The leaner, meaner Subex has posted good results for Q3. A while ago, Subex press releases liked to talk about the top line, not the bottom line. Now the focus has reversed. The leaner Subex looks like its annual revenues will be much closer to USD100m than the USD120m+ that had been its forecast only a few years ago. But now that Subex has a much lower cost base, profits and EBITDA have rejuvenated. In Q3 Subex made a profit after tax of USD 8.7m over sales of USD 25.1m. With Subex’s management saying they have resolved their FCC overhang, they can look forward with increased confidence thanks to their strong fundamentals.
Here is one footnote to this story. After a drop in Subex’s share price, I recently blogged about investors and analysts finding it difficult to put a fair value on RA vendors, and how they tend to lump them in with every other tech stock, even though RA should have more defensive qualities than the norm. Subex’s Q3 presentation to analysts begins with a dozen slides explaining what Subex sells and why telcos buy it. Is this a sign of increased effort to explain why investing in RA vendors is different to investing in other tech businesses?