Earnings Call: Q2 2021

Aug 20, 2021

Quarterly report

Hello and welcome to this quarterly report interview with Bandeuser CEO, Marjan Germani and CFO, Sara Lundell. So let's get right to it. We're going to get into the numbers shortly with you, Sara. But let's start with you, Mariam. I know it's been a very busy quarter. You want to pick just 1 or 2 key highlights? We have some many highlights, but I will try to keep it short. So I would say, the acquisition of Relatable, of course, it's really important for Bambuser in our future growth. Martin Gerbachek, that is the Founder of Relatable, is now the Chief Revenue Officer for Bambuzer. Our focus has until now been to build A strong tech and product platform, but now we're really building up the global sales organization, which Martin will lead. I would say that we have implemented a new pricing structure, which you can also see in the numbers, where we are going from a lot Short term proof of concepts to long term recurring revenue. And last but not least, we're extremely proud and Honored to have won the LVMH Innovation Award at VivaTech in Paris and also be one of Companies to be a part of the Disney Accelerator for 2021. Wow. So you've been busy. So let's start with relatable then perhaps. It was consolidated into your books on June 1. How has that been going? And what's the next steps then in terms of integration? So we are Starting to integrate Relatable into the BambuSO Group, which we are now. And We have worked on joint customers in the past like Samsung. So what we're doing right now is that we've started to work on Joint offerings and also to bundle our services together with them. Right, right. And you also sent out a press release after the quarter that Relatable has entered into Several new customer agreements. So I guess business is coming back after COVID for influencer marketing? I would definitely say yes. So 20 21 so far has been the best year in Relatable's history. Looking alone at June, it has been their best month ever in terms of record revenues. So yes, we're seeing a strong demand for influencer marketing again on the market. Great. So are there any particular Customer agreements for BAMF User that you want to highlight? Yes. So I would like to start with, so we have many new customer agreements. I would say the ones I would like to Highlight, which is really important, is that Clarins, which is also a quite big beauty company in the world, they went from a POC, proof of concept, To a long term agreement globally. So we started in APAC, and now we're rolling them out in the world. We have also renewed our annual agreement with one of the world's leading beauty companies in the U. S, which is also we get the confidence to work with them yet another year, which is we're very happy for. And then we have added additional markets for 1 of the world's largest furniture companies. And also we just signed a master agreement with LTL, the Mitch Good job. Wow, that's a lot. So in the report, you also mentioned that Bambuser has included in 2 accelerator programs. You mentioned that at the start of this interview, too. What is the significance of that? So I would say, First of all, we're very honored to work very closely with both LVMH and Disney, our top 500 Fortune companies in the world. And what this accelerator programs gives Bamboozer is that we're working on a very strategic level with these companies and we're working throughout the whole group. Normally, when you work with large companies, you would work with 1 brand and then take the next brand after another. Here, it is much more on a strategic level where we work across the group And we really get to come in, in a much more deeper connection with the companies from the start, which of course is a very unique opportunity for Like us. Okay. Interesting. And you also mentioned in the beginning that you're converting a lot of POCs into long term agreements. You want to elaborate on that a little bit? Perhaps start with what is a POC? Yes. So a POC is a proof of concept. It's like a Right. And I would say if you look at Live Video Shopping as a concept or as a phenomenon, it started in China when we released our products for the Western world. I would say nobody knew of it. It was a new channel. It was a new way of marketing and selling products. So of course, last year, All of our customer came to us and said, we think this is interesting, could we try it out? Because you didn't really want to commit long term. And also looking, we didn't have so many customers that there weren't a lot of Samples out in the market to be able to go and see like, okay, this company did that type of content and this is the numbers. We didn't have that much data to back up our product. And that has, of course, changed. So we have a lot of customers. There is super much examples out there in great companies that are doing this in a good way. Media has really picked up. Social commerce, I would say, is the buzzword of 2021, and live video shopping is social commerce. So I think if you look at How the trend has gone, now it's not on a tab established channel, I would say, but it's still something that people know of. So when they come to us, they actually To commit long term. So this year, we have actually signed 12 months, 2 years and also 3 years contracts with customers. So we're seeing that people, They want to commit much longer and they don't want to come and test it anymore as the same way they did last year. And that's why you see the big change from going to like Tests to actually long term contracts. Yes. Because they can see that it's working. It's working. The data is there to back it up and the behavior is really Starting to get established, but it's not a channel like social, but it's starting to get more established. Okay. So I want to get into the numbers a little bit too with you, Zohra. You're fairly new to the company. What is your background? And What is your impression been of Van Buser so far? Yes. So thank you for that introduction. Yes, I'm Sarah, the new CFO. And starting with my background, I'm bringing about 15 years of experience from various finance roles. The past 3 years, I worked at iSettle or now called By PayPal. I did establish and develop their financial planning and analysis department. And I was also the interim CFO while we were integrating with with PayPal. And prior to that, I worked at Apple for about 5 years as the Finance Manager, both in Stockholm and in London. And I've also done 5 years at Ernst and Young as an auditor and also a transaction consultant. But moving over to your next question about my impression so far. Well, I'm heading up to 3 weeks now at Vambusier. But my first impression is that it's a great company to work for, not only for the culture. I mean, I met so many Highly skilled people and dedicated to this task. So I really look forward working with them. And I think we I mean, we are on a tremendous journey. We have a journey ahead of us, which is Very exciting to be part of. Cool. So let's get into the numbers like I said then. The total contract value, Vorband Buser is up 664%, while MRR is up 2 63% compared to same period last year. Why are those particular numbers so significant to Bambuser? Mean, we are a SaaS company. So MRR is, of course, our northern star and the most important that we look at. It's the future revenue, the predictable future revenue for license revenue. But we've added on also the TCV to capture all the revenue streams, but also TCV is also capturing seasonality, which has been impacting the numbers, especially now in Q2. We see that some of the clients, they want to sign the deals, But they want to postpone the starting date of the services after summer, for example. So we've seen that, as you said, that TCV has growing more rapidly than the MRR due to this. But then we've also seen an increase in the TCV due to the acquisition, of course, of Relatable. Okay. And total revenue amounted to SEK 34,800,000 and net sales to 27.3%, if I get that right, an increase of 411%. Are you happy with that development? Yes. We were very proud of this development that we're seeing in the revenue. We're thinking that we've now established a very solid and robust foundation that we can start build on. We've invested a lot in the product and tech development. So now we can scale on that. We think 4% 11% is really good on a year on year basis. However, we do see, as I said, a impact, seasonality impact in Q2, but we also see a shift in the revenue. As Mary mentioned, we have moved away from doing or focusing on POX and then focusing rather on the long term revenue instead. And we see that shift within the revenue streams. So that the revenue from PSC is declining a bit and the licenses fees are increasing Okay. So perhaps we should stay take a step back and I want to get Mariam in on this. Do you want to just explain briefly what your Business model looks like, how do you make money? Of course. So we have 3 pillars in our business model. The first one is an onboarding fee, Which is upon customer activation. When the customer signs the contract, then we onboard them to Bambuser. The other one is A true loss SaaS license. So it's normally 12 months. But like I said, we have longer contracts now where they pay a monthly license to be able to use our services. And the third one is a variable fee, which is a usage fee. And usage fee is based upon how many people who watch the show and for how long time they will stay. So it's based on viewing hours. So those three components is our business model today. We are exploring, of course, because we're fairly new we have a fairly new product On the market, so of course, we're interested in exploring different business models, everything from rev share to click and other type of business models. So I would say that this is our business model today where majority of our, of course, revenue is from. But we will explore and maybe we will add more, How to say revenue models or revenue streams to our product. Okay. Thank you for that explanation. So sorry, getting back to the numbers, the result on the bottom line is still a loss, but Bambuser has raised a lot of money. Cash and cash equivalents amounted to SEK613,500,000 at the end of the period. So how do you plan to use that you see that you will grow both organically and through acquisitions going forward? Yes. Our plan is to grow both organically or And with acquisitions. I mean, we would as I mentioned in the numbers previously, we've invested heavily in the organization and building a strong foundation to now Scale and expand. So that's why we have Martin now on board that will accelerate our future revenue. Yes, yes, one of the founders of Relatable. Exactly, yes. So what is next in development? I mean, what are the both of you most looking forward now in Q3. I think we have a lot of things to look forward to. There's a lot of things happening in the company right now that is very exciting. But I would say for me personally, I really look forward to the holiday season. Last year, it was fairly new. We didn't have too many customers as we have this year. And we broke a lot of record last year. And I think this year with established channel as live video shopping is, I think we're going to see phenomenal results and a lot of Cool things happening during the holiday season. So that's my personal looking forward to. Yes. Q4 coming up. Yes. And what about you, Sarah? And this is, of course, super exciting for me. I mean, I just started. So I'm super excited just getting into the company more and get to know Everyone and everything about it, and be part of this. All right. Well, thank you so much, Marianne and Sara, for joining us today. And thank you, everyone, who tuned in and watched us.