Did this really just cause the Dubber share price to tumble 25%?

Unpredictability in cash receipts could be weighing on Dubber shares today.

| More on:
man grimaces next to falling stock graph

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Dubber share price is down 25% today following the release of the company's quarterly report 
  • Most metrics indicated continued growth, except for a decrease in cash receipts from the prior quarter 
  • CEO Steve McGovern provided more colour on the outstanding payments for the company's cash receipts 

The Dubber Corp Ltd (ASX: DUB) share price is losing its footing on the last day of trading for the week.

At the time of writing, shares in the cloud-based call recording software provider are 25% in the red. This contrasts with yesterday's solid 13.4% gain ahead of the company releasing its fourth-quarter results after market trading hours.

Yet, today is a different story after investors have had a chance to dissect the latest results. Furthermore, management conducted a quarterly webinar this morning, providing more information to digest.

So, what could be pushing the Dubber share price lower today?

Chasing down payments

For the most part, Dubber's fourth quarter is a story of robust growth. To quickly summarise the company's achievements, here is a recap of the highlights:

  • Annualised recurring revenue (ARR) up by 51% year on year to $59 million
  • Total annual revenue increased 75% YoY to $36 million
  • Subscribers increased 38% YoY to more than 580,000
  • Cash receipts grew by 48% YoY to $29.9 million
  • Cash on hand at the end of the quarter finished at $84.3 million

The above metrics are all relatively impressive given the challenging macro environment. However, it is possible investors are taking issue with the more granular details around cash receipts for the quarter, putting pressure on the Dubber share price.

According to the report, cash receipts fell by $1.8 million compared to the prior quarter. As a result, Dubber booked $6.7 million for Q4 or a 21.1% decrease. The company states this was due to outstanding payments, the majority of which are expected to flow through in the September quarter.

However, comments regarding cash receipts made by Dubber CEO Steve McGovern on the quarterly webinar this morning may have caused some unease among investors.

I think if you have followed Dubber for a while, the most important factor here is that whilst we have 580,000 subscribers who are on our call recording plan, they're not credit card subscribers. Our customers are actually service providers. And so, if we have a service provider that doesn't pay in a quarter, it can be quite meaningful. If you look at the four quarter's over the past year, you will see that that's happened, you know, quite regularly — fluctuating in terms of our receipts. 

This uncertainty created by fluctuations in payments from service providers may have spooked some investors today.

Dubber share price snapshot

Today's reaction to Dubber's quarterly report puts a dampener on what has been a recent resurgence in the Dubber share price. Prior to today, shares had surged 75% from the year's low of 51 cents.

As a result, the company's share price has retreated nearly 74% since the start of 2022. Despite the rather disappointing move, Dubber has continued to deliver revenue growth over the last 12 months. However, the company reportedly burned through $12.7 million of cash at an operational level during the fourth quarter.

Based on the current Dubber share price, the company holds a market capitalisation of $283.7 million.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Dubber Corporation. The Motley Fool Australia has positions in and has recommended Dubber Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Miner standing in front of a vehicle at a mine site.
Materials Shares

Rio Tinto shares sink on half-year profit decline and smallest dividend since 2018

Investors haven't responded positively to the miner's half year update.

Read more »

CSR share price rising asx share price represented my man in hard hat giving thumbs up
Materials Shares

Rio Tinto share price in focus on US$4.8b half year profit and dividend cut

Let's see how the mining giant performed during the first half.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

Guess which ASX 200 stock is jumping 11% today

Let's see why investors are bidding this stock higher on Wednesday.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock is rocketing 26% on better than expected results

The KFC operator has delivered on expectations with its FY 2025 results.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Earnings Results

Which ASX 200 stock is up 5% to a 52-week high on results day?

This blue chip is having a strong start to the week. Let's find out why.

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Web Travel share price rockets 13% on market leading full-year growth

Investors are sending Web Travel shares soaring today. Here’s why.

Read more »

Happy shopper at a clothes shop.
Earnings Results

Why did Myer shares just rocket 9%?

Investors are piling into Myer shares on Friday. But why?

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »