Subex Profits Bounce Back

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?

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.