Bango reports some strong growth in 2023

(Sharecast News) - Bango reported substantial growth across a number of financial indicators in its final 2023 results on Monday, with transactional revenue surging 79% year-on-year to $32.7m. The AIM-traded firm said revenue from DVM, Bango audiences and one-off revenue meanwhile increased 31% to $13.4m.

In total, Bango's revenue for the year soared 62% to $46.1m, as the company saw a significant upswing in annual recurring revenue, which reached $8.8m, representing a 77% rise, with a net retention rate of 137%.

Adjusted EBITDA rose 29% to $6.4m, although Bango's loss after tax widened to $8.8m compared to $2.1m in the prior year.

The company's net debt stood at $3.9m as of 31 December, swinging from net cash of $12.7m in 2022.

Operationally, Bango acquired nine new Digital Vending Machine (DVM) licence customers, bringing the total to 18 by the end of the year.

Bango said its DVM platform saw increased adoption from three of the top five US telcos.

The addition of 33 new subscription content providers to the DVM brought the total to 93 by the close of 2023, while its DVM sales opportunity funnel showed significant growth, expanding by a factor of seven in December 2023 compared to December 2022.

Bango also released the DVM consumer interface, enabling telcos to expedite their DVM launches and providing Bango with valuable consumer behaviour data.

Looking ahead to 2024, Bango expected to maintain its robust momentum, with first-quarter results aligning with expectations.

Revenue in the first quarter was up by over 20% compared to the first three months of 2023, reflecting sustained growth.

Annualised recurring revenue reached $11m by the end of March, indicating continued expansion.

Notably, the tier-one US telco, announced in 2023, started operations in the first quarter of 2024, triggering the initial licence fee tier with a minimum $2m annualised recurring revenue.

Bango secured four new DVM wins during the first quarter, underscoring its continued market traction.

Additionally, a leading European telco extended its DVM contract for another three years, with a minimum contract value of $1.5m over the term.

The quarter also saw the inaugural launch of telco bundling for the 'global technology leader', as previously announced.

At the same time, Bango said it had jointly decided with NHN Corporation to wind down their joint venture, NewDeep.

As part of the decision, the technology developed within the joint venture would be transferred to both companies, enabling unrestricted use within their respective core businesses.

"This has been a year of significant development for Bango; our strategic focus on capturing the subscription bundling opportunity with the Bango Digital Vending Machine (DVM) is seeing growing momentum, with a doubling of the customer base and a strong growth of 77% in annualised recurring revenue (ARR)," said chief executive officer Paul Larbey.

"Our technology is trusted by some of the largest companies in the world who rely on Bango to help them acquire and retain customers.

"One major area of focus in 2023 was the ongoing integration of the acquired DoCoMo Digital business, which has materially accelerated our growth."

Larbey said the complexity of the integration was reflected in the low initial purchase price, adding that the integration "went well", with all $21m of cost synergies now realised.

"With the end of year integration challenges having now been identified and addressed, we have a clear pathway to deliver further operational and cost synergies in 2024.

"We entered 2024 with increased momentum, a significantly expanded pipeline and a larger customer base providing clear growth opportunities.

"In the first quarter of 2024, we won 4 new DVM customers and exited the quarter with ARR of $11m."

The subscriptions market remained buoyant, Paul Larbey said, with an increasing variety of services available beyond music and movies.

"As consumers add subscriptions in all aspects of their lives, it drives the need for a solution to manage these subscriptions and the opportunity for the Digital Vending Machine to become the standard industry platform for subscription bundling.

"With our product, partners and customers, the building blocks are firmly in place.

"In the year ahead, our focus is on driving DVM growth with careful control of costs, which, together with increasing long-term revenue visibility, gives us confidence in capturing this opportunity."

At 1259 BST, shares in Bango were up 13.36% at 121.29p.

Reporting by Josh White for Sharecast.com.