24 September 2024
Boku, Inc.
("Boku"
or the "Company" and, together with its subsidiaries, the
"Group")
Interim results for the six
months ended 30 June 2024
Continued revenue growth as
we lift our ambition to be the world's best localised payment
partner for global commerce
Boku (AIM: BOKU), a global network
of local payment solutions, is pleased to announce the following
unaudited interim results for the six months ended 30 June 2024
("H1 2024").
Financial Highlights
·
|
Revenues increased 24% to $47.3m in
H1 2024 (H1 2023: $38.2m), up 30% on a constant exchange
rate1 basis driven by continued increases in transaction
volumes for our global merchants across all Local Payment
Methods2 ("LPMs").
|
·
|
Revenues include $11.9m from
digital wallets and Account to Account2 ("A2A"), up 64%
from $7.3m in H1 2023, showing continued adoption by merchants,
following our strategic initiatives focused on enhancing and
expanding our product offerings in these areas.
|
·
|
Adjusted EBITDA1
increased 18% to $14.2m in H1 2024 (H1 2023: $12.1m restated)
representing an Adjusted EBITDA margin1 of 30.1% as we
keep our commitment to maintain Adjusted EBITDA margin above 30%
while we continue to invest in the business.
|
·
|
An operating loss of $0.4m was
reported for H1 2024 (H1 2023: operating profit $2.1m restated).
This was primarily due to increases in foreign exchange revaluation
losses on non-USD balances, share based payment expenses driven by
increases in both the number of awards granted and our average
share price together with accelerated amortisation charges relating
to a legacy platform.
|
·
|
Boku's 'own' cash1
increased to approximately $75m at the period end (H1 2023: $54.4m
and FY 2023 $70.4m). Total group cash was $148.5m at 30 June 2024
up from $113.9m at 30 June 2023 (FY 2023 $150.9m). The Group
remains debt free.
|
·
|
The average daily cash
balance1, a measure which smooths out the effect of
carrier collections and merchant payments, was $138.6m in June
2024, up from $105.8m in June 2023.
|
·
|
In H1 2024, $1.6m was spent
repurchasing 700,000 of Boku's own shares under the share buyback
scheme.
|
·
|
Interest income increased to $1.6m
in H1 2024 (H1 2023: $0.5m) as more cash was moved to longer term
deposits.
|
·
|
A higher Boku share price drove a
fair value loss of $3.3m on the Amazon warrants (H1 2023: fair
value gain of $0.02m).
|
Operational highlights
·
|
We continue to see significant
growth in both users and payment volumes:
|
o
|
30% increase in monthly active
users2 ("MAUs") in June 2024 to 79.6m (June 2023:
61.2m).
|
o
|
39.9m new users made their first
payment or bundling transaction with Boku during the first half of
the year (H1 2023: 32.7m).
|
o
|
Total Payment Volume2
("TPV") up 16% to $5.8bn (H1 2023: $5.0bn) and up 26% on a
constant exchange rate basis in the period.
|
·
|
Growth driven by strong performance
in digital wallets and A2A connections:
|
o
|
MAUs increased 86% to 8.8m in the
month of June 2024 (June 2023: 4.7m).
|
o
|
New users increased by over 46% to
9.2m in H1 2024 (H1 2023: 6.3m).
|
·
|
Take rate2 increased to
0.81% in H1 2024 (H1 2023: 0.76%) driven by higher take rates from
digital wallet revenues.
|
·
|
Over 50 new launches across LPMs in
H1 2024 with new and existing merchants including Netflix, Sony and
Google.
|
The shareholders have approved the
board's proposal for a new stretch restricted share unit plan. This
plan will support and reward the performance of the executive
management team of the Company in a fair, transparent and
proportionate manner.
Stuart Neal, Boku's CEO, commented:
"Following on from a very positive
2023, the first half of 2024 has seen Boku continue to demonstrate
strong revenue growth, largely driven from existing merchants. We
are committed to supporting merchant growth and are lifting our
ambition to be the world's best localised payments partner for
global commerce. The first half has therefore also seen us increase
our investment in our products and the infrastructure required to
scale whilst maintaining our Adjusted EBITDA margin above
30%.
"It is pleasing to see continued
double-digit growth in our Direct Carrier Billing ("DCB") product,
proving once again its resilience and the value it adds for our
merchants. Digital wallets and A2A payments have kicked on again
and comprised 25% of total Group revenues in H1 2024. We have
expansion plans for these products with all our key merchants, most
of which we would expect to see rolled out over the coming two
years; thus, it is our expectation that the product mix within our
business will continue to see an increasing shift towards these
payment types.
"We reiterate our expectation that
2024 will be a year of solid top line growth that is in turn
funding an increase in investment, with Adjusted EBITDA margins
staying broadly flat on 2023. We remain confident that we will
achieve expectations for the full year."
1 These represent alternative performance measures ("APMs") for
the Group. Refer to the Non-IFRS financial information section of
Boku's 2024 Interim Report for a summary of APMs used, together
with their definitions.
2 For a full list of definiitons and abbreviations used by the
Group, refer to the Glossary at the end of Boku's 2024 Interim
Report.
Investor Presentation
The Company will be hosting an
online investor presentation and Q&A session at 5.30 p.m. BST,
today, Tuesday 24 September 2024. This session is open to all
existing and prospective shareholders. Those who wish to attend
should register via the following link where they will be provided
with access details
https://us02web.zoom.us/webinar/register/WN_nTiw40r8QsqXtvpPZKXyww
Participants will have the
opportunity to submit questions during the session, but questions
are welcomed in advance and may be submitted to:
boku@investor-focus.co.uk.
Enquiries:
Boku, Inc.
Stuart Neal, Chief Executive
Officer
Robert Whittick, Chief Financial
Officer
|
+44 (0)20 3934 6630
|
Investec Bank plc (Nominated Advisor & Joint
Broker)
Nick Prowting / Kamalini Hull /
Patrick Robb
|
+44 (0)20 7597 5970
|
Peel Hunt LLP (Joint Broker)
Neil Patel / Ben Cryer / Kate
Bannatyne
|
+44 (0)20 7418 8900
|
IFC Advisory Limited (Financial PR & IR)
Tim Metcalfe / Graham Herring /
Florence Chandler
|
+44 (0)20 3934 6630
|
Note to Editors:
Boku, Inc. (AIM: BOKU) is a leading
global provider of mobile payment solutions. Boku's mobile-first
payments network, including mobile wallets, direct carrier billing,
and account to account/real-time payments schemes, reaching over
7.5 billion mobile payment accounts through a single
integration.
Customers that trust Boku to
simplify sign-up, acquire new paying users and prevent fraud
include global leaders such as Amazon, Meta Platforms, Google,
Microsoft, Netflix, Sony, Spotify and Tencent.
Boku Inc. was incorporated in 2008
and is headquartered in London, UK, with offices in the US, India,
Brazil, China, Estonia, Germany, Indonesia, Ireland, Japan,
Singapore, Spain, Taiwan and Vietnam.
To learn more about Boku, Inc.,
please visit: https://www.boku.com
CHIEF EXECUTIVE OFFICER'S REPORT
The first half of 2024 has seen
Boku continue to demonstrate solid revenue growth, following on
from a very strong 2023. As presented at the FY 2023 results, 2024
will be a year of continued top line growth, largely from existing
merchants, coupled with increased investment in the business as we
lift our ambition to be the world's best localised payments partner
for global commerce.
The planned investment comes in
four focused areas:
· Investment in the functionality required to deliver the next
wave of growth opportunities for our existing merchants (some of
which are scheduled to technically land in Q4 2024)
· Investment to scale our business to attack the global commerce
market, allowing for a wider range of LPMs and market-leading money
movement capabilities
· Investment to fund R&D projects to design and build an
off-the-shelf Boku product that can target a wider set of global
merchants (either directly or via channel partners)
· Investment in our delivery capability to ensure that the whole
company can scale efficiently and maintain good operational
gearing
We believe that the above
initiatives are fully costed within existing analyst projections
and covered with existing cash reserves.
More of the same in H1
Revenues in the period were up 24%
(30% if you remove the impact of exchange rate movements, largely
the negative impact of a depreciating Japanese Yen over the
period).
It is pleasing to see continued
double-digit growth in our Direct Carrier Billing (DCB) product,
proving once again its resilience and the value added for our
merchants. DCB allows consumers to make digital purchases and
charge those purchases to their phone bill, which is settled at the
end of the billing period. In that regard, DCB is the original Buy
Now Pay Later (BNPL) product. It is for this reason that it proves
to be a highly effective way for merchants to attract more users in
any given market. We have seen continued strong performance
in heritage DCB markets such as Germany, UK, Japan, Taiwan,
Switzerland and Saudi Arabia, as well as a general ramp in demand
across the Middle East.
Digital wallets and Account to
Account (A2A) payments have kicked on again and during H1 comprised
25% of total Group revenues. We now have expansion plans for these
products with all of our key merchants in new and existing markets.
Thus, it is our expectation that the product mix within our
business will continue to see an increasing shift towards these
payment types.
It is by design that our success is
directly linked to the success of our merchants. Being useful for
our merchants is key to the ongoing success of our business, which
is why Monthly Active Users are tracked as a measure of how we have
performed for our merchants. In June 2024, 79.6m users successfully
completed a transaction using the Boku platform to access the
services provided by our merchants, 30% more users than did so in
June 2023.
An operating loss of $0.4m was
reported for the six months to 30 June 2024 (H1 2023: operating
profit $2.1m). This was primarily due to
increases in foreign exchange revaluation losses on non-USD
balances, accelerated amortisation charges relating to a legacy
platform and higher share-based payment expenses driven by
increases in both the number of awards granted and our share
price.
Innovate or die
Juniper research points to the
global ecommerce market growing to $11 trillion (tn) by 2028 and
59% of this total payment volume is expected to be via Local
Payment Methods (LPMs). (Boku & Juniper Research,
2024)1
Boku already possesses a formidable
set of assets to be successful in this market - we serve some of
the largest and most exacting merchants in the world, we have high
quality connections to c.300 individual LPMs, licenses to move
money in 60 countries and a flexible set of connections that offer
card-like conversion rates. Put simply, we remove complexity for
our merchants as they attempt to grow their businesses
internationally.
To fully maximise the long-term
potential for Boku, we are now adding scaling capabilities as
described below.
With the addition of A2A payments
to our network, consumer funds will be flowing through our
regulated bank accounts in real time. A significant emphasis is
being placed on compliance, segregation of funds, automated
reconciliation and faster settlement of funds, both domestically
and cross border.
To deliver a differentiated global
money movement capability, over the next 6-9 months we are building
a sophisticated treasury platform, supported by a number of tier
one banking partners, offering best in market payments capability
and foreign exchange rates for our merchants.
Scaling the back end of our
platform will allow for strong margin growth as Boku rolls out to
the broader ecommerce market and adds new payment products in new
geographies such as UPI in India and PIX in Brazil.
In addition to scaling the
platform, we also welcomed some new executives to the Boku
leadership team during H1, who will add vast experience and knowhow
when it comes to helping the business navigate the tricky step from
start up to scale up. Victoria Rogers (formerly AO.com) joined as
Chief People Officer, Paul Jarrett (formerly Zepz) joined as Global
Head of Banking and Rob Whittick (formerly NatWest Bank) joined as
our new Chief Financial Officer. I am excited to see what the
combination of existing Boku leadership talent and our new
executives will deliver as we grow.
Outlook for the year
We reiterate our expectation that
2024 will be a year of solid top line growth that is in turn
funding an increase in investment - with Adjusted EBITDA margins
staying broadly flat on 2023. We remain confident that we will
achieve expectations for the full year.
Once again, I would like to offer a
huge note of thanks to the 452 Boku colleagues around the world,
whose incredible talent and energy have helped to deliver these
results and provide a springboard for what's to come.
Stuart Neal
Chief Executive Officer
24 September 2024
1 Boku & Juniper Research, 2024. 2024 Global Ecommerce
Report. Available at:
https://www.boku.com/boku-knows/2024-boku-global-ecommerce-report.
CHIEF FINANCIAL OFFICER'S REPORT
Introduction and thank you
I am pleased to present my first
interim report as CFO of Boku. Since my arrival in July, I have
been warmly welcomed by colleagues across the company. My
particular thanks to Keith for ensuring a smooth
transition.
I have been thoroughly impressed by
the dedication, talent, and innovative spirit that defines the Boku
team. Our global payments platform is market leading in the DCB and
other LPM arenas with an impressive list of merchants and an
extensive, growing network of issuers across the
world.
As we look forward, I am excited
about the future of Boku. Together, we will continue to build on
our successes, leveraging our strengths to drive sustainable growth
for our customers and long-term value for our shareholders. We aim
to become the world's best network for localised payment methods,
and I am delighted to be part of that journey. With over 25 years
of experience in the financial services sector, I look forward to
contributing to our shared vision and helping steer the company
towards new and ambitious goals.
A summary of our financial and
operational highlights for the six months to 30 June 2024 are set
out below:
Financial
Highlights
|
H1 2024
|
H1
20232
|
% change
|
|
$'000
|
$'000
|
|
Revenue
|
47,284
|
38,174
|
24%3
|
of which
|
|
|
|
DCB
|
35,392
|
30,921
|
14%
|
Other LPMs
|
11,892
|
7,253
|
64%
|
|
|
|
|
Adjusted
EBITDA4
|
14,213
|
12,081
|
18%
|
|
|
|
|
Adjusted Operating
Expenses5
|
31,706
|
24,777
|
28%
|
|
|
|
|
Adjusted EBITDA
Margin6
|
30.1%
|
31.6%
|
-
|
|
|
|
|
Operating (Loss)/
Profit
|
(396)
|
2,107
|
-
|
|
|
|
|
Cash
Balances
|
148,500
|
113,866
|
30%
|
|
|
|
|
Average Daily Cash Balances
in June
|
138,610
|
105,777
|
31%
|
|
|
|
|
Own
cash7
|
75,206
|
54,434
|
38%
|
|
Operational
Highlights
|
H1 2024
|
H1 2023
|
% change
|
|
|
|
|
Total Payment Volumes
(TPV)
|
$5.8bn
|
$5.0bn
|
16%8
|
|
|
|
|
Take Rates
|
0.81%
|
0.76%
|
7%
|
|
|
|
|
Monthly Active Users (MAU) in
June
|
79.6m
|
61.2m
|
30%
|
|
|
|
|
New users in the six months
to June
|
39.9m
|
32.7m
|
22%
|
2 The prior period to 30 June 2023 has been restated to exclude
the fair value gain on warrants from administrative expenses,
further details can be found in note 2. Additionally, right-of use
assets have been restated, resulting in a reduction in
depreciation, further details can be found on pages 18 to
19.
3 30% on a constant exchange rate basis
4 Adjusted EBITDA is a non-IFRS measure defined as earnings
before interest, tax, depreciation, amortisation, non-recurring
income, share-based payment expense, foreign exchange gains/
(losses) and exceptional items (see pages 18 to 19 for further
details).
5 Defined as gross profit less Adjusted EBITDA.
6 Calculated as Adjusted EBITDA over revenue for the
period.
7 Own cash is a non-IFRS measure calculated as cash held plus
amounts due from issuers less amounts owed to merchants
8 26% on a constant exchange rate basis
Comments on overall performance
Our growth remains positive, with
revenue increasing by 24% to $47.3m (30% on a constant exchange
rate basis) over the first six months of the year (H1 2023:
$38.2m). Building on the momentum from last year, we achieved
meaningful revenue growth from other LPMs which now accounts for
25% of total revenues. This was underpinned by our strategic
initiatives focused on enhancing and expanding our product offering
in this area. Our DCB product also continues to perform well
reporting double digit growth in the period. Despite investment we
have increased our Adjusted EBITDA by 18% to $14.2m (H1 2023:
$12.1m) and maintained an Adjusted EBITDA margin of greater than
30% underscoring our efficient operational management and
cost-control measures.
The growth trajectory is maintained
Supporting our customers has always
been the cornerstone to Boku's growth story. By continuously
enhancing our offering we have not only retained our loyal customer
base but also attracted new customers in new markets. This is
reflected in our revenue growth of 24% (30% on a constant exchange
rate basis) which has been primarily driven by a 16% increase in
TPV (26% on a constant exchange rate basis) to $5.8bn (H1 2023:
$5bn).
The increased TPV is underpinned by
a 30% increase in MAU to 79.6m in June 2024 (H1 2023: 61.2m),
together with adding 39.9m new users in the six-month period (H1
2023: 32.7m), reflecting our continued efforts in adding new
connections for our global merchants across existing and new
markets. We completed over 50 new launches in multiple
jurisdictions across all LPMs - DCB, digital wallets and A2A in H1
2024 with both new and existing merchants including Netflix, Sony
and Google.
A significant portion of our
revenue growth came from other LPMs - digital wallets and A2A -
where revenue increased by 64% to $11.9m. This was supported by
increases in new users of 46% to 9.2m and increased MAU of 86% to
8.8m across these other LPMs.
Our take rate has also increased to
0.81% in the six months to 30 June 2024 (from 0.76% H1 2023) which
was largely due to higher take rates in other LPM products -
specifically digital wallets.
Looking ahead, our growth
trajectory remains positive and promising. The expanding
addressable market together with our relentless focus on meeting
customer needs through innovation and operational excellence will
continue to drive us forward.
Investment continues while maintaining Adjusted EBITDA
margin
To support and sustain our growth,
we are committed to continued investment while maintaining an
Adjusted EBITDA margin of over 30%. Consequently, while our
Adjusted operating expenditure has increased by 28% to $31.7m (H1
2023: $24.8m) our Adjusted EBITDA increased by 18% to $14.2m (H1
2023 $12.1m), resulting in an Adjusted EBITDA margin of 30.1% (H1
2023: 31.6%).
As noted by Stuart above, our
investment strategy is centred on both enhancing our product
offering and strengthening our delivery capability to make it
scalable for the future. This approach ensures that we can drive
innovation and expansion, allowing us to capitalise on growth
opportunities while maintaining strong financial
performance.
Review of operating expenses and other items
Boku reported a small operating
loss of $0.4m for the first six months of 2024 compared to an
operating profit of $2.1m in the previous half year. Key items
contributing to this loss are as follows:
·
|
Depreciation and Amortisation
charges have increased to $3.8m from $3m in H1 2023 due to the
accelerated decommissioning of a legacy platform related to a prior
acquisition.
|
·
|
Share-based payment charges have
increased to $5.8m from $4m in H1 2023 primarily due to the
increased number of share awards granted and an increase in our
share price. Boku has a policy of making annual RSU awards to all
staff which vest in full over 3 years. These share awards are
satisfied from treasury stock as part of our share buyback
programme which is discussed in more detail below.
|
·
|
Foreign exchange losses of $4.8m
were reported in the period compared to losses of $3.1m in H1 2023.
This is largely driven by losses on the revaluation of non-USD
balances during the period.
|
Other notable items below the
operating loss line are as follows:
·
|
A fair value loss on the Amazon
warrants of $3.3m was reported in the period compared to a fair
value gain of $0.02m in H1 2023 reflecting increases in our share
price. See note 8 for further detail.
|
·
|
Interest income has increased to
$1.6m from $0.5m in H1 2023 as more funds were moved to longer term
deposits.
|
The Group reported a Basic loss per
share of $(0.0036) (H1 2023: EPS $0.0060).
Ongoing cash generation continues to strengthen our balance
sheet
Cash Generation
Boku continues to operate debt-free
and generate positive cash flows. As at 30 June 2024 the group held
cash balances of $148.5m which was up 30% from $113.9m in H1 2023
(FY 2023: $150.9m) and average daily cash balances in June of
$138.6m which were up 31% from $105.8m in June 2023 (December 2023:
$131.7m). At 30 June 2024, $75.2m is Boku's 'own' cash which was up
38% from $54.4m in H1 2023 (FY 2023: $70.4m). It is encouraging to
see the business enhancing its cash generating capabilities which
will allow us to make the necessary investments to drive future
growth as noted above.
The 30 June 2024 cash balance
includes $3m of cash received from Danal relating to the exercise
of warrants granted upon acquisition of Danal. See note 8 for
further details.
Share Buyback
The cash balance above is stated
after the purchase of 700,000 of Boku's own shares in the first six
months of 2024 for a total consideration of $1.6m as part of its
share buyback programme. As explained in Note 10, this
programme has now expired.
Intangibles
As at 30 June 2024, the Group had
goodwill of $41.8m (FY 2023: $42.2m) and other intangibles of
$14.8m (FY 2023: $14.4m). As at 30 June 2024, no impairment was
required.
Deferred Tax Asset
Our deferred tax asset increased to
$17.7m from $15.3m as at 31 December 2023. This is primarily due to
recognition of previously unrecognised tax losses.
Principal Risks and Uncertainties
For the six months to 30 June 2024,
the principal risks and uncertainties of the Group remain
consistent with those previously reported in the Annual Report and
Accounts for the year-ended 31 December 2023. For more details on
the Group's risk management, please refer to the 'Principal Risks
and Uncertainties' section on pages 16 to 20 of the Annual
report.
Going Concern
The Group has undertaken a detailed
going concern assessment, reviewing its current and projected
financial performance and position, including forecast cash
flows. The Directors are satisfied that the Group has
sufficient cash resources over the period of at least 12 months
from the date of approval of the condensed consolidated financial
statements. As such, the condensed consolidated interim financial
statements have been prepared on a going concern basis.
Looking forward
As I look ahead, our investment
narrative remains clear. We anticipate continued volume increases
as we tap into an expanding addressable market. Our commitment to
supporting merchant growth will drive our ongoing investment in our
products, while we also enhance our delivery capability to ensure
scalability. Our goal is to be the leading network for localised
payment methods globally and I am confident we can meet that
ambition.
Robert Whittick
Chief Financial Officer
24 September 2024
Cautionary Statement
Boku has made forward-looking
statements in this financial information, including statements
about the market and benefits of its products and services;
financial results; product development plans; the potential
benefits of business relationships with third parties and business
strategies. The Group considers any statements that are not
historical facts as "forward-looking statements". They relate to
events and trends that are subject to risk and uncertainty that may
cause actual results and the financial performance of the Group to
differ materially from those contained in any forward-looking
statement. These statements are made by the Directors in good faith
based on the information available to them and such statements
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors underlying any
such forward-looking information.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
Unaudited
|
Unaudited*
|
|
|
Six months
ended
|
Six
months ended
|
|
|
30 June
2024
|
30 June
2023
|
|
Note
|
$'000
|
$'000
|
|
|
|
|
Revenue
|
5
|
47,284
|
38,174
|
Cost of providing
services
|
|
(1,365)
|
(1,316)
|
Gross profit
|
|
45,919
|
36,858
|
Administrative expenses
|
|
(46,315)
|
(34,854)
|
Other income
|
|
-
|
103
|
Operating (loss)/ profit
|
|
(396)
|
2,107
|
|
|
|
|
Fair value (loss)/ gain on
warrants
|
8
|
(3,279)
|
18
|
Finance income
|
6
|
1,637
|
474
|
Finance expense
|
6
|
(115)
|
(150)
|
(Loss)/ profit before tax
|
|
(2,153)
|
2,449
|
Income tax benefit/
(expense)
|
|
1,084
|
(649)
|
(Loss)/ profit for the period
(all attributable to equity
holders of the parent)
|
|
(1,069)
|
1,800
|
|
|
|
|
Other comprehensive income
|
|
|
|
Items that may be reclassified to profit or
loss
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
(1,063)
|
1,141
|
Other comprehensive (loss)/ income
for the period, net of tax
|
|
(1,063)
|
1,141
|
|
|
|
|
Total comprehensive (loss)/ income for the
period
(all attributable to equity
holders of the parent)
|
|
(2,132)
|
2,941
|
|
|
|
|
Earnings per share for loss/profit attributable to equity
holders of the parent
|
|
USD
|
USD
|
|
|
|
|
Basic (loss)/ earnings per
share
|
|
(0.0036)
|
0.0060
|
Diluted (loss) / earnings per
share
|
|
(0.0036)
|
0.0055
|
|
|
|
|
Alternative performance measures
|
|
|
restated*
|
Adjusted
EBITDA1
|
|
14,213
|
12,081
|
*The prior period to 30 June 2023 has been restated to exclude
the fair value gain on warrants from administrative expenses.
Further details can be found in note 2.
1Adjusted EBITDA is a non-IFRS measure defined as earnings
before interest, tax, depreciation, amortisation, non-recurring
income, share-based payment expense, foreign exchange gains/
(losses) and exceptional items (see pages 18 to 19 for further
details).
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
|
|
|
Unaudited
|
Audited
|
|
|
|
30 June
2024
|
31
December 2023
|
|
Note
|
|
$'000
|
$'000
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and
equipment
|
|
|
771
|
758
|
Right-of-use assets
|
|
|
3,232
|
2,784
|
Intangible assets
|
|
|
56,645
|
56,620
|
Warrant contract assets
|
8
|
|
1,954
|
1,840
|
Deferred tax assets
|
|
|
17,660
|
15,306
|
Total non-current assets
|
|
|
80,262
|
77,308
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
|
|
139,016
|
148,522
|
Warrant contract assets
|
|
|
226
|
122
|
Cash and cash
equivalents
|
7
|
|
148,500
|
150,859
|
Total current assets
|
|
|
287,742
|
299,503
|
|
|
|
|
|
Total assets
|
|
|
368,004
|
376,811
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
|
214,509
|
233,049
|
Current tax payable
|
|
|
778
|
509
|
Current lease
liabilities
|
|
|
1,362
|
1,370
|
Total current
liabilities
|
|
|
216,649
|
234,928
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
|
1,537
|
979
|
Deferred tax liabilities
|
|
|
126
|
182
|
Warrant liabilities
|
8
|
|
9,089
|
5,511
|
Non-current lease
liabilities
|
|
|
2,173
|
1,682
|
Total non-current
liabilities
|
|
|
12,925
|
8,354
|
|
|
|
|
|
Total liabilities
|
|
|
229,574
|
243,282
|
|
|
|
|
|
Net assets
|
|
|
138,430
|
133,529
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
10
|
|
29
|
29
|
Other reserves
|
|
|
256,895
|
255,249
|
Foreign currency translation
reserve
|
|
|
(5,781)
|
(4,718)
|
Treasury reserve
|
10
|
|
(2,018)
|
(6,628)
|
Retained losses
|
|
|
(110,695)
|
(110,403)
|
Total equity
(all attributable to equity
holders of the parent)
|
|
|
138,430
|
133,529
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
|
|
Share
capital
|
Other
reserves
|
Foreign
currency translation reserve
|
Treasury
shares reserve
|
Accumulated losses
|
Total
|
|
|
$'000
|
$'000
|
$'000
|
$'001
|
$'000
|
$'000
|
Balance at 1 January
2023
|
|
29
|
252,385
|
(6,290)
|
(1,835)
|
(120,713)
|
123,576
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
1,800
|
1,800
|
Other comprehensive
income
|
|
-
|
-
|
1,141
|
-
|
-
|
1,141
|
Total comprehensive income for the period
(all attributable to equity
holders of the parent company)
|
|
-
|
-
|
1,141
|
-
|
1,800
|
2,941
|
|
|
|
|
|
|
|
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
Loss on treasury shares
|
|
-
|
-
|
-
|
269
|
(269)
|
-
|
Issue of share capital upon
exercise of stock options and RSUs
|
|
-
|
40
|
-
|
-
|
-
|
40
|
Share-based payments
expense
|
|
-
|
3,559
|
-
|
-
|
-
|
3,559
|
Taxation adjustment on share-based
payments
|
|
-
|
-
|
-
|
-
|
(55)
|
(55)
|
Acquisition of treasury
shares
|
|
-
|
|
-
|
(5,460)
|
-
|
(5,460)
|
Issue of treasury shares to
employees
|
|
-
|
(5,008)
|
-
|
5,008
|
-
|
-
|
Balance at 30 June 2023
|
|
29
|
250,976
|
(5,149)
|
(2,018)
|
(119,237)
|
124,601
|
|
|
|
|
|
|
|
|
Balance at 1 January
2024
|
|
29
|
255,249
|
(4,718)
|
(6,628)
|
(110,403)
|
133,529
|
Loss for the period
|
|
-
|
-
|
-
|
-
|
(1,069)
|
(1,069)
|
Other comprehensive loss
|
|
-
|
-
|
(1,063)
|
-
|
-
|
(1,063)
|
Total comprehensive loss for the period
(all attributable to equity
holders of the parent company)
|
|
-
|
-
|
(1,063)
|
-
|
(1,069)
|
(2,132)
|
|
|
|
|
|
|
|
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
Issue of share capital
|
|
-
|
3,000
|
-
|
-
|
-
|
3,000
|
Issue of share capital upon
exercise of stock options
|
|
-
|
428
|
-
|
-
|
-
|
428
|
Share-based payments
expense
|
|
-
|
4,412
|
-
|
-
|
-
|
4,412
|
Taxation adjustment on share-based
payments
|
|
-
|
-
|
-
|
-
|
777
|
777
|
Acquisition of treasury
shares
|
|
-
|
-
|
-
|
(1,584)
|
-
|
(1,584)
|
Issue of treasury shares to
employees
|
|
-
|
(6,194)
|
-
|
6,194
|
-
|
-
|
Balance at 30 June 2024
|
|
29
|
256,895
|
(5,781)
|
(2,018)
|
(110,695)
|
138,430
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
Unaudited
|
Unaudited
|
|
|
Six months
ended
|
Six
months ended
|
30 June
2024
|
30 June
2023
|
|
Note
|
$'000
|
$'000
|
Operating activities
|
|
|
|
(Loss)/ profit after tax
|
|
(1,069)
|
1,800
|
|
|
|
|
Adjustments:
|
|
|
|
Income tax
(benefit)/expense
|
|
(1,084)
|
649
|
Amortisation of intangible
assets
|
|
2,802
|
2,061
|
Depreciation of property, plant and
equipment
|
|
987
|
1,041
|
Loss on disposal of property, plant
and equipment
|
|
-
|
2
|
Fair value adjustment on warrant
valuations
|
|
3,279
|
(18)
|
Amortisation of warrant
assets
|
|
81
|
76
|
Finance income and
expenses
|
6
|
(1,522)
|
(324)
|
Foreign exchange loss/ (gain)
(unrealised)
|
|
1,535
|
(707)
|
Share-based payments
expense
|
|
4,413
|
3,559
|
Operating gain before working capital
changes
|
|
9,422
|
8,139
|
Decrease(increase) in trade and
other receivables
|
|
8,009
|
(3,012)
|
(Decrease) in trade and other
payables
|
|
(15,680)
|
(2,892)
|
Cash generated from operations
|
|
1,751
|
2,235
|
Income taxes paid
|
|
(159)
|
(118)
|
Net cash from operating activities
|
|
1,592
|
2,117
|
Investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
|
(267)
|
(133)
|
Payments for internally developed
software
|
|
(3,461)
|
(2,617)
|
Interest received
|
6
|
1,637
|
474
|
Net cash used in investing activities
|
|
(2,091)
|
(2,276)
|
Financing activities
|
|
|
|
Principal elements of lease
payments
|
|
(750)
|
(625)
|
Interest paid
|
6
|
(115)
|
(150)
|
Proceeds on Issue of
shares
|
8
|
3,000
|
-
|
Issue of share capital on exercise
of options & RSUs
|
|
428
|
40
|
Acquisition of treasury
shares
|
|
(1,584)
|
(5,460)
|
Proceeds on sale of treasury
shares
|
|
-
|
2,333
|
Net cash from/ (used in) financing
activities
|
|
979
|
(3,862)
|
|
|
|
|
Net increase/ (decrease) in cash and cash
equivalents
|
|
480
|
(4,021)
|
Effect of foreign exchange rate
changes on cash and cash equivalents
|
|
(2,839)
|
1,374
|
Cash and cash equivalents at
beginning of period
|
|
150,859
|
116,513
|
Cash and cash equivalents at end of period
|
7
|
148,500
|
113,866
|
The accompanying notes form an
integral part of these condensed consolidated financial
statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. General information
Boku, Inc., a public limited
company, incorporated and domiciled in the United States of
America, is the parent company (Parent Company or Parent) for all
of its subsidiaries (together Boku or the Group). The shares of the
Company are quoted on AIM, a market of the London Stock Exchange
Group plc. The registered office of the Company is 660 Market
Street, Suite 400, San Francisco, CA 94104, United
States.
The principal activity of the Group
is the provision of digital payments, including mobile wallets,
real-time payment schemes, and direct carrier billing for global
merchants. These solutions enable merchants to acquire new
customers and accept online payments from customers who prefer to
pay without credit cards.
The condensed consolidated
financial statements were approved for issue on 23 September
2024.
2. Basis of preparation
The annual financial statements of
the Group will be prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). The condensed
consolidated financial statements included in this interim report
are for the six months ended 30 June 2024 and have been prepared in
accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS
34"). The condensed consolidated financial statements have been
independently reviewed, not audited.
The disclosures in these condensed
consolidated financial statements do not include the information
reported for full annual financial statements and should therefore
be read in conjunction with the annual financial statements of the
Group for the year ended 31 December 2023. Comparative condensed
consolidated statement of financial position is extracted from
annual financial statements as at 31 December 2023 whereas
comparative condensed consolidated statement of comprehensive
income, consolidated condensed statement of changes in equity and
condensed consolidated statement of cash flows are extracted from
un-audited condensed consolidated financial statements of the Group
for the six-month period ended 30 June 2023.
In the six months ended 30 June
2024 the Group did not adopt any new standards or amendments issued
by the IASB or interpretations by the IFRS Interpretations
Committee ("IFRIC") that would have had a material impact on the
condensed consolidated financial statements.
2.1 Going concern
The Group meets its day-to-day
working capital requirements through its own cash balances. The
Group has undertaken a detailed going concern assessment, reviewing
its current and projected financial performance and position,
including forecast cash flows. The downside scenario considered
revenue falling between 31% and 55%. The downside scenario, outlining the impact
of a severe but plausible adverse case, shows that there is
sufficient headroom for liquidity for at least the next 12 months
from the date of approval of these condensed interim financial
statements. Thus, the directors are
satisfied that the Group has sufficient resources to continue in
operation for the foreseeable future and meet its financial
obligations as they fall due for a period of not less than 12
months from the date of approving this interim report. Accordingly,
the Directors continue to adopt the going concern basis in
preparing the condensed consolidated financial
statements.
2.2 Alternative performance measures (APMs)/ Non-GAAP
measures
Management regularly uses APMs
internally to understand, manage and evaluate the business
performance and make operating decisions. These measures are among
the primary factors management uses in planning for and forecasting
future periods. The primary APMs are EBITDA, Adjusted EBITDA,
Adjusted Operating expenses and Constant exchange rate revenues
which management considers are relevant in understanding the
Group's financial performance. Further information about these APMs
together with a reconciliation to operating profit are disclosed at
the end of this report.
2.3 Restatement
The condensed consolidated
statement of comprehensive income for the six months ended 30 June
2023 has been restated to move the fair value gain on warrants from
exceptional items in administrative expenses to a separate line
below operating profit, to more appropriately reflect the
accounting judgement.
This adjustment had no impact on
the condensed consolidated statement of cash flows or condensed
consolidated statement of financial position.
Fair value gain on
warrants
|
As originally
reported
|
Effect of
restatement
|
Group restated
amounts
|
30
June 2023
|
$'000
|
$'000
|
$'000
|
Condensed consolidated statement of comprehensive income
(extract)
|
|
|
Gross profit
|
36,858
|
-
|
36,858
|
Administrative expenses
|
(34,836)
|
(18)
|
(34,854)
|
Other Income
|
103
|
-
|
103
|
Operating profit
|
2,125
|
(18)
|
2,107
|
Fair value gain on
warrants
|
-
|
18
|
18
|
Finance income
|
474
|
-
|
474
|
Finance expense
|
(150)
|
-
|
(150)
|
Profit before tax from continuing operations
|
2,449
|
-
|
2,449
|
|
|
|
| |
2.4 Critical accounting estimates and
judgements
The preparation of interim
financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income
and expense. Actual results might differ from these estimates. In
preparing these condensed consolidated financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 31 December 2023, with the exception
of changes in estimates that are required in determining the
recognition of deferred tax assets.
3. Significant Accounting
Policies
The accounting policies adopted are
consistent with those of the previous financial year and
corresponding interim reporting period.
4. Operating Segments
These condensed consolidated
financial statements have been prepared on the basis of a single
reportable segment being the Payments Business.
5. Revenue from contracts with
customers
The Group's revenue is principally
its service fees earned from its merchants. All revenue is earned
at the time the transaction is processed and, as a result, all
revenue is recognised at that point in time. The geographical
analysis of the revenue by location of the users is presented
below:
Group revenue by region
|
|
Unaudited
|
Unaudited
|
|
|
Six months
ended
|
Six
months ended
|
|
|
30 June
2024
|
30 June
2023
|
|
|
$'000
|
%
|
$'000
|
%
|
Americas
|
|
1,043
|
2.2%
|
1,338
|
3.5%
|
APAC
|
|
27,999
|
59.2%
|
22,429
|
58.8%
|
EMEA
|
|
18,242
|
38.6%
|
14,407
|
37.7%
|
Total
|
|
47,284
|
100%
|
38,174
|
100%
|
The amortisation of the warrant
contract asset to revenue during the six months ended June 2024
amounted to $0.08m (H1 2023: $0.08m). See note 8 for more
information on warrants.
6. Finance income and expense
|
|
Unaudited
|
Unaudited
|
|
|
Six months
ended
|
Six
months ended
|
|
|
30 June
2024
|
30 June
2023
|
|
|
$'000
|
$'000
|
Finance income
|
|
|
|
Interest income
|
|
1,637
|
474
|
Total finance income
|
|
1,637
|
474
|
|
|
|
|
Finance expense
|
|
|
|
Interest on bank loans/ credit
facility
|
|
(25)
|
(51)
|
Interest on operating
leases
|
|
(90)
|
(99)
|
Total finance expense
|
|
(115)
|
(150)
|
|
|
|
|
Net finance income
|
|
1,522
|
324
|
7. Cash and cash equivalents and restricted
cash
|
Unaudited
|
Audited
|
|
30 June
2024
|
31
December 2023
|
|
$'000
|
$'000
|
Cash and cash
equivalents
|
123,721
|
117,360
|
Restricted cash
|
24,779
|
33,499
|
Total Cash
|
148,500
|
150,859
|
Restricted cash primarily includes
money received but not yet paid to merchants (segregated funds, in
transit), for Boku's licenced entities, cash held in the form of a
letter of credit to secure a lease agreement for the Company's San
Francisco office and a certificate of deposit held at a financial
institution to collateralise Company credit cards.
8. Warrants
Amazon Warrants - Derivative Liabilities
On 16 September 2022, the Group
entered into a stock warrant agreement with Amazon in conjunction
with a commercial service level agreement for the Group to provide
payment processing services to Amazon. The Group includes a
detailed explanation of the Amazon warrants and its accounting
policy for such warrants in the Group's most recent annual report
and has therefore not replicated those disclosures within these
condensed consolidated financial statements.
The fair value of the warrant
liability was $9.1m as at 30 June 2024, and $5.5m as at 31 December
2023. The increase in fair value from 31 December 2023 to 30 June
2024 was primarily due to an increase in the spot price of shares
on AIM from £1.34 to £1.82 (partially offset by an increase in risk
free rate from 3.81% to 4.25%), combined with an increase in the
number of warrants expected to vest from 5,333,781 to 5,622,828.
The fair value of 1 warrant increased to $1.616 at 30 June 2024
from $1.033 at 31 December 2023. The increase in the number
of warrants expected to vest resulted in an increase to the
contract asset and financial liability of $0.3m. The remaining
increase in the fair value of underlying warrants of $3.3m
represented a charge to the statement of comprehensive
income.
The warrants are classified as
Level 3 derivative liabilities as there is no current market for
the warrants, such that the determination of fair value requires
significant judgment and estimation. The Group values the warrants
using a combination of Monte Carlo Simulation and Black-Scholes
Model valuation methods. Significant unobservable inputs as at 31
December 2023 included volatility of the Company's common stock of
40%, revenue volatility of 30%, a risk-free rate of 3.81%, and
forecasted revenue from Amazon over the 7-year vesting period.
Significant unobservable inputs as at 30 June 2024 included
volatility of the Company's common stock of 40%, revenue volatility
of 30%, a risk-free rate of 4.25%, and forecasted revenue from
Amazon over the 7-year vesting period.
A significant increase in
volatilities in isolation as at 30 June 2024 would result in a
significant change in fair value. If equity volatility and
revenue volatility were both to decrease by 5% to 35% and 25%
respectively, the total fair value of warrants would decrease to
$8.8m, representing a decrease in fair value of $0.2m. If equity
volatility and revenue volatility were both to increase by 5% to
45% and 35% respectively, the total fair value of warrants would
increase to $9.4m, representing an increase in fair value of
$0.3m.
Exercise of other warrants in the period
Danal Company Ltd exercised a total
of 1,634,699 warrants, exercisable at 141p, for a total
compensation of $3m. As a result, 1,634,699 new common shares of
$0.0001 were issued. The warrants were issued as part of the
initial consideration in respect of the Company's acquisition of
Danal, Inc, announced on 6 December 2018 and completed on 1 January
2019.
9. Dividends
No interim dividend has been paid
or proposed in respect of the current financial period (H1 2023:
nil).
10. Share Capital
At 30 June 2024, Boku, Inc. had
303,028,613 (FY23: 301,066,914) common shares issued and fully
paid. Boku, Inc. has only one class of shares with par value of
$0.0001 each. The authorised share capital is 500,000,000 shares.
Boku, Inc. holds 747,451 shares in treasury (FY23: 4,007,868
shares). During the year the Boku, Inc. purchased back 700,000
shares under the Share buyback programme. The programme was
extended on 8 June 2023 and expired on 30 June 2024.
11. Contingent liabilities
The Group does not believe it has
any potential liabilities or obligations that would have a material
adverse effect on its financial position or results of operations,
including those related to legal disputes, patent claims, or
indemnification agreements.
12. Events after the reporting date
Executive award plan
On 11 September, the shareholders
approved the adoption of the new stretch restricted share unit
plan. This plan will support and reward the performance of the
executive management team of the company in a fair, transparent and
proportionate manner. The awards granted under new share scheme
will be RSUs. The aggregate number of shares that will be allocated
under the new plan will not exceed 3% of issued share capital as at
31 July 2024.
All awards are subject to the same
performance condition being a comparison of the 40-day
Volume-Weighted Average Price ("VWAP") following the release of the
results announcement for the 2027 financial year (expected to be
released in March 2028) (the "Tested Share Price") against 180.4p
(being the 40-day VWAP following the release of the results
announcement for the 2023 financial year on 19 March 2024)
("Base Share Price") as
follows:
·
|
no Awards will vest if the Tested
Share price is less than 3x the Base Share Price;
|
·
|
25% of the Awards vest if the Tested
Share Price is 3x the Base Share Price;
|
·
|
100% of the Awards vest if the Tested
Share Price is 5x the Base Share Price;
and
|
·
|
if the Tested Share Price is between
3x and 5x the Base Share Price, the Awards vest on a straight-line
basis from 25% to 100%. For example, if the Tested Share Price is
4x the Base Share Price, 62.5% of the Awards will vest.
|
Credit facility
The $10m revolving credit facility,
previously available to the Group, expired on 17 September 2024 and
was not renewed. This facility remained undrawn throughout the
period.
NON-IFRS FINANCIAL INFORMATION
Management regularly uses APMs
internally to understand, manage and evaluate the business
performance and make operating decisions. These measures are among
the primary factors management uses in planning for and forecasting
future periods.
Management present APMs because
they believe that these and other similar measures are widely used
by certain investors, securities analysts and other interested
parties as supplemental measures of performance and liquidity. It
is believed these APMs depict the true performance of the business
by encompassing only relevant and controllable events, allowing
management to evaluate and plan more effectively for the
future.
The primary APMs are EBITDA,
Adjusted EBITDA and Adjusted Operating expenses, and Constant
exchange rate which management considers are relevant in
understanding the Group's financial performance. Management
calculates APMs by excluding certain non-cash and one-off items
from the actual results. The determination of whether non-cash
items or one-off items should be excluded, is a matter of judgement
and is based on whether the inclusion/exclusion from the results
represent more closely the consistent trading performance of the
business.
The Group uses the following
APMs
APM
|
Definition and purpose
|
EBITDA
|
Calculated as net income/ (loss)
for the year, less discontinued operations gains, net of tax,
before finance expenses (including finance costs related to lease
liabilities), depreciation and amortisation (including depreciation
of right-of-use assets), and income tax expense/
(benefit).
|
Adjusted EBITDA
|
Defined as earnings before
interest, tax, depreciation and amortisation, non-recurring other
income, share-based payments expense, foreign exchange losses and
exceptional items. Adjusted EBITDA is used internally to establish
forecasts, budgets and operational goals to manage and monitor our
business, as well as evaluate our underlying historical
performance. We believe that Adjusted EBITDA is a meaningful
indicator of the health of our business as it reflects our ability
to generate cash that can be used to fund recurring capital
expenditures and growth. Adjusted EBITDA from continuing operations
also disregards non-cash or non-recurring charges (exceptional
items) that we believe are not reflective of our long-term
performance. We also believe that Adjusted EBITDA is widely used by
investors, securities analysts and other interested parties as a
supplemental measure of performance and liquidity.
|
Adjusted operating
expenses
|
Defined as gross profit less
Adjusted EBITDA.
|
Adjusted EBITDA margin
|
Calculated as Adjusted EBITDA over
revenue for the period.
|
Constant exchange rate measures
(revenue only)
|
Calculated by applying the monthly
average foreign exchange rates for each month of 2023 to the actual
2024 monthly results.
|
Own cash
|
Calculated as cash held plus
amounts due from issuers less amounts owed to merchants
|
A reconciliation of Adjusted EBTIDA
to operating (loss)/ profit is as follows:
|
|
Unaudited
|
Unaudited*
|
|
|
Six months
ended
|
Six
months ended
|
|
|
30 June
2024
|
30 June
2023
|
|
|
$'000
|
$'000
|
|
|
|
|
Adjusted EBITDA
|
|
14,213
|
12,081
|
Other income adjustment
(non-recurring)
|
|
-
|
103
|
Depreciation and
amortisation
|
|
(3,789)
|
(2,967)
|
Share-based payment
expense
|
|
(5,821)
|
(3,978)
|
Foreign exchange loss
|
|
(4,833)
|
(3,132)
|
Exceptional items (included in
administrative expenses)
|
|
(166)
|
-
|
Operating (loss)/ profit
|
|
(396)
|
2,107
|
*The prior period to 30 June 2023 has been restated to exclude
the fair value gain on warrants from administrative expenses.
Additionally, right-of-use assets have been restated resulting in a
reduction in depreciation, further details are set out
below.
Restatement of APMs:
Amounts previously accounted for
under IFRS 16 as right-of-use assets were restated to prepayments
in the condensed consolidated statement of financial position. The
impact on Adjusted EBITDA as a result of the related reduction in
depreciation for the six months ended 30 June 2023 is shown
below.
|
As originally
reported
|
Effect of
restatement
|
Group restated
amounts
|
30
June 2023
|
$'000
|
$'000
|
$'000
|
|
|
|
|
Alternative performance measures (extract)
|
|
Depreciation and
amortisation
|
(3,102)
|
135
|
(2,967)
|
|
|
|
|
Adjusted EBITDA
|
12,216
|
(135)
|
12,081
|
Adjusted EBTIDA margin
|
32%
|
|
31.6%
|
Adjusted operating
expenses
|
24,642
|
135
|
24,777
|
|
|
|
| |
INDEPENDENT REVIEW REPORT
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Boku, Inc.'s
condensed consolidated interim financial statements (the "interim
financial statements") in the Interim Report 2024 of Boku, Inc. for
the 6 month period ended 30 June 2024 (the
"period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB and the AIM Rules for
Companies.
The interim financial statements
comprise:
·
the Condensed Consolidated Statement of Financial
Position as at 30 June 2024;
·
the Condensed Consolidated Statement of
Comprehensive Income for the period then ended;
·
the Condensed Consolidated Statement of Cash Flows
for the period then ended;
·
the Condensed Consolidated Statement of Changes in
Equity for the period then ended; and
·
the explanatory notes to the interim financial
statements.
The interim financial statements
included in the Interim Report 2024 of Boku, Inc. have been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as issued by the IASB and the AIM
Rules for Companies.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the Interim Report 2024 and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the
directors
The Interim Report 2024, including
the interim financial statements, is the responsibility of, and has
been approved by the directors. The directors are responsible for
preparing the Interim Report 2024 in accordance with the AIM Rules
for Companies which require that the financial information must be
presented and prepared in a form consistent with that which will be
adopted in the company's annual financial statements. In preparing
the Interim Report 2024, including the interim financial
statements, the directors are responsible for assessing the group's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility is to express a
conclusion on the interim financial statements in the Interim
Report 2024 based on our review. Our conclusion, including our
Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of complying with the AIM Rules for Companies and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
London
24 September 2024
Glossary
|
|
|
Abbreviation
|
Definition
|
A2A
|
Account to Account based payment
systems allow payments to be made from one bank account to another,
generally in real time. They are contrasted with card-based payment
systems where the payment is mediated through a card scheme. In
A2As the payment is direct. A2A payments can be organised as
schemes, typically under the jurisdiction of the Central Bank (UPI
in India or Pix in Brazil), as interbank initiatives (Twint in
Switzerland, Blik in Poland) or as infrastructure (Open Banking
access to Faster Payments in the UK).
|
AGM
|
Annual General Meeting
|
AIM
|
Alternative Investment
Market
|
AISP
|
Under Open Banking, an Account
Information Service Provider, with consumer consent can access
information about the transactions and balances in the consumer's
bank account. AISPs can then provide services that provide a
consolidated view of a consumer's activity across multiple banks,
or analysis that might not be available from their financial
institution. In the UK, AISPs are authorised by the FCA.
|
APMs
|
Alternative performance measures
are non-GAAP financial measures used by
management to assess and monitor the performance of the
business.
|
ATV
|
The Average Transaction value is
the TPV divided by the total number of successful
transactions.
|
Bundling
|
The distribution of a digital
entertainment company's services through a 3rd party such as a
Telco, TV company, Bank or retailer, typically as part of a new
tariff (e.g. "Get 6 month's streaming music as part of your mobile
phone service"). Boku's services link the distributor and the
entertainment company's systems.
|
Carriers
|
Carriers are the consumers phone
company where purchases can be charged to a phone bill, see
DCB.
|
Constant exchange rate
|
Constant exchange rate is
calculated by applying the monthly average foreign exchange rates
in 2023 to the actual 2024 results.
|
CEO
|
Chief Executive Officer
|
CFO
|
Chief Finance Officer
|
CGU
|
Cash generating unit
|
COO
|
Chief Operating Officer
|
CT
|
Corporation tax
|
DCB
|
Direct Carrier Billing is a form of
payment method whereby consumers can purchase digital goods using
their post-paid mobile phone account or pre-paid mobile phone
balance.
|
DEI
|
Diversity, equity and
inclusion
|
DT
|
Deferred tax
|
EGM
|
Extraordinary General
Meeting
|
EPS
|
Earnings per share
|
eWallet/ digit wallet
|
An eWallet is a type of payment
method that allows a user to undertake transactions online and,
sometimes, offline. A user will link their eWallet to a funding
source which might be a bank account, debit card or cash top up.
The balance in the wallet is then used to fund the purchase. In
some cases, eWallets will have an auto top up feature that allows
funds to be withdrawn from the funding source if there is
insufficient balance. Examples include Alipay, PayPal, Dana or
Gopay.
|
GLT
|
Global Leadership Team
|
Gross margin
|
The difference between revenue and
cost of sales divided by revenue
|
Group
|
Boku, Inc. and its controlled
entities
|
IFRS
|
International Financial Reporting
Standards
|
Issuer
|
The Issuer is the entity within the
Boku system who has the relationship with the consumer, issues them
with payment credentials, collects the amounts owed by the consumer
and settles them. The Issuers within the Boku network include
Mobile Network Operators, eWallet providers and A2A
schemes.
|
LPMs
|
Local Payment Methods are those
which typically operate in a single country. They embrace domestic
card schemes, domestic voucher schemes, mobile network operators,
eWallets, Account to Account based payment systems and Buy Now Pay
Later operators. Local Payment schemes typically operate to their
own standard and are not interoperable with other
schemes.
|
LTIP
|
Long term incentive plan
|
MAU
|
Boku defines a Monthly Active User
as one who has undertaken one or more successful payment
transactions or who has an active bundle within the month in
question. Users who have registered and still have an active
payment method on file are not defined as active unless they have
successfully transacted
|
Merchant
|
The merchant is the party in the
system who wishes to sell products or services to consumers and
needs to support various payment methods in order to collect the
money.
|
MNOs
|
Mobile network operator, see
carrier.
|
Nomad
|
Nominated adviser
|
NPV
|
Net present value
|
Open Banking
|
In Open Banking markets, banks are
required to provide interfaces to authorised 3rd parties
to access account information (AISP) or initiate payments
(PISP)
|
PISP
|
Under Open Banking, a Payment
Initiation Service Provider, with consumer consent, can initiate
payments from the consumer's bank account. In the UK, PISPs are
authorised by the FCA.
|
Platform
|
The platform that Boku have built
to connect Merchants and local payment methods.
|
PPA
|
Price purchase
allocation
|
PSP
|
A Payment Service Provider acts as
a technical layer connecting a merchant to various issuers. The
base level of service is the transaction model where only technical
services are provided. It can be supplemented by the settlement
model whereby funds are collected and settled to those
merchants.
|
PwC
|
PricewaterhouseCoopers
LLP
|
RCF
|
Revolving credit
facility
|
RSU
|
Restricted Stock Units are share
awards subject to a vesting schedule and certain vesting
conditions.
|
Settlement Model
|
In the Settlement model, Boku
provides not only technical transaction processing services but
also collects the funds due from the Issuers and settles them to
the merchant in the currency of their choice.
|
SID
|
Senior Independent
Director
|
SMS aggregator
|
Company used by Boku used to
purchase SMS messages in bulk.
|
Take Rate
|
Take rate is defined as revenue
divided by TPV. It is a measure of the average price
obtained.
|
TPV
|
Total Payment Volume is total value
transacted through the system quantified in US dollars. For
payments, this is the total amount successfully transacted by
consumers translated into USD at average FX rates for the month.
For bundling transactions, it represents the total retail value of
the bundles. In some cases, this value is inferred from
revenue.
|
Transaction model
|
The Transaction Model is when Boku
provides solely technical connectivity services to a merchant who
arranges for settlement directly with the issuer.
|
WACC
|
Weighted average cost of
capital
|