Dubber Corporation (ASX:DUB) Faces $7M Margin Hit as VMO2 Agreement Ends
Contract Termination
Dubber Corporation Limited (ASX:DUB) reported that VirginMedia O2 has decided not to renew its existing agreement for call recording and wholesale SIP services, expiring on 30 June 2025. The termination was unexpected.
Financial Impact
The company anticipates a gross margin reduction of approximately $7 million if the termination proceeds, before any mitigating actions. Dubber has achieved a normalised EBITDA profit of $47k for April 2025 and reached an underlying cashflow run-rate breakeven.
Cost Reduction and Future Outlook
In response, Dubber plans to eliminate expenses associated with the VMO2 contract, pursue further cost reductions, and focus on new growth initiatives. Management targets returning to operating cash-flow run-rate positive by the end of the calendar year.
Balance Sheet
The company’s most recent Appendix 4C Report at 31 March 2025 showed working capital reserves in excess of $16m.
Motley Fool contributor Matt Burgess 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. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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