Dubber Corporation Limited

Okay, it looks like we're stabilizing so we might get started. Welcome to the quarter one FY27 quarterly activities update. I'm the CEO Matthew Bellizia. I'll be giving the presentation along with the CFO Prasad Kazi. Prasad, if you can move us along to the key messages please. All right, our cash flow positive for the quarter, which you can see through the 4C. We finished the quarter with $11.2 million of cash, as well as our further undrawn $5 million facility, giving us a total liquidity of around $16.2 million, again with a debt-free strong balance sheet. Our revenue was up marginally to $7.7 million. We've maintained our cost discipline. We're continually doing substantial R&D in this place, which I'll talk about in a minute, which we fully expense. We're not capitalising the R&D, so all the R&D we've done over the last 12 months is expensed into the numbers. I continually talk about broadening the revenue streams to four revenue streams. We have the call recording business. I think we all know now that Verizon's due now. I know it keeps pushing back, but they're doing more and more piloting right now, so we're expecting that to go live in the first quarter of... calendar year 27 in the next three, four months. So we're making good progress with them. Second revenue stream is our payments revenue stream. We're spending a lot more time on investing in payments. We've built it into the AWS cloud. We're now spending more money on marketing and selling the payments business, promoting the payments products. The third product stream is our Dubber Notes. We've invested heavily in this product. We have a good product. People that are piloting love it but we have not generated any substantial revenue off it yet because it's taken the most of the year to build. We've had to update contracts with partners. Partners are updating the contracts but people love the product and we hope that investment is going to start turning into real revenue very soon. and similarly we've invested substantially in our AI development. So we've got a lot of voice AI that we've built, a lot of us being piloted. We continue to get positive customer feedback but again in an R&D business we've got to build the IP, we've got to change the partners contracts, the partners then have to change their SKUs in their business with the ability to sell it and most of that's happened. So we're expecting to start to see the fruits of our labour coming through in revenue shortly. It's been a year of investment but we're hoping to start seeing some of these broader revenue streams start to feed on top of our existing revenue streams to broaden the business and pivot us in the growth into next year. Next slide please Prasad. And one more please. We did a deal to acquire Daisy. Daisy has some fantastic customers, MLC, Ampol, Woolworths, some massive brands throughout Australia and New Zealand. Some really good companies. They're very strong in insurance and financial AI. Quite a sticky business. The deal is we're paying $400,000 upfront, which has already been disclosed to the market. and then a further 300k at the 6 and 12 month milestones, anniversaries and you've got 1.7 million ARRs retained after 12 months, a further 250k in shares which will have to get shareholder approval. Completion is progressing fast and is likely to happen very soon. and again this plays into our four verticals. We said we've got call recording, we've got payments, we've got notes to go to market and voice AI. This again strengthens our AI offering which sits on top of our voice recording platform. There's a lot set in conversations. We're now untapping a lot more information to give the market to tell you what actually has been discussed in your business and things that you can actually improve your business. Real Solutions. So as we get this stuff to market, we hope to get pretty good acceleration through next year on sales. Next slide, Prince Prasad. To give you an idea of some of the things we've built, we've built sales playbooks. If you ring any organisation, any company, and you speak to a salesperson, they ought to pick up certain questions. So if you ring Dubba, who's your current provider, how many licences are you interested in, If you ring up to buy a car, who's the car for? Do you have budget? Do you need finance for the vehicle? Sales playbooks allows you to find questions so you can start to measure, have your sales team ask the right questions. It gives them instant feedback. Objections are then raised in the sales cycle. You're too expensive. Well this is the best response as the company thinks that you should give to objections. There's two responses you did use. There's two or three you could have also used to help do it. You ought to pitch it. You should sell the benefits of your company or the benefits of your products. We measure whether you actually pitched and you should be outcomes achieved at a sales meeting such as Did you get an appointment? Did you get a test drive? Did you get people to a presentation? What is the next outcome? So that's what a sales playbook is. We've built that. That's getting close to release. It's in pilot. Sales process looks at all the please look, sales process looks at all the particular ways you try to close a deal. A direct close which is Would you buy this? An assumptive close. Can I have the name for the reservation? A temperature check, which might be, or a conditional close. If I match the price, would you buy? We measure the close techniques the sales people try to use. The customer's reaction, did the customer react positively or negatively to that sales close technique, and which ones are working more effectively in your business, which of your sales team are using which sales close technique, and what results are resulting from it, so you can coach your lesser sales team into improving based on the best sales team's performances. The affiliate service and support workflow, that tracks you through a service course, different flows that happen in service, Did you achieve the milestones through a service and support to satisfy the customer? Did the customer get satisfied? Was he reacting well? Did he leave the call dissatisfied? If you leave dissatisfied, let's flag the service manager. Let's engage before you lose that customer. And a training centre. So you can actually take the best sales processes, the best sales books, put the best calls in a training centre. Your junior staff can learn by listening to the calls of the best sales staff. and that's the Dubber Training Centre. All this stuff is new. This is the stuff that's going to market. We're changing customers' contracts to support AI and these new SKUs so we can sell this stuff into next year. Next slide please, Prasad. We have a new iPhone and Android app that lets you record. So if you want to record in-person meetings, you can pick them up. You can review summaries. You can see basic information about your last calls with those customers. So before you call them back, you can say, what did I discuss with them last time? What was their main objections? How did I overcome them? Were they satisfied? We've built business intelligence modules which gives you graphs and stats. You can see which staff are talking over other staff. You can see talk to listen ratios. You can see who's making outbound calls, how many people are making external calls versus internal calls versus personal calls. Are people driving the KPIs they ought to be doing in their businesses? We have email and app reporting modules. that send straight to your email information pertaining to what you've been doing based on each of the things I just talked about. So people are getting live coaching at the end of a call. This is what you said. This is what you could have said. If there's escalations, we email managers so they can get involved. And we have our inside agent, which is ask AI any question you want across your voice. How many people rang up? How many of my customers were dissatisfied last week? If you like that query, you can then schedule and say each week, I want to know all the complaints in the business. Send me an email of all the complaints. I hope this is making sense. Next slide. And Daisy's obviously going to bring us some strong insurance and finance stuff, so that's another plug into our AI capability. And I've talked about a lot of stuff being post-call, where we send you an alert. Next year we want to coach the people live in the call, so... If you get an objection, we're going to flag up, here's some of the answers you can actually provide to the customer as and when it occurs. So that's some of the stuff we've built, which we haven't seen the fruits of our labour. I say to some of our investors, it's kind of like planting a field. We've planted the field, we've put all the seeds in, we've fertilised it, we've spent 12 months paying for all this R&D. Little seedlings are growing. People look at what we've built. All our partners and early customers say we love what you're doing, but we get to harvest and see the fruits flow into the revenue. So there's a bit of process, but that's where the business is heading. I obviously believe in it because I kept buying our shares and have so again. So that's where the business will go, which is full revenue streams. A voice AI is a boom market. and that's what I think is going to re-rate this place as we get this stuff to market. Next slide, please, Prasad. Some of the projects that we're currently working on, we're still moving Vodafone in the UK, our biggest customer, across to the Dubba platform, so that'll rationalise that. They're launching new SKUs and new products in November, which will give us then more revenues, more opportunity to give us revenues. Verizon still wants to go live now in Q3. They are making substantial headway now. We are hooking up more and more, more and more live testings going on. So now it's getting more and more real. The delays weren't at our end. They've been network-based and telco, but we're looking in good place to go live with that. We're migrating out of the UK data centre continuously, moving our payments customers from a data centre into the AWS cloud, which we've invested in. That's going to drive savings, plus it gives better security and a better product that we can then take around the world because we're in AWS, which can be globalised rather than setting up data centres around the world. There's still more direct cost optimisation to be found. We're still finding more things in AWS and Azure where we can save costs. So there's more work going on to drive down our direct costs. Dubber notes a new AI launch I've talked about and the recovery of funds is going on. We're doing a little bit of discovery at the moment with the BDO case over the next month or two. Then the case will be staged. There'll be no more to spend in this business until the ASIC case goes ahead and the ASIC case might take 18 months before they get BDO to court. But the good news for us is we get to sit behind that case, spend zero for that 18 months and see what the outcome. If ASIC beat BDO, you would think BDO ought to want to settle with us. And across to Prasad for the CFO update.

Thanks, Matt. Hi, everyone. I'll take you through the numbers for the quarter now. Overall, we are pleased with where we have landed. Costs are down again. We have delivered another quarter of positive normalized EBITDA, and importantly, the business generated 1.3 million in operating cash flow. Let's start with revenue. We finished the quarter at 7.7 million, slightly up on 7.6 million last quarter. Recruiting revenue grew around 3% to 7.3 million, and the exit ARR health study at 29 million. After the changes we've been through over the past year, it's good to see revenue stabilizing. From here, the job is to get to growing again. And the new first managers spoke about are a big part of that. Now to our operating run rate, which is probably the result I'm very pleased with for the quarter. Revenue of 7.7 million came in ahead of our cash-based cost of 7.2 million. That gives us a positive operating run rate of around half a million dollars, up from break-even last quarter. Our annualized cost base is now around 28.6 million. That is a further 1.9 million of annualized savings from last quarter. So the cost work we have been doing is now clearly showing up in the numbers. Direct costs didn't move much this quarter. They were around two and a half million. in line with last quarter. The gross margin is held at 68%. There was a small uptick in AI compute cost, which is about 21K. And this is due to the new trials products, which we are trying right now for our double nodes and other AI products. And we are continuously optimizing our cloud space. Operating cash costs are where most of our savings have come from. They fell 10%. from 5.2 million to 4.7 million, which takes our annualized operating cash cost base to around 18.8 million. That's the restructuring, supply renegotiations, automation work, all coming through. And also we have identified further savings in the coming quarters. On EBITDA, normal EBITDA was positive half a million, which is up from 100K last quarter. That is three quarters in a row of positive normalized EBITDA. For context, if you look at Q1-FI28, we made a normalized loss of 3.8 million. That is a 4.3 million turnaround compared to Q1-FI25. It shows how far we have come in putting the business on a sustainable footing. Now to cash. We have ended the September with $11.2 million cash in the bank, which is about $1 million more than at the end of June. On top of that, we have $5 million loan facility that remains completely on drawing. So the total available funding for the quarter is at $16.2 million, which is very strong. Coming to the actual cash flow, this slide shows the actual cash that came in and went out during the quarter. Operating cash flow was positive, 1.3 million, compared to a small outflow of 100K last quarter. Customer receipts were strong at 9.8 million, which is up from 8.1 from last quarter. Operating payments were around 8.5 million, which is slightly higher than last quarter. This is due to some timing of annual prepaid expenses. What we can see is that better operating performance is now turning into cash in the bank. This is about normalized cash flow. If this records the 90k for a one-off restructuring and recovery cost, the normalized cash flow is about 1.4 million, up from 200k last quarter. So the underlying cash performance of the business keeps improving all the time. So to wrap up, it's been a solid quarter. Revenue has skipped last. Costs were down again. Normalized EBITDA has been positive for the last three quarters, and the business is generating cash. A lot of work has gone in getting the cost base where we are today. The next step is bringing revenue while keeping the same cost to supply. With that, I'll hand over back to Matt. Thanks Matt.

Yeah, so pushing forward, next slide please Prasad. Our new model, and as we've updated all the contracts, we're moving to a token-based model. In fact, we got a good compliment from the head of product at Verizon who said, we think you've actually got one of the best models we've ever seen. but that means as we go forward and once we've done all these contract changes with all these customers and put all the SKUs in place, updated all the marketplaces people can buy through our token products, we can continually build more AI, continually put it in the platform. We've come up with a model where people can self configure the options, they can turn stuff on, they can turn it off, they can consume our tokens and they can they can spend more with us by buying value from our products. So our challenge going forward as a business is continually building purposeful AI, stuff that's going to drive real value for business, going out to market, understanding what the customers want, building stuff that people want to consume, putting in the platform and then it's easy to continue to build the business because people can just buy more and more tokens and enable more and more features. So it really helps us scale globally as we go through this transition from fixed SKUs to tokens and just continually consuming more tokens, which is the AI market. Importantly, we also talked our partners into a much lower margin on tokens. They've agreed to that. Their margins were much higher, which was pricing cover out of the market a little bit on previous AI, and they've gone to much skinnier margins. Understanding that the AI market is more competitive, but we do have reach into 224,000 people getting voice recordings off Dubber, who's readily available that can take our Dubber Notes products and our AI products as we go live. So focusing the next year, we'll continue to have cost discipline, we'll continue to drive down our direct costs. Once we see growth, once we get fully enabled and our notes and products are going to market and our AI is getting consumed, we have a good cash reserve to fuel the fire. We all throw the petrol on the fire once we see it starting to take off, which is more marketing, more sales team, and absolutely try and boost this business once we start to fuel the fire. We've gone through the process of R&D. We've built a lot of stuff. It's in positive feedback. We're going through the contractual updates right now. and the SKUs and the system to system changes so that they can order stuff automatically through our products. And hopefully next year as we go through, this stuff turns into a real growth market coupled with Vodafone backselling and the Verizon products coming on. So let's now go to questions. That's the end of the presentation. I'll ask the first question. Why is your share price in the bin? I assume everyone wants to know that. Our enterprise value at the moment is about $5 million, isn't it, roughly speaking. Obviously we have one of the institutions that are selling off our stock. You guys can guess who it is. They're selling off a lot of stocks around the world. Sorry, a lot of stocks in the small and medium cap. They were in the AFR yesterday selling off hard. But until they're washed out, we've just got to continue to absorb that sell-off. and it's just a particularly cheap stock. Our company's worth $5 million with $30 million revenue trading in the black enterprise value at the moment. So that's probably all I can talk about in the valuation stakes at the minute. Any other questions? I'm not seeing any unless my system's not putting them up. Are there questions coming through?