BCG vs TTD Accounts Payable

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  • #6326
    Logan
    Registered Boarder

    COMPARISON OF ACCOUNTS PAYABLE

    This is a comparison between Brightcom and The Trade Desk’s accounts payable in US dollars.
    TTD’s accounts payable is more than it’s revenue(1.3 times) and 8 times it’s net income for 2019.
    Whereas BCG’s is negligible.

    The Trade Desk

    2019
    ● Revenue : $ 661,058,000 ($ 661 Million)
    ● Net Income : $ 108,318,000 ($ 108 Million)
    ● Acc Payable : $ 868,618,000 ($ 868 Million)
    ● That’s 1.3 times the revenue and 8 times the net income.
    2018
    ● Revenue : $ 477,294,000 ($ 477 Million)
    ● Net Income : $ 88,140,000 ($ 88 Million)
    ● Acc Payable : $ 669,147,000 ($ 669 Million)
    ● That’s 1.4 times the revenue and 7.6 times the net income.

    2017
    ● Revenue : $ 308,217,000 ($ 308 Million)
    ● Net Income : $ 50,798,000 ($ 50 Million)
    ● Acc Payable : $ 419,377,000 ($ 419 Million)
    ● That’s 1.35 times the revenue and 8.25 times the net income.

    Brightcom Group

    2019
    ● Revenue : $ 368,799,000 ($ 368 Million)
    ● Net Income : $ 63,115,000 ($ 63 Million)
    ● Acc Payable : $ 12,303,000 ($ 12 Million)
    ● That’s only 0.033 times the revenue and 0.2 times the net income.
    2018
    ● Revenue : $ 375,875,000 ($ 375 Million)
    ● Net Income : $ 62,403,000 ($ 62 Million)
    ● Acc Payable : $ 11,818,000 ($ 11 Million)
    ● That’s only 0.03 times the revenue and 0.2 times the net income.

    2017
    ● Revenue : $ 365,546,000 ($ 365 Million)
    ● Net Income : $ 62,646,000 ($ 62 Million)
    ● Acc Payable : $ 12,976,000 ($ 12 million)
    ● That’s only 0.035 times the revenue and 0.2 times the net income.

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    #6327
    Logan
    Registered Boarder
    Topic Author

    TTD’s payables are more than it’s revenue and net income,why no is talking about that? TTD’s market cap is $13.55 billion that’s 340 times more than BCG’s.

    I don’t understand why people have negative views on Brightcom when it’s fairing so well in many departments. (Please check my other posts on Publishers list,receivables and growth)

    How can BCG trade so low when it’s business is doing well? It’s only because of negative perception about BCG and that’s holding the stock back.People who are negative on BCG have no proof for their argument.

    People haven’t researched enough on Brightcom because they don’t have competitors in India that are public but that doesn’t have to mean they should start spreading negative and fake information on it.

    BCG has worked with KPMG, E & Y in the past and are working with BDO Global now.Why would those reputed auditors want to work with them if BCG is a shell company?

    When you compare BCG with TTD only metric TTD has advantage over BCG is in growth but that’s because TTD (P/E 115) is not undervalued like BCG(P/E 0.5). They wouldn’t mind issuing more shares.

    We all know that Brightcom needs more funds to grow and since the price is low they haven’t issued additional shares. That’s why they are going with Receivable Financing.

    US Banks have stricter rules compared with Indian banks.
    No US bank would finance on receivables if they knew Brightcom is a fake company and if their receivables are fake.

    Common sense is more important than anything else.

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    #6331
    T9C
    Registered Boarder

    Thank you verymuch @SaulGoodman for your research.

    I have one doubt: since KPMG, E & Y had worked with BCG in the past, they should be knowing the strength of it. Then why they didnot inform this info (unofficially) to any MFs or Institutional investors.

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    #6332
    Logan
    Registered Boarder
    Topic Author

    Thank you T9C for your feedback.

    I don’t know much about auditing process. I don’t think it’s legal if the auditors start recommending their client’s share.

    In my opinion the whole concept of auditing is to give out the facts and figures of the company and recommend them how to conduct and improve their business. They shouldn’t be biased if they are external auditors.

    Analysts are the ones who are supposed to cover stocks, reading their reports only mutual funds start investing in a company.

    As the CEO mentioned, these analysts start researching on stocks only if the stock has certain criterias like minimum P/E of 5, market cap of 1000 crores etc.

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    #6333
    Logan
    Registered Boarder
    Topic Author

    One more thing I would like to mention is the hype around AFFLE’s stock. It got more coverage and hype because Times Group (owners of Times of India, Economic Times) owns a stake in it.

    It’s good that Affle came to the market, all these years BCG didn’t have a competitor who were public.

    Analysts and many retail investors didn’t understand Brightcom’s business(they still don’t).
    Now after comparing these two obviously people will like Brightcom more than affle. Though affle will grow more (like Brightcom grew earlier), it’ll be hard to sustain that growth.

    And since Brightcom is improving their business, improving communication with the investors, closing off pending issues, mutual funds will be fools if they don’t buy a great company like Brightcom.

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    #6334
    T9C
    Registered Boarder

    One more reason for AFFLE’s hype is Microsoft is one of its investor.

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    #6370
    hw_tw
    Registered Boarder

    Hi Saul,

    The comparison on the financial aspects and the stock price is good. It is helping all others to understand where BCG stands compared to its peers.

    Could you also do a comparison in terms of the technology aspects, the products they own, their features etc; and how it is in comparison with TTD, Criteo, Affle etc;

    Few questions which I have in my mind. It would help if you can cover these things too in your answer for the benefit of all tech and non tech investors

    – Brightcom listing Criteo, AOL as their partners. These are competitor adtech companies of Brightcom and not publishers. Want to understand what is that these companies have which BCG doesn’t have

    – I use MC mobile app and remember seeing ads from Criteo a year back. Wondering what drives these companies to choose a adtech company. Is it their technology platform or their services or is it the ad slots they own or something else

    – I heard from one of youtube analyst Mukul Agrawal that Affle has Amazon and Flipkart as their customers. These two being a technology companies I am wondering why they are not doing it on their own and why they need to depend on company like Affle

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    #6372
    Logan
    Registered Boarder
    Topic Author

    1>

    Hi hw_tw,

    I’m not an expert on digital/online advertising and I can explain it you in my view. Experts can correct me if I’m wrong.

    As far as I’m concerned, digital marketing is a complex business. There are :

    Publishers like CNN, MSN, Times of India, The Hindu etc.
    Advertisers like Maruti Suzuki, TVS, Indigo, Tata Motors, Hindustan Unilever etc.

    To connect these two there are Ad agencies like Brightcom, The Trade Desk, Criteo, AOL, Google, Facebook etc.

    Google, Facebook, AOL and even Amazon act as both publishers and Ad agencies. That is why they make more money. My guess is Mr.Reddy bought Lycos because Lycos had very good network with lot of publishers and advertisers back then.

    Ad agencies like BCG, TTD etc have two platforms i.e SSP (Supply Side Platform) and DSP (Display Side Platform). My understanding is that BCG has both these platforms but they are more focused on their SSP and TTD is more focused on DSP.

    SSP mainly deals with the publishers and DSP with advertisers. Since Google, Facebook are also publishers, they have more leverage and advantages over smaller Ad agencies.

    A publisher can have many number of Ad agencies as their partners and advertisers too have many Ad agencies as their partners.

    These Ad agencies are frenemies i.e they have to work together sometimes and other times they have to compete for the same thing. For example if they want to buy the ad space on a publisher’s website they have to bid and whoever bids higher will get that space. But with advertisers they have to bid low prices to get that advertiser’s business.

    Sometimes these SSP companies have to work with the DSP companies for the same publisher and advertiser. Like I mentioned before, it’s a complex business and understanding it takes some time (This may answer your question as to why BCG mentions AOL, Criteo etc as their partners).

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    #6373
    Logan
    Registered Boarder
    Topic Author

    2>

    Coming to your question on Affle having Amazon and Flipkart as their customers you must have seen Amazon’s and Filpkart’s offer on products on a different website. When you click that you will be directed to their websites. Well SSPs help the website(Publisher) that you visited earlier and DSPs help Amazon or Flipkart (Advertisers). Even though Amazon and Flipkart are tech companies they still need people to visit their websites and they can’t do it on their own, they need Ad agencies.

    There are many ways to target ads and to attract customers.
    These days there are more video ads and when 5G comes and people have faster internet access then advertising industry will grow further.

    To target ads many companies use different proprietary software and products. Brightcom has Compass and other products which you can see on BCG’s presentation on market overview and Company Overview which they shared a few days back. TTD, Criteo etc may have their own proprietary products.

    Here is an explanation from BCG on it’s competition.

    * The Company’s competitors include large global as well as, small local companies. The Company has a complete set of digital marketing tools with extensive global reach compared to its competitors. In addition, the Company provides large scale in-house software development, which many of its competitors lack.

    Digital/Online advertising has great future ahead. Large companies don’t have cash flow issues but smaller companies have and that’s because they invest more on tech at the beginning to acquire more customers. As they grow bigger they’ll have good free cash like the bigger companies. For BCG, Mr.Reddy said they’ll have better cash flow once they reach revenues of $500 Million from the current levels of $375 Million.

    These are not like IT companies which mostly make money from manpower,these are technology driven and they make more money than IT companies with fewer employees. Google and Facebook are some of the examples. At first they too have struggled with receivables but as they grew all those problems went away.

    Google’s cash reserve is more than $ 120 Billion . Accenture which is an IT company has a market cap of $ 130 Billion, even though Accenture is older, Google has the same cash on hand as Accenture’s market cap. They can buy Accenture easily. See the benefits of improving technology.

    Brightcom will also have great opportunities in the future, right now we should support the management and let them take good decisions.

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    #6377
    hw_tw
    Registered Boarder

    Hi Saul,

    Thanks for your detailed response. I have learnt few new terminologies today (SSP and DSP).

    Got some more knowledge from this blog which details different adtech terminologies

    What is Programmatic Advertising? The Ultimate Guide (2020)

    As per my understanding, each of these companies has the following products. Correct me if I am wrong

    Brightcom – SSP product
    Criteo – Both SSP, DSP products
    Trade Desk – DSP product
    Affle – Both SSP and DSP products

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    #6382
    T9C
    Registered Boarder

    Hi hw_tw,

    There is new investor presentation in bse, I think it explains everything how digital marketing works.
    Investorpresentation

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    #6383
    Deepak
    Registered Boarder

    I think this forum is best way to communicate to bcg board also, they keep an eye on this platform.yesterday mr saul was trying to explain the adtech company how they work and now company uploaded the same.

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    #6384
    Optimus Prime 06
    Registered Boarder

    One thing is clear..now Mr Suresh Reddy want this share price to go up..he is giving updates when ever there is a chance to selling..good to everyone who holding bcg..

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    #6385
    brightcom investor
    Registered Boarder

    Suresh kumar Reddy is now proactive, after all he wont to give exit to oak group at good and attractive price, let see how much it goes…….

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    #6396
    hw_tw
    Registered Boarder

    Thanks T9C, for the update. Good to see a timely presentation.

    My understanding of their platforms. It looks like they have platforms for both the sides. Please someone correct me if I am wrong

    – Brightcom platform (SSP) for Publishers
    – Compass platform (DSP) for Brands and Agencies
    – Other platforms (around 9) for Brands

    I guess Brightcom’s business model is to play a role of Implementor wherein they provide different marketing services to brands along with technology provider role to both brands and publishers

    Apart from this, I guess they also play a 3rd role of media buyer and seller. This is where all the receivables are struck. Having said that I feel this is the driving factor for their technology and services sales.

    Given this business model wanted to understand the following consolidated numbers.

    – How much of revenue each of these platforms are generating
    – What is QoQ, YoY growth rate in terms of product sales, in terms of product based services, only services using 3rd party technologies, media buying/selling
    – Do they have any customer who is only using these platforms and without any service

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