Bango (LSE:BGO) — Full Year Results Presentation

0:01 Good morning, ladies and gentlemen. Welcome to the BANGO PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your investor meet company dashboard.

0:34 Before we begin, I would like to submit the following poll. And as usual, if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, Paul Larby. Good morning, sir. Good morning, everybody, and thank you for attending our fiscal twenty two brilliant results presentation. I very much appreciate your time here today. A lot's going on in the year. Lots to share. So without that, let's dive let's dive straight into it. Those that maybe are are sort of new, I thought it'd be a good place to start just to align ourselves on on the BANGO Virtuous Circle and the the business in which we operate. As a business, we're very much focused on helping merchants find new paying customers, and we do that by allowing them to connect to you new customers via new payment mechanisms through the BANGO payments business.

1:24 That could be wallets. That could be carrier billing. And for those that offer subscriptions, by enabling those subscriptions to be bundled with other subscription services like broadband or employee benefits or or other different types of subscription services, and we call that the digital vending machine. We'll talk a lot more about that as we go through the presentation. All that together generates this huge pool of payment data. We exited last year at a run rate of about $8,600,000,000 worth of transactions that flow through the platform. And we built a a way of monetizing that helping those same merchants that are using the the platform to process payments, but to find new paying users by better targeting their marketing use what we call purchase behavior targeting, and that's the BANGGO audiences business. And so we have a virtuous circle because more successful we are with BANGGO audiences, the more payments we process. The more payments we process, the more data we have to generate those insights from, and so the virtuous circle just continues. So just a little refresher there for those some of you that are are maybe new to the to the BANGO business.

2:25 If we look at the highlights, over the other digital vending machine, that way of dispensing those subscriptions, some key wins in the year with T Mobile in America, Liberty Global, Benefit One, and then many of you may have seen the Verizon Plus Play launch and the and the advertising campaign that they launched through the Oscars. So that's a lot of lot of digital vending machine highlights throughout the year. Likewise, BANGO audiences started to move away from just helping clients at the bottom of the marketing funnel. We've historically focused focused on helping app developers, you know, immediately find those paying customers, but increasingly seeing the the opportunity for helping brands find customers for the top of the marketing funnel. And, again, we'll we'll talk a little bit more about that a little bit more about that later.

3:07 One of the big things that happened last year, I actually, probably the last thing you spoke if you joined one of these sessions previously is when we acquired Dokomo Digital. That really was a transformative acquisition integration going on or ahead of plan and really accelerated our growth by up to two years. So lots certainly lots going on in the year, and that's always delivered revenue growth of 38%. And importantly, as a result of that digital vending machine increase, increase our annualized recurring revenue by a factor of five. So significant progress throughout the year. It's not just about sort of results in the year. It's about building a business that's sustainable for the long term. If we look at some of the key elements of that, people are very important. We recorded our highest ever engagement score of 83%. Last year, it was our highest ever engagement score of 82, so we've increased yet again on the record score we set last year.

3:58 That allows us to, when we're hiring, to be hiring for growth. We have very low staff churn. People really are a a core element of BANGO. And likewise, it's and the reason they work here is because of our values, and part of our values is really all about diversity. We were privileged to win the diversity champion award at the at the AIM Awards in addition to being recognized by Business Weekly as the quality company of the year. In all of that, it's important to do that in a in a way that's sustainable for the for the planet. Lots of talk about that in the news this week in particular. We maintained our carbon neutrality. We actually reduced our carbon density, which is the our emissions per per unit of revenue, and we made an additional commitment to become net zero by 2040. So you'll see more detail of that when we publish our annual report in the coming days.

4:47 Security is a key element of what we of everything we do here, and so we've maintained and enhanced our ISO security accreditation with ISO 27,001. So really not just about building a business for a year, but building a business that's sustainable in the long term. So with that, let me turn over to Matt for more of a walk through the financials, and then I'll come back a little bit at the end and talk about the outlook and some of the things that happened throughout the year. Paul, good morning, everyone. Our first slide looking at the revenues showing continuing strong growth for BANGO in 2022. The end user spend increased by 36% to 5,600,000,000, but more interestingly, gave us an exiting run rate for the last quarter of 8,600,000,000.

5:34 So, again, showing the increased amount of data that's going through our platform and the availability for our BANGO audiences business also. So a good indicator there. Our revenues were up 38% on on 2021 to twenty eight and a half million dollars, and that's in line with the five year compound annual growth that's running just short of of 40%. So continuing impressive growth track going on from, the revenue side. To give a bit more clarity, especially in relation to our our digital vending machine business, we've started to produce the annual recurring revenue number this year, and that's at 5,000,000, which is up from December 2021, which was just over a million dollars. So as Paul alluded to just before, really good growth again there in in in that number.

6:22 Our gross profit margin continues to be above 90%, allows that revenue to flow down to the bottom line.

6:32 Looking at that, our EBITDA for the year was 5,000,000. So down on 2021, but we were expecting that one in relation to the acquisition we brought on with Docomo where there was costs involved with that business with that had inflated personnel expenses and additional sites and legal entities. So that was an expected item. It's actually ahead of ahead of the the consensus that was out in the market in the market. So pleased with that result on the the adjusted EBITDA. So our operating costs are up as expected. We're in line with the acquisition plan, but also reflecting how we've been continuing to invest into the the BANGO platform, and also within, sales and marketing to drive our sales team, to take on the new opportunities that we have.

7:22 Operating loss ended up at 3,400,000, but again, as as alluded to above, that was an expected result following the the Dokomo acquisition. Looking at the cash, you can see we had continued increasing cash, still generating cash from our operating activities, investing that wisely into our intangibles for the platform development, gains from some of the acquisition, revenues coming sorry, acquisition cash coming through and giving us with a healthy, cash balance at the end of the year. So looking a little bit more at the acquisition cost synergies, as you you'll probably be aware, we were indicating there's a 21,000,000, of synergistic of, gains that we expect to realize by the end of twenty twenty three.

8:12 And at the end of the year of 2022, we'd executed on 11,000,000 of those in the first four months. So almost a third of those savings completed by the end of the first four months. That's now risen to about 30 just over 13,000,000 as we speak now. So those savings come through reduction headcount costs. They're also the operating costs of their platform. We've been starting to reduce. We've reduced the number of entities that were within the the companies we acquired, and there are now fewer offices around the world. So we still feel very much on track to to hit our our 21,000,000 synergistic savings by the end of the 2023. We indicated in the previous announcement that'd be 30 to $35,000,000 worth of write offs as part of the acquisition.

8:58 Those have actually been accounted for through fair value adjustments on a purchase price adjustment basis. So our intangibles were impaired through that PPA on the opening balance sheet, so it didn't impact our our p and l and the income statement but was reflected within reserves. And our restructuring, which has been it's it's been our only cash element of that one continues and is shown within the the income statement. As part of the of the side effects of of buying the company at such a a good deal, we've got a benefit of a a negative goodwill figure, which has been which is also recognized on the front of the income statement.

9:38 We'll run through here just an income statement over the last six years giving a good sign of the the increased revenues, the continuing high margin. You can see as well the development in in in the business that's continued and a good movement in the EBITDA coming from the the lower levels in 2017, up some good levels of continuous EBITDA profitability in recent years. And, with cash, cash maintaining that cash, which is all BANGO cash, gives us the availability to invest without having to go back to the market to look for alternative fundings. So some of the key highlights from the year. Our EBITDA was ahead of expectations, a good result from that. We've had strong growth in annual recurring revenue, so focusing on our new digital vending machine, platform licenses development.

10:26 Strong growth in the balance sheet, sorry, strong balance sheet with growing cash position, no debt, and good progress with the savings for in relation to the acquisition.

10:39 Thank you. Pass back to Paul. Thanks, Matt. So I thought we'd look at some of the other things that have gone through the year. But, again, before we do that, sort of a a reminder of the the sort of the different, you know, business lines or segments that that we'll talk about as we go through. We'll talk first about the payments business. That's really we're allowing people to purchase goods, both physical and digital via busy anything other than credit cards. So carrier billing, charging to your phone bill or wallets being being two of the most common mechanism now. The way we charge for that is we'll charge a percentage of the end user spend as the as the transaction fee that could be from, you know, one to 3% for digital goods, less than half percent for physical goods. And that's a really, really good business. It's good it's good good continued organic growth. Probably Probably grows grows around sort of 20% sort of organically from a from an end user spend perspective, and wallets continue to play an important part of that of that overall sort of alternative payments business growth.

11:35 Digital vending machine, one of the newer lines of business that's really dealing with super bundling. So the ability to bundle multiple subscriptions together with a a broadband subscription, for example. That's a different business model, very much a SaaS business model. It gives us that annualized recurring revenue fee that that Matt talked about earlier. Also It's a setup fee and a license fee and and other bits and fees pieces, but the the really, that's that recurring revenue, that sort of SaaS fee. And that's really where the growth is high, and that growth comes from new wins, existing customer growth, and actually, I'll I'll move outside of telco into other verticals, and we'll talk about that as we as we go through the next slides. Then we have the BANGO audiences business. It's using that all of the payment data that those two generate, that 8,600,000,000 run rate that that Matt talked about earlier to basically help people better target their marketing using purchase behavior targeting in digital platforms like Facebook and TikTok and Snap. And the way we charge for that is we charge a percentage of the ad spend. So anywhere between 710% of what a marketing company will spend within those platforms to show their ads, we will take as the fee for using that audience. In In return, they get between a two and nine times increase on the return on ad spend.

12:40 And their growth again in that business is high. It's all about bringing out more app developers, nail to market on more platforms. And as I hinted a little bit earlier, as I talk moving higher up the marketing funnel. So we'll talk a little bit about not more and and how this can be used for brand marketing as we go through as we go through the deck. So we look at the payments business first. Obviously, the acquisition of Docomo Digital added over a 100 new customers for the payment business. It gave us that long term agreement with NTT Docomo. Remember NTT Docomo being the largest operator and the largest carrier billing market in the world. And, actually, their reason to sell the the payments business was to help them find a new strategic partner who have the right platform to allow them to continue and actually accelerate their growth because payments is very core, for the NTT Dokomo business as part of their mobile operator, in Japan. So, really, this was about them not raising cash from a from a from an acquisition, but they're finding the right partner.

13:33 So it's very much a sort of a competitive solution process to for them to find the best partner. We're already starting to see some revenue synergies. Think we've always talked about cost synergies and that 21,000,000 that Matt talked about. But not long after the acquisition, we expanded with Telefonica in Mexico, adding DCB into into their mobile operator in Mexico, a very fast growing market, and that's a a good example of one of the revenue synergies that's not baked into any of the numbers that you see out there in the marketplace. And finally, we added the the last major logo. We were missing that global technology leader, basically to do sort of both bundling as well as sort of app store carrier billing. So the the last big logo we were really missing as a company really rounds out the portfolio and just sort of, again, turbo charges that that payments business growth.

14:25 Looking at the digital vending machine. The digital the premise of the digital vending machine is all about this growth in the subscription economy. It's subscription economy. You can get a subscription for everything now. Right? It's not just movies. It's not just your gaming. It's not your music service. It's your home security, things like Peloton, services like Calm, lifestyle services like Duolingo so you can learn another language, you know, home delivery services, razor blades, everything's a subscription. And in that growing subscription economy, the it creates a challenge that it's even more complex for people to manage and and find those subscriptions. That's really what the digital vending machine is really all about, sort of helping to solve. So we did a a survey. You might have seen this on our website. There's a there's a link there at the bottom. We called it the subscriber strikes back.

15:12 Truly, know, so what did we find out from the survey we did? We find out that, you know, 62% of customers would sign up to more subscription services if they could if they could came as a centralized package, and if it was easier for them to manage them. And so even higher than that, 78%, they're they're they're really desperate for a single place to manage all those subscriptions. One of the challenges people have is, you know, different subscriptions on different credit cards. They've signed up in different places with different logins. It's just complex to manage. But when they were at 8%, I actually believe they would they would be more loyal to a company that provided all those subscriptions in one place. And that's exactly what the digital vending machine's all doing. I mean, this is those trends are quite often called super bundling. And when you see journalists writing about it, I mean, the digital vending machine is helping solve those problems by enabling telcos, but other verticals in particular place all those subscriptions in one place and and give the customer real value by enabling to add, subtract, pause, restart subscriptions all from a from a single marketplace, if you like.

16:08 And, you know, one of the drivers from a from a content perspective, we saw that that growth in the overall subscription economy earlier, but an increasing portion of that is going through what we call sort of a channel, so through a resell channel. And that's that's that's what the digital vending machine is. It's this really harnesses the intersection of this growth in the subscription economy and the growth of that economy moving more and more to a channel perspective. So you see a four x increase in terms of the percentage in a market that's over doubling. So significant growth in this intersection between subscription services moving to be delivered through a channel, and the BANGO platform is really right at the heart of that of that intersection.

16:47 If we look at the growth, and, again, this ties into recurring revenue. So we generate increased recurring revenue as customers grow, as they more customers, as those customers take on new subscribers, and that generates an increased number of the subscriptions we manage. That allows the people to climb through the tiers, so zero to 1,000,000, 1,000,000 to 3,000,000. So as they cross through those tiers, our ARR goes up. We had three customers generating ARR in 2021. We added five in 2022 generating revenues as new customers this year, and that's basically given us the confidence to increase the outlook for the end of the year. We were originally forecasting that we we would exit this year at 7,000,000 of ARR. We're now saying we're gonna exit to 10,000,000 ARR. So if you go back only to 2021, we exited a million. We exited '22 at 5,000,000, and we're now saying we're gonna exit '23 at at 10,000,000.

17:37 And that's because of, say, existing customers, but also new customers. So we announced T Mobile, Liberty Global, Intel last year. Verizon did a very public plus play launch. Encourage everybody to go on YouTube and look at some of the the Oscar commercials that they ran, very big marketing campaign for Verizon around plus play. I mean, the BANGO platform is really the heart of the the plus play solution. Benefit one was another customer we announced, and this is interesting because BenefitOne is not a telco. BenefitOne is an employee benefits provider in Japan that has around 10,000,000 employees who basically use their platform to to manage their the the benefits that their employers offer to them as a as an employee.

18:19 And benefit one, know using the digital vending machine initially to offer Netflix, but also other services as well, other subscription services as part of that employee benefit package. I think this is a great example of where the the potential expansion of the digital vending machine into other verticals it really makes sense. Telcos is you know, remains the focus. That's where the bulk of our customers are today. And it's it's a it's an obvious place to start because telcos are historically very good at bundling multiple services together.

18:47 But what makes them good super bundlers is they have three distinct characteristics. They have the ability to market to customers. They have the ability to regularly they're regularly in contact with customers. It's a high touch point, and they have the ability to process payments and collect charges. And employee benefits, you know, meets all three of those criteria perfectly. And so we'll see further expansion into that vertical and also exploring other verticals as well. Retail, we've talked about in the past. Utilities, these are all additional verticals that could benefit from the BANGO digital vending machine. And so all of that together drives this ARR growth, and let's say we increased the end of the year forecast from up from 7,000,000 up to 10,000,000. The digital vending machine itself continues to get more more feature rich.

19:33 So some of the things are going in terms of offer management so we can advise customers which offers to take up. So when I walk up to the vending machine, I see a very different array of products based on what I've subscribed to than Matt does when when he walks up to the vending machine.

19:46 Boost plus, which is our way of using those insights to help increase the number of activations, ensure that people follow through the sign up flow, and that don't just if they look at something, they're reminded to go back and make that purchase of that subscription later. Suspend and resume, that's something we announced a few years ago, and the the rationale when we did it was for enabling sort of benefits for prepaid subscribers. So you could if you topped up a certain amount, you got a service added in for that particular month. If you then failed to top up, the suspension was the subscription was suspended, and then it resumed again once you once you topped up your prepay account. But, actually, we're noticing that applied to other subscription services as as, you know, operators potentially look to allow people to pull subscriptions. So you can imagine you're going on holiday for a period of time, maybe you wanna pause your home delivery service or for example.

20:36 And that could mean that subscription pauses, and that it and the advantage of it pausing versus stopping is that it's easier to get back afterwards. You don't have to recreate all your logins and and all your preference. So that that suspend and resume is important

20:48 in that case. But it could be something as simple as you decide to suspend your, you know, Spotify, for example. If you suspend spotty Spotify, you actually drop down from a paid tier to an ad supported tier. So it doesn't necessarily mean you lose service. It means maybe you're just paying for it in a in a slightly different way. Asset select is all about enabling the payment providers to make sure the right marketing collateral is in front of the right person at the right time, all driven through APIs so you don't have multiple people copying files, updating websites websites and and apps. The entry point into the digital vending machine can all be updated from data collected from the BANGO platform with a set of rules that, you know, each merchant will publish. So, for example, when, you know, Amazon launching the new services at Jack Ryan, there's probably a set of imagery around Jack Ryan and and rules around when and how you can use that. And, again, that's automatically applied into the into what the customer sees rather than having the operator having to sort of manage that all manually.

21:44 And these are all sort of innovations are all around making that digital vending machine more feature rich and giving the operators more ability to offer better services, more personalized services, and drive higher revenue. And as they drive higher revenue and convert more subscriptions, they pay a higher license fee as the as they climb through those tiers. Moving forward to this year, one of our big drives is to reduce that time to revenue. You So can imagine, though, we've and we've talked about this on calls in the past. So if you look at the revenue profile, we sign the contract. There's then generally some sort of upfront fee.

22:16 And then there's a pause where the operator does everything they need to get it ready to launch, and then they launch, and then at that point, the license fee starts. So we're really focused on how can we reduce that interval. Well, one way is actually by pre stocking the vending machine. One of the common delays we saw was is in the operator trying to do negotiations with so many vendors at the same time. And so they were not just sort of building the technical solution. They were doing the commercial negotiation for the goods that they wanted to stock in the vending machine. So how can we bring the vending machine prestocked? So prestocked with a number of merchants so that there's less negotiations. And if at BANGO, for all intents and purposes, acts as the merchant. We already have a contract with the telco, so we don't need a new one. So it's just a way of the telco getting more services to market more quickly through the digital vending machine.

23:04 The second piece is on trying to reduce the amount of work that telco has to do to to sort of make that service available to customers. The most obvious example being the user interface. So the where does the customer log in? What do they see? What buttons do they click on to add a subscription? How do they see how much they're being charged over each period of time? That's only the way that that the user interacts with that digital vending machine. Historically, people like Optus and Verizon have sort of built that out themselves. And this year, we'll be launching a white labeled consumer experience so that operators can launch more quickly, take our UI, rebrand it with their own colors and their own logo, etcetera. But more importantly, it increases the deal size, and it allows us to start generating that ARR more quickly because the reduces one of those sort the key elements that the operator had to do and and allows BANGO to deliver it straight out of the box. So that's one of the the the things we're working on this year.

23:59 If we look at BANGO audiences, again, another good year of growth in 2022. All the right more payment data. Don't forget that the acquisition of Docomo Digital brought an initial 3,500,000,000, gives us a 8,600,000,000 run rate worth of data to to to generate these insights from. Moving to into more and more sectors, so the app stores or the apps and the

24:21 app stores have always been big customers. But increasingly, the merchants that are using the digital vending machine are also starting to use BANGO audiences. And that that's a brilliant example of the BANGO virtuous circle because we generate revenue by selling BANGO audiences as a service to that merchant. When that merchant finds more customers in the vending machine, it creates another entitlement, which pushes the operator further and further towards that next tier, which generates that that incremental recurring revenue.

24:49 More and more customers, you see some new logos on there. It's product madness. If you're at our Capital Markets Day, you would have heard from product madness talk about how they've used the product. But increasingly brands like Adidas, and I'll I'll I'll cover some of the more the brand piece on the next slide. And then moving that into automated platform. We've done a lot of work this year to automate the sharing across multiple platforms. Facebook, TikTok, and Snap are all live. We're in the process with Pinterest at the moment. We have one customer who wants to use Pinterest. And for us, we're building that so that the the mechanics of the audience generation and the audience sharing are all the same. And so we're very platform agnostic in terms of the platforms we share with them. Clearly, the more platforms we can offer to our customers, the more embedded we come in their marketing campaigns. We wanna be that default mechanism that they use in every single marketing campaign.

25:37 If we look at the the the marketing funnel, historically, where we focus with BANGO PLC is right at the bottom in that in that sort of purchase model where you're trying to get an app developer using purchase data to to immediately convert somebody from seeing the ad to making a purchase, so to making that in in app purchase. So you're right at the bottom of the of the marketing file. And that has very strict metrics. It's very easy to measure for the app developer in terms of the return on the ad spend, and it's a very, very immediate return. But what we're starting to see is actually there's there's more budget higher up that marketing funnel as people look to bring in traffic into their ecosystem, as people use to use it to raise brand awareness and then to start to get engagement with the customers all ahead of making a purchase. And the the added example I gave earlier is is a good example of that. We also have, for example, cruise liners using exactly the same exactly the same methodology, and that's so we started to focus BANGO audiences now on using that purchase behavior targeting, but on those sort of branding and traffic and then the engagement pieces of the marketing funnel.

26:36 What that does is, in effect, broaden the

26:38 overall marketing funnel so that more people drop out at the bottom. But it's a very nice business because those campaigns are generally more long term plan. When you're at the bottom of that purchasing things, our developers are week to week or month to month in terms of the campaigns, they have very strict metrics. Higher up the funnel, there's more budget. The campaigns run for longer. There's less immediacy of measurement. There's more metrics. So, for example, things like we have with some app developers, we've seen much better engagement, much better click through rates, but they don't care about that. They purely care on the on the purchase. So while, really, the purchase we have we're targeting really works well at the bottom, what we're seeing is actually there's a bigger opportunity higher up that market funnel. So that's something we're starting to execute on this year. Those campaigns tend to be really agency led, so starting to build relationships

27:23 with some of the big agencies, and that will be our really our way of scaling this business is bringing on a few brands, using them to get into the agencies, and then using the agencies to help scale that solution moving forward. So early days, but certainly very interesting times for helping BANGO audiences sort of climb up that marketing funnel. We look to the future, and, really, our focus for 2023 is really broken into into three areas. It's all about continued growth, the simplification of the business, especially as we complete the integration of the of the DOCOMO digital acquisition, and then making BANGO, you you know, really special in terms of the places that people want company people wanna work with and the company people wanna work at.

28:04 You know, we've solidified our leadership position for DCB and wallets with some of the world's largest merchants. The Dokomo digital acquisition played a big part of that by accelerating us forward by over two years. That pipeline of DBM deals means we've increased our ARR outlook to 10,000,000 by the end of this year. We continue to invest to see how we can accelerate that even further, reducing the sales cycle time, reducing deployment time so we can get to revenue faster. And and those in DVM customers are using

28:31 BANGO audiences to help them sell more once those once those services are live. And as it can climb up the marketing funnel, the ability to grow into that much larger marketing budget outside of the pure app developer spend at the bottom of the marketing funnel is really exciting. So so much going on throughout the year. It gives us great confidence that 2023 will be a very positive year and hope you feel that. Hope you feel the sizzle and look forward to to continuing engagement and updating you as we go through the year. So with that, why don't we pause for questions?

29:06 Paul, Anil, Matthew, that's great. And thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

29:31 Guys, we did receive a number of pre submitted questions ahead of today's event. And as as you can see in the q and a panel as well, we've also received a number of questions throughout your presentation this morning as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, Rebecca, perhaps if I may hand over to you to chair the q and a session with the team, and then I'll pick up from you at the end. Thank you. Yeah. Of course. Thank you. Yeah. We've received quite a few questions, so we'll try to make sure that we we come to all of them. But as he mentioned at the beginning, we'll we'll submit them on the platform

30:03 if there are any that we don't get to. There's a question on end user spend. I'm just I guess, if looking at the Document Digital contribution and extrapolating the sort of four months contribution that BANGO's second half end user spend looks flat to me. You could provide any more context on that. No. I think I think so I think there's a couple of others. The the underlying business continues to to grow strongly. If you look at you know, we'd said Dogmore Digital is about 3,500,000,000. You divide that by three because we had it for roughly a third of the year. You sort of get to 1.1 plus billion. You sort of take that off the the total number. You can see we we grew by, don't know, 8%, something like that, and that's a bit that's a bit an actual currency basis. But due to the the fact that the we report in dollars and the dollar has been very strong against the key currency where we're generating that end user spend, particularly in in euros and particularly in Japanese yen, there's over $500,000,000 of end user spend that's, in effect, lost in FX of that. So I think you've gotta you've gotta look at the the big picture. But, no, the the the front line business continues to grow. We see that business going around, you know, 20%, you know, per annum barring unusual events. It just sometimes get masked a little bit by that by that effects.

31:12 Thank you. And sticking with end user spend, another question on how much of it is gaming related, whether we'd expect that mix to change as DBM revenue grows. You If I take that. Yep. So the revenue in terms of energy spend, in terms of gaming dependency, I think if you look at if you think about the BANGO business from a payments processing point of view, we power a number of the leading global app stores and global merchants. So you you get a you get a mixture of products generating that energy spend. Gaming is a big contributor, but so are other media experiences big contributors. So if you look at the Google Play Store, for example, you'll see things like YouTube's premium subscription service and Google Play Music are very significant services that that millions and millions of customers use.

32:01 So they're they're big contributors. And, of course, in the BANGO business, we have that unique position where we power direct carrier billing for the Amazon retail business in Japan. So that's a significant trip contributor to end user spend. But your your your point about dependency in in the digital space on on gaming, it's actually an increasingly diverse set of products and services you saw in one of the earlier slides in the presentation that that are now coming to market in the form of subscription. So there's almost no media company left on the planet that doesn't have a over the top subscription based streaming

32:36 service delivering its content. And we saw some interesting announcements from BANGO in the last twelve months for small small specialized content like Televisa Univision in North America, which is Spanish language content. But there's also all sorts of new services, lifestyle services coming to market, which are really interesting, I think, around health and productivity and home activities. So there isn't really a dependency in end user spend on any particular content category anymore. It's it's very broad, increasingly broad, increasingly diverse. Thank you. We've had a few questions on BANGO audience's revenue, both whether whether we're able to give any indication of revenue increase or any indication of what revenue might be sort of going forward into 2023 and the rationale for not breaking out BANGO audience's revenue at the moment and if there's any timing on when we might do so.

33:28 Yeah. So we don't we don't break out the the revenue. We we report a single revenue stream. One of the reasons for that is you remember with the BANGO audience's business, the data is in effect owned by the the mobile operator in in in many cases, and we do a revenue share of that of that BANGO audiences revenue back with the operator. You can imagine with Dorkomo Digital, we acquired 3,500,000,000 additional end user spend. That's a whole set of new operators to go and have those discussions with them, do those negotiations. And and any information that's in the market in terms of the size of the business, the growth, it's basically it's it's counterproductive because it it it impacts our ability to have some of those negotiation discussions. So as a result, we decided it's too commercially sensitive, so we'll not break it out. We will do in the future when we get sort of past that, sort of the bulk negotiations, and it it gets to a a point where it's where it's significant in scale. It's certainly fast growing, and it's certainly fast growing in two ways. It's not just generating revenue itself. It's really driving, you know, those merchants that are in the DBM. And that that's one of the focus for that team this year is to is to really ramp up the number of DBM customers that are using BANGO audiences because then that's that virtuous circle in action.

34:33 Thank you. And are you able to give any indication of either the organic growth rate or the growth rate in constant currency during '22?

34:42 So I think as we've talked, we we don't report in constant currency. I think that's, you know, it's a little bit of a fudge in in many ways. You the currency is the currency. If you look at so we saw good growth I mentioned earlier. You know, if you did you got rid the FX impacts that they're bidding around, you know, about over 500,000,000 of additional end user spend. So you can sort of do the maths on that. But, you know, I think reporting constant currency just fudges it. We're all about growth. We grew at 38% in actual currency. That's really where our focus is as a business. And reporting anything else, think, is is is confusing and potentially misleading. Thank you. A question on the digital vending machine. Now that we're live with several telecom operators, do we have some better visibility on the conversion rates of bundling uptake by each operator or merchant over time?

35:31 Yes. We do. We do. We started to get a get a better picture now of that because we are managing the bundling resource services through the digital vending machine for several operators in several different markets. It's still early days of that data. We're we're we're learning quite a lot. Naturally, you won't be surprised to hear that factors that that impact conversion include what what sort of offer it is, what what kind of bundle it is. Also, in the media world, it's also it's also about the content that's available. The, you know, media companies market their their streaming services based on particular shows, particular series, particular box sets that they they might be bringing to market. So that can that can impact take up as well. Interestingly enough, there was a a view perhaps in the past that the more content you had in a in a a digital vending machine that a lot of telco offered, then the less take up there would be because it's almost too much stuff, and it was undifferentiated.

36:27 In fact, early evidence suggests that the opposite is true. The the the broader the content range, the the greater the engagement with consumers and the more take up there is of services. So this idea, when we talk about a digital vending machine, the underlying concept that's happening in the market is super fun thing. So rather than just adding one or possibly two services to your first party telco service, you're now bringing a whole set of different services in in formatted and using BANGO technology as this kind of subscriptions marketplace. And that's actually driving much stronger consumer engagement than just the one off or or two off service bundles that marked the years in the past. Thank you. And this is maybe another one for you, Anil, just whether we can provide any more information on sort of the growth opportunity in the transactional side of the business and more specifically about the impact of cyclicality on underlying growth in transactional revenues, sort of excluding Docomo, and whether new or what our new wallet relationships are making a significant contribution or if it's primarily carrier billing current.

37:32 Okay. So several questions there. I'll I'll try and deal with those in reverse order. In term in terms of wallets, the the mix of alternative payments, BANGO, obviously, we position ourselves, and our technology is designed to to to offer any payment method that's of interest to our customers. We're really focused on the alternative payments market, so customers that don't want to or cannot use a a payment card online. And that includes, of course, wallets. But our definition of direct carrier billing is broad. It's not just mobile air times. It might have been in the past. It's broadband bills, fixed line bills. There's all sorts of different alternative payment methods, billing methods that that fall into that category. So that mix is broadening. We are seeing more wallets. In fact, one of the trends that we see is more and more operators offering what we might have called operator billing in the past, particularly in in emerging economies.

38:27 In fact, the payment instrument lies behind that operator's billing as a wallet of some sort. So when we think about operator billing, actually, that is often powered by a wallet in the background. So so that that that diversity is increasing. Rebecca, remind me on the other parts of the question. The question has been removed. I think it was about sort of the growth in wallets and with the sick sick Oh, yes. Sick the cyclicality of payments. So we don't we don't see a great deal of evidence of that of that. We see generally, we see an uptick in spending towards the year end. Almost globally, the year end is marked by various events, whether it's New Year events or Christmas events or other events like that. And that does generally drive an uptick in spending, but we don't see any kind of seasonally based exaggerated seasonally based cyclicality in in any part of the business, really, other than the the year end. What what we're more interested in is kind of events driven activity. So when new products come to market and new events that have subscription services associated with them come to market, we'll we'll sometimes see surges both of consumer spending, but also new customers coming on on stream that we haven't seen before.

39:44 Thank you. A question on what what level of expenditure on capitalized development costs and intangible assets do we expect in 2023? I think we'll be continuing to invest as we have done in 2022. So the platform continue to have investment from r and d capitalized work we've completed on cloud work and also further enhancements to digital vending machine. So we continue to see we expect to see that one continue at the same level it is in 2022. Thank you. We've had a few questions on NewDeep. So maybe if we can just give sort of a general update on NewDeep and sort of our engagement, whether in particular, whether there's any additional BANGO cash to go into NewDeep, that kind of thing.

40:30 Yeah. So I think stepping back then. So NewDeep is the the joint venture that we we hold with NHN. We have a a 40% share. NHN of Korea have 60%, and that that business was formed when we basically spun out the audience with an s business that we acquired back in 2018. And we acquired that business to suck out technology that we needed to build the BANGO audience's business in terms of how we segment data and how we publish that data to marketplace, and that allowed us to launch that business significantly earlier because we had the technology that we've taken out of that business. And then it wasn't core, and we decided we went through a process and in the end divested it into that that joint venture with NHS. So you see it accounted for sort of pretty far down than than the income statement. That business is very much sort of pivoted to using the the technology that it that it had already, but also additional data and technology from NHN. So NHN have a very large sort of data science team, and they've injected additional technology from that team into that new deep joint venture. And, really, what it's now focusing on is helping Shopify shops basically increase their revenue. So reduce the number of abandoned carts, bring people back to make purchases.

41:40 So the way that that business, right, that audience with an s now appears as an app in the Shopify store. If you saw if you manage a Shopify store, you can download the audience app, take the recommendations that that service provides in terms of targeting your customers. It will automatically know using some AI technology and chat GPT. I'll likely draft those emails, automatically send those emails to your customers, message your customers, all about bringing them back to make a repeat purchases, is making sure abandoned carts flow through to the end. So there's many recommendations that the tool makes all around helping people who run Shopify shops really drive drive their revenue and and and grow their revenue. So it's a business that's that's repivoted. It's growing very nicely. You can sort of see that if you look at the in keeping, you can see the loss on associate reduced year on year from last year to this year. So it's a business that that's pivoted, but it started to gain traction in in that new market. That's that's very evident in the 2022 results.

42:38 We really think think there's there's good opportunity in that business, not just as a standalone, but also potentially since BANGO, there's no reason why one of the recommendations that Nudie could use is actually you do more digit you you do more digital marketing using purchase behavior targeting using BANGO audiences. So BANGO audiences, this could very easily be a channel for BANGO audiences. And likewise, the data that that that NewDeep is collecting could very easily feed into BANGO audiences. So so NewDeep could, in effect, be a data supplier to BANGO audiences. So there's lots of lots of nice synergies and and sort of overlap in the business. When we pull up your annual report, you'll you'll see a little think a little bit more about that. It's a business we'll continue to support moving forward. We're very excited about about the potential. At a point in time, there may be another investor that comes in, and we bring in another investor to help turbocharge it. There's all sorts of options being discussed with NHN.

43:29 And and so we'll update you on those as and as and when they happen. Thank you. A question on the global tech leader that we announced in June last year and whether we have sort of any view on the when the revenue of this from this contract might reach steady state or sort of the route rollout or the opportunity there. Yeah. It's a good question. I'm I so that that's an opportunity that's continued to progress well. The integration there and then the business continues to develop. I'm not sure it will reach a steady state. I'm not sure what a steady state is. I think it will our vision is it will continue to grow. It's certainly not material this year. We expect it to start to become more material in '24 onwards as not only routes launch, but they actually launch and and start to grow. And and remember, there's multiple components to that business. It's about bundling, about the bundling of subscription services as well as the carrier billing for for the App Store. So early days, I'm gonna say I'm not sure steady state is a is a word that I would ever apply to that that business. We we would expect that business to continue to grow. It just happens to be growing from from a start of zero, you know, last year. Thank you. A couple of questions on competition and who who would be sort of, like, the key competition, particularly in payments, but, I guess, also in other areas of the business.

44:44 And that yeah. That's interesting question, competition. We always tend to we ask this we ask this question. It's a a good question to ask any business is the thing which we reflect on on the what we're competing against when we do a sales pitch. It's in most of our businesses, it's it's do what you're already doing versus bring BANGO in to to manage that technology for you, that capability for you. So it's often build versus buy is the real competition or an internal team, so to speak. I think in across all parts of the business, particularly with this digital vending machine business, quite quickly, customer base has realized that there's no point trying to build what we built already. And part of the inspiration for this digital vending machine metaphor was precisely just to say that for any particular telco that wants to deploy this super bundling capability, 80 to 90% of the functionality you're going to need has been built already by BANGO.

45:36 So the the metaphor of the digital vending machine is look look. It's here already. We can deliver it to you. We can customize it. What you really want to focus on is you want to focus on the product mix you're going to offer, the kind of offers that you're gonna put together, thinking about your customer base and the marketing campaigns that will work and resonate well with your customer base. So we're seeing less kind of in house DIY competition in that business, I think, than we've seen before in in other parts of business like integrating caravan into app stores. There are other players that provide this provide infrastructure technology to the telco sector in particular. You'll be familiar with companies like Amdocs. They do a bit of what we do. But, otherwise, I think, you know, the competition, we're we're we're a new player in in we're a a play with new technology in this market.

46:24 We're changing the markets we operate in, so we're changing the subscriptions market and then the way subscriptions delivered. And then the the ad tech market, we're changing the way people think about targeting. Thank you. A question on sort of, obviously, having acquired Docomo Digital and a mention of Bocu having acquired Fortumo, whether there are any other sort of further consolidation opportunities that remain within the DCB market. I'm just quick. I've I've mentioned one of my earlier answers. I mean, we're we're we're already broader than DCB. We do all kinds of telco billing and all sorts of things. There are other players. They're mostly regional players, actually, that's that still operate some elements of this sort of thing. So I think there are a few potential opportunities regionally based in the future, but but compared to ten years ago, there were obviously far fewer players, and there's been quite a high level of consolidation.

47:18 Thank you. A question for Matt maybe. When do you envisage operational leverage coming into the profit and loss account and a move to material and growing profit stream? I think as we grow with the revenues and the margin being at over 90%, the proportion of investment will, as a percentage, will reduce against those revenues. So longer term basis, we expect to see our our EBITDA moving to about a 50% margin as we take the synergies from the acquisition by the end of twenty twenty three. That top level revenue drops down, as Paul alluded to previously, $1,516,000,000 dollars of sale, contributing about 10,000,000 of EBITDA. So that good high margin coming from the single platform means that those the investment will still continue to be similar levels, but as a portion to revenue will drop down, therefore giving us increased EBITDA and cash generation.

48:15 Thank you. I guess a couple more sort of back to we've touched on a few of these areas, but with the digital vending machine, sort of how much further ARR growth we expect from telcos and an expansion on sort of the other verticals. Obviously, we've mentioned employee benefits and telcos, whether there are other verticals that it applies to as well. Yeah. I mean, I think I think there are there's there's certainly lots of opportunity. I'll just skip back to the the slide we have before on the digital vending machine because I think you can you can can sort of see. Right? We're we're and with the eight new customers that we're generating revenue plus new customers here, we're already talking 10,000,000. There are, you know, 100 plus telcos where this could apply to. So it's it's, you know, it's relatively straightforward to do some do some scaling of the maths based on that. But the point about other other verticals is is a very good one. Benefit one is a great example. We're now building a nice pipeline of opportunities in the in the employee benefit scheme. I see plan to launch our own BANGO employee benefits using our own platform to, you know, allow employees to to take some of these subscription services as part of the the ongoing evolution of the of the BANGO benefits package.

49:16 So we really wanna sort of eat our own dog food or fly our own jets, pitch pick which metaphor you like. But, really, that that that that vertical is a very interesting one. Other interesting verticals is a sort of retail. We've done things with retail in the past, bundling subscription services with sort of physical good purchases. We've done things with loyalty cards. I think that's a particularly interesting one. We have some work going on in financial services and some work going on in utilities. And, you know, what all of those have in common is the risk of insulting all those companies are offering a very utility type service. And so the ability to bundle and differentiate that utility services with exciting third party services is a really compelling proposition. It makes it easier to attract customers. More importantly, makes it easier to retain customers and allows them to protect their core revenue and actually potentially grow their core revenue at a time when, you know, consumer spending is under pressure. We've we've seen that especially with the telco space.

50:12 Actually, the the pressure on consumer spending is driving telcos to launch newer services more quickly, be more compelling about how they market those services because they wanna protect those core broadband service and get people to go from $20 to $25 a month, But maybe by giving them $6 of sort of perceived value for the for the next $5, it doesn't cost them $6 because, obviously, they're they're taking the margin on the service that they're offering, but it's a way of protecting their core business and potentially helping people climb up their their own subscription tiers and therefore increasing the ARPU. But any you talk to any operator, any operator that does any business case that reduces churn, it naturally pays these results because the cost of customer acquisition is large for these guys. Thank you. Perhaps another one for you, Matt, whether you can explain sort of if BANGO makes a loss but cash goes up, how that is.

51:01 Yeah. I mean, obviously, within the the income statement, some of the costs that come through there are noncash elements. So the amortization and depreciation, that cost has actually been incurred in previous years, sometimes, you know, several years previous days. The amortization goes between five and seven years. And in this case, particular, as well, we we have some movement in working capital, and also we've had some cash from where we've done savings in relation to the acquisition. We've been able to release some more cash from that as well. So that kind of takes the difference between paper loss and some cash incoming cash. Thank you. A question on whether we've taken any steps to improve liquidity in the trading of our shares? Yeah. So I think one of the announcements you've made recently is is two things. I think it's a makeup of one of the other questions. Well, we we announced sort of the appointment of Singers as our as our normative broker and obviously Stiffle as a joint broker, and that's the first time we've ever had two brokers as appointed. So we're for the first time we've had joint brokers. And that's all about driving increased liquidity in the shares. You're seeing over the last past three or four months liquidity has been higher than it has been historically.

52:09 If you go on our web page web page, you can see that BlackRock on our major shareholder have been acquired over 3% of the of the the stock of the company, and that all of those are activities to drive that increased liquidity. The reason we do events like this, the reason we spend the next few days talking to current and and future holders is, you know, to to drive that and and help bring more investors into the BANGO circle and get more investors excited about BANGO. And that itself will naturally create that liquidity. So they I think the appointment of new brokers is a part of that. Increasing for the Stiffle in particular is very interesting in helping us expand more into The US market. We did a listing on OTCQX last year that started to although the it's hard to see the volume on that if you if you look online. It started to bring in US investors. We have increased interest from inbound investors, and Stifel's contacts over there will really help us, I think, nurture The US US investors more. And I think as a company, we map very nicely with criteria that new investors US investors like. We're a high growth technology business, and that there's there's more to I think more investors are sort of focused on that sort of growth element of technology in The US than than necessarily in The UK.

53:15 But likewise, with people like BlackRock coming onto the register and as well as a lot of other companies at at smaller numbers, we've seen a spread of the shareholder base, which I think, as it continues, will naturally drive liquidity. Thank you. Can you talk about whether there are any steps to further increase management's ownership of stock? Yeah. So one of the programs we operate is a an stock option scheme or a share option, I guess, as I should call it. So everybody in the company gets share options at at at every at every low level. Directs inside, there's no preference given to any of the the directors or management stock. Everybody gets, you know, a different number, but stock under the same conditions. And those are stock options. So they're not RSUs where you get given them or anything later. Those are stock options. So, therefore, everybody only benefits, and not just management, but everybody in the company only benefits if the stock option rises.

54:06 And that stock option is a really important part of the compensation. It's why we have such an employee a high employee engagement score. It's why we have such a low employee churn because people are invested in helping BANGO grow. They're excited about being here. They see the potential, and they'll realize a capital gain from those stock options as the share price rises. So, you know, everybody's compensation could not be more tied to to to to the to the to the growth in the company and the and to be aligned with the benefits of shareholders. And don't forget last year, one the things we did was we launched our employee share purchase scheme as well, which UK employees are entitled to participate. I guess yourself and Ray, obviously, very large shareholders. Correct. Yeah. Yeah. And I think most management's bought shares as well at various points. So, yeah, we are very strongly as a management team focused on shareholder value, value of the business, success, winning in our markets, becoming the market leader.

55:03 I think that's probably covered the the majority of of questions we've got, sort of, five minutes left via hand back to to Jake. Rebecca, absolutely. Paul, Anil, Matthew, thank you very much indeed for being so generous of your time there in addressing all of those questions that came in from investors this morning. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended for you to review. To then add any additional responses, of course, where it's appropriate to do so, we'll publish those out on the investor meet company platform. But, Paul, just really before redirecting those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, If I could please just ask you for a few closing comments to wrap up with, that'd be great. Yeah. Once again, just thank you everybody, for taking the time this morning. I know it's result season, so there's lots going on.

55:51 So we do appreciate, the time spent today. Thanks also for the number of questions. I think we've had a great number of questions. We didn't get around or completely answer those. There were some questions that were very close, so we tried to sort of wrap questions together and answer them. But if we don't feel we answered them, once you see the the full published list online afterwards, please do email investors@BANGO.com. We really appreciate input. We really appreciate the suggestions, but more importantly, we wanna make sure you fully understand the business. And as excited about it as we are because we enter 2023, I think, in a stronger position there, the digital vending machine, the opportunity around super bundling, the ability to use BANGO audiences as part of that, the ongoing integration of DOCOMON digital makes '23 an incredibly busy year, but also an incredibly exciting year. And and as a company, as a team, and as a board, and certainly as an individual, we're we're all incredibly excited about the future and hope you share that and look forward to sharing the progress as we move throughout the year. So thank you very much for your time, and we'll speak to you all again soon.

56:47 Paul, that's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of management team of BANGO PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.