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But……costs are still rising. Is this a sustainable business?"
Good question,
@BRIAN70. I have analysed this issue for you and others on this forum, using Dubber's published quarterly cash flow statements because I believe these are more meaningful than profit statements at this stage of Dubber's development.
The following chart clearly shows how quickly Dubber is improving its Customer Cash Receipts as a % of Total Operating Cash Outflows (ex Grants) from operating activities. It has gone from the mid 20% range in the March 20 quarter, to 61% in the most recent Sep 21 quarter. That is only 18 months. When it gets to >100%, Dubber will be making an operating cash flow surplus.
Cash receipts have been growing very strongly (they have gone up by 6.5x or 550% in the 18 months to the Sep 21 quarter), and from here on should accelerate in $ terms off the larger base. Operating cash outflows are very likely to grow more slowly after the recent very rapid growth in staffing costs and product manufacturing & operating costs. Therefore, I would expect that cash receipts should exceed total operating cash outflows within 12 to 18 months. A completely separate issue is how much Dubber will be investing in acquisitions, but this bears no relation to the objective of achieving an operating cash flow surplus (when the below graph gets to >100%).
So yes, Brian70, it is clearly a sustainable business. You need to look for the longer term trends as shown in this chart - not just from one particular quarter to the next, because if you pick the wrong two consecutive quarters (e.g. Sep 20 to Dec 20), you may not get the correct picture. Also, just concentrating on the profit and loss statement can confuse some investors when there have been large increases in investments for growth, as Dubber has done.
P.S. Brian70, if you appreciate the considerable effort I have put in to analyse and respond to your excellent question, then I would appreciate some appropriate feedback (ideally a GA if you think the analysis helpful). I have noted that you provided no feedback on my last analysis 2 days ago that also relates to your question yesterday.
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