Dubber Corporation Limited

A Quick Look At March 2019 Quarterly Update: Dubber Corporation Limited (ASX: DUB) is into cloud-based software technology business with a market capitalisation of ~A$185.64Mn as on 28^th May 2019. On 30^th April 2019, the company published its quarterly results for the three months ended March 2019, and this was a significant quarter in terms of expanding the global opportunity with regards to its services.
 
The market conditions, customer requirements and the continued development of consolidated and cloud services with respect to telecommunication sector had allowed DUB to capitalise its position in the market.The company had accomplished the capital raising of $22Mn from institutional and sophisticated investors.
 
DUB reported unaudited revenues amounting to $1.57 Mn in the quarter ending March 2019, which reflects a decent rise of 23% in comparison to the previous quarter. The company mentioned that the result was in accordance with the company’s expectations. The company had continued to develop its existing telecommunications service provider relationships to confirm sustained growth during 2019 and beyond. In terms of user numbers for recording services, the company had witnessed an increase to 73,157 numbers in comparison to 68, 575 and it was in accordance with internal expectations. These numbers represent the seasonality of the sector and the company’s focus within the period. The company anticipates the core user number to return to growth at a higher rate within the rest of 2019 and beyond. The cash receipts have increased by 42% from $752K to $1.07Mn in the quarter ending March 2019.
 

 Revenue- Quarter on Quarter Growth (Source: Company Reports)
 
At the end of Feb 2019, the company had launched a dubber’s service for the Cox Business Service in the US. The Cox Communication is the leading privately held telecommunications carrier in the US and it had implemented the dubberconnect.com model. The Dubber and Cox had jointly accomplished a scalable platform integration program, which allows customers to utilise an automated sign-up service that would instantly provision Dubber services on the Cox network.
 
Future Focus: As per the annual report, Dubber Corporation Limited is continuously focussed on increasing the number of active users of the service on a quarter on quarter basis and to increase the revenue from users of Dubber platform. Additionally, DUB is also focussed on increasing the global footprint throughout telecommunication service providers. Therefore, it is allowing DUB’s platform to demonstrate the value of capturing and analysing voice data on a global scale.
 
Stock Recommendation: The cash balance of the company stood at $3.7Mn at March 2019 end, which is augmented by the proceeds from the capital raising of $22Mn in April and the Export Market Development Grant of $40k. The current ratio of the company stood at 4.20x in 1HFY19 in comparison to the industry median of 1.58x, which reflects that the company is in a decent position to address its short-term obligations in comparison to the broader industry. With respect to stock’s past performance, it had witnessed a decent rise of 13.07%, 32.67% and 148.75% in the time span of one-month, three months and six months, respectively. As per ASX, the stock is trading closer to its 52 weeks higher levels. Hence, considering the aforesaid facts and current trading level, we give an “Expensive” recommendation on the stock at the current market price of A$1.170 per share (up 17.588% on 28^th May 2019).    

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