Bango (AIM: BGO), the mobile payments company, provides a trading update for the six months ended 30 June 2016, ahead of announcing its interim results on 20 September 2016.
• Annualized End User Spend (EUS) exiting June 2016 increased by 283% year-on-year to £159m
• Margin remains in-line with Bango and market expectations
• Excluding recently acquired BilltoMobile business, annualized EUS exiting June 2016 grew 143% year-on-year to £101m
• Successful transition of BilltoMobile Direct Carrier Billing operations to Bango management following the acquisition on 6 May 2016
• New app store billing routes launched in India, Hungary, Norway, Finland, Belgium, Australia, Indonesia and Malaysia, including a migration to Bango from another provider
During 1h2016, the rapid growth in EUS has been driven primarily from established activations as a result of growth in app and content sales, augmented by the increasing use of Bango Boost technology by existing Bango partners. To drive future growth in EUS, multiple new routes have been activated across the major app stores including European launches for Microsoft’s cross-device Windows Store and the first launch for Google Play Direct Carrier Billing (DCB) in India.
Since June 2016, the Bango Payment Platform is now processing more than twice the EUS using the same technology and operational processes and within the existing cost base, consistent with Bango’s technology-led platform strategy. As previously stated, the Bango Payment Platform has been tested at £650m ($1bn) annualized spend levels and has capacity to be able to support EUS well beyond likely cash flow positive spend levels.
Following the acquisition of the BilltoMobile carrier billing services from Danal Inc., BilltoMobile services are now being managed and monitored by the Bango Platform Operations Team, supported by Bango employees based in Palo Alto, CA. All services continued to operate without interruption throughout the transition period.
The acquisition also introduced a number of new revenue streams to the Bango Payment Platform. These only make a small contribution to EUS, but have considerable potential for growth by exploiting the reach and capabilities of the Bango Payment Platform, and will be announced in due course.
Bango CEO Ray Anderson commented:
“Bango has created a powerful and flexible payment platform that can handle significant growth in End User Spend on a fixed cost base. In addition to the strong growth in End User Spend on the existing Bango Payment Platform, the acquisition of BilltoMobile added around $80m of End User Spend in one step, together with new operator and merchant partnerships. I’m pleased to report that the Bango team has accomplished the first phase of the transfer of business quickly and efficiently within existing Bango systems, and with no additional operating cost or disruption to BilltoMobile customers. We are excited to move to the next phase which involves providing BilltoMobile customers with access to Bango Boost technology, enabling them to grow their carrier billing sales more quickly.”