Dubber Corporation Limited (ASX: DUB) (‘Dubber’ or ‘the Company’), the leading global Unified Call Recording & Voice Intelligence cloud service designed for service providers, government, and businesses of any size, today released its report on the Company’s operating activities along with the Appendix 4C for the quarter ended 31 December 2021.
- ARR increased by $8.3m to $51.8m (82% pcp)
- Revenue increased by $400,000 to $8.5m (98% pcp)
- Dubber subscribers now exceed 510,000
- Core OpEx of the business is currently $5m per month, providing a strong platform to deliver operational leverage as ARR continues to accelerate faster than OpEx
- The Company has in excess of $108m cash on hand
- Finalised landmark agreement with British Telecom (BT)
- Launched first native mobile recording service in Australia with Optus
- Speik acquisition earn-out payment brought forward on improved commercial terms
Record Performance in growth metrics
The December quarter saw the Company reach notable milestones, achieve record growth in its key metrics and finalise landmark commercial agreements and deployments. The Company is establishing critical scale in its business in terms of fundamental additions to its leadership team and through the expansion of products and services as accretive revenue generators.
Users and ARR
Following on from the September quarter, subscribers continued to grow at a record rate via a combination of ‘standard’ SaaS and Foundation Partnership subscriptions.
The Company’s ‘standard’ SaaS subscriptions grew organically by over 60,000 during the quarter and the Company was able to secure a number of Foundation Partner Agreements whereby a Dubber service is embedded as a standard feature of every subscription on a network. As previously stated, the Company continues a policy of not including Foundation Partner Program subscriptions in its overall numbers for reasons of consistency and commercial sensitivity. The Company will continue to re-assess its reporting of these subscriptions on an ongoing basis.
Annualised Recurring Revenue (ARR) grew by over $8m, to approximately $51.8m, a new record for the Company reflecting both organic growth, particularly in the financial services sector where enterprises are looking to their service providers to deploy Unified Communications Services such as Cisco Webex and Microsoft Teams calling platforms and, the execution of landmark service provider network agreements.
The Company’s ARR is calculated as the next 12 months of subscription revenue net of any incentives.
Revenue for the quarter was $8.5m, an increase of 98% pcp. During the quarter, the Company finalised a landmark agreement with BT, reflecting terms which had been agreed in-principle in April 2021 but were subject to a lengthy formal procurement process. In the intervening period, BT sought Dubber’s agreement to supply services to a key financial services customer prior to procurement finalisation and this was undertaken through a BT distributor in order to facilitate the transaction. This contract has now been transferred to BT directly, resulting in an adjustment of revenue relating to Q1 and two months of Q2 FY2022.
This adjustment does not impact the Company’s ARR metric. The revenue for the quarter is subject to audit which will be completed at the end of February 2022.
For the purpose of clarity, revenue for the month of December exceeded $3.7m.
Cash receipts for the quarter were $5.6m, impacted by seasonal factors and a reduction from the September quarter where the Company received several lump payments from previous billing resulting in collections exceeding revenue.
Receipts were approximately $1m less than that expected, largely reflecting delayed payment from a large customer of one of the Company’s international subsidiaries.
The Company’s debtors are primarily large global service providers as opposed to direct end users and, while this provides certainty in future collection, delayed receipts from these accounts can have a notable impact on the Company’s quarterly results.
Telecommunications Networks Growth and Yield
During the quarter, the Company continued to expand its footprint of service provider networks along with increasing penetration and revenue yield from its current telecommunication and UC platform partners. Contracted service providers grew 13% pcp to 170 and billing service providers grew 18% pcp to 111.
Dubber’s Unique Position with Global Unified Communications Service Providers
In the September 2021 activities report the Company noted that there was a significant increase in activity in the global unified communications (UC and UCaaS) markets with service providers and enterprises (particularly in the financial services sector where compliance requires recording of voice conversations).
This trend is continuing and a considerable amount of the Company’s current growth profile is derived from this sector, where Dubber has a unique product and service offering. Large carriers are seeking to unify the provision of these cloud based offerings and Dubber’s ability to be provisioned ‘as a service’ across all communication networks enables Unified Call Recording (UCR) as a compelling offering for financial service providers.
Dubber enjoys a unique position with Cisco via the Dubber Foundation relationship and as the sole recording option for Cisco Webex Calling. The ‘Dubber Go’ product is an embedded and standard feature for every Cisco Webex Calling and Cisco UCM Cloud calling subscription. There has been substantial growth for Dubber via this initiative with Cisco having already established a large customer base, which in turn is leading to increased opportunities from ‘Dubber Go’ to Dubber’s other higher ARPU offerings.
Dubber also provides a unique offering for Microsoft Teams, offering service providers a single platform service, the same way as Microsoft Teams operates, without the requirement for the end user to maintain their own cloud infrastructure or manage recording integration.
This model does not require end user customers to incur the cost of establishing their own instance of Microsoft Azure for the purpose of managing its Dubber generated data. The Dubber model fits seamlessly into a service provider’s SaaS model for delivering Microsoft Teams calling.