Dubber Corp Ltd

Can you see them now? Yes, I can. Good morning, everyone.

Welcome to Dubber Corporation's Quarter 3 quarterly update. It'll be delivered by myself, Matthew Belizzi, a CEO, and Prasad Kazi, Acting CFO of the company. The key messages going into this quarterly update. Next slide, if I can, please, Prasad. Our underlying operating cash flows run rate turned positive for the entire quarter. So it's the first full quarter in Dubber's history where we've had underlying cash flow run rate positive for the entire quarter. We continue to heavily invest in AI and R&D in order to continue to bring forward the products and we're getting really purposeful about what we build in R&D and what we're going to deliver and I'll talk more about that in later slides. We advised last quarter that we'd signed a Tier 1 North American CSP who made an initial payment of USD just over $3 million. That is for a five-year connection fee to the network. The network's currently in place. The contract goes from 1 January 2026 for five years, 60 months, and will be accounted for equally over that 60 months at USD $48,000 a month. The subscription revenue will commence on that network shortly. It was originally planned to be March, April. It's probably more going to be around June, July, August. They've got delays at their end. It's not at our end at the moment. I will tell you the name of the network because we don't believe that's sensitive. What is sensitive is the fact that we received the payment and we've announced that. We announced that last quarter. It is Verizon that we've signed up. We are hooked into their mobile network and we'll be launching in their product. What's holding up their launch at the moment is delays by other vendors who are launching as part of this product. So it's not sitting at our end, but subscription revenues will start coming on and there should be substantial growth going on. The reason we aren't putting Verizon all over our presentations and we're not screaming it from the rooftops is following the events of 2024 where we did obviously have 30 million disappear. We're rebuilding the brand of this company and getting a lot of people to come back positively supporting what we're doing by continually being honest, ethical, reliable with the information we're talking about. We're not going to go out spruiking Verizon's announcements in writing across our publications, they will certainly do a lot of product announcements into the future. Right now, I've told you verbally, but you will see further announcement when Verizon is ready to launch their product and talk more about what they're doing with us in amongst other vendors and broader product and it gives us a fairly good global footprint. The financial highlights, recurring revenue of 7.4. We had some unfavourable FX again, which I'm sure people have seen what's happening to the Australian dollar or the US dollar weakening. Our cash-based costs continue to reduce down to a run rate of 33 million. We're looking at driving them back even further at the moment. We've got further savings to be had, things like... We expect to drive better savings through our direct costs, which we've now got a big focus on. We're renegotiating vendor contracts. For instance, Cloudflare was costing us $400,000 a year until the end of July. The renewal from the 1st of August for the same service will cost us $100,000 a year. So some substantial savings we're getting both in renegotiating vendors to more commercial contracts as well as driving down direct costs. Service CSPs remains at over 245 globally and recoveries of funds I'll talk about in later slides. We've got a dedicated slide on that topic. Next slide please Prasad. So a little on the CEO presentation. In the UK right now we're currently migrating Verizon Vodafone from the old data data center onto the cloud into the end of the double platform. So they're moving from the speed platform to the double. It's progressing quite well. More than half the customers have progressed now and we should be finished that in July or August. So that'll get us onto one platform. globally, which is what we've been heading towards, and we've pretty much wound up the call-in platform, too. There's a little bit left there, but it's all coming together into one platform, which will give us good efficiencies around there. We've talked about Verizon, UK Data Centre I've just talked about. We're also migrating a lot of our payments customers in the UK into our AWS cloud also, so that's also a better solution, sitting... and again exiting the data centre which will drive further cost savings into the business. The R&D I'll talk about in the next slides and we're continually driving internal projects in here to automate our billing. We have automated all our wholesale billing at the moment and a chunk of our resale billing but this business is getting more automated so when you subscribe and enable a service it just comes live on the system that flows right through our billing, our accounts and the invoices flow through to the customers. So we're getting more and more efficient in terms of the way the business is operating. Next slide please Prasad. One of the new products that we're close to releasing is our new Dub and Notes product. It's a pretty intelligent product in that it will send you summaries of your calls which can then go directly into Salesforce and other third party products. You can customise why you want to get a double note and it will tell you what was discussed during the calls, key actions, key complaints, key elements of these phone calls. So you can detect in about a one hour phone call by reading these notes in about 20 seconds what transpired in those calls. But we're getting more intelligent, it's not just you get your own notes, you can get them sent to, as a team manager, you can receive your team's notes. you can receive them based on trigger points. Certain KPIs that were set in the conversation might go to the HR manager, they might go to the sales manager. So some really clever stuff that we'll be launching through to again bring more value to our customers and further revenues. Next slide, Priest-Bassard. I'm not going to disclose everything we're doing on product here because we don't want to hand this to our competitors. I see there are competitors, one of the competitors sitting online. There's going to be a lot of intelligent AI. We're looking at our AI across a few lenses. How does an end customer improve sales, reduce costs or improve compliance in our R&D? So we're tuning a lot of R&D to drive real business outcomes that customers can see real value in what they're getting. And I'm not going to talk a lot more about that for that purpose. Next slide, please, Prasad. And I think everyone's aware that our AI agentic agent got released in the last quarter, which allow you to go online and you can type in any query you want across all your voice conversations, ask any questions you like, and agentic AI will derive not just using an LLM out of the box, which will give you rough answers. We have a lot of tuning in that LLM using our moments and other advantages. to give you real outcomes by doing a pre-form query on your voice recordings. So Prasad, next slide please and you can start the financial update.

Starting with revenue, we've delivered $8.8 million for Q3 with recurring revenue of $7.4 million. The movements this quarter mainly reflect portfolio optimization, some pricing changes, license adjustments, and unfavorable ethics. That said, the underlying customer base remains stable, and our focus is very much on improving the quality of revenue through better retention, targeted upsell, and deeper engagement with customers. Moving to costs, this is where we have really seen a good progress. The total cash base cost came down 13% quarter on quarter to $8.3 million, which puts us at an annualized run rate of about $33 million. And importantly, you can see on the chart, the revenue was higher than the total cash cost this quarter, which is a good reflection of the work we have done on the cost base. We also delivered around $5 million in annualized cost savings driven by workforce changes, vendor rationalization, Operating Costs Operating costs also reduced 15% to 5.7 million with an annualized run rate of about 22.8 million. So overall cost discipline is now well embedded in the business and not something we're just doing it for one quarter. And we do expect to see further cost savings flow into Q4 as we continue to streamline and automate the business. Coming to cash flow, We delivered 3.5 million operating cash inflow for the quarter. This was driven by strong customer receipts of 14.7 million, up from 8.6 million from last quarter, supported by the Tier 1 CSP payment of 3.06 million USD and improved collections among existing customer base. At the same time, the cash flow outflow was stable during the quarter at $11.2 million, reflecting both ongoing cost discipline and timing of payments during the quarter. If you look at normalized cash outflows, they were about $0.7 million paid for one-off costs for restructure and legal costs for the TD recovery. The normalized cash outflow is about $4.2 million for the quarter. So we finished the quarter with $10.5 million in cash and $15.5 million in total available funding, including an undrawn facility of $5 million, which leaves us in a very strong liquidity position. So overall, the quarter shows good progress, particularly on cost and cash flow, and we are starting to see the flow through into the numbers. I will now hand over to Matt to take over through the remaining slides. Thanks.

Okay, in terms of the investigation and recoveries of funds, I think everyone's aware that we've got action against BDO ordered in WA to recover $26.6 million from there. Additionally, ASIC announced in January they've also issued proceedings against BDO. So we will be able to save a bit of cost and not really pursue a lot on that action because ASIC will go first. ASIC will pursue BDO and the auditor. If they win, that then makes our case a lot cleaner to come through and get our settlement on that recovery of funds. We've also got action against the former CEO Stephen McGovern and Mark McDaffrey that we're currently moving that to the federal court. That will probably be stayed for a period so there will not be much spent on that for the minute because of other ASIC investigations. And then following that, we'll continue to proceed with that action. The Victorian Legal Services Board Fidelity Fund has declined our claim. But again, there are some recoveries for the same funds, which is kind of interesting because we do have a lot of people, a lot of senior legal people questioning that on the basis that how do you trust a lawyer's trust fund? The people are blindly putting money into settled properties and settled all sorts of things. if the insurance is not looking after those monies. So we're further considering our options in that case. Next slide please Prasad. Next slide, there we go. Some of the focus areas to complete the financial year. We're aiming to achieve positive underlying run rate We're continually upgrading our AI products. We're improving our marketing and sales efficiency and how we're going to market. A lot of business automation to drive costs around our core business. And again, product evolution to drive real value to end customers to really have purposeful AI that people want to buy and drive higher sales. So that's all we have. I'll open now for any questions. There's no questions so far, so we'll just give that another minute or so. If you're going to enter questions, by the way, you need to type them into the questions pad. There is a section for entering a question. Okay, the question is, what is the anticipated growth in CSP and how much is innovation? Are you talking about our growth in service providers? And how much is innovation? Is that revenue? I'm not quite following that question. We haven't grown our CSPs a lot in the last quarter. We've been focusing on execution and getting our current CSPs to actually start selling more. And how much is in innovation? Is that sales or how much we're spending? Not quite sure what that question means. So guys, any questions you need to type them in if you've got a question and they'll come up on the board. I'm going to see one or two people raising hands, but just type the questions in if you can. What does the new business pipeline look like? Please discuss. We've got new business pipelines for all our partners around the world at various levels and I probably can't provide a lot more detail than that. How do you see the next 12 months for Dubber? Thank you. I think we're now levelling where our revenue shrinkage has been. I think we've had the hits substantially that we're going to see. There might be a little bit more trim off but not substantially more. I think we're starting to see, I think we're going to start to level out. Our cost base will start to level out and where we're driving our direct costs and so forth. And hopefully we're at the bottom where we can start to be profitable and start to grow our revenues into next year. Here's Dubber notes a rehash of a previously released product. No, I do not believe it is. I don't believe that the Dubber Notes was released back in 2021. And this product is quite a bit different to what I assume of what a Standard Notes product would do. Well, it's just someone saying thank you for the briefing. Okay, do we expect, based on the new client horizons of Big Wind, do you anticipate any significant clients contracts in the next six months? Again, without disclosing it, if the world's largest telco is going to buy Dubber, you can obviously imagine we've had some numerous confidential conversations with other substantial telcos who are also in conversations with us because if it's good enough for them, for Verizon it's probably good enough for others, so Hopefully there's some more good deals on the way. Are there any other questions? If there's no other questions, we might conclude this quarter's update. All right, well thank you everyone for attending. That will conclude this quarter's update. Thank you. Thank you.