Bango has announced FY17A results ahead of our forecasts, with financial performance once again demonstrating strong growth and platform scalability. Momentum remained strong during the year, with End User Spend (EUS) confirmed as having more than doubled but opex having grown by just 13%. The positive outlook statement will give confidence in the near-term financial performance. Our FY18E adjusted earnings estimates are unchanged following the release and FY19E forecasts are introduced for the first time.
Bango reported FY17A revenue of £4.2m (+58%) and LBITDA of -£1.6m. We had forecast £3.7m and -£2.0m respectively. The FY17A closing cash position was confirmed at £4.8m.
EUS of £271.4m represents a more than doubling of the FY16A figure. Revenue growth was driven by the addition of new billing routes and increasing spend from existing routes. As highlighted at Bango’s recent Strategy Day, several new technologies were launched during 2017, including Direct Carrier Billing (DCB) for physical goods, launched with Amazon Japan, and resale and bundling launched with Amazon Prime Video and Bharti Airtel in India. 2017 also saw a number of upgrades to the Bango Platform, with an API upgrade and new payment methods such as mobile wallets – with early launches in Japan (Au) and Nigeria (9 Mobile).
Alongside the impressive growth in the business, opex remained firmly under control, increasing by £680k, 13% YoY. This was the key driver of a £1.2m improvement in LBITDA. We note that Bango became EBITDA positive on a run-rate basis in Nov-17. The Bango Platform has been successfully tested at over £5bn of annual transaction volume, giving further confidence in the outlook for profits and positive cash flow.
With EUS having more than doubled over each of the last three years, management believe 2018 could see a similar performance. This will be accompanied with continuing investment in the Bango Platform and commercial relationships.
Although our FY18E revenue and opex estimates are revised upward to account for Audiens, the net result is no change to adjusted earnings estimates. FY19E results are introduced for the first time. These are summarised below and detailed overleaf.