Bango (LSE:BGO) — Interim Results

0:01 Good morning, ladies and gentlemen, and welcome to the BANGO PLC Interim Results Investor Presentation. 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's appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll send you an email to notify you when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit to the following poll. And if you'd be so kind to give that your attention, we would be most grateful. And I'd now like to hand over to Paul Laby, CEO from BANGO. Good morning to you.

0:51 Good morning. Thanks, Mark, and thanks to everybody for taking the time to join. We certainly appreciate you taking your time to talk about what we've done in the first half, but I think more importantly, what's what's to come for the future of BANGO. So really do appreciate the time. I'm joined today by Mike Garner, our CFO, and all cofounder and CMO, and also Rebecca who heads up our investor relations. We'll hopefully, you've had some time to see the results that we published a few days ago now. But if not, don't worry. We'll sort of walk you through the key points. But the goal here is to sort of, I guess, have more commentary and discussion around the, you know, the formal RNS that was published back on Tuesday. So we look at the first half. Great set of results. We're really pleased with the results. Revenue up 49% in excess of 7,000,000 in the half. And you spend that key metric about the the volume of transactions through the platform, but also the volume and data we have to monetize, you know, well over a billion and a half, growth of seven 70 plus percent. And that platform approach means a lot of that that growth in top line dropped straight to the bottom line. So we saw EBITDA almost double generating cash in the first half. And that puts us in a really fortunate position to be able to continue to reinvest our own money for growth, and growth is really what we're about as a as a company.

2:07 And so we'll continue to reinvest that cash for growth. A lot of that growth in terms of how we spend our cash is in people. Our people are a key part of BANGO. You'll see in the main 10. We're gonna build a long term sustainable business. We need a really engaged team who are driving the business forward, really understand what we're trying to do and are committed to do that. And that's exactly what we have despite lockdown, despite some of the challenges we've been through, despite us growing at such a pace, we did deliver the record employee engagement score in 2021 on the back of a previous record that we set last year. So really engaged team focused on driving this growing business forward. And there are two urban areas that we'll talk about which will I'm gonna accelerate that growth to the next level. And the first of those is the payments business and the addition of what we call this sort of platforms business. And the second of those is the the great success we've now seen in BANG and Marketplace for that data monetization business. So, again, we'll we'll spend some time talking over that.

3:01 Just as a reminder, our strategy for growth is what we call the virtual search, and that's where if you start at the top, we have merchants who have built to sell and app developers. We connect them to paying users by assuming it has a bill on which we can place that charge. That generates lots of volumes of payment data. We use that payment data to generate these insights that help those same merchants and and app developers better target their marketing using what we call this purchase behavior targeting technology that generates more payments. So we process those payments, which generates more paying users, which generates more payment data, and that virtuous circle just continues to grow. So growth in one business, absolutely fueling fueling growth in the other business. In that circle, we see spinning faster and faster as we continue to move forward. KPIs in terms of tracking progress, Matt will talk about the top two, which are very much the financial metrics around end user spend and revenue. You can see the shape of that growth is really exciting, but I think we'll we'll get even more excited in the future.

4:01 The bottom half of that chart are good indicators of the success of BANGO marketplace and the growth of BANGO marketplace. The one on the bottom right, and that's the number of app developers we're engaged with. We started 2020. If you go back to January 2020 at around 200, we ended last year at around 2,000. We're now in excess of 4,000. So more and more app developers come into BANGL to help help them so we can help them monetize their marketing campaigns. And then even more interesting and exciting is the the graph on the bottom left, the BANGL audience days. And that's a measure of the use of BANGO audiences within active marketing campaigns. And you can see between January and June, we grew by a factor of 10 for the month of January to the month of June. Incredible growth driven by, in part, some of those app developers, new app developers coming on board, that that extra sort of 2,000 or so that we engage with. But even more is driven by advertisers spending more and more through of their marketing budget through buying audiences on more and more platforms and more and more countries running multiple campaigns in the same time. And that repeat business has really gone through a step change in the first half of the year, and we're we're really excited, therefore, by the the future of that business. And that 10x growth in BGO audience data is a is a great reflection of that from a KPI perspective.

5:16 So let me pause there, and then I'll let Matt walk through the some of the financials. Thank you, Paul. Good morning, all. As Paul alluded to, another great period of of growth for the business with revenues going up 49%. You can see from the chart on the right hand side that five year compound annual growth at 53% showing excellent periods of revenue increase. On that same chart, we've we've put the end user spend. Now people like to make correlations between the end user spend and the revenues. That's becoming more disassociated as we have marketplace growth and also as we continue with some of our platform revenues, which Paul will talk about a little bit later on in the presentation.

6:02 However, what it does do is give a good indication of the amount of information we have available for use on our marketplace offering. So that one has gone up. Paul said it's up 74% to $1,300,000,000 for the first half year. What's also great for us is that the gross profit margin on our sales is still very high, over 95%. And then moving on to the next page. The operating costs at $4,800,000 up from last year but still in line with our investment plans, and that is that continued growth driver where we're doing investment within the R and D resource so we can continue to develop our platform and offerings and also within sales and marketing so that we can drive forward our growth with those new offerings and also into new markets.

6:53 That's absolutely in line with what we were looking to do. What that increased revenue has done with those high gross profit margins has also enabled our EBITDA to increase by 83% to just over £2,000,000 for the first half of the year, and that has natural consequence of of giving us increased cash. So our cash has increased by 1,300,000 during the course of this first half year, up to $7,100,000 We have no debt, so that money is available to us to reinvest, to drive forward the growth of the company. On this next slide, what we what I'm doing here is is basically replicating that virtuous circle growth within the financial metrics.

7:39 So on the right hand side, that revenue growth, that high revenue growth, high margins is driving our our EBITDA growth, which drops down to the bottom. That EBITDA growth is generating us cash and the possibility and availability to reinvest within the business to drive forward growth. So on the left hand side, that increased growth in sales and marketing and r and d enables us to widen our offering and drive our revenues to to different areas, and that in turn will give us extra end user spend information, which helps us drive forward on marketplace offering. That, in turn, again, will bring us to the increased revenues on the right hand side, and the circle continues. Thanks, Matt.

8:26 It's not next to be useful to talk a little bit about the market, so I know I'll give you some of the sort of the market context that we operate. Thanks, Paul. Hi, everybody. So so, let me share with you some analysis that we've done during the course of this year about the two ways in which we monetize this this market. Obviously, BANGO plays in additional content and services, a rapidly growing market. We have this unique proposition, which means we monetize it through the business we do around payment processing, enabling merchants to collect money off their end users everywhere in the world. And, also, more recently, you'll be aware of the fact we monetize we started monetizing the market through this unique proposition around purchase behavior targeting. So this is the idea of of taking that payment data and providing it in a form that allows app developers and other marketers to more effectively target paying users in their in their campaigns on Facebook and other online marketing channels.

9:22 So if we look at the payments side first, which is the purple pyramid on the slide in front of you, the bottom line number there is, you know, it's a big number. It's 3,000,000,000,000 of end user spend on mobile commerce, and that was lost back in 2020. It's no no surprise from anybody, I'm sure, on this call that people have shifted wholesale, their spending habits to online purchasing, online spending. BANGO is really interested in the digital content area. So there's analyst data showing that last year, about $110,111,000,000,000 was spent by users on apps in app stores and on some of the key streaming services, music, video streaming service, those kinds of things. Probably more interesting, though, is that point about the growth.

10:07 So that figure is estimated by analysts by 2025 in three years' time to grow to 270,000,000,000. So you can see that the pace of underlying growth in the market is really quite rapid. BANGO, as you'll be aware, we focus on offering payment methods that aren't cash and aren't cards. So things like putting charges on telco bills, mobile network bills, other kinds of bill that we can hit. That market segment, again, the analyst estimate says around about 25,000,000,000 currently. But, again, that's gonna double by 2024, so just two years away. So, actually, the the pace of growth in the market segment that BANGO is targeting is quicker than the growth in the overall market, which itself is is is increasing at a rapid rate. So there's plenty of underlying growth in the market that BANGO targets on our payment side of the business. And then going to the data monetization side, which is the green pyramid, again, be no surprise to anybody. The a a big portion and a growing portion of marketing budgets are shifting to online advertising, online marketing.

11:11 Again, BANGO is really focused on what are the digital content providers doing. And we've got a good good number here of about 76,000,000,000, which is an analyst estimate of the amount of money that app developers spent last year to encourage people through Facebook advertising and other social media advertising to encourage users to download their apps to their phones. And that should be no surprise to us because if on the purple pyramid, we're seeing that significant growth in consumer spending on apps, digital content services, then clearly a lot of that money that developers and publishers are making will be reinvested into further user acquisition activities further online marketing. Now the the bit that BANGO is interested in then is the the mid tier of those developers. So the tiny little developers obviously don't have particularly material marketing budgets, so we're not focused on those.

12:01 The the really big guys, you know, the top 10 big guys, people like EA, for example, or Rovio, you may have heard of, or Activision. BANGO's product will be of interest in BANGO audiences. The BANGO marketplace is certainly of interest to them. But their priority is these people can release titles and drive a 100,000,000 downloads. So something like FIFA. When FIFA 22 comes out in October of this year, there'll be hundreds of millions of downloads of that game. So their number one priority is how do we take our existing installed user base that we know about already and try and generate more revenue out of them. So that's their their priority. So it's really the mid tier guys then. It's the people who have got marketing budgets, material marketing marketing budgets to spend, who are going through a rapid period of growth. They're the primary audience for the BANGO data monetization business.

12:52 And those people need to acquire more users, but you also need to be able to drive increasing revenue out of their expanding user base. And so for those those developers, BANGO audience is perfect because they meet both of those needs. They acquire you more users, but a higher percentage of those users that you require using a BANGO audience will then go on to spend money with you. So those are our two markets. And then before I hand back to Paul to talk about the growth drivers of BANGO, We added this slide actually in the last week or so because there's been a couple of things that have happened in the industry, globally, in the last two or three weeks, literally, that we see as being, favorable towards BANGO's business. The first of those, which is the the blue block on the left hand side, happened earlier on this year during the first half, which is that under increasing scrutiny of how consumers attract online, Apple changed the rules with respect to something called an ad ID, which in broadest terms is like a cookie that tracks users as they bounce between different websites, different apps as they look at in advertising, as they basically interact with content.

14:00 And so there's been much strict controls applied by Apple on how third parties can use that data to track users in order to target advertising at them online. As a result of that, actually, we've had more developers contacting us in the in the last few months, Not simply because they're interested in the the power of BANGO audiences to capture more paying customers, but because BANGO audiences do not rely on ad updates or any other cookie, instead they use payment data, BANGO audiences are a reliable and dependable source of targeting data. So we've had developers coming to us and saying, we don't feel we can rely on ad ID anymore. Can we use BANGO audience instead to more robustly and more dependably target customers? So that's a really interesting change in the market. And then the other two boxes, the purple and greeny box, they're about payments.

14:48 And some of you may have seen the games in in in global national media changes that Apple announced just about two weeks ago, actually, to the rules on how app developers selling through the Apple App Store can collect money. So previously, if you sold a product to an Apple user, an iPhone user, you had to sell it through the Apple App Store. You couldn't sell it directly, and you had to use Apple's payment method methods within the App Store to collect money. You couldn't bill the customer directly. The new rule basically now says that a developer may contact a customer directly and offer that customer an alternative way of paying. We added the green box actually because literally in the last ten days in South Korea, the Korean regulator has gone even further than that and has said it is now unlawful to mandate a way to pay on a developer selling through any app store, to Apple, Google, any app store in Korea. So South Korea a developer selling to customers in South Korea is free to choose whatever payment method they wish.

15:49 And on the back of those two rulings, you may not be surprised to hear we we've had some inquiries from some major developers about the possibility of exploiting the BANGO platform to collect money directly from their customers even though they're selling through app stores. So thought that would be of interest to you. I'll add that in. It's pretty right up to date. And with that, I'll hand back to Paul. Thanks, Alan. So what we're to do in this sort of last part of the presentation before we get to the q and a is really talk through, the growth drivers behind the business and try and relate that to some of the things that have happened in the first half and some of the things that we'll we'll see happening going forward. So this incredible growth we've seen in the payments business over the last, you know, five or six years is really evident on on mass charts. Has been driven by this formula. It's about connecting more users, buying more routes, giving them more things to buy from more merchants, and using the data we have in that platform to make those routes as successful as possible, driving as many payments as we can through that connection since life.

16:45 And so we talk a little bit about each in turn. We look at more users first. You'll have seen during the first half, we signed a a couple of partnership deals, one with TPA Mobile focused on The Middle East, Africa, and Turkey, and one with the NTT Data focused on Asia. Racking out for both being identical being being exactly the same, and that is how can we help the global merchants that are connected into the BANGO platform and rely on us then for expanding their business, expand even faster in in certain regions? In Middle East Africa, we already had 30 or so routes live, but there's a there's a big demand to accelerate that and to bring new new new routes live all the time. And we thought the best way to achieve that is actually through partnering with t t Pay. So by partnering with the the local payment aggregator t Pay, one connection into t Pay gives an additional 76 wallets and and operator connections that are now available immediately to the merchants connected into the BANGL platform.

17:38 Likewise with NTT data in Asia where we have, you know, something like 12 or so new wallets across nine different countries immediately available to all the merchants that connect to you. So the quickest way of expanding groups was through these partnerships. We're very excited about the opportunity that those and and other partnerships that we go will have as we help the global merchants expand as fast as they possibly can. More routes. We're always launching more routes with more merchants. We don't necessarily publicize a lot of those now, but continued expansions in the first half have been across Netflix in in Latin America, for example, Google Playhouse and all all expanding. So we're always launching new routes. Quite often, that's just taking in a merge another merchant to an existing operator connection, so adding more than more than one sort of connecting to an existing operator.

18:25 And sometimes it's a merchant requires a new operator. We bring a new operator into the BANGO circle who also then wants to take on some of the other merchants that we already have connected. So there's that natural momentum around our sales and business development just in lighting up roots on a sort of a a one by one basis. For more merchants, subscriptions have been a big driver. We've talked about that, I think, pretty consistently for the past, you know, eighteen months, two years. If you go back a year, probably, we had a similar chart, probably because of video logos on them with that fragmentation and growth in in online video streaming services. And while that continues, I think what's exciting is the new services we see coming to the market. Microsoft Xbox Game Pass is a is is a new development. We've noticed that back in 2020, helping Microsoft take this new gaming subscription, which is really enabled by five g and the ability to play games anywhere in any device.

19:16 And rather than known by titles, you pay subscriptions, which gives you access to multiple titles. And you take out the right subscription, which is called All Access. You can also have a games console bundled in with that. That's a very long term, very high value subscription. Now let me think just one of a whole host of new services that five g will bring from virtual reality, augmented reality, Internet of Things, just more and more apps and more and more services moving to that subscription model, and we're ideally positioned to capture that growth. One of the other things on the more merchant species is what we helped Amazon do with with Prime Video in in India. And I think that's that's really the sort of the first example, certainly, I've seen of a subscription service being tailored to a specific market or a specific demographic. If you think what it is, it's fundamentally the Prime Video offer, which we've helped Amazon launch in India for for many years now, boom, made a mobile edition. So it's a cheaper service tied to one single device, mobile screen only.

20:13 And Airtel are using that to help and encourage people to maintain a top of balance. So we maintain the right top of balance on the prepaid market. And remember, India is very heavily dominated as a prepaid market, then you get access to this Prime Video mobile edition service. It's great for hotel, helping people maintain a top up balance. It's a great service as a customer. For Amazon, it gets people hooked on the Prime Video content so that they then go on to upgrade later to the full prime video so they can watch it on their on their first screen. So really first example of that that subscription channel on that market and, for us, quite an exciting development indeed. The second element is the continued rollout of of BANGO Boost. BANGO Boost has always been our program of using the data we have to bring more paying cons customers onto the plat onto the platform to bring the success rate for all those payments to be as high as possible, to make sure subscriptions renew at the best possible time to maximize that subscription renewal rate when you have credit. And we because we have that platform approach, we're in the unique position of being able to say, see what users spend across multiple merchants.

21:18 And so then we know when people are likely to have credit to win subscription, renewals will be successful. Now, you know, it's subscriptions are a different beast than sort of one off purchases. If I'm making a one off purchase on my front of my phone, if something goes wrong, I'll probably try again. But my subscription renewal probably happens when I'm in bed, and therefore, the first time I find no experience is probably when I can't get access to the content. So it's a very poor consumer experience, at least a natural churn for the merchant. That's bad for them. It's bad for the payment provider, poor customer experience. So by using the data in the platform, we can make sure that those success subscription renewals are successful as possible. And we took it in Japan from an excess of 85% to an excess of 95%. So really great technology. All of our focus on not just putting that pipe in the ground. You know, we don't see ourselves as a utility plumber. This is not just putting the pipe in the ground. Our job is to get as much water as we can flowing through that pipe as possible. That's all of sudden, we've differentiated against sort of self build solutions or against the the other competition that's in the market.

22:15 So that's how we've grown from a payments perspective. And we're gonna once we're never what we call that that next phase of growth. And that's basically taking that growth and accelerating it to the power of end. Really taking it to that next level. And by end, we mean that some of the platform effect. So what do I mean by that? I mean, everything we've talked about so far has been connecting merchants and operators together and then making that route as successful as possible. And subscription bundling has been a big part of that, and that's something that the telco industry in particular have been doing for many years now. You go back to the five, ten years, triple play was the the big buzzword that was connecting mobile data and TV together. So they've always bundled those first party services together, the rationale being that it reduces churn, it generates more revenue, and it attracts new customers.

23:01 More and more now, that same sort of philosophy is being applied. We're using third party services. So there's there's a massive drive for the increase in third party service funding, which we've, you know, benefited from very well over the past two or three years as, you know, people like Vodafone who tried Amazon into their into their offering and people like BT at Amazon and and and all and services like that. But if you're an operator, when you integrate one or two, it's fine when you integrate five, ten, 20. You wanna create a single platform that brings all those together in a very cohesive way and gives you a single view into how you manage those offers, how you target customers with offers that based on bundling across different different third party services. And so the way to do that is a platform and and deploying a single platform that integrates to all these third party services.

23:46 As a business that we next our first with with back in 2020 was with BT. We launched another one in the first half this year that we've not announced. You'll see in the r and s results we talked about is tier one North American telco, which will be our largest platform deal to date and really exciting. And then there's a whole pipeline of other deals rapidly following behind that. And so why is this why is this so exciting? Why is this really gonna take the growth to the next level? And that's that's for two reasons. Firstly, this is usually incremental revenue. So as a result, normally payments, you will know we take a percentage of the end user spend, but this is platform. This is a SaaS based revenue stream on top of quite often in top of that percentage of end user spend revenue, where the merchant will usually pay as a percentage of the end user spend. Here, the operator is paying us an integration fee, a license fee which scales us as they manage more subscriptions, and a software and support fee, which is a percentage of the license fee. So very traditional SaaS model. So incremental revenue and, you know, big deals, I think when we announced the our first telco deal we talked about, it was a million 5 over three years.

24:51 The North American telco deal, we think, would be even bigger. So really exciting deals that add big chunks of revenue onto onto our payments business. But actually have their own virtuous circle because every time we connect a new platform deal, it brings on new merchants. Those new merchants, they want to connect with operators that we already have connections to. Those are their operators. They want to do multiple bundles, and that drives them to become a platform customer as well. So there's a natural momentum around that, the platform business as well, which is really exciting. So when you put those together, that's what's gonna be the net power of the next phase of the of the BANGO payments growth. And the more payments we generate, the more payment data we generate, and that's a big driver behind the the BANGO marketplace and how quickly that business expands. And so, like, continually growing part of end user spend, the more payment data that allows us to generate the insights is is really, really valuable.

25:42 Also, we have many more app developers to use that to use those those audiences in their campaigns. You see you see that growth in new app developers I talked about on the first slide, huge trialing being two of the ones that we've announced in the first half of the year. But also repeat customers increasingly important. NEXON, been a customer of ours for quite some time now. We've published our second case study, which we'll look at in the slides time. They're getting really, really big boost to their marketing campaigns, becoming regular users of BANGO audiences in all their digital marketing campaigns. And the third element is through channels. We've talked about that in the past. One of the channels we announced in the first half of the year was advertiser, again, US based agency looking to add BANGO audiences as a way of differentiating their services. So another way was getting BANGO marketplace and the value of BANGO audiences out to the app developers and reach as many app developers as possible.

26:29 Now all those logos on there so far are all games. You you hear the presentation in the past, we always talk about games. But, actually, in the last month or so, one of our largest customers has been an online trading platform. And so they're using the power of purchase behavior targeting to bring new new customers onto their online trading platform because we know exactly who spends, who has money to spend, so that's really valuable data for them in their in their online targeted marketing. And they're getting great results, across Europe and North America in terms of bringing new customers onto that trading platform. So that clearly shows the power of purchase daily targeting as technology outside just the gaming space, which is historically where the the bulk of our focus has been. More campaigns. Once those are developers in, we wanna get them using the audiences as much as possible. So if you visit bangle.ai, you can, see exactly what we have developers see. You can see the audiences that are available. You can see here to select them.

27:19 We can also do what we call select create a tailored audience. So tailored audiences is an is an audience created specifically for an app developer based on your criteria. That could be how often people spend, how much people spend, but more likely a list of titles that are similar to yours or or or very complementary to your title that if somebody plays these three games, they are very likely to play my game. So we can build a very specific audience. We call those tailored audiences, and that gives you a much higher return on that marketing investment than the the Lingerie audience, which already perform incredibly well. The final element, again, if you'd see the good examples, we also talk about Facebook and and the reason being that's the where the bulk of the marketing spend is from the app developers. But in the first half of the year, we brought the same purchase behavior targeting technology to tick the TikTok platform. So we have app developers who are running campaigns on Facebook and tick Facebook and TikTok using exactly the same audiences to target their their marketing campaigns and really shows that that, you know, that that BANGO marketplace technology have been is is completely agnostic to the digital marketing platform. All we need is the ability to focus marketing through a group of users, and there are all sorts of platforms that are available to do that, and it works equally well in each of those.

28:30 Put those three together. That's what's driven that 10x growth we saw in those BANGO audience days in the first half. Couple of case studies here. I'm not spending too much time on these. We've two very different customers try win, new customer in the half, next on an existing customer. What I like to see in a one more puzzle strategy games, very much using trying to achieve different objectives, but both getting an incredible return on their advertising spend. Try win, just using generic audiences, 50% high return. Next on by using that tailored audience, getting almost four times, return that they used to on their advertising spend, and both getting better quality customers, customers who are more engaged with their games, who play for longer, and therefore have a much higher lifetime value. So while the short term return on advertising spend is really important and, you know, some great figures on that slide, the long term benefit for them is is is way in excess of anything that you that that they've previously been able to use.

29:25 Which takes us to the the sort of the the final slide, and we've also talked about our our goals with that technology behind every payment choice. With BANGO Marketplace, we're revolutionizing marketing just as Google did twenty years ago by allowing it to be targeted based on search. Ten years later, Facebook allowed it to be targeted based on likes. We find what we can target based on what people actually pay for. And we've if you couple that and the growth we've seen in that business with the the the the historic growth that we see continuing on the payments business and overlay that with the platform business, which is an extra source of revenue for the payments business, you can see why the future has never been more exciting. And the next eighteen months, twenty four months, I think, offer the opportunities for for BANGO's growth to really go to that next level. So great half of results. Hopefully, you're pleased with the first half, but really the future is where the excitement is.

30:13 Paul, thank you very much indeed, and thank you both to Matthew and Anil as well. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the right hand corner of your screen. But just while the company take a few moments to review those investor questions submitted already, I'd 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 Meet company dashboard. We again will send you an email when that's ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected to the opportunity to provide feedback in order the company can better understand your views and expectations. Rebecca, maybe I could hand back to you for the Q and A. Obviously, investors had the ability to pre submit questions, which I think you have there to address.

31:00 And also investors had the ability to submit questions in real time. And if I could ask you at that point to read out the questions and who it's from, that will be great. And thank you once again to the engagement from those investors submitting questions. So perhaps I may hand back to you, Rebecca, if I may. Yes. No problem at all. I'll start with the ones that we had submitted ahead of the meeting. So I think you touched on it briefly in the presentation, but a couple of questions on take rate and whether we can talk a bit about the evolution of end user spend mix and the impact it's expected to have on take rate as well as a longer term target. Sure. I think I think Matt sort of touched on this invitation that sort of I know a lot of people like to draw that correlation to end user spend and take rate. So, of course, end user spend has been an an important metric because it's sort of an indication of our relevance to the major merchants that we're helping power their payments for, but also a size of that data pop that it has to be that that we that we can use to generate those data insights from. We've never really liked the the phrase take rate and and that that metric. And then we've always said it's gonna be lumpy, and you saw that in 2020.

31:59 2020 was largely flat on that sort of e use and user spend divided by revenue metric, dropped a little bit in the first half. It's it's gonna remain to be lumpy, and that's driven by product mix. So physical goods versus digital goods. You know, physical goods have a lower a lower percentage that we take versus the the the digital goods. It's been driven by obviously the contribution of BANGO marketplace as as that grows. The platform business, which is that SaaS business, well, that scales with end user spending scales in a different way. If you if you think of a a traditional end user spend where we we just take a percentage of that spend model, we start from zero, and then the more the spend, we sort of a linear growth and then the revenue grows linearly with end user spend. With the platform model, it's so there's more of a staircase.

32:44 So on day one, the take rate is not in effect infinite because we are generating license revenue with no end user spend. That end user spend ramps up until you hit the next licensing tier, and then again, you spike up from a revenue perspective. So the the correlation between the two is becoming harder. But I think when you put all that together, what should we expect to see over a long time if you take the overall end user spend through the platform or look at the overall revenue that we're generating, you would expect to see that increase over the long term. But it's gonna be lumpy while those businesses grow and especially, you know, with that with that SaaS model, which sort of breaks up direct linear relationship between end user spend and revenue. Thank you. And then another question on the data monetization opportunity beyond in app purchases purchases and whether there's up or demand for subscription data.

33:30 One for you, Adam? Yep. Sure. So we we our focus, as you saw, in our market analysis, and you you know from listening to the BANGO story and our the market opportunity, we are focused primarily on purchase behavior targeting through BANGO audiences to app developers. The biggest take up, as Paul was commenting, is is games developers. There's a lot of competition against developers. So we see that as being, you know, based on the number of engaged engaged developers that you saw in that chart earlier, a significant majority of those are game servers. But but we are there there is already take up outside of that. And interestingly enough, in the last few months, one of the biggest users of BANGO audiences has actually been an online trading platform where they're interested in customers that have propensity to spend money and comfortable spending money online.

34:23 So outside of the game space, we see that. We also had some interesting initial experiments with some much, much bigger brands who were trying to correlate how people spend their money on digital content consumption with offline, physical goods, retail goods. There are some sort of interesting, you know, intersections if somebody is a consumer of music apps and music content digitally. They might be in the market for headphones, speakers, Hi Fi equipment, those kinds of things, concert tickets even. So you can see how there is the application of bank awarding to a much broader space than than just games developers. However, as a content in the market analysis, with hundreds of thousands of developers out there, there's a a lot of opportunity for us just in that segment. But we are seeing we are seeing interest, and we are seeing adoption beyond just games.

35:13 Great. Thank you. A question on whether we can provide more detail about the nontransactional payment revenue, whether it includes data licensing revenue fee amongst the BANGO payment platform? Yeah. I'm happy to take that one. The nontransactional split doesn't include anything related to as well as BANGO Deep now. What it does contain is some of the license and platform fees as we go forward. So that's where that split has come through. And and then maybe another one for you, Al, on whether we expect Google to change its Google Play Store privacy policy in the future. We don't there's no no no immediate changes to to to Google Play's privacy policy.

36:03 They they are along with the, you know, all the big guys, they're under quite a lot of scrutiny from not just consumers, but regulators as well. And, actually, if you go to the Google Play Store, there are there are some very sophisticated controls already that end consumers can can interact with to decide whether they want to see marketing or have their data used in in in a number of ways or not at all. I think, you know, Google and Apple are more or less quite aligned, closely aligned in terms of their attitudes and the adoption of the privacy regulation and general views on privacy. I commented earlier on about Apple exercising much tighter controls on on on its advertiser identity. It's used cookie technology for advertisers. Google has said it's going to do the same. It's taking more time.

36:49 Basically, Google says because rather than just withdrawing the the old legacy method, they want to be able to introduce at the same time a more sophisticated method that advertisers can use that that nudges and embraces consumer privacy to a greater degree. So so they'll both be aligned. The other interesting comment I would make on on on that point is the observation I made about regulation on app store payments. And actually, what's gonna be interesting, I think, in the future is that the stores themselves like Google Play will obviously be responsible for a lot a lot of the monetization of content and, therefore, collection of consumer data. But, increasingly, we see developers using direct billing mechanics of the kind that BANGO offers. So developers also will start needing to take more responsibility for the management of consumer data.

37:38 And overall, the good news on this is that there's much clearer regulation now than there was ten years ago when when when this industry really kicked off. So through things like GDPR in Europe and CCPA, the equivalent regulation in The United States, They have much more transparency for all parties, for consumers, for advertising platforms, for merchants, and indeed people like ourselves. Thank you. One for you, Matt, maybe on what the forecast revenue and profit is for 2022. Okay. We then put out forecasts ourselves. However, Lee Britain provide research through through their analyst, which is available, and they're indicating about an 18,000,000 8,500,000 sales for next year and EBITDA of around $6,000,000 I think both they and we consider that to be a good conservative figure.

38:33 Great. Thank you. A couple of questions on BANGO audience day revenue. What sort of the average revenue per day or the revenue generated in the first half. So if you want to touch on sort of revenue model. Yeah. Sure. So we don't we don't break out the revenue. We report that single stream. So I I announced the questions on the revenue generated in the first half. And in terms of how it correlates with BANG audience, yeah, I think the best way to do this studies are let me talk you through the commercial model. Because how we sell and how we charge for the use of BANG audience is is basically as a percentage of what we call the ad spend. So if you were a developer, you will go into Facebook, and you will set up your marketing campaign, and you will click it to use a BANGO audience. And you'll set a budget in Facebook, and Facebook will then go spend on your behalf by showing your ad to people within the audience that we've provided. And you might set a $10,000 budget.

39:19 You might set a $100,000 budget. You might set 500,000 to a to a million budget. Right? Depends on what your marketing budget is and and how much of that you're gonna spend through that particular platform. And we will take a percentage of that. So we take a percentage of anywhere between 710%, which is why you saw that that correlation that gets us that sort of 1,200,000,000 TAM in that targeting data that I'm not showing in that in that pyramid chart earlier. So that's how we charge for it. So how does that correlate to BANGO audience days? Well, clearly, the more active campaigns that are being run, the more the more percent the more campaigns we're taking your share of, well, well, that doesn't necessarily show you is the spend in each campaign. So as the spend in each campaign grows, then then clearly we generate more revenue, but you wouldn't necessarily see that in the BANGO audience days metric. So I think it's a the simplest answer is the growth we're seeing in revenues is is at least correlated with BANGO audience days, but in reality, ends up being much higher because that doesn't give you an indication of the spend through those through those audiences at all.

40:14 Thank you. While we're on the topic of BANGO audience days, a question on sort of in a landscape where Apple is restricting developers' sort of ability to use customer data, how BANGO audiences are insulated from that, whether it's linked to sort of the anonymity element where developers aren't seeing the targeting data that they're using. Al? Yeah. The the interesting question is coming there's actually a couple of points that come out of Andre's question there. So what Apple's actually doing is actually coming up with a different system to allow third party data to be collected and made available to consumers. So it hasn't gone away forever. It's just the old technology of ad IDs has been replaced by a new technology that Apple hasn't said much about yet, but it said it's going to be launching in the not too distant future.

41:01 So it's all it's not so much about tracking data. It's about consumer consent or use of tracking data. Like, I think is is the is a big shift. And then the the other the other big piece in the question is is was really about what BANGO does. So the BANGO is focused on on people's purchase behavior, and that's entirely anonymized. So when we we get purchase data about an individual, we don't know anything about we don't know anything about where they live. We don't know anything about their gender. We don't know anything about their age. We don't know anything about in in interests and social media preferences and all that sort of stuff. Really, all we know is what that individual has chosen to spend their money on. And so we pull that data together and we aggregate it in a form that's totally unidentifiable.

41:50 So it it is, as you as you raise your question, is entirely anonymous. So I think the other key point you raise in your question is we don't ever share that data with anybody. Sounds like a curious statement to make given that we're allowing developers to target with that data. It's probably worth spending ten seconds on the mechanics of it. We produce an audience, we now have audiences that are compatible with Facebook advertising. And recently, as you've seen the presentation with TikTok advertising, so when an advertiser takes an audience from BANGO and says it wants to use it in a campaign, BANGO directly puts that into the Facebook advertising account. And then the advertiser, the developer, instructs Facebook to show that advertising with the BANGO audience filter to all of the customers in there subject to calls those customers have been told Facebook that they want to see advertising or, equally, they don't want to see advertising.

42:41 So those customers sort of opt in to see advertising will get the advert from developer. When the campaign finishes, the file that BANGO has loaded into Facebook is basically withdrawn, taken back by BANGO, the campaign comes to an end. So in that entire process I've just described, developer never touches the the audience. They they so they never so we never transfer the audience to the developer. So it is a system that's set up to to to to put the idea of of controls and and and privacy front and center of the mechanism. So I hope that that's helpful in terms of helping you understand how we we deal with and we accommodate the the privacy requirements. Brilliant. Thank you. A question on whether we could comment on open banking and whether it's had any or has any effect on the future prospects of our business.

43:30 Yeah. I think I think all open banking is is an opportunity. If look at what we focus on, we focus on that alternative payment method, which is anything other than card. You know, we've proven as a platform we support mobile phone billing, so the historic carrier billing, mobile wallets is something we've been doing for many years. Placing that charge on a pay TV or a broadband bill or a utility bill from an energy provider or on a on a loyalty store charge card. All of those we've we've sort of integrated with. So for those open banking, it's a great opportunity of paying another payment mechanism, if you like, on that on that south side of our platform, which the merchants get access to. And, you know, we're actually looking at a few opportunities here in the moment, which probably will will result in something later after this year or maybe, really, mid part of next year. But for us, that that's an opportunity because those are more payment mechanisms that we can do one integration, two, and the the merchants in the platform can then benefit from.

44:24 Thank you. A question on whether there are any acquisitions that we might explore to accelerate our growth plans? I think from an from an acquisition perspective, what what you won't see us doing is an acquisition just a new and numeric role. That's absolutely not part of that strategy. Would we do and have we done in the past acquisitions that accelerate that virtual circle? Then absolutely, yes. The last one mean audience back in 2018. We acquired it for that data segmentation and marketing technology, which we took out of the company, then ran ran it independently, and then eventually last year, spun that out into a JV, and that we generated a profit from from spinning that business out into that into that JV. And that that business is, you know, we now have a minority shareholders, a lot of seats on the board, has really great growth opportunities ahead of it, which will be a benefit in the in the future. But it's really very, very separate from a from from sort of the main BANGO business.

45:17 So, you know, acquisition in the future, obviously, never say never, but anything we do will be targeted on accelerating that virtuous circle and really helping us accelerate the growth. Brilliant. Thank you. There was a sort of a follow-up question on the data privacy side of things and just the relationship between sort of the way Apple has changed their rules and how that affects being able to share audiences in Facebook. Okay. Yeah. So just just quickly on this. Yeah. So this is remember, this is payment data. So it's data that's collected from the way people pay. So it's it's not collecting data from from Apple. It's not collecting data from Apple I advertiser IDs. So we don't we don't take any data from what people sort of done in terms of interaction and advertising. It's it's merely the data based on how people should have paid and what they've purchased. So it's it's totally unrelated.

46:10 Thank you. A question for you, Matt, maybe on whether we can comment on the increase in the cost of sales versus the increase in revenue. Yeah. I think, obviously, first of to point out that 360% looks like a a scary number, but, actually, it's it's we have a very low cost of sales anyway. The slight change there is the increased cost that we have from the data monetization element. There's a a higher cost of sales in in that than there is in the payment service. But, again, it's still very low cost of sales, Anything up to about, you know, zero to 15 to 20% can be the cost of sales for the marketplace side. And a question on the relationship with NHN, and if we can just talk a bit about how that's been going since since it began.

46:59 Yeah. Sure. So I think the relationship with NHN, I'll say, I think it has many sort of different different assets to it. So they are the majority shareholder in that new deep joint venture that we created by spinning out that audience business we talked about earlier. And the big ambitions for that business, injecting lots of expertise, in particular, in addition to the cash they put in when that joint venture was created, and that's a business that's now targeting or helping Shopify shops better use their data to monetize the the drive the the number of payments they have through the through that platform. So ex early stages in in terms of that business, certainly very exciting prospects. The next element is NHN are obviously a a data provider to us. So they they they monetize their own payment data from Korea within the BANGO marketplace platform. So some of the audiences we sell in Korea, for example, use BANGO marketplace, and we revenue share that back with NHN.

47:50 And, obviously, that forms part of the cost of sales that Matt talked a little bit about earlier. Obviously, a very well connected company. We are helping multiple of their subsidiaries connect into payment mechanisms. So in in many some countries, any part divisions of any channel becoming a merchant connected into the into the platform. On Demand Media have been a good example of that. Another final level, a a shareholder. When we did that deal, they had a we featured shares, and they took 4.7% stake. They've been since buying on the offer market, and they're just under 10% at the moment. So, you know, many different aspects to to the relationship, and I think all really firing on all cylinders. Great. Thank you. And then what we see as the greatest opportunity for the business over the short term? Hopefully, you sort of you sort of see that from the from the presentation. It's the, you know, the historic growth of the payments business is continuing.

48:43 And now on top of that, we're overlaying the incredible growth we're seeing in BANGO marketplace, that data monetization business that we announced only sort of probably back in 2019, with 2020 being that first full year of trading. You add on on the top of that the platform opportunity that is relatively new, sort of a year or so, but great traction and look look for more exciting announcements over the next week or so as as we announce more deals in that space. And on top of that, everything that's going in in the market in terms of privacy changes, making BANGO audiences more valuable, in terms of App Store payments and the re re re rule of that monopoly in certain App Store payments, creating more payment opportunities for us for the same merchants that are already customers of ours through BANGO Marketplace. So the game developers who wanna monetize directly outside the App Store are already customers of ours through BANGO Marketplace. So when you pull all that together, I don't think we've ever been in a in a stronger position than, let's say, in, you know, eighteen or two years time, we I can't wait to see what this business looks like.

49:36 Rebecca, I might just jump in at this point because I see that you've addressed pretty much every question that's come through. So firstly, thank you to all those that have submitted questions this morning. If any other questions do come through, of course, feel free to grab them and respond to them. If not, we'll make them available to you after this meeting is finished. Paul, I know that investor feedback is important to the company. Perhaps before I redirect investors to provide you with their thoughts and expectations, I could just hand back to you for a few closing comments. That'd be great. Yeah. Sure. And so, again, once again, thank you for for everybody's time and for those that have been investors. And I know we have a a number of investors who've been with us for a long period of time. We we greatly appreciate your continued support. And for those of the new, hopefully, you came away as excited about the businesses as certainly we are hope are are excited and passion for driving this business forward.

50:24 It's very clear the opportunity is is there ahead of us, and can't wait to update you all as we move forward. But I think the future is never been bright as we as we move to be in that the technology behind every payment choice. So thank you again, and, you know, look forward to receiving your feedback. Thank you. Paul, Matthew, Anil, Rebecca, thank you very much indeed for updating investors this morning. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? This only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of BANGO PLC, we'd like to thank you for attending today's presentation. That now concludes the session, and good morning to you all.