts Costs, Eyes FY26 Cashflow Break-even

Strategic Contract Win Bolsters Revenue Outlook

Dubber Corporation Limited has announced a pivotal new agreement with one of North America's largest Communications Service Providers (CSPs). The five-year contract, which includes a network connection and support fee, is expected to deliver an upfront payment of approximately AUD 4.6 million in the third quarter of FY26. Beyond this initial payment, Dubber anticipates incremental subscription revenues as end-users adopt its AI-driven conversation analytics platform over the contract term.

This deal not only validates Dubber’s platform at a Tier 1 carrier scale but also strengthens its long-term annual recurring revenue profile through embedded, network-level deployment. The company is focused on driving customer adoption and subscription growth, aiming to leverage the contract as a springboard for deeper market penetration in North America.

Financial Performance and Cost Efficiency Gains

In Q2 FY26, Dubber reported recurring revenue of $7.8 million, a slight decrease from $8.2 million in the previous quarter. This marginal decline primarily reflects residual impacts from changes in Cisco invoicing, though the underlying customer base remains stable. The company continues to prioritise retention initiatives and targeted customer engagement to stabilise recurring revenue streams.

On the cost front, Dubber achieved a 12% reduction in total cash-based costs compared to Q1 FY26, bringing the annualised cash cost run-rate to $38 million. This improvement stems from a combination of workforce optimisation, automation, SaaS vendor rationalisation, and the exit of surplus UK property leases. Operating cash-based costs specifically fell by 15% quarter-on-quarter, underscoring the company’s commitment to operational efficiency.

Path to Operating Cashflow Breakeven and Strategic Focus

Dubber is targeting an underlying operating cashflow breakeven run-rate within FY26, a milestone first achieved in June 2025. The company expects to offset the loss of gross margin from the non-renewal of the VMO2 contract through continued cost savings and revenue growth initiatives. Key priorities include sustained investment in AI research and development, product evolution under the Dubber AI brand, and deeper penetration into industry verticals.

Brand consolidation efforts are underway, with all marketing and communications transitioning to the Dubber AI identity, emphasising the tagline “Unlocking the power of conversations.” This repositioning aims to clarify the company’s value proposition and enhance market-facing communications.

Ongoing Legal Proceedings and Fund Recovery

Dubber continues to navigate complex legal challenges related to investigations into alleged misuse of funds. Proceedings have been filed in the Federal Court of Australia against former auditors BDO Audit (WA) Pty Ltd and ex-CEO Stephen McGovern, with ASIC also initiating civil penalty actions. The company’s Board sub-committee remains actively engaged in recovery efforts, though the timing and quantum of potential recoveries remain uncertain.

Despite these headwinds, Dubber maintains a solid cash position with $7.3 million in cash and an undrawn $5 million loan facility, providing approximately 4.8 quarters of funding at current cash outflow rates. This financial buffer supports ongoing operational and strategic initiatives as the company advances towards its FY26 targets.