Bango Share Discussion Threads

[spawny100] 27/11/2017 15:54

Thanks simon yes I read that but it still is not clear to me that annualised EUS is calculated from sales in the preceding month. Sure he talks about monthly revenue so it is an implication but not quite explicit enough for me with my pedantic head on!

Thanks egrid/lentjes yes I seem to remember seeing an interview where he said about how they calculated their runrate from a monthly figure multiplied by 12 but just wanted to be sure. Will watch them again.

[lentjes] 27/11/2017 15:34

Raymondo clarified in one of his interviews that the monthly annualized EUS run rate is taken from the same week each month and then multiplied x 12. BANGO have been very carful in the past not to over state this so I would be very surprised and disappointed if Raymondo had announced an annualiszed EUS run rate based on a spike and not on a steady increase which would more reflect the actual EUS that can be expected for 2017. If he thought/ new it was a spike and not representative of the actual EUS then he should not have announced this to the market and he was under no pressure to do so as Bango do not announce EUS on a monthly bases.

I still question on what bases has ST announced an end December EUS annualized run rate of £452 million ?

Don't get me wrong £452 million is not bad news in that it would confirm that all is on track as promised.

[simonsaid1] 27/11/2017 15:31

Another new deal just announced:

hxxps://news.bango.com/2017/11/27/bango-expands-carrier-billing-on-windows-10-and-xbox-one/

Bango has expanded the availability of Direct Carrier Billing for Windows Store and Xbox One to over 200 million subscribers across Europe and the USA.

European launches for Windows 10 carrier billing through the Bango Platform include EE in the UK, Base in Belgium and 3 in Italy. In the USA, subscribers on the Verizon network can purchase their favorite apps, games, movies, music and more from Windows Store, across all devices running Windows 10, including Xbox One, by charging the cost to their bill. No fiddly credit card details are required. Users simply store their phone number in their Microsoft account, then purchase any content from Windows Store or Xbox One console with a frictionless Direct Carrier Billing payment experience.

Anil Malhotra, Chief Marketing Officer at Bango commented:

“In highly developed mobile countries such as the USA and UK, Direct Carrier Billing still boosts payment conversion rates by up to 10x compared to credit card, due to its frictionless payment experience. Bango is delighted to increase the availability of Windows Store carrier billing to more leading mobile markets, for all Windows 10 users.”

Windows 10 has been adopted at a faster rate than all previous versions of Windows. Microsoft announced at its Build 2017 developer conference earlier this year that Windows 10 is running on over 500 million devices. Carrier billing provides an inclusive payment method enabling all Windows Store content across all Windows 10 platforms to be charged to the phone bill.

[simonsaid1] 27/11/2017 15:25

It is in the last results RNS, spawny.

'At the end of June 2017, the EUS run rate was over £300m/yr (1h2016: £159m/yr). Exiting August 2017 it had grown to over £400m/yr. Growth in annualized EUS came from all of the major stores integrated to the Bango Platform. Bango is on track to generate monthly revenue from EUS fees in excess of costs - generating a monthly operating profit at the end of 2017. '

[spawny100] 27/11/2017 15:04

Understand that run rate is not a Bango idea but it has to be clarified how it is calculated (i.e annualised from the last month/quarter/6 months etc). I'm just trying to find that on any Bango literature but not with any success yet.

[simonsaid1] 27/11/2017 15:00

Run rate is not a Bango idea, it's an accounting term and appears on many websites if you Google it. Nothing special about how Bango uses it, other than that it's applied to EUS rather than profit. The link between those is also slightly different to a normal company in that the costs don't rise with revenue, thankfully!

[simonsaid1] 27/11/2017 14:56

I think we might find that the huge growth in EUS early in the year was down to specific activations. It may have been a huge bump that was not sustainable due to one-off factors. Percentage gain beyond that becomes harder as the base number is higher. So it may average out at a lower monthly rate, but it depends on what happened earlier in the year.

The key remains actual EUS which is set to double again. That has always been the key goal for Bango this year.

[egrid1] 27/11/2017 14:50

"I am trying to understand how Bango calculate it"

I am pretty sure it was discussed in one of the videos. But unfortunately cannot remember which one! But my recollection was that it was simply the months figure that they are exiting multiplied by 12.

I hope I am not misleading you, and am happy to be corrected.

[spawny100] 27/11/2017 14:45

I don't have a problem with run rate but I am trying to understand how Bango calculate it. Is it (as egrid suggests) based on EUS for the last month? Or last quarter? Or last 12 month period. It needs clarification imo.

[nurdin] 27/11/2017 14:40

I think the best indicator for the likely year end outcome is their brokers forecast.The broker is forecasting revenues of £4.6m which translate to EUS of £258m assuming margin of 1.7%

[spawny100] 27/11/2017 14:35

Hmm thanks egrid. I'm trying to get my head around these numbers so was not out and out stating that you are wrong. Runrate/EUS/Annualised EUS are still a tad opaque to me and seem to lack a little precision but I'll keep trying to understand them. Seems to be a fairly civilised brand of poster here generally into BGO unlike some other boards on advfn adn people are happy to discuss things!

[nurdin] 27/11/2017 14:33

That is very deceptive if that is the case

[egrid1] 27/11/2017 14:30

Spawny, it is the way Bango provide their figures. When they give an annualised EUS at end of August, they are, in my understanding, annualising the August EUS as if earned for each of the previous 12 months - it is a run rate based on the August EUS

Take a look at the video on bango site

The actual EUS in the six months to mid 2017 was actually £92m for the whole 6 months.

They "exited August with an EUS run rate of over £400m)".

How do you think they got from £92 million for the whole of the first half to £400m by August?

They do it by taking an annualized run rate. It is how Bango often express their figures when looking at their growth.

When they talk of "Run rate" or EUS exiting month I think they are talking of the same thing.

But I did start the point earlier by saying, in danger of over annalising!

[spawny100] 27/11/2017 14:26

"At the end of June 2017, the EUS run rate was over £300m/yr (1h2016: £159m/yr). Exiting August 2017 it had grown to over £400m/yr"

i.e in the months of July and August their EUS had gone up £100m! That to me implies a huge rate of growth - somthing along the lines of £100m/2 = £50m then multiply by 12 to get £600m per year increase but this seems to be growing exponentially, not at a fixed rate. Again maybe I am missing something though?

This is why I am somewhat disappointed with the analyst prediction today.

[lentjes] 27/11/2017 14:24

Again, how can ST forecast end December EUS with all the recent activations excluding todays 200m subscribers Windows store / Xbox news which he maynot have been aware ?

Hopefully he clarifies this issue

[spawny100] 27/11/2017 14:17

I share your concerns egrid but "Annualized EUS exiting August 2017 was over £400m"
does surely NOT imply EUS in August 2017 was £33.3m? Or perhaps I misunderstand this figure myself? This is a company growing at a seemingly exponential rate. Your calculation simply diving annualised runrate by 12 assumes no growth in EUS whatsoever.
I'm hoping that Bango blow away these latest forecast with all their recent rollouts though as agree an increase in EUS of just £52m during the final quarter of 2017 (with all the xmas sales) sounds a less exciting than their announcment in August of the 140% runrate increase over the previous 12 months.

[simonsaid1] 27/11/2017 14:16

Somebody has commented under the Simon Thompson story to get an answer to that.

There is probably something we're missing here, but the point is that the actual cumulative EUS at year-end is apparently, according to emails myself and many others have had from Bango, set to double. The actual figure may have had surges at various parts of the year, we'll see when we get there.

I can't account for Simon's projections or how he came to them, hopefully he'll see and respond to the comment that was made.

[egrid1] 27/11/2017 14:07

"This is a run-rate increase, i.e. 'if we earned at this rate for all 12 months, this is what we'd make'"

Yes, I appreciate that, by "make" you mean EUS.

The Interims said:
"Annualized EUS exiting August 2017 was over £400m"

I take that to mean that the EUS in August 2017 x 12 would be £400m

Which suggests EUS in August 2017 of £33.3m

The annualized figure for a year earlier was £167m

Suggesting EUS in August 2016 of £13.9m

Simon now suggest the annualised exit rate for December will be £452m

Suggesting EUS in December 2017 of £37.6m

An increase between August 2017 and December 2017 from £33.3m to £37.6m - 14%

In 12 months to August 2017 we had a 140% increase. In 4 months to December 2017 we are projecting just a 14% increase.

[simonsaid1] 27/11/2017 13:52

The maths isn't right there. This is a run-rate increase, i.e. 'if we earned at this rate for all 12 months, this is what we'd make'. Therefore the run rate can go down as well as up, unlike actual cumulative EUS. Increases in run-rate are slower as they implied sustained growth.

Bango have said they are on target to double EUS year-on-year. That is separate from run rate, as it uses real monthly EUS rather than run-rate equivalent. The end of year EUS increase rate will always be different to run rate at a given time.

Also to put that £400m in context, that was up £100m in the 2 months prior. That was a massive jump, and likely directly related to various activations at that time.

[lentjes] 27/11/2017 13:40

Egrid1

I'm with you on that, £452m would not be a good result considering the £400m end August EUS and especially with all the activations taking place over recent weeks and with the expected Japan / Amazon Christmas shopping (although we don't want to report on seasonal spikes).

As I said how can ST forecast end December EUS.

Maybe somebody with ST contact details should ask for clarification

[egrid1] 27/11/2017 13:28

Whilst being in danger of over annalising things - and please correct me if I have got this wrong...

If annualised EUS was £400m at end of August (that is taking the end August EUS and multiplying by 12), and EUS is predicted to be an annualised EUS of £452m at end December (December EUS multiplied by 12) - the four months leading up to and including Christmas will have seen annualised EUS increase by 14% (£400m to £452m), that equates to an annual growth rate of less than 50% (14% in 4 months compounded by 3 x 4 month periods).

An annual growth of 50% (albeit extrapolated from just 4 months figures)would suggest a considerable slowdown from what happened in the year to August where it was above 140%.

I would hope that the EUS at year end is well above the projected figure of £452m, and with it earnings.

[lentjes] 27/11/2017 13:26

Bango launch multi activation of Windows store / Xbox to 200 million subscribers.

Remember as per my previous post Microsoft expected to increase activations to over 60 this year

hxxps://www.finextra.com/pressarticle/71704/bango-expands-carrier-billing-on-windows-10-and-xbox-one

[lentjes] 27/11/2017 13:11

Strange that ST can forecast the end December EUS ?

[simonsaid1] 27/11/2017 12:54

The run-rate figure was the main contribution, Egrid. But agree that I was hoping he'd say more about Boku and DCB overall.

The main purpose of his column is to tip readers with all the recent Bango developments, which he has done. Prospective investors won't have been reading all the BGO news updates and RNS's! Every time he writes it up, Bango is exposed to new investors with new money.

[egrid1] 27/11/2017 12:41

I am a little disappointed with Simons column today, I was expecting more analysis vis a vis Boku following his podcast last week. I note he is now on sabbatical until January, so we will not be getting any more soon.

The "Buy" recommendation is really just a reiteration of the previous "Buy" recommendation which was made when the market price of Bango was at a higher price than the market price today.

Still positive overall about Bango, just don't see todays write up as adding to the picture in any way.