Home » Market News » DirectorsTalk Highlights » Boku well positioned in difficult times
Boku Inc.

Boku well positioned in difficult times

Boku Inc (LON:BOKU), the world’s leading independent carrier commerce company, today announced its audited results for the year ended 31 December 2019.

Financial Highlights

· Revenue of $50.1 million up 42% on 2018 (2018: $35.3 million)

· Adjusted EBITDA* 17% higher at $7.4 million (2018: $6.3 million). Revenue includes $3.3m of non-recurring Payments Revenue; to better reflect underlying performance, this non-recurring revenue is excluded from Adjusted EBITDA

· Payments division performed well with Revenues increasing to $43.5 million, delivering a 100% increase in Adjusted EBITDA of $12.8 million (2018: $6.3 million)

· Net Profit after Tax of $0.4 million compared with Net Loss after tax of $4.3 million for 2018

· Closing cash balances as at 31 December 2019 were $35.6 million – compared with $32.3 million at 31 December 2018

· Monthly average cash balances in December 2019 were $22.4 million, compared with $22.2 in June 2019 and $24.4 million in December 2018

Operational Highlights

· Total Payment Volumes (“TPV”)** of $5.0bn for 2019 compares with $3.6bn in 2018. Growth was steady throughout the year with volume in H2 2019 $418 million higher than in H1 2019

· Monthly Active Users (“MAU”) of the Boku Payments Platform in December 2019 increased to 17.8 million, up 2.6 million from the half year and 4.4 million higher than December 2018

· During 2019 nearly 19 million end-users made their first transaction through Boku

· Good progress on building out Mobile Wallets

· Integration of Identity business which was created following the acquisition of Danal Inc on 1 January 2019, for a total finalised cost of $25.1 million

· Identity billable transactions up by 45% to 253 million

* Adjusted EBITDA: Earnings before interest, tax, depreciation, amortisation, non-recurring payments revenue adjustment, stock option expense, foreign exchange gains/(losses), and exceptional items

 ** TPV is the US$ value of transactions processed by the Boku platform

Post-period end Highlights

· Strong start to the year. In January and February 2020 TPV grew to $966 million, an increase of 30% compared to the same period last year, a slightly larger increase than anticipated

· In February 2020 daily volumes showed an increase over January 2020 against the background of the increasing prevalence of COVID-19 worldwide. Average TPV per day increased by 2.5% in February 2020 compared to January 2020 and Daily Average Users (“DAU”) were 4% higher in February 2020 than January 2020

· Trends seen in January and February 2020 have continued into March 2020 with significant increases in new users of the Boku Payments Platform, particularly for streaming video services and gaming in those countries hardest hit by COVID-19

Jon Prideaux, Chief Executive of Boku Inc, commented:  “2019 has proven to be another year of exceptional growth for Boku. The Group has continued to build upon the strength and depth of the Boku Platform, which has allowed the Company to report a maiden profit after tax. There has been a focus on integrating and growing our Identity business which was created following the acquisition of Danal Inc at the beginning of the year and I am pleased with how things are progressing in this division, billable transactions have increased by 45% to 253 million and Identity revenues up 26% on 2018 to of $6.7m. Our state-of-the-art Platform now connects most of the world’s largest digital merchants and more than 190 carriers worldwide and we continue focus on delivering first class products and services to our customers.

“Boku is a business where much of the growth is built in. A lot of groundwork has been done in 2019 to set us up for success in 2020. Volumes and revenues in one year are, barring accidents, largely the result of efforts made in the previous one.  Just such a shock, COVID-19, has cast a long shadow over many businesses. Boku however is very well placed: operations are unaffected — our team is used to working remotely. New implementations are mostly proceeding with, at worst, minor delays. New sales and business development are more difficult without face to face contact, though opportunities are being pursued.  As our services are delivered digitally, supply has not been disrupted; on the demand-side, the more people stay at home the more they play games, download apps and use streaming services. We have seen definite evidence of recent increased volumes in countries with social distancing measures in place.

“In Payments, our existing merchants and connections will continue to perform strongly for as long as lockdown measures are in place. There is a strong pipeline of new deployments, especially from higher margin settlement model merchants to be implemented. As yet, our DCB deployment plans have not been materially affected. There is also potential material upside from Mobile Wallets.

“On Identity, our focus in 2020 is continuing to build out our international carrier connections to create a truly global offering. Demand remains strong, including from global customers. Transaction processing on existing customers is continuing unaffected. Identity has a greater dependence on new business to hit full year expectations and so is unlikely to perform as strongly as Payments, with its larger installed base.

“There will be a time when we can look back at the COVID-19 pandemic and take stock of its impact. For now, it’s too soon to tell. We know not how long it will last nor how it will end, but at least for Boku, its employees, customers and suppliers we are able to say with confidence that Boku is well positioned in difficult times.”

Receive our exclusive interviews – Enter your email to stay up to date.

Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.