Shares in ASX cloud-based communications company, Dubber Corp Ltd (ASX: DUB), have been on an absolute tear recently. In the last two months, the Dubber share price has surged 60% higher to $1.54, following a flurry of business activity and positive results announcements. Overall, the company's shares have now risen more than 30% this year and are up over 300% since bottoming out at a 52-week low of 38 cents at the height of the coronavirus selloff back in March.
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What does Dubber do?
Dubber operates a software-as-a-service (SaaS) business model. It develops cloud-based call recording software that helps companies manage and analyse large volumes of calls as well as meet compliance targets. The software offers advanced search capabilities and allows business users to easily categorise and sort calls. Although particularly useful for call centres, Dubber's software has a variety of sophisticated applications, and even has the ability to use artificial intelligence (AI) technology to measure customer sentiment.
What's drving the Dubber share price?
Dubber has been one of several ASX companies, along with Whispir Ltd (ASX: WSP) and Megaport Ltd (ASX: MP1), to have seen their business opportunities actually increase as a result of the COVID-19 pandemic. FY20 saw record growth in customer numbers for Dubber, and annualised recurring revenues jumped by 95% year on year in FY20 to $16.1 million. Dubber's cloud-based software has helped its clients transition away from traditional communications infrastructure during the move to remote working arrangements.
The company has been able to leverage this positive performance through a series of capital raisings. It raised $10 million from institutional and sophisticated investors at the onset of the COVID-19 crisis in April. It then raised a further $35 million in October, again from institutional and sophisticated investors.
And just last week, the Dubber share price was on the rise after the company announced its share purchase plan (SPP) offered to retail investors had closed well oversubscribed. The company had intended to raise $6 million through the SPP, but had received applications totalling over $33 million. In the end, the company elected to keep $10 million and refund the remaining applications.
And it has already been putting the cash raised to good use. Back in May, Dubber announced it was acquiring CallN, a call recording company based in Australia. Dubber also hired former chief marketing officer (CMO) and chief operations officer of Xero Limited (ASX: XRO), Andy Lark, as CMO, and conducted a comprehensive rebranding.
Part of this rebranding exercise was to overhaul the company's strategic priorities. And Dubber has set itself some lofty targets. It would like its call recording software to one day be part of every network and communications solution across the world. Achieving this goal will require significant investment in sales and marketing, as well as in improving its AI technology. Currently, the company has $16 million in cash on hand to help it achieve these outcomes.
Ultimately, only time will tell whether this will be enough cash to sustain Dubber's growth trajectory. Based on the current Dubber share price, the company has a market capitalisation of just under $370 million.
