The Dubber (ASX: DUB) share price has jumped 50% higher since the beginning of April. What are the reasons behind these massive gains?
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The share price of call recording software developer Dubber Corp Ltd (ASX: DUB) has been on an absolute tear recently. Since the beginning of April, shares in the junior tech company have soared over 50%, from $1.77 to $2.67 as at the time of writing – and that’s despite an almost 10% slump on Thursday.
So, what has got the share price skyrocketing?
First, let’s take a quick look at what Dubber does.
Dubber operates a software-as-a-service (SaaS) business model. This basically means it sells licenses to companies so that they can access and use Dubber’s cloud-based software.
These sorts of business models can be quite attractive to investors (if successful) as they can provide dependable revenue streams in the form of recurring subscription payments from clients.
Dubber specialises in call recording software. The technology can help its clients manage and analyse large volumes of calls, which can help with sales optimisation, customer retention, staff training and can even help to ensure companies meet compliance targets.
The software even uses artificial intelligence to measure customer sentiment, providing emotional insights into a company’s performance.
What really got the Dubber share price skyrocketing was the news on 14 April that it is set to partner with US-based telecommunications company Zoom Video Communications Inc (NASDAQ: ZM). Businesses will now be able to record their Zoom conversations and use Dubber’s software to analyse these calls.
Zoom became a globally recognised brand during the COVID-19 pandemic, as it has supported companies who have had to adapt to remote working arrangements.
Following this announcement was Dubber’s March 2021 quarterly activities update, in which the company reported strong growth across just about all of its key metrics.
Revenues increased by a whopping 54% quarter on quarter (to $2.3 million), driven by record growth in customer numbers. Annualised recurring revenues from its subscription-based licenses reached $34 million, a jump of $5.6 million (or 20%) over the previous quarter. Dubber also ended the quarter with almost $38 million in cash on its balance sheet.
Commenting on the results, company CEO Steve McGovern stated that, “The company is very well positioned to continue to take advantage of the major shift towards cloud-based and ‘work from anywhere’ communications we are seeing in all geographies.”
What next for the Dubber share price?
The fact that Dubber is quickly growing its customer base and inking deals with internationally recognised telecommunications companies like Zoom seems to be resonating with investors.
However, Dubber is still a junior company and a speculative investment. On Thursday alone its share price slumped almost 10% after one of its major investors (Regal Funds Management) ceased being a substantial holder, showing that the Dubber share price can still be incredibly volatile.
But, for those of you who can stomach those sorts of price swings, Dubber is arguably turning into an exciting ASX tech company. It will be interesting to watch how its share price performs over the next few months.
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Rhys Brock owns shares of BIGTINCAN FPO, Dubber, Elmo Software, and MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, Elmo Software, MEGAPORT FPO, and Zoom Video Communications. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Dubber. The Motley Fool Australia has recommended BIGTINCAN FPO, Elmo Software, MEGAPORT FPO, and Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.