Bango (LSE:BGO) — Interim Results

0:01 Good morning, ladies and gentlemen, and welcome to the BANGO PLC 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 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 can review all questions submitted today, and we'll publish those responses where it is appropriate to do so.

0:29 Before we begin, I would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from BANGO PLC. Paul, good morning, sir. Good morning, everybody, and thanks for your time on what's quite a a wintry day, at least here in in Cambridge. Really appreciate taking the time to join us today. Hopefully, you've got chance to see the r and s that we put out this morning with the with the results for the first half of the year. And, hopefully, the poll that we put up and the the slide that you saw when you came in sort of got you thinking about how many subscriptions really do you have. And I think that's a that's sort of a a key element. I'm sort of looking at the results that coming in as we speak, but I think I think that really that that challenge about actually can you even remember how many scripts subscriptions you have is really what the BANGO DBM looks to solve. So it will be interesting to see the results on that as they as as they come in.

1:22 But when we look sort of global this is from a a US study, we've done these studies in different parts of the world. We actually have one being published in a couple of days time for Japan, Korea, and and sort of Taiwan. But on average, there's sort of, you know, people have between sort of four and six subscriptions a year, you know, individually. I think that's a bit on the low side. I'm looking at the poll here. The bulk of the responses seem to be in six to nine, and there are there was 4% of people who have 10 plus subscriptions. So probably the audience this on this call probably more aware of the number of subscriptions they have maybe than some people when we do a as a some consumer research are willing to admit. And and one in 10, period, 10 or more subscriptions. So, again, you can see that slightly higher than here because currently we have, however, 8% of people who have more than 10 subscriptions.

2:09 So, you know, very much, very much aligned with that. And on average, those people spend almost a thousand dollars a year, on those subscriptions. So an increasing portion of our consumer spend in our wallet is moving into that moving into that subscription marketplace. And that's really what is BANGO with the digital vending machine we're we're here to capture. But it does create challenges. That that that that drive for everything to become a subscription does create challenges, and we see very much from a consumer level that subscription fatigue is is setting in. You know, almost half of people find it very difficult to keep track of all the subscriptions that they have. Well over a third, have no idea how much they're spending on subscriptions. Over a third pay for subscription they never use. I suspect suspect that's the the third that are willing to admit that. I suspect the actual percentage is certainly much higher.

2:58 And two thirds can't afford all the ones they have, and we've seen people sort of change subscription tiers and introduction of of cheaper ad supported tiers, really sort of to try and sort of enable and maintain that that viewership with different subscription levels. So that sort of subscription fatigue is really is really a challenge. But, really, there's a there's a there's a solution to that, and that solution to that is to give consumers more flexibility, more choice, more control, try and put all those services in one place. See, 70% of people wanna put see all the subscriptions in one place. Almost three quarters want to be able to manage all those subscriptions in a single platform. And ironically, what we see with this is is an increasing percentage of people would actually spend more on subscriptions if they had more control, more visibility, and it was easier to try out new services. And now that's exactly where the BANGO digital vending machine fits in and really what our our sort of vision and purpose is around because we're here to be the place where people come to subscribe and in delivering that benefit for consumers that gives that control and that choice for subscribers, that's really, that's really our purpose and and sort of why we exist. All of that underpinned by our our thrive values, which really are the the the heart of the company.

4:10 So we look at what's the way to sort of capture that and how are we gonna capture, this fast growing subscription economy. There's basically four elements to the, to this to the strategy for growth. The first is sort of expand. We wanna dominate and lead that that's that bundling within the telco market. Telcos are a great channel for bundling as we've discussed at the time before. And, certainly, if you talk to any of the content providers, it's the number one choice. And in the consumer research we do, it always comes up as the number one choice in terms of where people want to go for those subscriptions. So, really, that's our our our big focus, and we'll we'll talk some more about the progress we've made on that as we go throughout the deck. The second one is to to basically give a better experience to content providers. Really, we're although we're most of our customers are resellers, the the the people who are the channel that's reselling that subscription, we're here to serve the content on us.

4:56 We've not built product to sell subscriptions through a telcos. We build a product that helps people have a subscription service deliver that to the to to new customers. And so we wanna we're experimenting a lot with with new ways to use the data that we have within the platform to deliver a better experience for content providers so they can get better customers and get a better lifetime value from those customers. New opportunities outside of telcos, something we continue to look at. We signed our first bank in the first half of the year. That's our first move into that financial services vertical. Again, we'll talk a little bit more about that later, but that's a, you know, a great opportunity for us in terms of in terms of future expansion. And, fundamentally, it's underpinned by, you know, good growth and good strong growth in the in the DCB, in that payments business, mid single digits or around sort of 5% growth in that, close to 10% in a in a

5:43 constant currency environment. And, really, that that good growth in that business allows us to fund the really high growth sort of digital vending machine business. So that's our source of cash of the business that in itself continues to grow, but really is the engine that fuels, the the growth in that, in that, in that digital vending machine business. So just a reminder of those sort of two businesses in terms of how we report when we go through the financials. We talk about a sort of a transactional business. So the bulk of that is this carrier billing where you go to a sort of either the Google Play Store, purchase a bag of gems or a bag of coins in a game or maybe a a YouTube subscription. We charge it to your mobile phone bill, and we do that for operators all over the world. We also do the, obviously, the physical goods for for Amazon in Japan. And that in in that model, we sort of take a percentage of the retail price. So that's that transactional segment.

6:31 And then the digital vending machine, which is this, the the product we've just talked about solving that consumer, you know, fatigue with subscriptions, giving customers more choice and control, let alone people like Netflix, etcetera, and Disney to sell their subscriptions to a channel. And that's a license model, and the channel pays us a license fee based on the number of subscriptions that we're managing through the platform. So you see that in sort of our recurring revenue numbers that Matt will talk a little bit about, shortly. So really those two halves of the business, payments on the left, really good growth mid single digit percentage. Annual digital revenue stream, you know, grew at over 60%, half on half. So just look at highlights, from an operational perspective. We had four new DVM customers in the first half, including that bank in Latin America since since the end of the period. So within q three, in effect, we've already already added another three, another three customers.

7:22 Number of content providers connected to the platform, really continues to grow, and an increasing number of those are choosing to use not just the sort of the technical capability that the platform provides in terms of that sort of connectivity, but also some of the distribution capability. And we'll talk a little bit more in the aftermath of results on what we call our EDISTE program, which is in effect where we act as a reseller for that subscription, and it allows us to provide a pre stocked digital digital vending machine. DVM customers, very it's a very sticky solution. We don't have churn with with DVM customers, evidenced by the fact that one of our first customers renewed for a further three years. We'll see how increasingly the digital vending machines do used to offer more and more different consumer propositions. So it really becomes embedded in the sort of the core ways that telcos are taking their products to market.

8:08 With people like Uber, help helping Uber roll out their new subscription service, Uber one, and getting more penetration for that Uber one service. Disney plus joining the e d c portfolio. You can see we have the sort of the support and the recognition from the content providers in terms of how important the digital vending machine is in their growth strategy. So with that, let me turn you over to Matt, and we'll, walk through some of the financials. Thanks, Paul, and good morning, everyone. Just like to run through our financial results for the first half of twenty twenty four. In line with the trading update we put out in in early July, the revenue is picking up by 19% or 22% if you include constant currency basis, where obviously, again, we were affected by Japanese yen weakening. Some of that revenue is driven from our core DCB business, so that went up mid single digits around about 5.3%.

9:00 And this is where we have most of our FX impact. So that actually increased to 9.4% if you add back in for that constant currency effect. The main driver, however, is coming from the increase in the DVM, our new business on digital vending machine, both through new customer acquisition but also growth in our existing customers. And that one you can see by the increase in our annual recurring

9:23 revenues, that's up 130 to $12,900,000 from $5,600,000 in the equivalent period of last year. So those revenues and coupled with the production in our core costs, which I'll talk about later on, has seen our EBITDA drive up from negative 200,000 this time last year up to $4,000,000 in this year, so a $4,000,000 increase in EBITDA. Putting a bit more flesh to the revenue growth of 19%, giving a three year growth of a three year CAGR growth of 34.4% over the years, you can see from the graph on the right hand side. That solid growth coming from the DCB business with the original sorry, the acquired Dottmo Digital acquisition giving core revenue growth, but also cash generation that helps fuel the growth within DVM.

10:14 This underlying DCB growth, we expect to continue in the sort of mid single digit percentages as we proceed forward. The DBM business, driving that strong growth of 63% from H1 twenty twenty three with the annual recurring revenue growth at 130%. And that one grows as we have more deals and as the existing customers progress through their pricing bands. And Paul spoke a little bit about that and will speak a little bit about it more. So we have that growth coming through. The DBM becomes embedded as a customer super bundling offers, so it becomes very sticky. And that is emphasized by our our net revenue retention metric that we put through, which this year was a 159%. So remember that at the beginning of the period, the development of those customers that were at the beginning of this one year period up to, their numbers in June 2024.

11:10 Those new customer deals, as Paul's referenced before, new DBM deals in the first half of twenty twenty four and further three wins in since we announced those June results.

11:24 Focusing again on our expense control. What I've tried to do here is strip out just to show our core controllable costs and the improvement that we've done there as part of the restructuring element of DOCOMO where we said that we would be driving those those costs down. That's reduced 10.8% on on h one of twenty twenty three and six point seven percent on on second half of of twenty twenty three as well. So we have some really good improvements there, and it's reflecting some some good skilled cost management, but also the reductions as part of those Docomo restructurings. Now that will continue. We expect to see that one continuing onwards into the second half and as we progress forward. What you'll also see is there's a reduction in our R and D capitalization. So it was a particular high point over the last few periods as we did a lot of investment within DVM. We were also doing work on the migrations elements to move the routes from old Docomo data center across onto the BANGO platform.

12:22 That started to reduce, so our R and D capitalization has dropped 14% on h 122% on a sequential basis from h two of twenty three. So expect to see both of those reduced, both the R and D capitalization and the core administrative cost as we move forward. Obviously, the impact of that growing revenues and the reducing costs mean it's had a very beneficial impact on our EBITDA, so up $4,200,000 on last year, reflecting that that that those good core basic metrics on that. Net loss for the period is 4.1. We have got some increasing depreciation and amortization costs as some of the previous capitalization for DVM and for the migrations starts to be realized into the P and L as these new developments are generating the revenue that we expected.

13:13 Also within this period, we've seen a tax cost that was a result of the DOCOMO acquisition, which we won't expect to continue. On the cash movements, you can see there's some good generation of cash from operating activities, some benefits on working capital movement where, as you know, we have a seasonal nature to our business, so 40% in first half, 60% in second half traditionally. So obviously, as those revenues that came in towards the end of H2 get converted, the debtors drop down, and we see that improvement in cash coming through. And that, as we've spoken before, being reinvested in our capitalization of R and D, our investment in DVM and the platform, and also some smaller amount within interest and leased costs.

14:01 So these increasing revenues and the decreasing core cash costs, they're providing that support for our continued growth, but also for the loan repayments to NHN, and that first one has been completed. We've made the first $1,000,000 repayment on that loan just at the end of September. I won't go through this, but here's for reference for later on. This is some history of our first half results, some comments reflecting to them. I think in summary, what we're talking is our increased revenues, so 18.6% year on year growth and 130% increase on annual recurring revenue. Our margins are growing. In second half, as we increase our revenues, that revenue predominantly coming from DBM, which has extremely high gross profit margin, so that's going to drive a GP growth. Our costs are reducing from that aspect, and our R and D capitalization is also reducing.

14:58 So revenue EBITDA and cash generation increasing, we feel as though we're on track to be in line with the market expectations for the year. And as I said just previously, we also made the first capital repayment from a cash perspective to NHN at the end of September. With that, I'll pass back to Paul. Thanks, Matt. So I thought I could remind everybody really what the opportunity is and and the size of the opportunity. And the digital vending machine sits at that intersection between a growing subscription economy as we talked about, you know, more and more of us have more and more subscriptions. It's now not just music or games or video. It's lifestyle services. It's relaxing. It's shopping blade shopping. It's basically it's, you know, coffee, all sorts of different things available via subscription in the market that, you know, is set to triple over the next few years to to almost a sort of a trillion dollars in in terms size.

15:47 And the digital value machine sits, you know, at the point where an increasing proportion of those services are being distributed in through a channel. And somewhere between 20 to 20% set to go to 25%, particularly of asphalt services are distributed through that that sort of telco channel, and that's really where we we fit. So it's an increasing percentage of this increasing market is delivered through a channel, then the opportunity, obviously, for the digital vending machine is, is is significant.

16:13 And we see that in terms of the different use cases for the digital vending machine is sort of is sort of highlighted here on this slide. And, you know, Verizon, they're very clear about the reduction in churn that this bundling gives them, you know, 60 to 70% reduction in churn. But what we're seeing is this concept of bundling and putting subscriptions together being used in Verizon in more or less all of the different consumer propositions now. This is why, you know, creates such a sticky solution and why we see that net revenue retention at those those sort of levels. You know, my home is that that fixed broadband plan, so fixed fixed wireless local loop. So you see subscriptions are a key element of the the sign up for that. You see in the middle on the right hand side how different subscription service with different sort of standard tiers. You can see on the top right that the variety of creating new concepts of of of content by bundling different complementary services together.

17:02 Netflix with HBO Max, quite often referred to as sort of Netmax. So quite a unique content bundle to, again, attract and retain customers. But then, obviously, the Plus Play Store, which gives you access to the 50 or so, different content providers, and all of those are powered by the by the digital vending machines. You can see the the ways in which telcos and and and resellers can use the digital vending machine, And the flexibility that's in the product allows them to really create some unique and compelling opportunities to allow them to differentiate themselves, increase revenue, and reduce churn. So it's a very, very powerful solution that's really only possible because of the flexibility and the power within the digital vending machine itself. Our challenge is one of our frustrations. Everybody always ask me what's my what's my frustration. My frustration is I'm I'm impatient. I'm naturally an impatient person. And the times of revenue has always been a a challenge. We saw that with, you know, one of the big tier one telcos in The US last year where we signed a deal in the midpoint of last year, and it didn't launch until early part of early part of this year.

18:01 And that's generally because there's there's actually quite a lot for telcos to be launching these sort of services. For our part of view, the there's other the light blue arrow at the top, we have to negotiate a contract, and we have to do the integration. I think we're pretty good at both of those. And, generally, the integration in particular is that, you know, it's a matter of weeks. Right? It's not months. It's it's weeks to bring that together. So, generally, what happens is we're then ready sitting there, and there's there's sort of a big gap before we get to launch. And that's because there's lot of other things for telco to do. They have to build a user interface, the portal, what is the customer experience like, how do they subscribe for these services, what do they click, how do they manage, how do they see all the subscriptions together. And they've got to do agreement with the content providers themselves to allow them to resell those services. And then they have all the marketing plans and the marketing strategies, which telcos are really,

18:45 really good at, sort of, obviously, along alongside of that. So there's a lot for the telcos to do. Quite often that creates this this sort of big period where we're we're sort of, we've done our work and we're ready to go, and we're waiting for the for the system to launch. So a lot of patience. I mean, we've been looking for solutions. Right? What are what are how can we help reduce this interval? It's in everybody's benefit to reduce this interval. It's in the the content provider's benefit. It's in the reseller's benefit, and it's certainly in our benefit as well to to reduce this as much as possible to compress that interval so that we can launch the service faster. And, obviously, the BANGO user interface has been where we've been investing a good portion of our research and development over previous years to create that user interface, into the into the DVM. We've got our first contracts now with that, CX included. We'll be launching, towards the second half this year and into the first part of next year. So to get takes that that hurdle away, for launch.

19:35 And this eDiscity program, which allows us to deliver the digital vending machine pre stock. So mitigates the need of of launch being dependent on these content provider agreements. So that's what we're doing to compress that interval,

19:46 together. The user interface, looking at each one of those in turn, this is a sort of a white label for that sort of content hub, allows you the operator to put their brand on and their logo, their look and feel, and and change how offers are presented and what customer experience is, but also a configurable product. So this is not building a professional services to do bespoke work for each telco. This is building a product that's configurable that telcos can put their look and feel and their brand on, but without having to do all that sort of development work to develop that portal themselves. We already have it,

20:17 and it's already integrated with the APIs as a part of the digital vending machine. We have different operators looking at things from a a sort of full a la carte solution so you can pick and choose to prepay operators who are looking for more sort of an entitlement help. So depending on what your prepay, sort of rate is, which services you can sort of get access to as part of your package. So it can you know, again, very, very flexible and very powerful solution powering lots of different, commercial propositions. So eDigs did. It's something we talked about before, but I thought it worth just spending a little more time on this. So the the the chart on the left is is that traditional model. So that there's a you know, we have a we have a commercial agreement with the reseller. We have a technical integration. And then with the content provider, we just have a technical integration. And we we take we move that technical friction, if you like, about bringing on new services.

21:06 We've talked about this before how we, you know, we launched Disney in Belgium in four weeks versus the the six months or so it used to historically take. We got 22 different merchants with Verizon in sorry. 40 different merchants with Verizon in twenty months. So we're very good at solving that sort of technical friction. But the fact that this commercial agreement was needed between the the sort of the telcos and the content providers was one of the one of the ongoing challenges of that. And so we've been looking at how can we reduce that friction as well. And, you know, eDisty is is one of the solutions for that. And that's where we agree we do an agreement with a content provider. We have a standard set of terms and conditions the ability to, in effect, act and resell that subscription product and make that available to the reseller. That creates this pre stocked concept of the digital vending machine.

21:55 For us, that that gives us the ability to to to get to contract faster. It attracts customers in because the I see here, BANGO can provide even more value. So it generally speeds up the the contracting cycle. It means we can launch faster because we've just taken away one of those big delays to revenue. And it means that generally, licenses can grow faster because there's more different services available in the in the digital vending machine. So that's those are the benefits to BANGO. The nice thing always about the the BANGO digital vending machine is everybody in the ecosystem has benefited in. This is a slide we've you've probably seen before. We talk about the benefits to consumers, solving a lot of that friction and complexity that we talked about right at the start of the, start of the presentation, gives more choice and control to customers, gives the content providers new outlets, for their for their for their subscription services, new channels to market, and it gives the telcos a way of increasing ARPU, reducing

22:49 churn, and attracting new customers. And those benefits only accelerate when you sort of add eDisty on top. It gives customers an even bigger range, of, of subscription services. It gives both the content provider and the telcos faster time to market with these services without the overhead of the commercial and contract negotiations, etcetera, that can go with that.

23:10 So back to the original chart, so this was this is my sort of frustration, sort of chart. If you look at sort of that really compresses if, you know, customer takes the BANGO user interface, our CX, as well as the Yugisti, that launch interval really, really, really compresses and allows the telco to focus on what they're really good at, which is how they're gonna market these services, how they're gonna bundle, what are the different consumer propositions that they're going to put together? And we've seen increasing portion of merchants also looking to take advantage. This is getting now sort of 20 or so different merchants as part of that eDisty program. Microsoft have been in there for for quite some time with both Game Pass as well as the three six five. But the big merchant that was added in q one was Disney plus, and that e c agreement with Disney plus that allows us to offer telcos a pre stock digital streaming machine with one of the marquee streaming video providers in the in the world is is really, really, really powerful. And that's what that EDC program was really missing was this marquee name that that attracts people because customers want when resellers want a variety of services, but they want one big name to headline it. And now we have to have that big name with Disney plus. So really great traction on on eDiscuit, sort of thing that will sort of generally accelerate the business and and and allow the business to grow faster, but it's a sort of project that will see the benefits next year and the year after and the and the year after that.

24:32 So looking forward, go back to the sort of the strategy that we put on at the start, the four key key elements of the strategy. Obviously, continuing to to sign new DVM customers. You'd say the full funnel is strong, three already signed in q three, and seeing those customers continue to grow. And you can see how the Verizon samples, get embedded in more and more difficult propositions. There's more and more different marketing behind either consumer propositions, all of which are powered by the the, you know, the digital vending machine, and it's that flexibility of the digital vending machine that makes so many of those possible. And and that's what we'll why we'll see growth as existing customers as they start to climb through the license tiers, which is really evident in the net revenue retention figure. Enhance.

25:17 So it's all about, you know, trying to monetize with more of the content owner side. In most cases, the license is paid for by the reseller, so by the the telco. But, actually, the content owner provider is getting a massive benefit from the digital vending machine. So how can we use the data we have in the platform to deliver more value for them and potentially open up a new revenue stream? EGIST is the first part of that sort of monetization of the of the content providers, but clearly a step behind that. We need a lot of work into the on the product side there to experiment in terms of the different ways we can use the data to generate that value for the content owner. It's not just telcos. As we talked about, telcos come up sort of number one sort of generally in in when you ask a consumer where they'd like to buy the subscription services too. But we've already done employee benefits. We'd already sort of done some retailers in in The US in particular.

26:04 But the the the vertical comes up second every time is financial services. I mean, with our first contract with a bank in Latin America in the first half and have a nice funnel of opportunities that should flow through over the next sort of twelve or eighteen months or so. And the final element, which is as important as ever is is that that sort of that transactional business really, really important, you know, continues to grow, say, mid single digit, percentage growth. Q four is obviously chock full of of shopping events, Black Friday's, Amazon Day, Prime Day, Cyber Monday, Christmas really is always the the sort of the the peak business for us from a from a from a carrier billing perspective in particular. So capturing that that momentum that we get in the second half of the year, particularly in q four. And obviously, much as you do, those costs continue to those continue to drop. And as we complete the document migration, generate even more cost savings, which you'll see in sort of 2025 and beyond. So the ability to generate even more cash from that business. So when you put all those four together, you know, you can hopefully, you can see that what our focus is and the and the progress we're making against each of those elements. But the heart of it is this the digital vending machine, which is is really the the growth in that service and our ability to invest in things like user interface is powered by really solid growth in the transactional business, which throws off the cash that allow us to invest.

27:23 And also, as as Matt said earlier, to to, you know, pay the first loan installment back to NHN, and so we're well set to become net net cash positive, in 2025. So thank you all very much and I know there's been a number of Q and A submitted but thank you very much for your time. Perfect. Paul, Matt, if I may just jump back in the room. 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 company take a few moments to review those questions that were submitted already, I'd just like to remind you a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard. Guys, as you can see there, we have received a number of questions throughout your presentation this morning. And thank you to all of those on the call for taking the time to submit their questions.

28:12 But, Suki, at this point, if I may hand over to you just to chair the the q and a with the team. And if I pick up from you at the end, that would be great. Thank you. Thank you. Yes. We we have the first question is on costs. Could you provide an update on the cost reduction related to the integration of the Docomo digital acquisition?

28:34 And are there more cost reductions expected? I can take that one. Yes, I mean, we've continued. We obviously, we hit the 21,000,000 of synergies that we were expecting at the end of last year. And you can see actually within the core cost base, it is coming down. And yes, we do expect those ones to continue. As we finish the migrations towards the end of this year, we'll see cost reductions from no longer having to support, for example, the Frankfurt data center for the old Dokomo routes. So yes, we do expect to see those ones continue. Thank you. Second question. Given the low share price and the cash generation of the company, would BANGO be keen to explore a share buyback? And if so, when would it make sense to initiate? So at the moment, obviously, with that, we have that strong DCP business, which continues to generate cash. Our focus is to get back to a net cash positive position and to repay the loan for NHN. It will be net cash positive in 2025. And then we think the best use of that capital is to continue to grow and accelerate the DVM business. So that's really where our focus is in the sort of short to medium term at least.

29:39 Great. Thank you. And a question on Japan. With the Bank of Japan recently raising interest rates and the potential strengthening of the yen, do you anticipate any headwinds or alternatively positive effects of BANGO's operations and revenue in Japan? Obviously, we have a element of our DCP business coming through Amazon sales in Japan. We're expecting some improvement in the revenues as the yen strengthened against sterling. We have seen that slightly deteriorate in the past few weeks, think, really as The UK GBP starts to gain strength, unfortunately. But still, it's an improvement on where it has been. So we hopefully get more revenues from that one. And obviously, that goes straight down to the bottom line by way of margin.

30:29 Great. Thank you. And then in regards to the seasonality, that you mentioned the impact earlier, with seasonal events like Black Friday and Christmas driving a significant portion of H2 revenues, what percentage of annual revenues typically come from H2? Do you expect this trend to continue? No, you got that. Yes. I mean, we would expect that continuation to still go on. There are those heavyweight events in the second part of the year. And it usually does drive the same, I think I referred to previously 46, I think it was 45, 55 previously. So we would expect to see those ones continue to drive on. Thank you. And a question on the NHN loan.

31:15 When do you expect to repay the loan in full? That'll be done by the second half of twenty twenty six. We've got equal capital repayments each quarter now going on. So our next repayment will be at the end of December and then quarterly going onwards, so we should complete by about June 2026. Well, one for you on the consumers. Are consumers resistant to using the digital vending machine because of security concerns? I I think no is the answer. I don't we don't see a resistance for consumers to use the digital vending machine. In fact, all our research points that the consumers there's there's a pent up demand from consumers that want all the subscriptions in one place. It makes it easier to sign up. It makes it easier to to manage and understand how much you're spending.

32:01 And there's actually it's in many ways more because you don't have to enter your payment details on it on every side, put your credit card details on every side. You can sign up with them all in one place. So, no, I I think is is the answer. We we don't see a resistance. We see a demand. Customers and the the telcos that are doing the best and are reducing the churn and going the fastest are the ones that are that are capturing them and being more creative with the flexibility that the product provides. Thanks. And a question on eDisty, the eDisty program. Are there conflicts of interest to manage with eDisty where BANGO is distributing competing subscription services? No. I I think the answer to that is no because those customers want a broad range of of subscription services. And as you see with the on the Verizon slide that I had earlier where we see Verizon creating a unique bundle with Netflix and HBO Max, right, two in two very competing services, putting that together in a single bundle. You can see there's a the content providers really want more customers and and sticky customers, and the digital vending machine gets that. They understand they're not the only music service. There's not a single video service that that anybody subscribes to. So that conflict of interest really doesn't exist. It's sort of a it's a known quantity within the industry. And what what differentiates fundamentally these services is the content they can provide, not necessarily what the what's in the digital solution.

33:16 Back to you, Matt. Do you expect R and D spend to remain around the same levels? Yes. I think we will do. We'll continue to develop it. We are a growth company, so we will continue to develop our platform. And Paul's alluded to some of the areas that we're continuing to enable the speed of revenues come more quickly, so after people have signed. And also, whilst using some of the technology and the algorithms that we've learned from BANGO audiences, we can hopefully provide greater insights into the use of data as well for customers. So, yeah, we expect this to remain about that that sort of level. Right. And, Paul, you mentioned that BANGO works with three of the top five US telcos. As a question, are you working to pick up the other two? Yeah. Absolutely. There's lots of lots of activities ongoing. And The US is an interesting market, right, because actually US where there's sort of five very large telcos, they're actually an increasing portion of sort of smaller telcos, some regional companies, some of the old chem companies that are now in sort of group spread across The US. So there's lots of especially on the fixed broadband side, there's lots of opportunity in The US for for future growth even outside the top five. But, absolutely, right now, our goal is that we want everybody to have access to that digital vending machine.

34:29 And you mentioned the capability of, digital vending machine is the CX user interface. There's a question asking if it's aimed more at smaller telco partners. I think the answer is it's a mix. I think there are some, telco partners who want to develop that ourselves, and they integrate directly to the APIs that we have within the digital vending machine. And there are other even some big ones who want for the help about bringing that that solution to market. So it's a it's a combination of both. I think you might I can see the logic where it naturally applies to the smaller ones, but I think we have a number of big telcos who are very interested in taking that user interface. I think largely depends on the telco, their strategy, what what technical capabilities they have, what apps and sort of portals they built for their customers already. So it's a it's a very mixed bag, so there's not a there's not a single answer to that question.

35:18 Thanks. And how quickly do you see the number of DVM customers growing? There's been seven so far this year. How do you see that progressing? Yeah. I mean, it it continues to grow. That sales cycle was sort of obviously almost been one of the frustrations. That's why things like eDisity because that not only shows the the sort of the time to launch, but it shortens that sort of sales cycle as well because it means we can deliver it pre stocked. The funnel continues to grow and continues to expand and as especially as we sort of look at in other verticals as well like financial services. So the opportunity funnel continues to grow. You know, we're you know, the the deals will close as the as the deals close. You know, we're doing everything we can to sort of shorten that interval. What we're not short of is demand. Sometimes because of those other elements of the telco asset, just takes a little bit longer before they sort of realize an an actual project.

36:07 On the transactional side of the business, what are the implications from Google having withdrawn carrier billing in The US? Yeah. So we did Google carrier billing for Verizon. That was stopped actually a number of years ago. That I think the most recent that probably somebody's referring to is with sort of T Mobile that wasn't Google group that we had done the integration for. So, you know, The US is is is a very highly credit card penetrated market. So I see many ways for the for people like Google, it makes more sense to do to do credit card because there's a lower cost of payment. You know, Apple, for example, never offered sort of carry billing, I don't think, in The US for their App Store. So it's a it's a, you know, it's a it's a mixture. Doesn't really I think the answer fundamental answer is there's no upward impact because, you know, the Google carrier billing we're doing in The US.

36:54 We stopped sort of a couple of years ago now where we see the growth within, you know, Middle East in particular, parts of Asia, and particularly in Japan is where we really see the sort of the high growth in that digital vending machine. Combination of all those together, you know, offsets any decline in in sort of other markets. But that's where the bulk of our business is is in those high growth markets anyway. Couple more questions on eDisty. Is every content provider who's currently in the digital vending machine willing to go down the eDisty route? And if so, will it be a lengthy project to add the 80 plus additional subscription providers into the eDisty? Yeah. I mean, I I think from our point of view, we we're not I guess we we care less whether there's 20 or 80 or a 100 or whether everybody's is sort of in the eDisty. The the big gap that we were missing was these sort of marquee sort of names, which we know is sort of a combination of Microsoft as well as Disney plus we have. So there will be other people that continue to join the UGC program.

37:52 But especially as you get to that long tail of content, that's not gonna be a good driver or leading indicator for how fast we're gonna grow the BBM business. The focus is on bringing in one or two more new tier ones into the digital vending machine. They're all interested, but it's a new model for many of these, big, big customers. And so it takes time to to, you know, to understand and align all the principles, align how we're operationalize it, what's the report, and etcetera. Like, these are these are long decision cycles for content owners to know distribute through a channel in previously, there's something they did direct. So by by default, the big guys, it just takes a little bit a little bit longer. We saw that. We didn't post those discussions. We've been going on for quite some time before we we managed to get sort of pen to paper. Seen increased interest from other people as a result of that of Disney plus joining the program. But the success of BANGO digital vending machine, you know, the eDisty helps out, but it's not dependent on the number of merchants that are eDisty. And for some of the smaller merchants, we're very much a blow. If you wanna sign up to eDisty, these these are the sets and terms and conditions. You can almost do it online. Right? We're almost moving to that point. And really so we can focus the time on the big merchants, which really make the difference.

38:55 And what what's the current annual growth on existing contracts on the DBM? And where you can see that one best from the existing customers if you look at the net revenue retention side, so 159%. So that probably gives you the best indication of customers in existence a year ago, what they've done by way of growth in and that's not all DBM business. In terms of AI, what are the opportunities to leverage AI in regards to BANGO data? And is there a good fit with the CX to provide insights to subscription merchants? Yeah. So it's a really it's a really insightful question. I think fundamentally with the the the BANGO platform, we sit in the middle and we understand what, you know, what people are doing across the world, across different operators, across different countries, across different merchants, and where the the platform is uniquely positioned to understand, to get that global picture across different channels, across different subscription services. There's lot of real power in that data, and a lot of what we're doing at the moment is focused on how we harness that data to make everybody in the ecosystem more expect more successful.

40:04 And for the folding in of BANGO Audiences technology into that was really the first step of that. The CX gives us the opportunity to capture even more data. It gives us the option to capture intent data. Because previously, if it's somebody else's CX, we just see the, you know, the subscriptions that are activated or the subscriptions that are paused or subscriptions that are canceled. Now we get to see what people were looking at, how long they were looking for it, what what when did they put something in the basket then add something else? Is that complementary? And how can we leverage that intent data to really generate even more value for for for the merchant and for the for the reseller in the in the ecosystem? And and AI plays a a sort of a key role in that. And I think I probably mentioned the RNS. We brought on a new chief product officer with a really strong track record in using data and AI to bring these solutions to market. And for us, that's that's part of that sort of enhanced element of the of the growth strategy. So, yes, really important.

40:52 And then speaking of of BANGO and and jobs and new recruits, Someone's asked a question around the the there's only a small number of jobs advertised on BANGO website. Is that due to cost cutting or redeployment within BANGO? No. So I think I mean, fundamentally, the number of jobs on the website, it sort of varies depending on where we are in the recruitment and how successful recruitment, and some jobs never appear on the website. Something like the chief product officers will they will do a very targeted search for because that's the best way to recruit rather than necessarily advertising vacancies. I don't think that's really a measure or anything. We've seen our headcount decline as we, you know, deploy those synergies. So we were down to sort of, I don't two twenty five, two thirty now in terms of headcount versus if you remember the day we did the acquisition of Drupal Digital, we went from around 20 people up to three sixty.

41:45 So we certainly come down that as part of realizing those synergies. The good thing about the Dokomo Digital acquisition, it gave us loads of talent that had demand knowledge, which have been redeployed on helping drive that digital vending machine before. So the number of vacancies on the website, must say, I don't think it's really a measure of anything other than just what the current recruitment activity is. There's a there's a follow-up question on on AI and can we attract talent to work on AI, especially given that we're based in Cambridge. I think as you as you've just mentioned, Marissa is a perfect example of where that's happening. Yeah. I mean, I think the one thing we can we we know is when we talk to people about the opportunity, they they get excited about it, and that that that itself is a is a great way of of attracting talent. I think you pull that together with the culture that we have in the company that was is really special. We always get sort of top, you know, 10% in terms of percentiles of sort of employee engagement scores. We have a stock option program that everybody participates in so that when we start to see the success appear in the stock price, everybody can get a capital gain for that. And we're working on some really interesting things with some of the largest companies in the world. Right? If you look at the company rosters, Disney's, Netflix's, Google's, Amazon's, you know, the global technology leader, which we sort of never named. You put all those together. It's a really interesting space that we work in, and and we don't have any any challenge capturing people's attention.

43:01 Right? Yes. Cambridge is a hotbed of talent. But firstly, we operate sort of globally, so we have offices in different parts of the world. But also what we're working on, I think, is really unique, and and people get excited about that when they when they come for interview. Question on the telco landscape. How is Starlink going to affect the telecoms landscape over time? Will traditional companies be able to compete with Starlink? Do you anticipate doing business with them? I mean, provide what I mean. Starlink are a a sort of a a telco with a, you know, a very different access technology and a very different sort of model underneath it. But, fundamentally, it's a telco. So there's a natural fit that ultimately they're gonna wanna provide different services on top. It's not something that necessarily done so far, but, absolutely, they will be a sort of a potential customer for the digital vending machine. In terms of how they impact the broader telco market, then I think that's a question for the broader the broader telco market. And that's one of the reasons we think the digital vending machine is is so important because telcos operate in a very capital heavy environment, four g, five g, delivering what is becoming an increasingly commoditized services.

44:07 So the ability to monetize some of the other assets that telcos have, the customer base, the ability to market customers, the ability to build customers, for us is is fundamental to to sort of telco's success. And so I think the telcos will be more successful with telcos that are the most creative, and and you sort of saw some of examples earlier that that Verizon have put it together in terms of how they're using the digital energy to really drive their consumer proposition. So, yeah, I think that's the way I look at that point. K. And our final question is on DBM. It's a very exciting growth driver. What do you see as the potential size of the DVM market? And as a a follow-up to that, who are our competitors in the space? Yeah. Good question. So let me answer the second one. Mean, competitors are generally always always people wanting to do it themselves. That's always the biggest competitor.

45:00 There are as well some professional services companies that do sort of do work for hire that that that also compete in the this space. But the only one with a sort of a true product with hundreds of content providers connected already is is is the BANGO digital vending machine. And when you go to an operator and they're doing a build versus buy business case, that business case very much pushes you towards buying the BANGO digital vending machine once you get past one, two, three, or four merchants because the complexity of not only managing the ongoing maintenance of those merchants as new price plans are added, as new tiers are added to the subscription as they change their APIs is really, really significant. And we take all of that all of that pain away. And in in addition, deliver a very feature rich platform that allows you to pull these different services together in ways that you kind of use sort of just do them yourselves on a on a on a siloed manner. So I think that's the, you know, the really the way we we sort of put that together really sort of, you know, really positions us well in that market. I just come back from a sort of a trade show in in in Asia, and everybody sort of BANGO. Everybody knows BANGO about bundling. And it creates sort of a momentum in the sales side. We have, you know, content providers referring us to telcos, telcos referring us to content providers. There's a there's a natural sort of a momentum in that space as we become synonymous with the bundling of subscription services through a channel, and that's really what we're what we're very much focused on. So the opportunities and the potential size of that business is really, really significant.

46:21 You're just in that sort of the corporate of the telco pieces. No reason actually here, you know, a 100,000,000 of recurring revenue in the the sort of the medium term. You add on the other channels and the financial services. You add on monetizing the content provider services on top, and there's tons of opportunity. It's just a case of, you know, finding that exact the exact product for the content providers, finding which really bit the data is really valuable for them, then being able to build that into a product and monetizing it, And then finally getting that traction beyond the first bank that we've signed with within the financial services sector. So there's lots of different opportunity, lots of irons in the fire, but we're we're very much focused on that digital vending machine piece and how we can make that that de facto platform for bundling. We have actually had one one one additional question on DBM and the opportunity.

47:07 What are the irons in the fire? Audiences, it's mentioned as a capability of DBM. How big is that opportunity? I think I don't think we know yet, but let's put it in perspective. If you think at the moment, we generate our revenue from the reseller. Right? So in a traditional model, let's let's to keep the math simple, let's take a $10 a month subscription. Of that, the reseller has a dollar, and the content provider generally keeps, you know, sometimes somewhere between 7 and, you know, 7 to 10. So the concept the the reseller has 1 to $3. The content provider has 7 to $10. And it's the reseller that's paying us. So the person that's paying us with this different energy is a piece of person with a smaller slice of the pie. So you can see if we can find that product to deliver that value for the people who have the biggest piece of the pie, then the revenue should be really significant.

47:55 Great. Thank you. That's all the questions we've had so far. Perfect. Paul, Zuki, if I may just jump back in there. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors. 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 just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But, Paul, perhaps before really just looking to redirect 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 just to wrap up with, that would be great. Yeah. We really appreciate, everybody's time today. And if you have any follow-up questions, you can always email us at the investors@bango.com. We also do our best to address all those questions. Hopefully, we did, answered a number of your questions as we went through this particular presentation.

48:46 Hopefully, you saw the excitement that we have with the digital vending machine and the progress that we've made. But if you boil it back to sort of fundamentals, we're in a in a market where our revenue is growing, we have that solid, you know, mid single digit percentage growth on that transactional business. We saw 6% growth on that digital vending machine, half of the business, that fast growing element. So we have a fast growing business in a in a model where sort of costs are reducing, and you see that as as sort of Matt went through that. So, fundamentally, that results in, you know, increased profitability and increased cash generation, and it's all you know, the math's become very simple, and we look forward to showing you our ongoing progress towards that throughout the rest of this year and into 2025. And thanks very much for your time, and speak to you all soon. Okay. Perfect, Paul. That's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session?

49:33 You'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the 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.