Bango (LSE:BGO) — Interim Results for the six months ended 30 June 2025

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 just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, company can review all questions submitted today and will publish our responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we 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, and welcome, everybody, and thank you so much for your time this morning to go through our first half twenty five results.

0:48 So my myself will will walk you through an overview of BANGO, highlights of the half, lot more details on the financials, and then I wanna talk a little bit more about the DBM opportunity in particular. And this time, I'm gonna zoom in on what's happening happening in each geographical region from a telco perspective just so you can see the different dynamics of the geographies in which the DBM is is getting great success, And then we'll end with a quick highlights and outlook. As always, these are more beneficial, I'm sure, if they're interactive, so please do submit q and a as we're going. We'll we'll sort of keep them to the end. We'll try to address them all at the end. And if there's any we've you've submitted that we think we've answered, we'll sort of we'll sort of address those again if if it's not clear. So just as a reminder, when we you'll see this, like, vocabulary as we as we go through the presentation, we have been going BANGO PLC are really sort of two distinct businesses. The the transactional business, which is primarily the the direct carrier billing business, that's where you can purchase something, pay for it on your mobile phone. Here, the example, obviously, being a bag of POPi coins in the Google Play Store, but also physical goods from Amazon in Japan, for example.

1:55 And on the other side, the subscription business, very much focused on the digital vending machine. That's really our market leading platform for bundling of subscriptions, allowing anybody who has a subscription service to distribute that through a channel. Two very different business models, common technology platform in the middle, but on transactional business, it's where it's a percentage of the retail price. And in the digital vending machine, that's our SaaS model with that setup and one off fee plus the license fee that generates that ARR that we've seen increase through the period. So two businesses very much we'll cover both as we go through there. Underpinning both of those, if you step back and think at a very simple position, we're in the forward to position where if you look at the customers and the companies that are connected to the DBM, it's sort of all the logos you would ever want to see, right? Some of the biggest companies in the world, some of the biggest telcos, some of the biggest content providers, and actually some of the largest of the West Coast technology providers all use the DBM to help them scale their business. And really the fundamental and very simple value proposition is you connect once and you access many many. And that doesn't matter whether you're on the payment side of the business on DCB or the digital vending machine. By connecting once into BANGO, we give you access to hundreds of people on the other side of that equation. So if you're a content provider, you access to hundreds of telcos.

3:14 If you're telco, you get access to hundreds of content providers. And you can see there the speed and scale is really how we've been differentiating, on the DBM side of the business where we can launch services quicker than anybody else in the market. Disney there in four weeks, NBA in three weeks and with Verizon we launched over 14 in twenty months. So really that speed and scale is what the platform is really about. But as we go through today, you'll see it's going way beyond that and the value that the platform provides go beyond that. I think that's a good element to keep in your mind as you go through the rest of the presentation. We're all about being the place where people subscribe and our strategy for growth, as you'll see if you've read the RNS, is broken down into what internally we call the four Es. So that's expand, that's continuing that growth in the telco sector.

4:00 Enhance is about looking at how we use the data we have in the platform to differentiate the content providers. That's one of those sort of strategies that sort of more in the sort of mid to long term. We're very early in that enhanced one at the moment where we're looking at what data we have and how we can add value to the content providers. Because ultimately, we'd like to monetize both halves of the marketplace, both reseller as well as the content provider. Explore is all about looking at new verticals. You'll see, obviously, I noticed at the back end of last year, Constantin in Portugal, actually retailer. Lots more pipeline developing in those markets. And we certainly see great interest. And I'll share a little bit later some survey results we've done with different content providers and so you can see the sort of verticals that they're looking to move to after telcos.

4:45 And then extract, that's about making sure we manage our payments business by cash and profit. And you'll see in the first half, we obviously finished the migration and integration of the Boca More digital business. So that's well and truly behind us now and Matt will talk about the financial impacts of that a little bit more as we go through the rest of the deck. So just in summary, I'll turn it over to Mike. You can see a great set of financials for the half. You see both the total revenue and the transactional revenue continue to receive a growth around 38% CAGR over the past three years. Matt will talk a little bit more about the dynamics of that transactional business between those high cost of sales routes and the core revenue. The core business really continues to see good growth of around 10%. DBM business, again, continuing to scale, 49% growth CAGR over the period. And sort of top line growth coupled with the optimizations we've made in a cost perspective, see that increasing level of EBITDA. So significant EBITDA growth year on year from first half twenty twenty four into first half twenty twenty five. Well, that DBM business is really driving that growth in the ARR business, that's up 20% year on year. Net revenue retention, that's a measure of the growth in existing customers that's our earnings that's always above 100.

5:58 Naturally It's going to be lumpy, especially in the small business depending where customers are. But keeping that above 100% shows that existing customers are growing and we continue to have no churn once networks and customers are alive. And that's a really, really solid part of the business is this continuous growth because of the way the license structure is tiered as we manage more and more subscriptions for our customers. Momentum is building in the phone. We have seven new BBM deals in the first half of the year. We added another one obviously, I think you saw with MTN at the back end of last week and the funnel was really well populated for 2025. And our focus is really getting those deals through the funnel as fast as we can, so we can get them live, get them integrated and get them launched. And that's really what will sort of continue to drive that growth of the business moving forward in addition to the growth in existing customers.

6:47 So with that, I will turn you over to Matt to run through the financials. Thanks, Paul. Good morning, everybody. Welcome to the earnings call for BANGO's first half results 2025. Overall, a solid period, reflecting both the financial discipline and the continued execution of our growth strategy. We've made strong gains in recurring revenue. Our gross margin has expanded and our operating expenses have reduced. All three of those pillars helping deliver a 66% increase in adjusted EBITDA. Thanks as always to the BANGO team globally for making this happen. I'm pleased to now walk you through the highlights for the period. Starting with the top line, revenue grew 5% to GBP 25,200,000 and building on a consistent trajectory of growth since 2022.

7:38 It's important to also highlight the quality of that growth. Our annual recurring revenue increased 20% year on year to GBP 15,600,000 and net revenue retention remains strong at 108. That tells us two things: one, new customers continue to come on board and two, existing customers continue to spend more. And couple that with the fact that churn across live DBM customers continues to be zero, and it highlights the attractiveness and sustainability of the DBM model as it embeds itself deeper and deeper into the global subscription economy. Moving to the next slide and looking at our transactional business. Revenues held steady at £16,400,000 in line with last year.

8:28 On the surface, whilst flat, if we look deeper, I believe the underlying picture is a stronger one. In June, I introduced the split of core transactional routes against those higher cost of sales routes acquired from Docomo Digital. Both channels have shown differing trends in the first half, but the underlying health of transactional payments remains strong. Our core transactional business, which is both more profitable and strategically more valuable, grew 10% year on year, adding GBP 1,200,000 and rounding off a strong first half. That sales growth was unfortunately offset by the volatility we've seen in the high cost of sales routes as we guided to in June. It's important though to stress with those routes operating at low single digit margins, the impact on adjusted EBITDA of those movements is minimal.

9:20 We continue to actively manage these routes with a clear ambition of improving their profitability even if that means stepping back from some lower quality revenue. Overall, with the migrations from the Frankfurt Data Center now complete, the transactional business is back on a firmer footing, providing stable cash flows and still growing in its core areas. Moving to DVM and one off. Revenue increased 15% to GBP 8,900,000, reflecting strong momentum in both new customer wins and expansion with existing customers. As Paul mentioned before, we secured seven new DBM customers during the period, including our first in Korea, our first telco in Japan and further expansion in The U.

10:07 S. And Europe. The number of active subscriptions managed by the platform has also more than doubled to over £19,000,000 This underlines the scalability of the EVM model and why we are increasingly being recognized as the standard in subscription model. Turning to Slide 11 on costs. We continue to be very focused on discipline and efficiency. Our core administrative expenses, which is a better indicator of the controllable costs in our business, decreased by GBP 2,200,000 over the last twelve months, equivalent to a 9% reduction. On a cumulative basis over the last two years, those expenses have reduced by nearly 20%. Despite the FX headwinds in 2025 from a weaker U. S. Dollar, we expect to maintain that year to date cost reduction for the full year with a further reduction in fiscal year twenty twenty six.

11:05 Isolating some of the movements in the statutory reporting, we incurred GBP 1,800,000 of cash exceptionals. This includes GBP 1,300,000 of one off restructuring costs to deliver our efficiency initiatives as well as GBP $05,000,000 data migration and asset write down charges associated with Docomo Digital. We expect exceptional costs to continue in the second half, but to cease in fiscal year twenty twenty six. D and A increased by GBP 1,200,000 year on year as past R and D investments comes online and begins generating revenues. We have not reached the peak yet in the D and A cycle as it catches up with historical spend, but this will naturally come down as we reduce our CapEx spend going forward.

11:51 And one can see from the bottom chart, this continues to come down. Consensus estimates forecast a 7% reduction in CapEx this year and a further 14% in fiscal year twenty twenty six. So putting it all together across the P and L, gross margin improved by three fifty basis points to 84.3%, driven by strong core transactional performance, savings from procurement initiatives and an increased weighting of higher margin DBM activity. The strong performance across recurring revenue, gross margin and operating efficiency drove 66% increase in adjusted EBITDA versus the prior year period, reflecting the benefit of higher margin revenue and disciplined cost control.

12:42 Adjusted EBITDA margin rose from 17% to 27%. Finance charges increased, reflecting the current debt profile as well as lease interest from our new head office in Cambridge. That's a strategic investment to support growth and talent retention for BANGO in the future. While we still reported a net loss of £3,200,000 this narrowed by £1,000,000 versus last year, clear evidence that the operational leverage is delivering. And absent anything unforeseen, we would expect to report positive profit for the year in fiscal year twenty twenty six. On cash, the story is very much one of investment and transition. As the DBM matures, we continue to put capital into R and D, though at a lower level than last year.

13:34 Working capital movements are more of exceptionals from the efficiency initiatives and the refinancing this year, impacting cash generated from operations as expected. We made a big step forward with the refinancing of the capital structure in June, securing a GBP 15,000,000 revolving credit facility with NatWest and an enhanced loan facility with NHN. That significantly strengthened our balance sheet and gives us flexibility to keep investing whilst driving efficiency. Net debt increased to GBP 7,300,000 for the half, in line with our expectations, and we ended with GBP 4,600,000 of cash on balance sheet. Finally, looking ahead, our priorities are clear: reduce net debt, continue to expand margins and deliver recurring revenue growth.

14:26 With the refinancing in place, liquidity is strong and net debt will start to reduce in Q4 as the efficiency savings and seasonal inflows materialize. Strengthening the balance sheet was a key focus in H1. And with that delivered, attention turns to driving profitability. Gross margins are improving, core administrative expenses are falling and R and D CapEx is declining as the investment cycle peaks. Those efficiency gains will keep showing through in adjusted EBITDA and particularly cash EBITDA as we look forward to 2026. On the top line, the DVM pipeline remains strong and transactional revenue has a natural weight into the second half.

15:12 Clearly, the timing of new DBM launches will be a key driver of the full year results, but the momentum we've built so far gives us confidence. Overall, we're currently on track to deliver revenue and EBITDA in line with expectations. And I'll now hand over to Paul to walk you through the DBM opportunity. Thanks, Matt. So I hope this is a good place to start. Just a reminder, we've shown this before about the way that bundling itself is evolving. It's moving from on the very left, what we call sort of a basic bundle, that's where one particular content service is tied to a particular mobile or telco plan. And so really the area of sort of multiparty bundling, where there's more choice, can pick, you can add perks, you can upgrade and downgrade subscriptions, all the way through to easy with up to some sort of where you have that sort of almost like marketplace or that that app store for subscriptions and we call soup bundling.

16:07 And as a reminder, digital menu team supports all of these different different models, but the value that we add really increases as you move out of basic bundles into those multi party. That's where we're seeing some great success at the moment. We'll talk a little bit about more about the capability we're adding into the vending machine to make those even easier for televisions who were looking to launch those services moving forward. If we step back and look at the market size, you can see that the market is continuing to grow. The overall subscriptions market is continuing to grow. You see that has a CAGR of around 6%. What we see is that it's an increasing portion of is being bundled particularly through telcos. So the CAGR for the telco bundle piece is close to 10%. So the bundling growth is faster than the overall subscription market growth. And then the final 80% of CAGR, that's our evolution from a simple bundle into the multi party or super bundling and that's growing much faster. So you see the subscription market is growing, an increasing portion is being bundled through telcos and those telcos are increasingly moving to more complex bundles. And that's really where the digital vending machine starts to have significant value. So that's the market that we're operating in. On the other side of that, you have obviously the content providers.

17:18 And back in June this year, we published a survey. You may have saw it if you follow us on LinkedIn or any of our material. We published a report called Gravity Shift. And Gravity Shift basically interviewed 200 senior execs from all sorts of content owners and with all sorts of different subscription services to really understand what their plans were for us for sort of secondary channels or distribution subscriptions through channels. And they see over 90% of those are looking to use these additional channels. So rather than just go direct to consumer, looking to grow their base by distributing subscriptions through a channel like a telco. And when you look into the channels they're looking to use, you can see it's not just telcos, it's moving into retailers and banks as well. And that's a significant step up in both retailers and banks. And I think that's largely because we're seeing more and more telcos already having launched these services.

18:06 So the subscription brands are looking for alternative channels. And that very much aligns with what we see from a sales perspective and in the pipeline is that move into retailers as well as financial services products. And you can see the reason why they want to do this and it's largely complexity. It's complex, it takes time. How can I simplify all this? And that's really what the digital vending machine does is take that complexity, we make it simple and as you've seen from some of the examples I gave earlier we're making very quick to launch these new services. And the speed of scale is really what is, as I said at the start, what it's been about so far and you can see all the examples there. You can also see the more Verizon has seen and the benefits that the telcos have seen in terms of reducing churn. And the ambition that the telcos have to get more and more of their customers using bundles because for them it's the best way to grow revenue and reduce their churn.

18:56 But back in February this year, we launched what we call the world's first super building subscription hub and that's going way beyond just optimizing that connectivity to the entire lifecycle of our product. And we continue to innovate all these ways. It's all about from onboarding and having test plans or content providers and telcos who come into the platform and self certify. It's about having a pre canned user interface. We call that the CX that went live with Altice in The US this year. That's our version. If you're a customer, that's your way of accessing the digital vending machine through this movie user interface, which the telco can put their own brand, their own colors and choose their own layer, all through a configurable product. I'm very much into these offers, the creation of these offers and how do you define these offers, how do you publicize them, how do you distribute them and how do manage the complexities that come with those offers in terms of rules, upgrades, downgrades, what happens if you cancel one product, what was the impact on another product. All of that complexity we've been sucking into the digital vending machine. That was two things. It really allows these offers to be launched a lot more quickly, but it also makes customers very, very sticky.

19:58 It means we're not doing the connectivity, we're doing a lot of that complex logic that was historically sometimes done in the Telco's back office system. So the value that the telco that the digital vending machines deliver is increasing all the time and that's providing the ability to launch services more quickly and making it a sticky relationship with the telco. So talking about telcos, thought it'd good to look at the different geographies because the dynamics we see globally are very, very different. So I thought it'd be useful just to do a bit of a world tour of what we see. But before we do that, let's step back and look at what drives growth. So we drive growth in two ways. We drive growth by winning new BVM customers, the logos, the likes of MTN that we announced last week. And then by existing customers growing. And existing customers growing two ways. They grow by getting existing of their customers to take on more bundles and more offers in effect, moving from maybe having one subscription to two or three as a user. And then by then getting new consumers to adopt bundles and bring those into the bundling. You see that the Verizon calls and their demand to get 50% of their customers into that My Plan bundle. So those are the way that we grow in DBM. It's new logos and then new more subscriptions and that's either from new customers or from existing customers taking more and more subscriptions.

21:15 So we look at The U. S. And Canada. I think this is by far have been our largest market. And that makes sense because it's actually the largest market for digital subscriptions by revenue. So it makes sense that it will be our largest market. Also is a market where a lot of telcos and particularly regional cable operators are struggling as people look to cancel their cable package, TV package. The cord cutting that's hold, if you look around in the press, I think people basically taking a broadband only subscription and then getting their entertainment through third party services. And so it's a natural next step for those guys as they look to differentiate and reduce churn that they look to third party subscription bundling as a way of compensating that. The U. S. Is really made up of about 10 major national telcos. There's then sort of tens of mid size and really thousands of smaller regionals. So it's quite a diverse market.

22:02 Likewise, similar to in Canada, although a little more concentrated, we have sort of three nationals and sort of tens of regions. And we've built a really good position in that marketplace. We have six out of the top eight in The U. S, including the Dish announcement that we made last week and the Altice announcement earlier in the year. In Canada, we do bundling for all three of the nationals as well as a number of the regionals as well. And so really, we have a really strong position there. So in The U. S. Really and Canada, really the growth in terms of new logos and new wins is largely going to be with those smaller regional telcos. So for that, that's where the all in one super building solution makes sense for having that user interface, that sort of zero touch access is a way of bringing on these small telcos with less and less work and less and less effort so they can launch more quickly.

22:48 And then really the big growth in this kind of going from existing customers, that sits out of the top page as they look to step through the tiers, bringing on more customers. And that's where that offer management functionality really makes sense allowing us to create these complex bundles. With the start of a new sort of football season sports bundles are always very popular and big drivers. You saw that in the DISH announcement. And that's really one way of sort of entering getting these services launched more quickly so we can drive more and more subscriptions through the platform. Shifting to Sarto, Latin America. That's a very region very much dominated by large telco groups. It's one of the largest bundling markets for SVOD. There's more SVOD bundled through telcos in that region than in the other regions. And local language content is particularly important and that's provided sometimes by the global players like Netflix, but also by specialist players like the big service from Televisa.

23:41 If you look at where we are in that market, we've been doing simple bundles in that market for quite a while, particularly with Amazon and well as some other partners. And so we have sort of bundling connectivity to 80% of the telcos in that market. The D game is being very heavily used by Liberty Latin America across the region. And then we work with television Univision to help them scale their local language service bits across the different telcos. You can see we have a great embedded base. It's a case of building on that base and converting those simple bundles into DBM and multiparty bundles. That's really where the new logos will come from is that conversion from the simple bundling we do at the moment into the more complex bundling solutions where the DBM really adds great value. It's a big prepaid market. So some of the top up features we've been developing where we can really manage the top up and again take that top up complexity out of the telco system, manage that in the DBM, allows us to launch prepaid bundles a lot quicker and also makes it a very, very sticky solution with customers.

24:43 Closer to home, if you look across EMEA market, obviously Europe is very much dominated by a few large telco groups. The Middle East is really there's very limited complex building at the moment in The Middle East. It's very much still very much a DCB focused market. We're seeing signs that are starting to evolve, it's certainly one the least developed markets. In Africa, there's huge demand, but the economics are very, very different. And you can see that on the chart at the bottom. You look at the what the price of a network premium subscription and more likely between The US, South Africa, and here, you can see it changes pretty rapidly. So from $25 then to $10 in South Africa down to sort of $5. So the unit economics in Africa are very, very different. But the demand and the volume and the number of subscribers is very, very high.

25:29 So where are we in those regions? Obviously, in Europe, BT, especially in Liberty Global, there were some very early DBM customers. We've seen them, both of them increasingly look to use the DBM more in sort of a marketplace type of us, almost moving out of multi party into sort of super bundling. We've seen that with the Telenet marketplace announcements as well as what EE are doing with some of the marketplace work. And last week, we got our first win in Africa. I'd say with MTN Group, they operate across 16 different markets in that region. We'll start with the rollout of global SVOD in South Africa and then we'll expand into other markets, then each market will add on even more content providers. So there's certainly lots of opportunity and for us a really good entry into a market that has, say, very different economics versus some of the rest of the world for everybody, both the content provider, the telco, and obviously we're in the middle of that.

26:23 So our strategy really is to continue with Europe on the work in the groups. We're starting to see at long last the large telco group to move out of the studying phase into the execution bundling. We had a win in the first half with an operator in the Benelux region. We're starting to see other opportunities drop through the pipeline. Obviously, we want to drive customers in Africa, so big numbers of customers there, big demands. We want to get those services launched and deployed to as many countries as possible as quickly as possible. And that's where eDisty is quite helpful with some of these marketplace solutions like the likes of Telenet are doing is to bring in other merchants more quickly. So the eDisty solution we have really plays well into those marketplace offers. Finally in Asia Pacific, obviously again a very mixed market.

27:11 We sort of broke it for simplicity on here into sort of two. You have the mature markets, Japan, South Korea and Australia, very high disposable income and really a big adoption of digital services and the subscription economy in general. And then growth markets like India and Indonesia, etcetera, where there's sort of a rapidly expanding sort of mobile first digital savvy customer and price sensitivity is really key in those markets. And that actually drives bundles. So the more and so really the more price sensitive markets are, the more creative some of these bundles are that are put together for customers. So generally that works in our favor. So where are we at the moment? We obviously have a strong DCB position across that market, particularly in Japan. And once we have Benefit one that employee benefits provided me just a few years ago, we added the first telco in Japan, the DBM in the first half of this year. And really what we want to do with digital red machine is exactly what we did with DCP in Japan, is establish that position, that beachhead position and grow from it. And that's the way that market historically works. You build up that position, you build up position of trust, you become known as a company in that region and then business continues to grow. And likewise, it's very similar in Korea. So that's why we were really pleased to get our first win in Korea with KT.

28:26 And after they launched their first AI subscription service only a few days ago at the back end of last week. In the growth markets, for instance, we're launching about gaming in Indonesia as well as with the social media platform in India. So very much more of that simple bundling to the level, but certainly with ambitions to grow into that multi party. That's really how we'll sort of grow in this region is capturing the prepaid users in the growth markets and looking at AI subscriptions in these developed markets and basically building a reputation in those countries like Asia, Japan and Korea. So we replicate what we've done in PCB with digital vending machine. So finally, before we shift to Q and A, just a brief look. If we look at some of the transactional business, then we've obviously completed that migration as we talked about, talking about digital integration now fully behind us.

29:22 We have that volatility in those high cost of sales routes that Matt talked about, but the core business really continues to grow well. And then additionally, you'll see the gross margin increase with some of the cost of sales reduction activities that we've undertaken. So business, as Matt said, is very much moving into that sort of strong cash generation business and more than we're very pleased with the growth level that we see in the core and that's the groups. In DBM, seven new customers in the first half. We now have probably six out of the top eight service providers in The U. S. First customers in Korea, first telco customer in Japan, new Western European customers and our first ever customer in Africa literally that we announced back end of last week. Put all that together, see some great DBM growth, the ARR growth in particular, that net revenue retention during the growth from existing customers.

30:10 All of that, coupled with the cost savings that we have been implementing in delivering good EBITDA growth in excess of 60%. And we're really on track to deliver revenue and adjusted EBITDA in line with market expectations. And really moving into 2026, all those cost savings, you get a full year of benefit, even more revenue growth as those DDN wins this year start to move into the growth phase. You can see we're in a business that set a significant cash generation with a very different looking P and L in 2026. So with that, I'll stop and turn back and we'll go back to Q and A. Perfect, guys. That's great. If I may just jump back in there and thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that 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 dashboards.

31:09 Guys, as you can see there, we have received a number of questions throughout your presentation this morning. Thank you to all of those on the call for taking the time to submit their questions. But Suky, at this point, if I may hand over to you just to share the Q and A with the team. And if I pick up from you at the end, that would be great. Thank you. Great. Thank you. I'll start by apologizing for the dudes of Hazard Horn, which you can hear earlier in the call. That was announcing the sandwich ban. It's it's not a new BANGO theme tune or my way my technique to believe in these two. It's slightly random intro. As always, we're really keen to hear from investors and to anyone who's interested in BANGO. So on bangoinvestor.com, we have a Q and A functionality.

31:56 So thank you to everyone who's been using that. It's proving really effective. And to everyone who's submitted questions today, we appreciate those. So let's dive straight in. We'll start with one for you, Paul. We've had lots of questions about announcing deals and news flow ranging from there's not enough to there's too many and comments about the lack of commercial details in announcement. So could you provide a comment on this, please? Yes, sure. So I guess the only thing I've learned is as far as communications go, can never please sort of everybody and people die you know, digest information in in different ways. So if it doesn't meet the way that you personally like, I apologize for that, but everybody is different. So what we try to do, especially with RNSs, is basically, I would say, normal split in two. With deals that are very large initial revenue, for example, you remember a couple of years ago, we had that one of the top three telcos in The U. S. Where the start in ARR was sort of $2,000,000 We announced that on a normal basis.

33:06 So generally, we're giving the commercial we're talking about the commercials, we will be restricted from talking about the operator that is launching those services as part of the contract. So that's one category for announcements is where it's very large immediate revenue and that's generally announced on a no names basis. And the second category is where I think most of the wins fall into where deals that have huge potential but generally start off a lot smaller. And MTN, the announcement being a great example of that, huge potential, but obviously starting with South Africa and one more particular SVOD provider in South Africa. And those we announce as soon as we can. So we're restricted often by the timing from the partner who signed the deal with. And we will generally announce those as an RFH if we think they are of particular interest to investors.

33:55 If So you look at the two we did last week, Dish and Sling TV, I think that's a really, really interesting start. Firstly, they're one of the top eight operators in The U. So that sits over the top eight and Dish is obviously one of those, so it's very relevant for that. But also it's an interesting model because they have DISH TV, they have Sling TV, which is also a content provider, and then they have Boost Mobile, which is our MVNO. So very different elements of the group. So for us, that's quite an interesting model to see how that evolves because in fact, they sit on both parts of the the digital vending machine depending which sort of part of that overall group that you're talking to. So for me, that's that's that's really interesting. And then MTN obviously was the entry into a new market, right, within into Africa and our office customer win in Africa. So we thought that was relevant and and interesting to investors. And there'll be others which you don't see, we did a press release with telecom selling Indonesia and announcement with a partner Nagra to launch Netflix in Hungary.

34:51 And also announcements where they're just sort of deal wins, we do general press releases of those, We benefit commercially from that. But the only reason for announcing deals is not just for investors, it's also to generate the commercial momentum as well. And so those two we didn't announce as RNSs because we didn't think they were as interesting as investors and want to keep a new flow as far as RNSs go a bit more focused on the deals that we think we are interested. So that's the model we follow. And let's say, if you want to find out more, you will see on the previous slide, there's tons of ways you can keep in touch with what we're going on. RNS reaches are just one small part of it. I'd say in those we do as and when we acquire and when we think it's interesting. As a related follow-up, the releases last week had a very positive impact on share price. It's increased recently. There were a number of comments about what the Board is doing to increase the share price.

35:42 Yes. Think if you look last week, obviously, I think some good news of mostly investing last week was all retail driven. That tends to be very news flow driven. And I think hopefully the retail market saw. So we'll say we really do the opportunity with both DISH and MTN in terms of what those can deliver to the business over time, right? Those are both deals that will grow and grow over time. Just a reminder, the Board and all employees are very big shareholders overall. We're all invested and interested in the share price. In terms of what actions we've taken, I think you pointed Canaccord as a second broker. We've seen some great traction from that both in The UK as well as in The U. S. One of the reasons we picked Canaccord as a second broker was because of their regions, The U. S. Market. We are obviously adding Westell to register a year or so ago and we have a great interest from other investors.

36:33 And this is the start of what it proves to be a very long eight to nine days where we're meeting not just existing institutional holders, but well in excess of 20 non holders. So we got a very, very busy eight to nine days. So there's certainly interest from institutions and I think I would say more demand than certainly I remember for many years and we have a busy eight to nine days ahead of that. Moving on to DBM specifically, how many DBM customers are there and can you comment on where they are in the implementation phase? Yeah. Sure. So they're all in different phases of implementation phase. So I think we ended last year with 27. We had a seven in the first half. We just had another one with MTN, I guess 35.

37:19 And with some of these, depends where you're currently, whether you're in the group or reach individual countries, we were currently in MTN as a group in that particular number. And they're all very much in sort of different phases and obviously some are very much in that growth phase where they're starting to move through the tiers, other is in that implementation phase. We rest on a call this morning what was the driver for that implementation phase. And really it's twofold. The technical implementation is sort of a matter of weeks. To get these things technically live is generally a matter of weeks. The complex part or the things that delayed are two things. Firstly, it's the commercial agreements between the telecom and the content provider. And secondly, it's fitting this into the telcos marketing plans. Those two tend to be the driver for launches. That's why we like the things like football seasons and Christmas and things like that because they're very hard deadlines that are removable. So the launch is a great example of that, very hard deadline in time for the new football season. And so we actually saw those things move very, very quickly from contract signature to launch because there was that very, very hard deadline. So certainly, so much really is outside of our control, but the bit that is the technical piece is sort of about a matter of weeks.

38:23 On a related note, is near term growth driven more by new partners or expansion of existing ones? And of the reported reach, what's the conversion rate into active subscriptions? Blimey, do want to take the first part? Yes, I'll take the first part. And so as I mentioned in the presentation, we're in the privileged position here of being able to have growth coming from both new partners and existing customers. And you can see that in both the metrics that we're reporting. Obviously, important to strike that balance, so we're not dependent on one particular lever. So the net revenue retention of 108%, the key there is it continues to be over 100%, shows that the customers are growing as scale the licenses. When a customer scales the license tier, it will obviously be dependent on the commercial contract with that partner.

39:15 And so that can be quite lumpy. So I wouldn't focus on is net revenue retention 159% or 108%. The key is that it's over 100% that shows that the existing customers are growing. And then the ARR growth of 20% year on year also supports the addition of new logos. So we've got both pillars driving that overall growth and we're not dependent on anyone, which is a great position to be in. And in terms of how that converts into number of subscriptions, it's very, very, very low. I don't think there is a standard answer for that. Hopefully, you saw some of the geographic differences that I talked about in the presentation. And it's largely, I would say, driven by the telcos on the marketing campaign. So things like start of football season, back to school, Christmas, and generally when we sort of see the growth rate increase and then maybe after that campaign, drops back to a more normal level until the next level. So it's very hard to predict and very, very driven by the telcos marketing campaign. So we're trying to do with the product is make as much information available to the telcos so they can really target those marketing campaigns and make them a lot more direct. And that's the bit that we can influence. That's what we're focusing on now.

40:24 There's a question about beyond telcos. How are the nontelco partners progressing? Well, as you see, obviously saw from the survey, right, there's definitely now an increasing interest from the content providers to move into those verticals. Now a lot of the telcos are in progress. Banks and retailers are the two that sort of come at the top and we see a good pipeline in both of those. We also have some other more interesting and and different verticals that we're talking to customers as well. We'll see whether we're gonna which which of those is gonna be successful. For all these telcos remains a priority. That's where the bulk of the subscriptions that bundle go through. Banks and retailers absolutely are probably the next two. But there are others as well. So you'll see more as we go throughout the year. But our primary focus is on the telcos. And you can see outside of The US, there's lots of green space, white space to for us to expand into and bring new logos onto the platform.

41:18 In terms of scaling DBM growth, which regions are the focus? I know you in the next twelve to eighteen months? And then how do you see the competitive landscape evolving? Are they the biggest risks within that? So I think for sure, you've probably been we see sort of outside The US where, you know, a lot of it's done. I think there's there's also a question about, you know, we've done six in top eight. What about in the last two? But I think they're certainly not out of reach. One of those doesn't really do that much bundling, so maybe less of a less of a criteria. So there's still a little bit to go in The U. S. But really the growth in terms of new logos we see will come in sort of Asia and Europe in particular and Africa, we'll see how that goes and sort of how that expands.

42:07 And the MTN South Africa announcement, which was issued last week, are the margins comparable to other markets? Or are they lower given the subscriptions are less expensive in these regions? So it really depends on way we are margin. Look at BBM is a high margin business. So BBM is and will always remain a high margin business. But obviously, economics and the deal structure are very different in that particular region, but there's very, very high volume. So the margin will remain high, close to 100% for the BBM license. But the way the deal is structured and the way the economics put together are slightly different just given the different economics that people like Netflix, Telco and ourselves sort of feel in that region. Are we expecting to roll out into the end of your Yeah, are certainly. I think we saw that's where it's going to start with an SVOD service in South Africa and then it will move into other countries and then each country will be adding more and more services. So great opportunities, certainly a lot of demand. It's a case of sort of rolling out in that region and getting particularly quite heavy creeping market live as quickly as we can.

43:11 Question on the pricing model. How does the pricing model work for both segments transactions in DBM? And are you intending to split out EBITDA reporting for both segments? Sure. I'll take that one. So as we discussed in the past, the transactional segment is based on a percentage of end user spend, and that percentage could of BANGO and then each the partner question will then be subject to a recurring license fee stream. And that license fee revenue is basically linked to the number of subscriptions to the platform.

44:00 And typically, we talk about customers scaling the license tiers, so each contract would have funding for particular license fees depending on the number of subscriptions. As those customers grow and more subscriptions come up to the platform, then the license fee will also increase. And then in terms of reporting segments separately, I completely agree with this. We've obviously got two very different business units within BANGO, each that has their own sort of different drivers. And so I think the intention definitely is to start reporting these separately from next year to provide better visibility on the overall business to investors.

44:51 And on the two different businesses, DBM and transactional, what's the competition we face for each of those? Yes, sure. I think firstly, we talked about that transactional, that DCP You know, a lot of the the the the core deployments, I think, are most of our growth, while we're all launching new telcos and new merchants, the growth really comes from existing customers. And so, you know, competition is historically been from operators looking to do it themselves or to use an integrator, which the two global integrators are ourselves involved. So that's where that market sits. On the digital vending machine and the bundling side, and really our biggest competition is these people looking to do themselves. Build versus buy business case is always the first thing we go through with any new customer. And really, you move from simple bundles to multi party and if you bring on more content providers, the that equation bias is very much in our favor and that we can very much a very simple buy decision about that. There are other companies in the market that have a product that does similar things.

45:54 Amdocs being the most obvious one with their market one product. They're obviously big OSS, BSS provider for telcos with the bundling that's been added on the side. And so I think it's always good in the market for our competition. We're very different than Amdocs in terms of scale, size, pricing model, product capability, number of merchants integrated, etcetera, etcetera. And so I think there is in some ways it's great competition and then they're great to compete against because we are so different. How sensitive are the number of subscriptions we manage by DPM to changes in consumer spending? Yeah. Guess, couple of ways. Supposedly, the license fee that we charge is not based on the retail price of a subscription. It's based on just the number of subscriptions.

46:40 And secondly, actually, what we see is that it would generally with a squeezing consumer spending, everybody feels a bit more creative in terms of the offers that we put together. So we drive more discounts, more bundling. So somewhat ironically, sort of works it works in our favor because telcos get more creative. They want to protect their core telco pricing and really sort of put some really good offers into the market. So ironically, it's sort of almost the opposite that you would expect. Question on operating profit margin. This fell in the first half, what from FY 'twenty four, what are the expectations for operating profit and future margins? Sure. So as you've seen in the results for this period, we've got a nice balance of growth coming from recurring revenue, we've got gross margins expanding and we've got cost reducing, and that's really supporting, as I mentioned, the 66% increase in adjusted EBITDA.

47:39 You've seen the adjusted EBITDA margin move from 17% to 27% off the back of that. So there's a high level of operational gearing in the business. So as revenue improves, that will all drop through. So whilst we've got an operating profit margin loss for this year, we can expect to be positive next year. And I see so just reading the Q and A, there's a separate question on what I mentioned. We expect to be profitable next year on what basis. So just to be clear, bottom of the P and L net profit for the year, absent anything unforeseen, we'd expect the benefits of everything that we've been doing over the last couple of years to show bottom line profit in fiscal year twenty twenty six.

48:28 We have a question about when BANGO will achieve tangible growth. I can take that one. I think, obviously, delivering a 66% increase in adjusted EBITDA, I would suggest that, that was tangible growth. But look, I think, as I've just mentioned in the previous question, the nice thing that we're facing here is that we've got different pillars all supporting growth, so be it revenue, it margin expansion, be it cost reduction. We're not dependent on any one single pillar. So we're seeing those all align now. And I think the real benefits will be apparent as we move into fiscal year twenty twenty six because we'll also move away from some of the legacy exceptional costs that obviously have been weighing on the bottom line as well. So as continue to mention, the outlook fiscal year twenty twenty six shouldn't be one of material cash generation.

49:30 You mentioned having no churn, which is great. How simple is it for customers to cancel contracts in either segment? Would you have advanced notice? So yes, we would always have advanced notice. I mean, I think the contractual cancellation is one thing. You then have the challenge of migrating the services from whatever systems to the other. And what we've seen increasingly is, you know, on on the DCB churn, there's very, very low churn. It's very rare that people it does happen, but it's it's very, very rare. On the DBM side, as and that's why we're doing things like this offer management or this prepaid, not only to get services launched more quickly, but to embed the d p n the d v m more deeply in the telcos back office system. So while contractual churn, think, is is sort of one question, the actual practical churn is much much harder than anything that's written a contract. And that's really, you know, the value of the DBM.

50:21 And the more subscriptions that get onto it, the more users that are using it, the bigger you are in the growth curve, the harder it gets. Why does BANGO have such a high cost structure? Yes. So look, historically, we've obviously had the integration of the document digital acquisition, which has naturally made that cost base elevated. You can see the numbers, and that's part of the reason why we've introduced this core administrative expenses metric because that does show the level of core controllable costs, and that has been coming down 20% cumulatively in the last twenty four months and 9% this year. That naturally does get distorted by the things like depreciation and amortization rising and the exceptional costs.

51:07 As I talked about before, those exceptional costs should cease next year so that we can remove that from the cost base. The D and A has yet to peak. Naturally, we've made a lot of investment historically, and so there is that lag effect for D and A to catch up. But we are approaching that peak, I'd like to say, towards the end of next year, and we can see the R and D CapEx investment continuing to trend down, so the D and A will follow that soon after. But related to the quote around Verizon in the presentation, what is the timeline for Verizon to reach their targeted penetration of having half their subscribers under the MiFam? Yes. Think that's probably a better question for the Verizon results call. But I think the key element there is you clearly see their ambition. You can see their ambition impacting other players in the market as we see more and more launches in that market. So I think the timing is very always very, very hard to predict.

52:06 I think its endpoint is inevitable, quickly is the challenge. The answer to the question, none of us know is how quickly we'll get there. But clearly, there's a drive on our side, there's a drive from the content owner side and there's a drive from the telco side. So everybody is pushing in the same direction. So I'd say it's not a question of if, it's a question of what. Thank you. That concludes the Q and A. So I'll hand back to Jake. Perfect, guys. That's great. And thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you afterwards. But Paul, perhaps before really now 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. Yes, sure. Thanks again everybody for taking your time and for all the Q and A.

52:53 We have loads coming in there. And I think we've answered certainly all of them. I really do appreciate that level of engagement. And we want to keep that moving, right? That's why we launched our Investor Hub, where you can register, receive updates and ask questions against RNSs and see our answers online and see answers to what questions other investors have raised online. So I really encourage everybody, especially on the retail side, to join that investor hub. It's a great way of keeping up to date with what's going on in the company, and you can see some of their other ways of doing that as well. But that investor hub really should be, I think, everybody's go to place for asking questions or finding out more about what's going on in the company. And that's what we try to do today is lay out not just what happened in the first half, but what we're seeing in some of the different geographies and what we're seeing in terms of the future of the company. And I think if you look at the future, as Matt said, we've got sort of great top line growth in the transactional business in those core routes.

53:42 The DBM growth continues to grow. Cost base is coming down, the R and D CapEx base is coming down, giving significantly improved profitability no matter which line in the income statement we measure on. And that will result in significant cash generation and a reduction in our net debt in 2026. So I think come the end of 2026, businesses is in a very, very different shape than it is today. I think we're in a great position in the market. And I'm looking forward to what will be a busy eight to nine days talking to institutions. But during that period, please do engage with us on Investor Day if you've got any questions. And thanks again for your time and for those shareholders, thank you for your ongoing support. Perfect, Paul. That's great. Thank you once again for updating investors this morning. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order the management team can only better understand your views and expectations.

54:36 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of BANGO PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.