Tagged: BCG- AUDITOR AND LOAN
January 28, 2022 at 6:49 pm #13119vskRegistered BoarderTopic Author
1. In one of the previous calls Mr. SKR sir mentioned about a stake in edgecase.ai(https://www.edgecase.ai/) and at the right time also plan to increase the stake. How are the things progressing in edgecase.ai.
Also medcase.health(https://www.medcase.health/about) is a transformed or application version of edgecase as we see KyleGiddens the CEO of edgecase also our Brad Cohen(President and Chief Strategic Officer of Brightcom) is the Chairman of Medcasehealth(https://www.linkedin.com/in/bradcohen/)
Is there any stake or relation of BCG with these two companies edgecase and medcase health.
If yes, can you please elaborate a bit with whatever you can ?
2. What is the progress on initiatives from Mr. Prasad Pisipati initiatives? There was some mention of IoT related initiatives happening any updates that you can share on that if you can sir?January 28, 2022 at 7:43 pm #13122adminKeymaster
Thank you everyone for sharing your queries, I have sent to IR. Special thanks to @hw_tw and as always to @Logan sir.
Congratulations on a great quarter, exceeding guidance for the second time in a row and also rewarding investors with bonus. This was the company’s best quarter ever and we look forward to seeing this record broken in the coming quarters. Thank you for taking decisions and initiatives that have benefited all the stakeholders. Please convey our thanks to the management team, directors, and employees of the company.
– What’s the total number of CTV publishers we have and are there any new additions in this quarter
– What is the typical contract period we have with Publishers in general? How many or how much percentage of these publishers have contracts signed up for next year or two?
43 new publishers added in this quarter
– What’s the size of these publishers in terms of potential Impressions or page views per month. Do they fall under Top 10 or 20 or 50% of your existing publishers?
– The percentage addition seems to be small in comparison to the 47k publishers we have. Is this a strategic thing or a cyclical one and can we expect a higher percentage in coming quarters supported by the MediaMint backend team.
– Could you please share some details on the number of publishers using the interactive ads feature and the volume it is handling as of now
– In terms of revenue margins, how much percentage it costs higher in comparison to normal video ads
– Are there any competitors as of now … any new features planned which would be advantageous to us from competition?
– I guess there is no dedicated page for this similar to BLocal in Brightcom website … request the team to please add this
– The FCF is projected equal at 250 and 250 crores for the next two quarters, whereas in the last two quarters our revenues and PAT have increased … What will be the percentage of Profit to FCF ratio we can expect in coming quarters
– You were planning to try out some new accounting / reporting policies inline with large global companies … Could you provide updates on this front
– Can you appoint one auditor to audit most of your businesses? The comments from the current auditor saying they haven’t audited the subsidiaries individually causes some confusion to less informed people. We understand the process and we don’t have any complaints but it’s just a suggestion.
– The EBITDA margin of BCG is historically healthy and high … around 31 % in general and around 28% in the Dec quarter … In future too can we expect these margins remain at same levels or improving further
– When do you expect the acquisition process of MediaMint to be completed? Will it be done before this financial year (March end) or will it take more time?
– Will MediaMint continue to operate as a separate subsidiary entity of BCG or will it be merged with BCG India unit
– Are we planning for acquisition of single or multiple Audio AdTech companies … In case of multiple ones what is the strategy behind it … any updates on the talks, can we expect LOI to be signed in next two weeks or so
– AdTech industry is projected to grow at > 20% CAGR for next 5 years … Can we expect BCG to grow above these numbers. Any ballpark figures for next year, say above 20, 30 or 50% of topline growth excluding acquisitions
– Do we see any impacts post pandemic or from fed rate hikes and spending … How are we planning to mitigate this and keep our growth intact?
– Update on AI&ML business. Has there been an increase in this business like the ad-tech business?
– Do you have plans to revive the company’s IoT business?
As you predicted many years ago, augmented reality and recently metaverse are gaining more popularity which should benefit IoT companies
– Any updates on partnerships with Amazon, Meta and LinkedIn
– In terms of Metaverse, I guess MediaMint is already working on AR/VR related projects for its clients … could you share more details on this on the amount of work being done currently … and future plans in terms of gearing up resources, building tech PoCs, partnerships etc;
– If time permits, can you explain the benefits of augmented reality and metaverse for ad-tech companies like BCG.
– Gaming companies like Nazara has entered Adtech space, do we see any possibility of BCG entering into gaming space either as an AdTech player or as a gaming publisher under Lycos brand
– Given that we will be expecting a good FCF in next quarters too … any plans to utilize these funds beyond the planned Audio AdTech acquisitions … like setting up a Start-up fund say 100 to 200 Cr for Series A, B, C rounds of Investment in early stage startups either AdTech or DM or any other platform based companies … Similar to Naukri’s investments in Zomato, Policy Bazaar etc;
1) How important is first party cookies now that third party cookies are being phased out? Is this development good for BCG? Do you expect the SSP business of BCG to benefit from this change?
2) Do you expect streaming giants like Netflix, Disney+ and Amazon Prime to start advertisements on their platforms? Since they can’t expect their subscriptions to keep increasing forever, they’ll either have to increase the prices or start putting ads on their platform to make more revenue.
3) How is the Indian ad-tech market different from Western markets?
4) To the CFO – There are some old tax disputes mentioned in the annual report. Can you please provide some information on that.
5. In one of the previous calls Mr. SKR garu mentioned a stake in edgecase.ai and at the right time also planned to increase the stake. How are things progressing in edgecase.ai.
Also medcase.health(https://www.medcase.health/about) is a transformed or application version of edgecase as we see KyleGiddens the CEO of edgecase also our Brad Cohen(President and Chief Strategic Officer of Brightcom) is the Chairman of Medcasehealth. Is there any stake or relation of BCG with these two companies edgecase and medcase health. If yes, can you please elaborate a bit with whatever you can?January 30, 2022 at 8:12 am #13126m4max1979Registered Boarder
Could someone please summarize all the points discussed at the conference call. I missed it this time. Specially the details about acquisition of Mediamint.2+January 30, 2022 at 11:42 am #13127January 30, 2022 at 12:04 pm #13128January 30, 2022 at 12:10 pm #13129hw_twRegistered Boarder
My views on some of the points discussed in the call … a bit lengthy one, hope it will be published
—– Receivables —-
[SKR, YSR comments]
– Receivables are around 2095 Cr … most of it is pertaining to this quarter sales
– On track for total of 500 Cr FCF in next two quarters … We are gung ho about achieving it
As most of it is for the current quarter’s revenue we could expect significant collections in Q4 and most probably this number will come down in Q4 and FY23 Q1 (excluding growth factor)
Anyway this High receivable amounts / days is no longer a worrying factor for BCG. It has now successfully overcome this threshold limits and is now into a FCF zone… Yes it is still a problem for its peers who are struggling to swim across this zone and also it will keep away any new entrants at bay … also it is advantageous for BCG as it will now be able to make competitive deals compared to it peers and grow faster while increasing its market share
—- Other Points —–
– Publishers count at 43 … The number given is for Full Service publishers … We also have automated model … Will share more details soon in a PPT
My understanding on this is that, in the Full service model, BCG team will be working closely with the publisher team to discuss on things like ad types, size layout etc; plus many other things … they would be looking to maximize the revenues for the target publisher … mostly this is opted by large publishers with multiple sites
Automated model, is like a self service type wherein the publisher himself takes care of everything on Brightcom’s platform, its a typical SaaS model
– Added 12 new Ad agencies on top of 200 existing agencies
This is a significant increase in a single quarter
– There are other pure play video players … the major advantage with Brightcom Player is that BCG will also be giving a monetization option to the publishers
—- Future Focus Areas —-
– Not interested to get into gaming / content side
– Not interested in start-up fund creation and partial stakes
This shows that the team’s strategy is to clearly focus on AdTech business … given the FCF it will be tempting what other new age startups are trying to do with investors money … VC type investing with some crazy valuations in the name of cutting costs
This also brings the point of low Promoter’s holding … It is again clear that the promoters interest is only in this business and are full-time working only on this business and not trying to do anything outside or even inside … 😀
—- Long term Visibility and Sustainability —-
– Contract periods are usually for 1 year and are automatically renewed … budgets are defined upfront
– EBITDA margins will remain at same level in coming quarters
Stable with multi-year contracts, provides a clear visibility in terms of revenues, margins and resources etc;.
You know now why BCG is able to give guidance and is able to meet it consistently unlike other Adtech or midcap IT companies who’s contracts are for shorter periods in months and totally depends on how much the sales team is able to bring in new business on a quarterly basis
Needless to say Analysts give higher weightage to this aspect and will be comfortable in giving higher PE as they see long term revenue visibility with multi-year contracts coupled with a healthy and industry leading EBIDTA margins … of course this needs to be coupled with other factors like growth, FCF etc; which we will discuss below
—- Growth Related —–
– AdTech industry growth will be EVEN GREATER than 20% CAGR for next 5 years and our target is to do better than this … FCF, ROE will help us to do it better
– Don’t see much impact post pandemic as most people are spending online and this behaviour is going to stay … also more people are purchasing online which has shown a 60% growth last year
– Ad impressions count has touched 90 billion / month … hope to see this touching 100 billion fairly soon
– High quality Publishers flowing through Google MCM partnership
This is a super good news if you are a long term investor … lets decipher this a bit
Considering it is around 25 to 30% industry CAGR and BCG trying to do better than this figure by a plus 15 to 25% … I guess this is reasonable considering that this year BCG is clocking 80% plus which is 20% above the highest growth rates of 60% seen in eCommerce segment, one of the massive contributor
So, overall we will be seeing a organic growth of 40 to 55% range in coming years … I am also including MediaMint led growth into this as achieving it would be requiring this teams support
On top of this growth figures, for the next FY we will have to do some additions
– The first one is the gap of around 500 to 600 Cr because of lower base of last year Q1
– The second one is around 185 Cr revenue from MediaMint … This is expected to close max by Feb / Mar end
This addition will be 500 + 185 Cr = 685 Cr
40% growth on top of it = 685 + 274 = 959 (near to 20% of 5000 Cr)
So, the final growth will be 60 to 75% for the next FY
What about the FCF component … this year the FCF is around 50% of total profit … Assuming it will be in same percentage this could come in the range of 800 to 875 Cr basis above growth figures
This is just my view from outside, and my expectations on growth and FCF might be totally wrong both on lower and higher range … Things will be clear in March with official guidance numbers from the company
Listing some important growth drivers and levers which gives us an idea of what is causing growth for AdTech industry how BCG will be capturing it
Adtech Industry growth drivers – Increased digital time, 5G, Audio, Metaverse, Increased adoption of digital and programmatic ads etc;
Levers of growth from BCG’s side – FCF, Acquisitions, New Product and Services offerings, New markets, Existing market share increase etc;
With these growth drivers, levers and projections even on lower side, I am seeing a “Decacorn” in my portfolio … hope it’s not foggy out there for you 😉
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