Dubber (ASX: DUB) shares plunged -12% in early trade as mounting losses in the first-half of FY22 appear to outweigh the growth in revenues.
For the uninitiated, Dubber is a leading provider of cloud-based call recording and voice AI services. Its technology can capture calls and conversations automatically, with features to allow for instant replays, transcription, sentiment analysis and more.
Revenue of $16.4m, up 122%
Annual recurring revenue of $51.8m, up 33%
Net loss of -$30.8m, up 303%
Cash and cash equivalents of $108m versus $32m a year ago
Last July, Dubber successfully raised $110m from institutional investors.
Dubber sees several tailwinds for the cloud call recording industry, notably:
75% of business conversations to be recorded by 2025, according to Gartner
Public cloud spend as a percentage of total software spend to rise from 58% to 86% by 2025
Dubber has built a 4-layered network effect to accelerate its pathway towards $100m in revenue and capture industry headwinds. This includes:
Strategic and accretive M&A
Expand Dubber solutions and functionality to grow users
Partner program to sign on large customers and integrate with service providers
Ride the growth in total addressable market as more customers migrate to cloud
Dubber shares went on a relentless run last March, rallying from $1.50 to all-time highs of $4.3 by September.
Dubber has now gone full-circle, back to 15-month lows of $1.30.
Dubber's downfall was broadly in-line with the fallout of technology stocks and pivot towards cyclical companies with strong cash flows.
The market has become less accepting of fast growing companies reporting accelerated losses.
Some recent examples include Kogan.com (ASX: KGN) and Life360 (ASX: 360), both of which suffered sharp double digit percentage share price declines. With interest rate hikes and tighter monetary policy conditions on the horizon, companies need to make sure strong revenue growth trickle down to the bottom-line.
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