Announcement PDF RNS Number : 7095L Bango PLC 06 June 2025 Bango PLC ("Bango" or the "Company") 2024 Full Year Results and Outlook Cambridge, UK, 6 June 2025 -Bango (AIM: BGO), today announces its full year results for the 12 months ended 31 December 2024 and provides an update on current trading and outlook for 2025. FY24 Financial Overview: Results for the 12months ended 31 December 2024 FY24 FY23 YoY Change Transactional Revenue1 $36.2M $32.7M +11% $17.2M $13.4M +28% Total Revenue $53.4M $46.1M +16% Annual Recurring Revenue (ARR) 3 $14.0M $8.8M +59% Net Retention4 125% 137% Adjusted EBITDA 5 $15.3M $6.4M +139% Loss After Tax ($3.7M) ($8.8M) $5.1M Net (debt)/cash at 31 December6 ($1.8M) ($4.0M) $2.2M DVM & One Off Revenue 2 FY24 Operational highlights: · · · 9 new Digital Vending Machine® (DVMTM ) license customers (total 27 at end of 2024) 110 content providers connected to the DVM, up from 93 at the end of 2023 · Launched Disney+ with Continente - Portugal's largest high-street retailer, in only 12 weeks from first customer contact First two DVM CX (user interface) customers signed, including Altice in the US · First Eastern European DVM customer signed Post period-end Digital Vending Machine® · 6 new DVM customers to date in 2025, including: o New US wins mean the Bango DVM now serves 6 out of the top 8 US communication providers (by subscriber count) o First DVM customer in South Korea - leading Telco selected Bango DVM for bundling o · · New DVM Telco customer in Benelux marks the first win from an improved Western Europe DVM pipeline First customer launch of the Bango DVM CX (user interface) with Altice in the US. The DVM CX reduces the effort for resellers when launching bundled offers, allowing them to launch much faster. It is sold as an additional license fee. DVM is on track to once again deliver double digit revenue growth in-line with consensus7. Transactional · 98% of traffic acquired with DOCOMO Digital has been migrated to the Bango platform · The high cost of sales routes acquired from DOCOMO Digital have experienced volatility and are below expectation however, given the margin profile of these routes, there is minimal impact to EBITDA. Work to optimize or restructure these routes is ongoing. · Bango has disconnected several small, unprofitable routes since the DOCOMO Digital acquisition and continues to launch selected new routes where there is significant growth potential. · Core Transactional revenue (excluding the high cost of sales routes) is in-line with expectations. Financing · Bango has secured financing which will be used to strengthen the balance sheet and provide further flexibility on the timing of cost reductions. o Bango has secured an enhanced loan facility from NHN. Under the agreement, the existing loan will increase by $2.85M and include a deferral of principal repayments for 18 months (further information can be found detailed in the RNS announcement published earlier today titled, 'Loan Agreement and Related Party Transaction'). o In addition, Bango has secured a $15M Revolving Credit Facility (RCF) with NatWest. This provides a committed, long-term financing solution that will replace the existing £3M overdraft from Barclays. Efficiency Initiatives · Bango expects to report FY25 Adj. EBITDA in-line with consensus7 · · Further efficiencies are expected to result in a modest increase to Adj. EBITDA vs consensus7in FY26 of $1M. A reduction in R&D capital expenditure versus current consensus7, of $0.5M in FY25 and $1M in FY26 is planned. Board changes · As separately announced, (See 'Directorate Change' RNS published today), Anil Malhotra and Frank Bury will formally step down from the Board at the conclusion of the AGM on 30 June 2025. Investor Presentation: Bango is hosting a presentation, open to all existing and potential shareholders, at 10.30am BST today. Investors can sign up to Investor Meet Company for free and register to join the call here: https://www.investormeetcompany.com/bango-plc/register-investor Bango CEO, Paul Larbey, said: "2024 was a pivotal year for Bango, marked by strong revenue growth, a significant increase in profitability, and strategic progress across both our Digital Vending Machine® andPayments businesses. We delivered a 16% increase in total revenue and more than doubled Adjusted EBITDA to $15.3M, reflecting the operational leverage of our platform and disciplined cost management. The DVM continues to gain global traction, with 9 new customers added during the year and a strong pipeline rapidly converting in 2025 with 6 new wins including our first customer in South Korea. With tens of millions of subscriptions already managed, and the scalability to support hundreds of millions more, Bango is uniquely placed to benefit from the structural shift toward subscription-based services and indirect distribution models. Increasingly, the Bango DVM is becoming the standard platform for subscription bundling - not just in capability, also in reputation. It's the solution recommended by some of the world's largest content providers when their partners want to scale subscriptions and build customer engagement, and now serves 6 of the top 8 US communication service providers. This positions Bango at the very heart of the global subscription economy. In the Payments business, Bango continues to have a leading position in the market and remains the largest Direct Carrier Billing partner for the Google Play store, the only partner powering DCB for the Amazon store in Japan and the sole provider of online DCB services to NTT DOCOMO Japan - the largest operator, in the most valuable DCB market. With the migration of traffic from the DOCOMO Digital platform to the Bango platform we are optimizing our Payments business for cash and profitability by simplifying operations. The financing provided by NatWest and NHN demonstrate strong confidence in Bango's business model & strategic plan and materially strengthens the balance sheet. The decision to make the strategic investment in DVM coupled with the market growth in "Super bundling" are driving a strong sales pipeline. This combined with disciplined cost management, a reduction in R&D capex and the inherent operational leverage of our platform will deliver a step-change in cash generation in FY26 and drive shareholder returns. We view the future opportunity with both confidence and excitement." Notes: The Annual Report, including full accounts, is available at, https://bangoinvestor.com/results-reports, and will be sent to shareholders shortly. 1Transactional Revenue is revenue derived by charging a percentage of the retail price paid by the consumer and is made up of carrier billing, resale and e-Disti revenue share amounts. 2DVM & One Off Revenue includes all DVM license and support fees, revenue from Bango Audiences (discontinued in Q1 FY24) and one off fees including DVM set-up and change requests. 3 Annual Recurring Revenue is the expected annual revenues to be generated in the next 12 months based on contracted revenues recognized as at 31 December. 4 Net Retention is a measure of the retention and expansion of revenue from existing customers over a specific period and is calculated by dividing the ARR from existing customers at the end of a period by the ARR generated from those same customers at the beginning of the period. 5 Adjusted EBITDA is earnings before interest, tax, depreciation, amortization, negative goodwill, exceptional items and share based payment charge. 6 Net debt is cash and cash equivalents plus short-term investments less loans and borrowings. 7 Current consensus market expectations prior to today's announcement. The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for making this announcement on behalf of Bango is Paul Larbey, Chief Executive Officer. For further information, please contact: Investor questions on this announcement We encourage all investors to share questions on this announcement via our investor hub Bango PLC https://bangoinvestor.com/s/2a69da +44 1223 617 387 Paul Larbey, CEO Matt Wilson, CFO Singer Capital Markets (Nominated Adviser and Broker) Jen Boorer Asha Chotai +44 20 7496 3000 About Bango Bango enables content providers to reach more paying customers through global partnerships. Bango revolutionized the monetization of digital content and services, by opening-up online payments to mobile phone users worldwide. Today, the Digital Vending Machine® is driving the rapid growth of the subscriptions economy, powering choice and control for subscribers. The world's largest content providers, including Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) trust Bango technology to reach subscribers everywhere. Bango, where people subscribe. For more information, visit www.bangoinvestor.com Subscribe to our news alert service:https://bangoinvestor.com/auth/signup Chair's Statement 2024 was a year of significant progress for Bango. In a rapidly evolving subscription economy, we have strengthened our leadership position, expanded our capabilities, and delivered solid financial performance. This success reflects the skill, resilience, and ambition of the Bango team as we navigate opportunities and challenges alike. The subscription economy is growing at an extraordinary pace, with billions of active subscriptions and a fundamental shift toward subscription-based models. Bango sits at the heart of this transformation, leading the way in subscription bundling - an emerging trend that helps users to manage subscriptions seamlessly and enables content providers to gain new customers efficiently. At the core of this growth is the Digital Vending Machine® (DVM™) from Bango, which powers subscription bundling for some of the world's largest Telcos and content partners. Our momentum is accelerating - three of the top five US Telcos have already chosen DVM, and deployments continue worldwide. In December 2024, DVM drove recurring revenue exceeding $14M per year, and we see a clear trajectory toward over $100M per year as more subscriptions flow through the platform. Alongside the DVM, our Payments business remains a vital part of the Bango commercial model. Processing billions of dollars of payments, the Direct Carrier Billing (DCB) business is trusted and cash-generative, integrated with over 100 Telco billing and wallet systems. As one of only two global market leaders in DCB, Bango is capitalizing on prior investments to drive exceptional performance for our customers. In 2024, we made significant strides toward our target of 50%+ EBITDA margins in DCB, benefiting from the integration of DOCOMO Digital. With the complexities of acquisition, platform migrations, and restructuring largely behind us, Bango is now fully focused on accelerating growth. The upcoming switch-off of legacy systems marks the completion of a demanding phase, allowing us to concentrate entirely on scaling DVM and maximizing value from our DCB foundation. As we move forward, we are committed to providing clear, transparent financial insights to ensure investors understand how we are driving shareholder value in both the near and long term. We strengthened our leadership team in 2024 with the appointment of Matt Wilson as CFO and by welcoming Tony Perkins to the Board as Audit Chair and Senior Independent Director. Their deep financial expertise enhances our ability to execute effectively and reinforces our commitment to strong governance and strategic execution. Anil Malhotra and Frank Bury will not be seeking re-election to the Bango PLC Board at the June 2025 AGM. Anil will be focusing all his energy and extensive AI credentials on helping Telcos and others leverage the unique data the DVM gathers, helping increase its value and importance to the subscription industry. I would like to thank Frank for his invaluable contributions, excellent guidance and counsel to Bango as a NED since 2019 and as a supportive shareholder. Looking ahead, the Board remains focused on three core priorities: · Demonstrating clear financial progress - increasing free cash flow while maintaining disciplined cost management. · Expanding our leadership in subscription bundling - growing the number of subscriptions flowing through DVM. · Strengthening competitive barriers - ensuring Bango remains the market leader as subscription bundling scales globally. 2024 tested our agility and resilience, but the Bango team has demonstrated its ability to adapt, innovate, and deliver. With a high caliber team, clear strategy, strong execution, and an expanding market opportunity, I am confident that Bango will continue to thrive, creating lasting value for our shareholders, customers, and employees. Ray Anderson Chair CEO Statement Bango operates two distinct product lines that share a common technology stack and customer base but differ in revenue model and growth dynamics which, together, made 2024 a year of both growth and optimization at Bango. Digital Vending Machine® (DVM™): The Bango DVM enables subscription services to scale through major distribution channels including telcos, retailers, banks and others. Subscription services are increasingly delivered to consumers through these indirect channels, in the form of bundles and offers, enabled by the DVM. By connecting once to the DVM, a content provider becomes part of a large and expanding network of resellers. Equally, a reseller connected to the DVM becomes part of an ecosystem of over one hundred content providers. This unique position makes Bango THE place that the world's largest companies come to for bundling. The DVM is a powerful technology that is continually evolving to make bundling simple and powerful. The DVM, while still early in its evolution, has the characteristics to become the defacto standard for subscription bundling. Payments/Transactional: Bango was an early innovator in Direct Carrier Billing (DCB), a payment method that enables consumers to charge purchases directly to their mobile phone bill. Everything from paying for bags of gems in the Google Play store to buying duffel bags from Amazon in Japan can be paid for via DCB. Bango has a leading position in this market. Bango is the largest DCB partner in the Google Play store, the only partner Amazon use for DCB in Japan and the sole provider of online DCB services to NTT DOCOMO - the largest operator, in the largest DCB market in the world. Bango generates revenue from payments by charging a percentage of the retail price for processing the transaction. The DCB market is expected to grow steadily and the Bango payments business will grow with the market. Strategy for Growth In my 2024 interim statement, I described the four pillars driving our strategy for growth: ·Extract: Manage the payments business for cash and profit ·Expand: Lead the bundling of subscription services through telco channels ·Enhance: Use data to differentiate Bango and monetize content providers ·Explore: Identify new bundling opportunities outside telcos Below I set out the progress made in 2024 against each pillar. Extract: Manage the payments business for cash and profit The payments business continues to perform well, growing 11% in 2024 vs 2023. The fastest growing routes were in Asia and MEA, which Bango acquired with DOCOMO Digital (DDL). These routesoperate on lower margin contracts, affecting overall gross profitability in the payments business. Work to optimize or restructure these contracts is ongoing. Bango has disconnected a number of small, unprofitable routes since the DOCOMO Digital acquisition but continues to launch selected new routes where there is significant growth potential. The migration of the routes from the DDL platform to the Bango Platform is largely complete, with the final route migrations planned to complete in 1H 2025, allowing us to close the physical data centre we acquired in Frankfurt. We have reorganized the sales and account management teams to separate payments and DVM. This provides an increased focus on profitable growth. Expand: Lead the bundling of subscription services through telco channels Telcos are the primary channel used by content providers to distribute subscription services. Omdia estimates that in 2024, 418M digital content subscriptions are distributed by Telcos. Early, bilateral integrations were completed directly between a Telco and content provider. As more subscription services become available and Telcos add more content providers to their consumer propositions, these direct integrations no longer make economic sense and face increasing technical complexity, limiting the ability to create targeted multi content bundles - enter the Digital Vending Machine from Bango. In 2024, the global growth of the DVM continued. 9 new customer wins in 2024 brought the total DVM customers to 27 at 31 Dec 2024. · Entering 2024, Bango already powered 3 of the top 5 US Telcos. During 2024, the growth continued across North America with the DVM expanding to regional Telcos and cable companies, many of whom have millions of customers. With the decline in large PayTV packages these communications companies have struggled to retain their subscribers. Super bundling provides an ideal mechanism for these businesses to remain competitive, and to retain and grow subscriber numbers. Time to market is as important as reducing the work required by their internal IT teams. The R&D investment into new capabilities, such as the user interface (CX) and offer management, proved critical in securing new DVM customers, further differentiating Bango from the competition. · In LATAM existing customers continued to launch new bundles, expanding quickly. A number of new, large Telcos made significant progress towards launching super bundling with DVM. · Europe continues to lag the Americas. After two early customer wins with BT and Liberty Global, momentum has been slow in Western Europe. However, in 2024, we signed our first customer in Eastern Europe and in Q1 2025 signed an agreement with an operator in Western Europe - early signs that momentum is building. · APAC is a very diverse region. However, the overall number of opportunities is growing. In 2024, we signed new customers (our first DVM customers outside Australia). The 2025 pipeline is strong, and the product investments made to simplify the integration into pre-pay markets has opened-up new opportunities. Growth from existing customers is high, as evidenced by a Net Revenue Retention of 125%, which measures the growth in license revenue for customers who were active at the end of 2023. We expect this to continue as large customers accelerate and start to move through the license tiers as they manage more subscriptions through the DVM. Today, Bango manages tens of millions of subscriptions, generating tens of millions of dollars in revenue. However, DVM subscriptions are growing fast as existing customers launch more services to more users. Late in 2024, the first Tier 1 Telco moved out of the first license fee tier into the (higher price) second tier. Bango estimates that around 600 million subscriptions could be managed by super bundling platforms in 2029. The platform itself has been tested to support much higher volumes without significant additional capex or opex, to ensure it can accommodate the growth in the market that Telcoshave indicated. For example, the Verizon CEO stated at a recent UBS Media Conference: "Our ambition is to have more than 50% of our customers on myPlan. It's the quickest or fastest-growing service product we have had for wireless consumers…" With the average US household having 5.4 subscriptions this could lead to tens (if not hundreds) of millions of subscriptions being managed by the Bango DVM from Verizon alone. Enhance: Use data to differentiate Bango and monetize content providers The Bango DVM provides significant benefit to content providers, many of whom use the Bango platform to connect to resellers with no direct cost - the DVM license fee being paid by the reseller. While the DVM is the leading solution - and rapidly becoming the standard - for creating subscription bundles, the potential value extends far beyond bundling connections. "Enhance" is the newest growth pillar but has enormous potential. In 2024, we appointed Marisa Teh as Chief Product Officer to accelerate innovation in this area. Our current focus is on harnessing the rich insights within the Bango platform to help content providers understand, benchmark, predict, and influence subscriber growth for their bundled offers. By delivering powerful analytics and targeting opportunities through the DVM, we can enable content providers to scale faster and optimize their business strategies. The aim of this investment is to unlock the holy grail of any platform business - the ability to generate value from both sides of the platform - resellers and content providers. By leveraging data to drive subscriber engagement and growth, we are creating new revenue opportunities for content providers while strengthening the entire marketplace. Explore: Identify new bundling opportunities outside telcos While Telco is the largest vertical for super bundling, the Bango DVM is agnostic to the reseller, the same product powers retailers, banks and other resellers, as it does Telcos. The Bango DVM's flexibility was demonstrated when Continente, Portugal's largest retailer, launched Disney+ bundles just 12 weeks after a referral from Disney - despite Continente having no prior subscription bundling experience. Non-Telco verticals are not new to Bango. We launched employee benefits provider Benefit One in Japan in February 2023, and have powered bundles with US retailers Sams Club and Best Buy for a number of years. However, there is a new trend to move beyond offering one or two basic bundles to a more comprehensive subscription marketplace. This is DVM territory, and we have started to build a pipeline of opportunities in both financial services and retail. Another interesting observation is the trend for content providers to connect to both sides of the DVM, using the DVM to connect to resellers and also using the DVM to bundle complementary content with their own subscription services. (e.g. Sirius XM who are bundling other content service such as Fox Nation with their own music service) again this is something the existing DVM makes seamless. Summary At Bango, we are creating something truly exceptional with the DVM. It solves real problems for consumers, content providers and resellers, as highlighted when the Japanese publication Nikkei selected Super Bundling as one of their top two trends for 2025. The growth path is clear, the market opportunity is clear and the DVM is the right product to capture the opportunity. The payments business continues to be a strong bedrock, providing the profit and cash for us to continue to build resilience and invest in the DVM. The DOCOMO Digital acquisition has been complicated but solidified our position as a leader in the DCB market, creating significant economies of scale. With the acquisition integration largely complete, and with growing DVM recurring revenue, Bango is positioned to further extend its market leadership and deliver significant value to shareholders. Outlook We have seen a strong start to 2025. In the first quarter of the year we added 4 new DVM customers compared with an average of 9 per annum for the prior 2 years. The revenue from these 4 new customers in FY25 will amount to over 50% of the total new DVM revenue we added in 2024. The growth continued in Q2 with additional wins including our first ever contract in South Korea where a leading Telco has adopted the DVM to support their bundling strategy. The core of the transactional business is growing as expected however the lower margin routes are experiencing some volatility though the margin profile of these routes means that there is no impact to profitability. With a stronger balance sheet (as a result of the NHN loan extension and the $15M RCF) Bango has more flexibility to manage the business while providing increased comfort to our large partners. This flexibility will allow further cost reductions to be accelerated delivering increasing cash and profitability in line with consensus in 2025 with further profitability upside in 2026. Paul Larbey Chief Executive Officer CFO Statement I am thrilled to have recently joined Bango and look forward to supporting the team's strategic ambitions and driving value for our stakeholders. As newly appointed CFO, my focus is on driving sustainable growth, strengthening our balance sheet, optimizing costs and ensuring that every investment consolidates Bango leadership in subscription bundling. I am pleased to report that FY24 was a transformational year for Bango. We delivered double-digit revenue growth, a significant EBITDA improvement and a strong 2H performance that underscores our continued progress and resilience. Net debt (excluding lease liabilities) also improved to $1.8M (FY23: $4.0M) following the first two repayments of the loan provided by our strategic shareholder, NHN Corporation. With the migration of routes from the DOCOMO Digital (DDL) platform to the Bango platform nearing completion, Bango saw core administrative costs1 decrease by $7.1M, as well as a reduction in R&D capital expenditure of $2.3M versus prior year. Total revenue increased by 16% year-on-year to $53.4M(FY23: $46.1M). An 11% increase in Transactional revenue was driven by increased consumer demand from routes in Asia and the MEA. We grew DVM license and one-off revenues by 28%, despite our decision to wind down the Bango Audiences business and related revenues in the first quarter of the financial year. Bango signed 9 DVM contracts in FY24 and 2025 shows a very strong sales pipeline of opportunities. Revenue and costs of sale Bango continues to report revenues under two lines: · Transactional Revenue ($36.2M; FY23: $32.7M) is revenue derived by charging a percentage of the retail price paid by the consumer and is made up of direct carrier billing, resale and e-Disti revenue share amounts; and · DVM and One-off Revenue ($17.2M; FY23: $13.4M) includes all DVM license and support fees, revenue from Bango Audiences (discontinued in Q1 2024) and one-off fees including DVM set-up and change requests. Revenue, such as setup fees, is recognized on completion of contractual milestones or on a percentage of completion and after consideration of the requirements of IFRS15 (Revenue from Contracts with Customers). Subsequent ongoing platform license and support fees have been judged as a separate distinct revenue, based on the contractual agreements, individual orders and discussions between customers and Bango. Total revenue increased 16% to $53.4M (FY23: $46.1M) despite currency headwinds from the strong US Dollar against the Euro and Japanese Yen. The Transactional revenue increase of 11% exceeded our expectations, although much of this difference was from low-margin revenues from Asia and MEA routes acquired at the time of the DOCOMO Digital acquisition. DVM and one-off revenue again saw a strong growth against prior year (+28%), although true growth has been masked by the cessation of the Audiences business in the first quarter of FY2024. Excluding the Audiences business from both years, underlying growth was +40%. Annualized Recurring Revenue (ARR), the expected annual revenues to be generated in the next 12 months based on contracted revenues recognized as at 31 December, increased 59% from December 2023 to $14.0M (FY23: $8.8M) in December 2024. The addition of a third Tier 1 US Telco in Q12024 increased the ARR by $2M. ARR growth rate is therefore best measured over the longer term. Gross profit margins reduced this year to 78% (FY23: 86%) due to rapid growth in the high cost of sales DOCOMO Digital Transactional routes highlighted above. Excluding these routes, the Transactional business gross margin was approximately 90%. The DVM delivered gross margins in excess of 99%. Operating expenditure of continuing operations During the period, administrative expenses increased to $46.7M (FY23: $44.8M) as a result of a $2.6M increase in depreciation and amortization (driven by the release of capitalized internal development costs as they become available for use and capable of generating economic benefit). At the same time, capitalized R&D costs for the year decreased by $2.3M to $15.3M. Importantly, as noted above, core administrative costs, which excludes the impact of exceptionals, depreciation and amortization, share based payment charge and capitalized R&D reduced by $7.1M to $45.0M. Adjusted EBITDA 2 for the year increased to $15.3M, (2023: $6.4M). This growth of 139% was driven by a combination of increased revenues and cost efficiencies. It also benefited from $2.2M of other income relating to recovery of costs from NTT DOCOMO arising from the acquisition of DOCOMO Digital ($1.4M of which was reported in 1H 2024). The share-based payment charge of $2.1M (2023: $2.3M) was again calculated using the Black-Scholes model. The share-based payments relate to the Bango share option program that enables all Bango employees to share in the growth in value of Bango. Share options are allocated to employees twice a year. It is a vital recruitment and retention tool in a competitive market for top talent. Exceptional items Exceptional costs for the year of $4.2M (2023: $3.9M) relate to one-off costs as part of route migrations from the old DOCOMO Digital platform, together with the write down of maintenance costs incurred