Bango PLC (AIM:BGO, OTCQX:BGOPF) this week released a trading update for the first half of 2025, showing a 21% rise in annual recurring revenue to £15.6 million and a significant rise in EBITDA.
Seven new contracts were signed in the period, reflecting increased momentum for its digital vending machine (DVM) platform.
Wins included a first contracting carrier in Korea, a first DVM customer in Japan, and further expansion in the US and Western Europe.
Bango now works with six of the top eight US operators.
CEO Paul Larbey joined the Proactive studio to catch us up on the latest developments.
Proactive: Hello, you're watching Proactive. Joining me is Bango PLC CEO Paul Larbey. Paul, very good to speak with you.
You've just released your first half trading update. Could you walk us through the key financial highlights please?
Paul Larbey: Yeah sure. Great to be back. Revenue's up—so good progress on the top line. ARR grew 21% to £15.6 million. Importantly, EBITDA grew by over 60%.
If you remove the £1 million additional benefit from last year's other income related to the Docomo Digital acquisition, EBITDA actually grew by over 130%. So really strong performance in the first half.
Proactive: There has been an increase in net debt though. Could you shed some light on the factors behind that?
Paul Larbey: Yeah, sure. That’s purely working capital movements. We discussed this in June when we extended the shareholder loan with NHN Corporation and put in place a revolving credit facility with NatWest.
These steps strengthened the balance sheet to support working capital and accelerate cost reduction initiatives.
Some benefits of these are reflected in first-half EBITDA growth, with more to come in the second half and into 2026, leading to material cash generation.
Proactive: Transactional revenue appears to remain flat. What context can you provide around this performance?
Paul Larbey: With the Docomo Digital acquisition, we inherited a small number of profitable, but high-revenue and high-cost routes.
There’s been a lot of volatility in those, which masks the core transactional business growth of 10%.
So we actually grew more than expected, but it’s hidden by the volatility in those few high-impact routes.
Proactive: Turning to the DVM and subscription bundling side of the business—how’s that been performing?
Paul Larbey: We’ve had a strong first half for DVM. Revenue grew by 15%.
Growth in DVM can be lumpy due to one-off connection fees, which were higher last year.
License revenue, a key growth metric, rose 21%. Net revenue retention was 108%, indicating strong expansion from existing customers. A new KPI - active subscriptions -doubled year-on-year.
This reflects the DVM’s importance in the subscription economy. Active subscriptions are now around 20 million, and we have a clear line of sight to 100 million, supported by customer demand.
Verizon, for example, announced plans to double perks customers this year.
Proactive: You mentioned recent wins. Can you share more about them and what they mean for the business?
Paul Larbey: Yes, seven new deals in H1. To compare, we've averaged nine deals per year over the last two years, so this is an acceleration.
Key wins include our first contracting carrier in Korea with Korea Telecom, our first telco DVM customer in Japan, and additional US deals that bring us to six out of the top eight operators there.
We also added a customer in Western Europe, where bundling projects are moving from planning to implementation.
Proactive: You've delivered strong operational progress, but it doesn't seem to be reflected in your share price. How do you interpret that?
Paul Larbey: I understand shareholders' frustrations. Analysts covering Bango both have 12-month price targets over £2.
One said the shares appear mispriced, another noted material upside.
We believe as we continue to deliver results, the share price will correct.
That’s also why we appointed Canaccord as our new broker, they have a strong sales team, especially in the US, where we’re seeing growing investor interest.
They’ll help refresh the shareholder register and drive the share price up.
Proactive: Paul, I hope you'll continue to keep us updated. Thanks for your time today.
Paul Larbey: Great to be here. We’ll be reporting full interim results in September - I look forward to speaking then, if not before.