REG - Boku Inc - Results for the year ended 31 December 2024
18/03/2025 07:15
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RNS Number : 0927B Boku Inc 18 March 2025
This announcement contains inside information
18 March 2025
Boku, Inc.
("Boku", the "Company" or the "Group")
Audited Results for the year ended 31 December 2024
Delivered robust revenue and adjusted EBITDA growth while strategically
investing in future business growth
Expecting medium term organic revenue growth exceeding 20% (CAGR) and adjusted
EBITDA margin of greater than 30% accreting from 2026
Boku (AIM: BOKU), a global network of localised payment solutions, is pleased
to announce its audited results for the year ended 31 December 2024 ("FY
2024").
Financial Highlights FY 2024 FY 2023 % change
$'000 $'000
DCB Revenue 73,322 66,100 +11%
Other LPM Revenue 25,951 16,620 +56%
Total Revenue 99,273 82,720 +20%
& +24% at CER(1)
Adjusted EBITDA(1) 31,412 25,799 +22%
Adjusted EBITDA Margin(1) 31.6% 31.2% +4bps
Operating Profit 6,156 9,716 -37%
Cash Balances 177,333 150,859 +18%
Average Cash Balances(1) 153,941 131,665 +17%
Own Cash(1) 80,249 72,919 +10%
Financial Highlights
· Total Group revenues increased organically by 20% to $99.3 million (FY 2023:
$82.7 million), or c.24% on a constant exchange rate basis.(1)
· Direct Carrier Billing ("DCB") (2) revenues grew by 11% to $73.3 million (FY
2023: $66.1 million), representing 7% growth in DCB payments(2) and c.50%
growth in DCB bundling(2).
· Revenue from other Local Payment Methods ("LPMs") (2) - Digital Wallets(2) and
Account to Account schemes ("A2A") (2) - increased by 56% to $26.0m (FY 2023:
$16.6m) accounting for 26% of total revenues (FY 2023: 20%). Other LPM revenue
contributed 27% of total revenues in H2 2024, increasing to 30% by the end of
2024.
· Adjusted EBITDA(1) increased by 22% to $31.4 million (FY 2023: $25.8 million),
reflecting an adjusted EBITDA margin(1) of 31.6% (FY 2023: 31.2%). This is in
line with our commitment to deliver an adjusted EBITDA margin of above 30%
while we continue to undertake important investment initiatives in both our
product offering and delivery capability to support future business growth.
· Operating profit of $6.2 million (FY 2023: $9.7 million). Reduction in
operating profit, despite a $5.6m increase in adjusted EBITDA, primarily due
to increases in foreign exchange revaluation losses on non-USD balances
(largely JPY) and share based payment expenses driven by increases in both the
number of awards granted, to a growing number of staff, and the Boku share
price.
· A fair value loss on the Amazon warrants of $3.4m was recognised (FY 2023:
fair value gain of $0.1m) reflecting increases in the Boku share price.
· Interest income increased to $3.7 million (FY 2023: $1.9 million) due to
higher average cash balances and more funds being placed on interest bearing
and/or longer-term deposits.
· Total Group cash increased by 18% to $177.3 million at 31 December 2024 (31
December 2023: $150.9 million). Average cash balances (1) during the year
increased by 17% to $153.9m (2023: $131.7m). The Group remains debt free.
· Boku's own cash (1) increased by 10% to $80.2 million at 31 December 2024 (31
December 2023: $72.9m). This balance includes the impact of repurchasing 4.7
million shares in the year at a cost of $10.7m and the receipt of $3m from
Danal relating to the exercise of warrants granted upon acquisition. Excluding
these items Boku's underlying own cash(1) increased by 21% in the year.
Operational Highlights
· Monthly Active Users ("MAUs") (2) of the Boku platform in December 2024
increased by 29% to 87.1 million (December 2023: 67.4 million).
· 83.1m new users made their first payment or bundling transaction through the
Boku platform during the year (FY 2023: 66.1 million).
· Total Payment Volumes ("TPV") (2) reached $12.4 billion, up 18% from $10.5
billion in FY 2023. On a constant exchange rate basis(1) this represents a
c.23% increase year on year.
· Continued strong growth in other LPMs with new users increasing by over 50%
year on year.
· Boku completed more than 100 new connections across various jurisdictions,
demonstrating our capability to link our issuer network with the world's
largest global tech giants.
· Highlights during the year include Boku's first e-commerce launch in Japan
together with the addition of BLIK as a form of payment in Poland. The latter
represented our first LPM connection for one of the world's largest merchants,
extending our already strong DCB relationship.
· Take rate(2) increased by 1 basis point to 0.80% reflecting a growing
percentage of our business coming from LPMs with higher take rates (FY 2023:
0.79%).
· Continued investment in scaling systems and people with key senior hires in
the year including three new executives adding significant depth and scale to
the existing team.
Current Trading and Outlook
We have started 2025 strongly and have a healthy and increasing pipeline of
opportunities. Consequently, the Board expects greater than 20% revenue growth
in FY25, significantly exceeding current consensus(3) expectations, with an
adjusted EBITDA margin of greater than 30%.
In addition, while annual growth rates may vary, we are expecting organic
revenue growth exceeding 20% on a compound annual growth rate (CAGR) basis
over the medium term. We are also expecting an adjusted EBITDA margin
exceeding 30% with progressive accretion from 2026 as we benefit from the
operational leverage generated by our ongoing investments. The future is
bright as we continue on our journey to becoming the world's best localised
payments partner for global commerce.
(1) These represent alternative performance measures (APMs) for the Group.
Refer to the APM section at the end of this announcement for a summary of APMs
used, together with their definitions.
(2) For a full list of definitions and abbreviations used by the Group, refer
to the Glossary at the end of this announcement.
(3) FY 2025 Consensus as of Monday 17 March 2025 is Revenue $109.6m and
adjusted EBITDA $36.0m.
Stuart Neal, Chief Executive of Boku, commented, "Boku's strong financial
health and positive momentum reaffirms our position as a leader in Local
Payment Methods (LPMs). With robust organic revenue and adjusted EBITDA
growth, we continue to invest in capabilities that will drive future business
expansion. Our deepening partnerships with global tech giants highlight the
growing need for them to offer broader payment options to consumers beyond
traditional payment cards. By consistently delivering for these merchants at
scale with reliability, compliance, and innovation, we have strengthened our
role as a key partner in their own market expansion. We are excited to be on
the path to becoming the world's best localised payments partner for global
commerce."
Board Update
The Board is committed to orderly and structured succession planning. Given
the current Chair, Dr Richard Hargreaves is approaching nine years in office
the Board has agreed to commence an initial search for a new Chair. Dr
Hargreaves has agreed to remain as Chair until a suitable successor is
identified and appointed to the Board
Analyst Briefing
The Company's management will be hosting a presentation for analysts today at
9.30 a.m. GMT. Those analysts who wish to attend the briefing and have not
already registered should contact Florence Staton at
florence.staton@investor-focus.co.uk
(mailto:florence.staton@investor-focus.co.uk) or on +44(0)20 3934 6636.
Investor Presentation
The Company will provide a live investor presentation relating to the results
via a Zoom webinar at 5.30 p.m. GMT today. The presentation is open to all
existing and potential shareholders. Those wishing to attend should register
via the following link:
https://us02web.zoom.us/webinar/register/WN_8JjYQM3mT1yn_v4OQBcJRw
(https://us02web.zoom.us/webinar/register/WN_8JjYQM3mT1yn_v4OQBcJRw)
There will be the opportunity for participants to ask questions at the end of
the presentation. Questions can also be emailed to boku@investor-focus.co.uk
(mailto:boku@investor-focus.co.uk) ahead of the presentation.
The information contained within this announcement is deemed by Boku to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 (as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018) ("MAR"). On the publication of this
announcement via a Regulatory Information Service, such information is now
considered to be in the public domain. For the purposes of MAR, the person
responsible for arranging for the release of this announcement on behalf of
Boku is Robert Whittick, Chief Financial Officer.
Enquiries:
Boku, Inc. +44 (0)20 3934 6630
Stuart Neal, Chief Executive Officer
Robert Whittick, Chief Financial Officer
Investec Bank plc (Nominated Advisor & Joint Broker) +44 (0)20 7597 5970
Nick Prowting / Kamalini Hull / Patrick Robb
Peel Hunt LLP (Joint Broker) +44 (0)20 7418 8900
Neil Patel / Ben Cryer / Kate Bannatyne
IFC Advisory Limited (Financial PR & IR) +44 (0)20 3934 6630
Tim Metcalfe / Graham Herring / Florence Staton
Note to Editors:
Boku Inc. (AIM: BOKU) is a leading global network of localised payment
solutions. Boku's mobile-first payments network, including digital wallets,
direct carrier billing, and A2A (account to account)/real-time payments
schemes, reaching over 7 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, 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, France, Germany, Indonesia,
Japan, Singapore, Spain, Taiwan and Vietnam.
To learn more about Boku Inc., please visit: https://www.boku.com
(https://www.boku.com/)
Chair's Statement
As our Annual Report demonstrates, Boku has continued its strong momentum,
delivering impressive growth in revenue, adjusted EBITDA and cash, with
operating profit seeing a modest decline in the year. Boku has also enhanced
its global footprint and broadened its capabilities in Local Payment Methods
(LPMs) to support the world's leading digital merchants. These are
achievements of which the Boku team can be very proud.
During the year, we significantly strengthened and expanded the management
team and made considerable investment in the future development of LPMs which
is where we expect to see much of our future growth. As stated elsewhere in
this report, our overall goal is to become the world's best localised payments
partner for global commerce. An ambitious but, we believe, achievable goal.
Leadership, Governance and Shareholder Engagement
As anticipated in my report last year, 2024 was a year of significant
transition. Having now had over a year in post as CEO, I am thrilled to
confirm that Stuart Neal's return to Boku (having previously been CFO at the
time of the IPO and then CEO of the Identity division which we sold in 2022)
has been a great success. He has deep sector and institutional knowledge,
strategic acumen, and leadership experience - all of which are needed as we
continue down our ambitious growth path.
We have also strengthened our leadership team by welcoming Rob Whittick (Chief
Financial Officer), Vic Rodgers (Chief People Officer), and Paul Jarrett
(Chief Treasury and Banking Officer). Their expertise, acquired at much larger
companies, will be instrumental as Boku scales to become the world's best
localised payments partner for global commerce.
Our Board has eight directors, two are executives and six are non-executives
(four of whom the Board considers to be independent). I believe the Board has
the right mix of industry expertise, regulatory knowledge, and strategic
insight to support Boku's ambitious expansion plans.
I have been privileged to be one of Boku's non-executive directors since
before our IPO and to have played my small part in Boku's development over
nearly nine years. In the UK, that is generally seen as the time limit beyond
which a non-executive's, independence is questioned. With this in mind, I have
notified the Board of my intention to retire from the Board once we have found
a suitable replacement. The Board has set a demanding specification for this
role and finding the right person with the appropriate skillset and experience
for the next phase of growth at Boku is seen as more important than the
timing. We have commenced an externally facilitated search process and will
update the market at the appropriate time on progress.
Compliance in all we do remains central to our operations, and we continue to
strive for the highest standards of regulatory adherence and risk management.
We also welcome the recent revisions to the QCA Corporate Governance Code.
Ahead of its due date we have adopted the recommended practice of submitting
all directors for annual election by shareholders at the AGM.
We are also acutely aware of the challenges facing the London public markets -
and AIM in particular. Limited share liquidity is an issue facing most
companies quoted in London, and to help ease the impact on our own liquidity
and where we consider shares to be undervalued we have established a share
buyback plan which our cash generation allows us to do. I am also very pleased
to see that the last Budget did not completely remove the Inheritance Tax
planning benefits of investing in the AIM market, even though the benefit was
reduced.
We have worked hard on shareholder engagement. Our shareholders mainly come
from the UK, Europe and the USA and Stuart Neal and Rob Whittick have
regularly met with institutional shareholders and prospective shareholders. I
am always available to speak to any shareholder or analyst. We are pleased
that our shareholders have given us strong support and encouragement as our
growth plan continued to develop.
Investing for Scale and Future Growth
To support our ambitious expansion, in addition to our strengthened leadership
team, we have invested heavily in technology, automation, finance and
compliance. Ongoing enhancements to our platform include improving levels of
straight-through processing, global treasury capabilities, and real-time
cross-border money movement, all of which are critical for handling higher
transaction volumes efficiently.
As part of our ambitious growth plan and following shareholder consultation
the Board asked for, and received, shareholder approval of an additional
long-term incentive scheme for the executive management team. This Stretch
Restricted Share Unit (SRSU) Plan is designed to reward exceptional
shareholder value growth between March 2024 and the date on which the results
announcement for the 2027 financial year is released (expected to be March
2028) with a holding period until vesting, in two instalments after which they
convert into common shares. They will only start to vest if the share price
reaches 541.2p (GBP) or more and they are capped at a share price of 902p
(GBP). We appreciate our shareholders' valuable input in shaping the final
plan, ensuring it aligns with our long-term goals while incentivising
exceptional performance from which all stakeholders will benefit.
Commitment to Culture
Boku's success is driven by its people and culture. We have a diverse
workforce spread around the world and I am proud of the dedication and
innovation they continue to display. Despite significant operational expansion
and leadership transitions, our team has embraced change with passion and
agility. It is worth noting that our largest customers include many of the
largest US technology companies who are some of the most demanding customers
we could have, so the team's commitment to exemplary customer service is
crucial to our success. That, in turn, offers the team high levels of work
satisfaction which, I believe, is one reason why they show such dedication and
enthusiasm.
Looking Ahead - An Exciting Future
Boku has had a great year, with strong financials, a growing market presence
and a powerful strategic vision.
As we move through 2025, our focus and investment will be aligned with our
five growth pillars:
· Grow core and develop new revenue streams
· Drive product innovation
· Increase operational efficiency
· Strengthen compliance and risk management
· Be a great place to work
The Board remains highly confident in Boku's future and its ability to
capitalise on the ongoing transformation in global payments.
Finally, I would like to express my gratitude to our employees, executive
team, board members, and shareholders for their continued support and
commitment. Boku is on an exciting journey, and I am proud to be part of it.
Richard Hargreaves
Non-Executive Chair
18 March 2025
Chief Executive Officer's Report
As I reflect on my first year as Boku CEO, I must say that I am pleased with
the progress that we have made against our multi-year journey to become the
world's best localised payments partner for global commerce. We delivered
strong financials with continued organic revenue growth together with solid
and sustained adjusted EBITDA margin, whilst also investing meaningfully in
core capabilities that will pave the way for the company to grow substantially
over the coming years. The company is in robust financial health, is cash
generative and has capacity to self-fund future growth.
We have once again been proud to support many of the world's largest tech
giants, as they continue to grow their businesses into new markets and
penetrate deeper into existing ones, by allowing them to offer greater payment
choice to consumers. These days, merely offering Visa and MasterCard as a
method of payment will not necessarily enable all consumers in a market to pay
for your products/services.
Throughout 2024, these existing merchants continued to deepen their
partnerships with us, expanding their access to consumers by offering more
Local Payment Methods (LPMs) via the Boku network. This sustained growth
reflects the trust we have built through consistent execution, reliability,
and a seamless payment experience. Our ability to deliver at scale, coupled
with our commitment to compliance and innovation, has reinforced our position
as a key partner for these industry leaders as they extend their reach in
existing and new markets.
It is a pivotal time for the Payments industry, where payment methods
previously referred to as "alternative" are now breaching into the mainstream.
I recently wrote an article about how the piano top life raft, a parable first
floated (excuse the pun) by American architect Buckminster Fuller in the 1900s
is a useful analogy for the way the payments industry is changing. The piano
top parable goes like this: imagine you're shipwrecked and adrift on the
ocean. The ship's grand piano floats by. You grab onto it, and it keeps you
afloat. From that moment on, because the piano top saved your life, it becomes
your go-to life raft.
The traditional plastic card-based payment systems that have dominated global
commerce for 50 years are like the piano top life raft. They did a great job,
but now there is a wave of new rafts tailored to modern businesses and their
customers.
In today's world of global commerce, a range of LPMs, including Digital
Wallets, Account to Account (A2A) payments and Direct Carrier Billing (DCB),
designed initially for facilitating payments domestically, have flooded the
scene offering greater convenience and opportunity.
Boku is therefore benefiting from three concurrent tailwinds relating to LPMs:
i. the rapid consumer adoption of LPMs across all continents (i.e. phones and not
plastic)
ii. the repatriation of payment systems by central banks away from Visa and
MasterCard domination a "pull" from larger global merchants who want to get
paid cheaper and faster, avoiding the multi-lateral
iii. interchange fees and other associated scheme fees of the card processors.
At Boku, we have been anticipating that these trends would unfold for many
years as we have steadily been adding more LPMs to our original network of DCB
connections. These LPMs help our merchants to grow their businesses into new
markets and cross-border. Our global network now incorporates over 250 LPMs,
including increasingly popular payment methods in Italy (Satispay), Poland
(BLIK), India (UPI), Nigeria (NIBSS) among many others. The Company is at an
inflection point as the rapid growth in Digital Wallet and A2A payment
adoption becomes a progressively meaningful part of our business.
It is pleasing to see how the slick, tokenised checkout experience for DCB
remains a popular way to buy digital content in many countries and
consequently continues to show good growth in mature markets such as Taiwan,
Japan, Germany, UK and Switzerland. We are also seeing adoption momentum in
newer markets in the Middle East where a short-term, interest free line of
credit to consumers (provided by Mobile Network Operators) is proving popular
in markets such as Saudi Arabia and Iraq.
During the year we added capability to support online retail (e-commerce), a
market with more complex dynamics and requirements to that of digital. In the
world of e-commerce, the demands on the payment provider are greater and
include processing significant volumes of refunds and handling the split
between authorisation of a payment at the time of order and capture of the
funds at the time of despatch. The ability for Boku to bring LPMs into the
broader world of online retail gives us the right to play in an addressable
market that is predicted to be valued at >$10 trillion by 2028 (source:
Juniper research(1)).
With this added functionality, Boku now supports cross-border payments not
only for digital streaming subscriptions and gaming (note - not gambling), but
also broader e-commerce, online advertising, subscription software and online
travel.
It is because of this sizable market opportunity that we are making necessary
ongoing investments into scaling internal processes as well as upgrading
systems, adding increased product functionality and introducing a global
treasury and banking capability. These investments in automation will continue
throughout 2025 and will deliver the potential to process larger transaction
volumes at higher velocity across our platform. We will also be able to
automate the segregation of funds to ensure we continue to meet regulatory
requirements, increase levels of automation within the reconciliation and
settlement of money flows in and out of our growing network of global banking
partners and exchange currencies real time all over the world.
Our investment in scaling systems is being matched by scaling efforts with our
people, having added significantly to the talent pool during 2024, combined
with ongoing expansion of the licensing, risk management, compliance and
finance functions - all key and necessary components for being a scale global
payments player. During 2024, three new executives were added to the Boku
leadership team: Rob Whittick, Chief Financial Officer (formerly NatWest), Vic
Rodgers, Chief People Officer (formerly AO.com) and Paul Jarrett, Chief
Treasury & Banking Officer (formerly Zepz). These new additions to the
exec table have added a huge amount of depth and scale experience to the
existing leadership team.
Clearly, achieving all the above would not be possible without the collective
talent, passion and hard work from every Boku employee from around the world.
Despite our relatively small size, our organisation spans the globe, with over
450 employees in over 30 countries. We know how to be truly global - executing
at pace for our merchants, with a clear global approach matched by local
knowledge and expertise. This exceptional team have embraced a huge amount of
change over the past 18 months, with changes at the leadership table, and
increased ambition and growth agenda, culminating in our newly articulated
Vision to become the world's best localised payments partner for global
commerce.
Whilst we grow and scale, adding organisational rigour, process and governance
become increasingly important, but we actively fight to preserve the vibrant
culture that has successfully enabled Boku to reach this point.
Looking Ahead To 2025 And Beyond
Looking ahead, our strategy will revolve around five core pillars-growing
revenues, product innovation, driving operational efficiencies, maintaining a
robust risk and compliance framework, and being a great place to work. Within
these there are three material vectors of growth for Boku over the coming
years:
· Continuing to be a strategic growth partner to our existing global merchants,
helping them fulfil their own global expansion ambitions, by connecting them
to more LPMs across more markets. This expansion will include launching PIX in
Brazil during 2025 and leveraging our recently obtained cross-border
permissions for UPI in India. We will continue to add new capabilities in MENA
and be a partner of choice for LPMs in our heartlands of APAC and Europe.
· Attracting new global and regional enterprise merchants to the network by
introducing direct sales capacity and/or partnering up to grow our presence in
the wider market. We hugely value our existing merchant base - names to die
for - and we also see potential to attract more big names to our network. The
value of LPMs is not simply attractive to the very largest companies.
· Creating margin opportunity by adding new functionality to our product
offering, for example helping merchants repatriate funds cross-border from
difficult places will add value over and above core payment processing. It is
surprising how even some of the largest global companies struggle with money
movement cross-border. Having the right entities, licenses, banking partners
and "know how" in the right places will be a differentiating factor for Boku
going forward.
We have started 2025 strongly and have a healthy and increasing pipeline of
opportunities. Consequently, the Board expects greater than 20% revenue growth
in FY25, significantly exceeding current consensus(2) expectations with an
adjusted EBITDA margin of greater than 30%.
In addition, while annual growth rates may vary, we are expecting organic
revenue growth exceeding 20% on a compound annual growth rate (CAGR) basis
over the medium term. We are also expecting an adjusted EBITDA margin
exceeding 30% with progressive accretion from 2026 as we benefit from the
operational leverage generated by our ongoing investments. The future is
bright as we continue on our journey to becoming the world's best localised
payments partner for global commerce.
We look forward to presenting our progress and outlining the next phase of our
growth strategy during our upcoming Capital Markets Day on 2 June 2025 of
which we will share details in due course.
(1) Boku & Juniper Research, 2024. 2024 Global Ecommerce Report. Available
at
https://www.boku.com/boku-knows/2024-boku-global-ecommerce-report
(https://www.boku.com/boku-knows/2024-boku-global-ecommerce-report)
(2) FY 2025 Consensus as of Monday 17 March 2025 is Revenue $109.6m and
adjusted EBITDA $36.0m.
Stuart Neal
Chief Executive Officer
18 March 2025
Chief Financial Officer's Report
Delivering robust revenue and adjusted EBITDA growth, while strategically
investing in future business growth
Introduction
I am pleased to present Boku's full-year results for the year ended 31
December 2024. This has been a year of significant progress for Boku,
evidenced, in part, by our strong financial performance. Revenues increased by
20% (or 24% on a Constant Exchange Rate(1) (CER) basis) to $99.3m (FY 2023:
$82.7m) driving a 22% increase in adjusted EBITDA to $31.4m (FY 2023: $25.8m)
and an adjusted EBITDA margin of 31.6% (FY 2023: 31.2%). We have delivered an
operating profit in the year of $6.2m (FY 2023: $9.7m).
This financial performance has been underpinned by strong operational metrics.
A year-on-year increase of 18% (or 23% on a CER basis) in Total Payment
Volumes (TPV) driven by a 29% increase in Monthly Active Users (MAU).
Our journey to becoming the world's best localised payments partner for global
commerce is advancing rapidly. Our position as a market leader in Direct
Carrier Billing (DCB) continues to be reinforced with revenues growing by 11%
in the year. In addition, we continue to diversify our revenue streams by
investing in other, higher growth, Local Payment Methods (LPMs) - Digital
Wallets and Account to Account (A2A) - where we have seen meaningful revenue
growth of 56% in the year. These products now represent 26% of total revenues.
We remain committed to undertaking important investment initiatives in both
our product offering and delivery capability to support future business
growth. Whilst making this investment we have delivered on our commitment to
maintain an adjusted EBITDA margin of over 30%, reporting an adjusted EBITDA
margin of 31.6% (FY 2023: 31.2%). We continue to generate cash through our
business activities with our year end own cash balance increasing by 10% to
$80.2m from $72.9m in the prior year. This 10% increase is after $10.7m
related to the purchase of our own shares under our ongoing share buyback
program and $3m of cash received from Danal relating to the exercise of
warrants - excluding these items our own cash increased 21% in the year.
The achievements of this past year reflect the ever-increasing strength of our
platform, the value we deliver to our global merchants, and the growing demand
for localised payment solutions. I am excited about the opportunities ahead as
we continue to deliver for our merchants and shareholders alike.
Expanding user base driving increased volumes and diversified revenue growth
Our robust revenue growth was underpinned by strong operational metrics and
strategic network development, reflecting our focus on scalable future
business growth.
Revenue Performance FY 2024 FY 2023 % change
$'000 $'000
DCB Revenue 73,322 66,100 +11%
Other LPM Revenue 25,951 16,620 +56%
Total Revenue 99,273 82,720 +20% &
+24% CER
Operational Highlights FY 2024 FY 2023 % change
Total Payment Volumes (TPV) $12.4bn $10.5bn +18% &
+23% CER
Take Rates 0.80% 0.79% +1bp
Monthly Active Users (MAU) in December 87.1m 67.4m +29%
New users for 12 months to December 83.1m 66.1m +26%
As Boku continues to connect our merchants into our issuer network, our MAUs
have increased by 29% to reach 87.1 million in December 2024 (December 2023:
67.4 million). Likewise, new users for the 12 months to December grew by 26%
during the year, totalling 83.1 million (FY 2023: 66.1 million).
These increased user numbers reflect the success of our ongoing efforts to
develop connections across our network providing more value to our merchants.
We have also continued to develop our geographic footprint, further enhancing
our ability to support new and existing merchants globally. Alongside this, we
completed more than 100 new connections across various jurisdictions,
demonstrating our capability to link our issuer network with the world's
largest merchants. Highlights in 2024 include our first e-commerce launch in
Japan together with the addition of BLIK as a form of payment in Poland. The
latter represented our first LPM connection for one of the world's largest
merchants, extending our already strong DCB relationship. This progress has
contributed to a 23% increase in TPVs on a CER basis which now stand at $12.4
billion (FY 2023: $10.5 billion).
As part of our focus on operational efficiency, we have made the strategic
decision to disconnect certain merchants and close selected LPMs that are not
economically viable for our business. Additionally, we have seen some
consolidation of LPMs during the year.
Our take rate increased by 1 basis point to 0.80% in 2024 (FY 2023: 0.79%)
reflecting a growing percentage of our business coming from LPMs with higher
take rates.
Looking at the product mix, DCB, which includes DCB payments and DCB bundling,
delivered revenue growth of 11% and we expect growth at a similar level in the
near term. Within that, there has been a 7% growth in DCB payments and c.50%
growth in DCB bundling. We continue to see merchants launching DCB connections
including in key markets such as Taiwan, Turkey and the Middle East.
At the same time, other LPMs continue to gain momentum, with revenue growing
by 56% year on year. These products now account for 26% of our total revenue,
up from 20% in 2023 - notwithstanding an 11% growth in DCB. This growth is
driven by strong operational metrics in other LPMs, with new users rising by
57% to 21.5 million (FY 2023: 13.7 million). This illustrates the progress we
are making in delivering new LPMs and developing existing connections that
continue to diversify our revenue streams towards higher growth products. This
is something we are well positioned to do given our long standing DCB
relationships with many of the world's largest tech giants who are working
with us to connect them to other LPMs around the world. This is a trend we
expect to continue going forward. Other LPM revenue contributed 27% in H2 2024
increasing further to 30% as we exited 2024.
Investing in our future
Our adjusted operating expenditure rose to $65.4 million (FY 2023: $54.9
million) whilst maintaining our commitment to an adjusted EBITDA margin of
above 30%. We continue to take a disciplined and strategic approach to
investment, ensuring that our resources are channelled into initiatives that
drive scalability, foster innovation, and secure future business growth.
These investment initiatives include:
· Our first retail (e-commerce) launch, which required enhancing the
functionality of our platform to support this type of payment activity
· Achieving authorisation from the Reserve Bank of India to operate as a Payment
Aggregator for Unified Payments Interface (UPI)
· Connecting increasing numbers of LPMs to some of the world's largest online
merchants
· Enhancing our platform to enable increasing levels of straight through
processing
· Expansion of our foreign exchange and money movement capabilities
· Submitting an authorisation request to the FCA to offer both account
information services and payment initiation services in the United Kingdom
which was subsequently obtained early in 2025.
Operating Performance FY 2024 FY 2023 % change
$'000 $'000
Adjusted EBITDA(3) 31,412 25,799 +22%
Adjusted Operating Expenses(4) 65,442 54,871 +19%
Adjusted EBITDA Margin(5) 31.6% 31.2% +4bps
Operating Profit 6,156 9,716 -37%
(3) Adjusted EBITDA is an alternative performance measure (APM) calculated as
operating profit before non-recurring other income, depreciation,
amortisation, share-based payment expense, foreign exchange gains/ (losses)
and exceptional items (see the APM section of this report for further
details).
(4) Defined as gross profit less adjusted EBITDA.
(5) Calculated as adjusted EBITDA over revenue for the year.
Review of Other Operating Expenses and Other Items
Boku reported an operating profit of $6.2 million for the year (FY 2023: $9.7
million). This reduction in operating profit, despite a $5.6 million increase
in adjusted EBITDA can be explained as follows:
· Share-based payment charges have increased to $10.5m from $7.6m in the prior
year primarily due to the increased number of share awards granted as staff
numbers rise and an increase of more than 30% in our share price. Boku
operates a number of different award schemes:
o Restricted Stock Unit (RSU) awards are granted to all staff and vest in full
over 3 years.
o Performance RSU (PRSU) awards are granted to executive employees and vest
after 3 years subject to certain performance conditions; and
o Stretch RSU (SRSU) awards relate to a new executive plan which was approved by
shareholders during the year. The awards vest in 2028 and 2029 depending on
Boku's share price performance following the 2027 results. 25% of the awards
granted vest if the share price reaches three times the base price of 180.4p
(541.2p), rising on a straight-line basis to 100% if it reaches five times
180.4p (902p). See note 22 for more details.
· Foreign exchange losses of $6.0m were reported in the year compared to losses
of $1m in FY 2023. These are largely driven by losses on the revaluation of
non-USD balances (largely JPY) during the first half of FY 2024.
· Exceptional items of $0.9m related to finance transformation costs, a one-off
refund from an issuer and employee restructuring expenses (FY 2023: $nil).
· Depreciation increased from $1.8m in FY 2023 to $2m in FY 2024 due to a new
operating lease and increased capital expenditure driven by increasing staff
numbers and the related IT equipment costs.
· Amortisation of internally generated intangibles has increased from $3.6m in
FY 2023 to $4.5m in FY 2024 reflecting the increase in capitalised expenditure
e.g. developments for recent e-commerce launch. This was offset in part by a
decrease in amortisation of acquired intangibles from $2.2m to $1.4m owing to
a catch-up of accelerated decommissioning charges in the prior year.
Other items below the operating profit line include:
· A fair value loss on the Amazon warrants of $3.4m was reported in FY 2024
compared to a fair value gain of $0.1m in FY 2023 reflecting increases in our
share price. See note 18 for further detail.
· Interest income increased to $3.7m in FY 2024 from $1.9m in FY 2023 due to
higher average cash balances and more funds being placed on interest bearing
and/or longer-term deposits.
The Group reported a Basic Earnings Per Share (EPS) of $0.01 (FY 2023: $0.03)
and a Diluted EPS of $0.01 (FY2023: $0.03).
Strengthening Our Financial Position
Boku continues to operate debt-free and generate strong cash flows, providing
flexibility for future investment opportunities.
Cash Metrics FY 2024 FY 2023 % change
$'000 $'000
Group Cash Balances 177,333 150,859 +18%
Average Cash Balances(6) 153,941 131,665 +17%
Own Cash(7) 80,249 72,919 +10%
( )
( 6) Average cash balances are an alternative performance measure calculated
as the average cash balance for each day
(7) Own cash is an alternative performance measure calculated as cash held
plus gross amounts due from issuers and merchants less amounts owed to
merchants
Cash Generation
Group cash balances increased by 18% to $177.3m (FY 2023: $150.9m) and average
cash balances increased by 17% to $153.9m (FY 2023: $131.7m). Boku's own cash
now stands at $80.2m representing a 10% increase from $72.9m in FY 2023. The
year end cash balance includes the following notable items excluding which our
own cash increased by 21% in the year:
· an outlay of $10.7m relating to our ongoing share buyback which is discussed
in more detail below (FY 2023: $9.8m)
· $3m of cash received from Danal relating to the exercise of warrants granted
upon acquisition (FY 2023: $nil). See note 18 for further details.
When deriving our own cash balance, we exclude merchant and issuer related
balances, which comprise issuer receivables, merchant payables, and merchant
receivables, thus providing a clearer view of the Group's own cash position.
In the current year, we have enhanced the disclosure of our financial
statements to provide greater clarity and transparency. Specifically, we have
separately identified issuer receivables and merchant payables in the notes to
the financial statements, providing better visibility into merchant-related
balances. Further details on these changes can be found in notes 16 and 20.
Share Buyback
The cash balance above is after the purchase of 4.7 million of Boku's own
shares during the year for a total consideration of $10.7m. This purchase took
place under Boku's 2022 and 2024 share buyback programmes as we consider it to
be the most appropriate use of our cash when we believe shares are
undervalued. See note 3.13 for further details.
Intangibles
At 31 December 2024, the Group had goodwill of $41.3m (FY 2023: $42.2m) and
other intangibles of $15.2m (FY 2023: $14.4m). No impairment was required at
year end. See note 13 for further details.
Deferred Tax Asset
Our deferred tax asset increased to $16.1m from $15.3m in the prior year. See
note 10 for further details.
Current Trading and Outlook Guidance
As we look ahead, we remain committed to strengthening our network and
enhancing value for our merchants and stakeholders. Our focus continues to be
on optimising our payments network, ensuring that each connection operates at
maximum productivity and efficiency. By investing in our products and
continuing to develop our infrastructure and processes, we aim to drive
greater value while maintaining a seamless, secure, and scalable service.
We will continue to leverage our geographic footprint, regulatory expertise,
and network optimisation efforts to support growth and innovation. By staying
agile and responsive to industry shifts, we are confident in our ability to
drive long-term value for all stakeholders.
We have started 2025 strongly and have a healthy and increasing pipeline of
opportunities. Consequently, the Board expects greater than 20% revenue growth
in FY25, significantly exceeding current consensus(8) expectations with an
adjusted EBITDA margin of greater than 30%.
In addition, while annual growth rates may vary, we are expecting organic
revenue growth exceeding 20% on a compound annual growth rate (CAGR) basis
over the medium term. We are also expecting an adjusted EBITDA margin
exceeding 30% with progressive accretion from 2026 as we benefit from the
operational leverage generated by our ongoing investments.
Through disciplined execution, strategic investment, and an unwavering focus
on efficiency and innovation, we believe we are well-positioned to capitalise
on market opportunities and sustain profitable growth in the years ahead. We
look forward to presenting our progress and outlining the next phase of our
growth strategy during our upcoming Capital Markets Day on 2 June 2025 of
which we will share details in due course.
Thank you for your continued trust as we work together to build on our
successes and deliver value to all of our stakeholders.
(8) FY 2025 Consensus as of Monday 17 March 2025 is Revenue $109.6m and
adjusted EBITDA $36.0m.
Robert Whittick
Chief Financial Officer
Date: 18 March 2025
Strategic Report
Mission Vision Purpose
To simplify global expansion for our merchants by providing seamless access to To be the world's best localised payments partner for global commerce To give people the freedom to buy what they want, the way they want
the world's most popular payment methods
When "Alternative" payment methods hit the mainstream: The rise of the Local
Payment Methods continues
Boku continues to be at the forefront of global payments, with a network
incorporating unique connections to over 250 distinct and emerging payment
methods across more than 70 countries. During 2024 we added notable new
connections in India, Nigeria, Colombia, Italy, Poland, and our first online
retail (e-commerce) connection in Japan. We have created this incredible
network to help solve a simple problem for our large global merchants: how do
they continue to grow and monetise globally. The Global E-commerce Report(9),
commissioned by Boku in collaboration with Juniper Research in 2024,
identified some key long term macro trends in global payments. The most
notable is that, by 2028, 59% of global e-commerce will happen using payment
methods that are not traditional credit or debit cards (including card-linked
wallets). This is a powerful trend and a profound shift in global buying
behaviours that is not always recognised in big western markets such as the US
and UK.
Across the world, the march of the new "local" payment methods continues. This
is not purely an emerging markets phenomenon, it is a global trend. New
payment methods and domestic schemes are becoming increasingly popular all
over the world: WeChatPay China (1,935 million users), UPI India (350 million
users), NIBSS Nigeria (219 million users), PIX Brazil (165 million users),
PayPay Japan (67 million users), Bizum Spain (26 million users), Nequi
Colombia (18 million users), BLIK Poland (17 million users), Satispay Italy (5
million users) to name just a small sample.
Put simply, companies wishing to expand into new international markets have to
offer greater payment choice than solely traditional card payment methods if
they wish to access more than 40% of consumers in those markets. In many
cases, these new Local Payment Methods (LPMs) are focused primarily on
enabling digital commerce within their domestic markets. Cross- border
commerce is often something of an afterthought. That's where Boku comes in. We
enable merchants to grow internationally by helping them to seamlessly access
the fragmented world of LPMs, either cross-border or within their own market.
One connection to Boku can open up access to billions of paying consumers.
(9) Boku & Juniper Research, 2024. 2024 Global Ecommerce Report. Available
a https://www.boku.com/boku-knows/2024-boku-global-ecommerce-report
Why are LPMs taking off?
LPMs are rapidly gaining traction due to their benefits for consumers,
merchants, and governments alike:
· Consumers: LPMs offer a seamless, mobile-first payment experience by
integrating directly into app ecosystems and eliminating reliance on plastic
cards giving consumers more control and more choice.
· Merchants: benefit from faster, more secure and lower-cost transactions,
easier expansion into international markets, relief from multi-lateral
interchange fees and the dominance of global card networks.
· Governments: may view LPMs as a means to reclaim control over their domestic
payment infrastructure, promote financial inclusion by expanding access to
secure digital payments, enhance transaction transparency, and improve
regulatory oversight of financial flows.
These combined factors are driving the rapid adoption of LPMs worldwide.
Different types of LPM are attracting different use cases
Direct Carrier Billing (DCB)
DCB continues to demonstrate strong value, with growth expanding across
multiple continents. As the original Buy Now Pay Later solution for digital
purchases, DCB payments remains a popular non-interest-bearing line of credit,
allowing consumers to spend up to $1,000 per month in some countries. We
continue to see merchants adopting DCB as a payment method in new markets
while seeing incremental subscribers in mature markets. With approximately 200
connections to mobile operators, Boku continues to play a key role in driving
the adoption and expansion of DCB globally.
DCB bundling continues to gain traction as a powerful distribution channel,
enabling merchants to integrate their services into consumers' everyday
digital experiences. Via Boku's bundling solutions, merchants can leverage
established third-party ecosystems to reach new customers and drive new user
acquisition and engagement. Boku provides seamless access to a vast network of
digitally engaged consumers. As demand for embedded commerce solutions
grows, bundling remains a key strategy for merchants looking to scale
efficiently.
Digital Wallets & Account to Account (A2A)
Digital Wallets and A2A payments are central to digital commerce, seamlessly
integrating payment capabilities within broader digital ecosystems. Digital
Wallets are often embedded within SuperApps-such as ride-hailing, messaging,
and e-commerce platforms-these payment methods connect to a vast, digitally
engaged user base, offering significant marketing potential. With direct
funding from bank accounts or linked payment sources, they provide enhanced
convenience and greater user control. Both merchants and consumers benefit
from integrated features like loyalty programs and promotions, driving higher
engagement and retention.
As the future of payments, A2A transactions enable direct transfers from
banking systems to merchants via Boku, offering a regulated alternative to
traditional payment methods. Designed to be instant, affordable, and secure,
A2A is becoming increasingly popular for cross-border transactions and offers
an alternative to expensive international wire transfers and card-based fees.
These innovations also promote financial inclusion, enabling more consumers to
make digital payments without requiring credit cards or third-party payment
services.
With over 60 connections to Digital Wallet and A2A schemes, Boku is
accelerating the adoption of seamless payments in the global financial
ecosystem.
Boku's portfolio approach to global, diversified payments
Boku is a truly global and diversified payments provider, enabling seamless
transactions on a pan regional basis across multiple countries supporting a
broader span of industry verticals.
· Pan-regional: we are present across APAC, EMEA and LATAM. Global merchants
benefit from working with a partner that is truly global
· Multi-country: we have a broad presence within each region and typically have
multiple payment methods connected within each country, without over-reliance
on one single market or product.
· Industry verticals: we offer a broad range of payment choices which has
attracted merchants in multiple industries, from digital and gaming (not
gambling), prepaid advertising, online travel and online retail (e-commerce).
Providing a multi-layered solution is the route to adding value
Companies wishing to win in global payments in the future will need to find
new ways to add value for merchants over and above payment facilitation in an
increasingly competitive market. To achieve this, businesses must focus on key
areas such as optimising payment connections, ensuring regulatory compliance,
and providing efficient fund settlement solutions that address the evolving
needs of merchants globally.
Optimising payment connections
Being the best at connecting merchants to LPMs at scale and cross-border
requires attention to detail and an increasing amount of analytical
intelligence:
· Conversion rates are key - better conversion rates drive quality connections.
· Dealing with complexity and the nuances within each industry segment e.g.
refunds are a significant part of e-commerce.
· Utilising data is essential to continuously optimise payment processes and
detect fraud or inefficiencies, leading to better decision-making and improved
merchant success.
Regulatory compliance
An essential part of our success depends upon having the right licenses in the
right countries:
· Payments is a regulated business and needs to be taken seriously.
· The growth in A2A payments, bank owned and run schemes, drive increasing
amounts of governance.
Efficient fund settlement solutions
Being able to settle money back to merchants quickly, in whatever currency
they prefer:
· Global expansion cannot be achieved if merchants cannot repatriate the
revenues they have generated in specific markets.
· Licensing, combined with an extensive network of global banking partners,
enables swift and seamless settlement of funds in the preferred currency,
while maintaining compliance with international financial regulations, and
minimising currency conversion risk and cost.
Driving growth through investment in our capabilities and our people
In 2024, Boku continued to invest in its workforce, which now exceeds 450
employees in over 30 global locations. This investment includes an infusion of
top-tier talent from leading financial institutions, bringing valuable
expertise in secure and efficient money movement while also enhancing our
finance, compliance, and technology functions. This positions Boku to handle
greater transaction volumes, support more merchants, and manage increasingly
complex settlement structures as the company continues to grow.
We are making ongoing investments to expand our product functionality
including the introduction of global treasury and banking capabilities and the
extension of our global banking network to facilitate real-time currency
exchange and movement worldwide.
In addition, Boku has significantly expanded its regulatory reach across
several key markets:
· Japan: Boku's Japanese entity received approval from the Ministry of Economy,
Trade, and Industry as a Registered Payment Service Provider. This allowed the
company to secure its first major e-commerce partnership with a global online
retailer via a prominent Japanese e-wallet, while also enhancing its
compliance technology, to screen hundreds of thousands of end-merchants.
· India: After sustained investment, Boku's Indian subsidiary was authorised by
the Reserve Bank of India as a Payment Aggregator in 2024. In November, it
went live on India's Unified Payments Interface (UPI) with a ride-hailing
firm.
· UK & EU: In early 2025, the company bolstered its presence in the UK by
obtaining, approval from the Financial Conduct Authority for its Payment
Initiation Service Provider (PISP) and Account Information Service Provider
(AISP) applications. Work is also underway to secure a similar authorisation
in the EU through its authorised entity there.
· Brazil: Boku is continuing to invest in Brazil and has applied for
authorisation from the Brazilian Central Bank as an electronic money issuer
and payment initiator which will enable it to join the PIX A2A payment scheme
in 2025.
Boku's strong foundation for future growth
Boku's success is built on several essential components-robust products,
strong merchant and issuer relationships, a global banking network, reliable
settlement systems, comprehensive payment licences, and top-tier talent-all of
which require continuous investment. As global commerce increasingly shifts
towards LPMs, Boku's strengthened regulatory footprint, growing banking
network, and deeper market presence position it for sustained long-term
success.
Looking ahead, the company will focus on its five growth pillars-growing
revenues, product innovation, driving operational efficiencies, maintaining a
robust risk and compliance framework, and being a great place to work. With
its solid foundation in place, Boku is not only keeping pace with the future
of payments-it is helping to define it.
Grow core and develop new revenue streams · Add value to existing global merchants and extend the LPM network
· Expand the network to new merchants via direct selling and
channel partnerships
Drive product innovation · Lead the market with cutting edge LPM products
· Drive transaction volumes with secure, expert money movement
Increase operational efficiency · Scale the platform with enhanced treasury capabilities for real
time settlements
· Automate back-office functions for seamless, high-volume
processing
Strengthen compliance and risk management · Grow in a controlled, compliant and low-risk manner
· Strengthen regulatory, data privacy and scalable compliance
frameworks
Be a great place to work · Attract, retain, and develop top talent
· Foster a strong, inclusive culture that supports scalable growth
Consolidated statement of profit or loss and other comprehensive income
For the Year Ended 31 December 2024
2024 2023
Note $'000 $'000
Revenue 5 99,273 82,720
Cost of providing services 6 (2,419) (2,050)
Gross profit 96,854 80,670
Administrative expenses 7 (90,698) (71,057)
Other income - 103
Operating profit 6,156 9,716
Fair value (loss)/ gain on warrants 18 (3,403) 53
Finance income 9 3,654 1,887
Finance expense 9 (221) (249)
Profit before tax 6,186 11,407
Income Tax expense 10 (2,407) (1,321)
Profit for the year 3,779 10,086
(all attributable to equity holders of the parent)
Other comprehensive (expense)/income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (2,228) 1,572
Other comprehensive (expense)/income for the year, net of tax (2,228) 1,572
Total comprehensive income for the year 1,551 11,658
(all attributable to equity holders of the parent)
Earnings per share 11
Basic EPS ($) 0.01 0.03
Diluted EPS ($) 0.01 0.03
Alternative performance measures
Adjusted EBITDA(1) 31,412 25,799
(1) Adjusted EBITDA is an alternative performance measure (APM) calculated as
operating profit before non-recurring other income, depreciation and
amortisation, share-based payment expense, foreign exchange gains/(losses),
and exceptional items (see the APM section of this report for further
details).
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated Statement of Financial Position
As at 31 December 2024
2024 2023
Note $'000 $'000
ASSETS
Non-current assets
Property, plant, and equipment 12 776 758
Intangible assets 13 56,485 56,620
Right-of-use assets 14 2,433 2,784
Warrant contract assets 18 1,806 1,840
Deferred tax assets 10 16,096 15,306
Total non-current assets 77,596 77,308
Current assets
Issuer, trade and other receivables 16 151,197 146,914
Warrant contract assets 18 208 122
Cash and cash equivalents 17 177,333 150,859
Total current assets 328,738 297,895
Total assets 406,334 375,203
LIABILITIES
Non-current liabilities
Warrant liabilities 18 9,130 5,511
Lease liabilities 14 1,612 1,682
Other non-current liabilities 19 1,676 979
Deferred tax liabilities 10 239 182
Total non-current liabilities 12,657 8,354
Current liabilities
Merchant, trade and other payables 20 252,882 231,441
Short-term lease liabilities 14 1,035 1,370
Current tax liabilities 2,019 509
Total current liabilities 255,936 233,320
Total liabilities 268,593 241,674
EQUITY
Share capital 29 29
Other reserves 261,049 255,249
Foreign exchange reserve (6,946) (4,718)
Treasury share reserve (10,728) (6,628)
Accumulated losses (105,663) (110,403)
Total equity (all attributable to equity holders of the parent) 21 137,741 133,529
Total equity and liabilities 406,334 375,203
The accompanying notes form an integral part of these consolidated financial
statements
The consolidated financial statements were approved by the Board for issue on
18 March 2025 and signed on its behalf by:
Stuart
Neal
Rob Whittick
Chief Executive Officer
Chief Financial Officer
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2024
Share capital Other Foreign currency translation reserve Treasury share Accumulated Total Equity
reserves Reserve losses
Note $'000 $'000 $'000 $'000 $'000 $'000
Equity as at 1 January 2023 29 252,385 (6,290) (1,835) (120,713) 123,576
Profit for the year - - - - 10,086 10,086
Other comprehensive income - - 1,572 - - 1,572
Total comprehensive income for the year (all attributable to equity holders of - - 1,572 - 10,086 11,658
the parent company)
Transactions with owners of the Company
Issue of share capital upon exercise of stock options and RSUs - 406 - - - 406
Share-based payments 22 - 7,467 - - - 7,467
Taxation on share-based payments - - - - 224 224
Acquisition of treasury shares - - - (9,802) - (9,802)
Issue of treasury shares to employees - (5,009) - 5,009 - -
Equity as at 31 December 2023 29 255,249 (4,718) (6,628) (110,403) 133,529
Profit for the year - - - - 3,779 3,779
Other comprehensive expense - - (2,228) - - (2,228)
Total comprehensive income for the year (all attributable to equity holders of - - (2,228) - 3,779 1,551
the parent company)
Transactions with owners of the Company
Issue of share capital on exercise of warrants 18 - 3,000 - - - 3,000
Issue of share capital upon exercise of stock options and RSUs - 495 - - - 495
Share-based payment expense 22 - 8,903 - - - 8,903
Taxation on share-based payment - - - - 961 961
Acquisition of treasury shares - - - (10,698) - (10,698)
Issue of treasury shares to employees - (6,598) - 6,598 - -
Equity as at 31 December 2024 29 261,049 (6,946) (10,728) (105,663) 137,741
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Note $'000 $'000
Cash flows from operating activities
Cash generated from operations 23 42,659 40,935
Income taxes paid (646) (338)
Net cash generated from operating activities 42,013 40,597
Cash flows from investing activities
Interest received 3,635 1,887
Purchase of property, plant, and equipment (529) (434)
Payments for internally developed software (7,016) (5,430)
Proceeds from discontinued operations (net of cash disposed) - 5,600
Net cash (used in)/generated from investing activities (3,910) 1,623
Cash flows from financing activities
Payment on lease liabilities (1,747) (1,649)
Issue of share capital on the exercise of options and RSUs 495 406
Payments for the acquisition of treasury shares (10,698) (9,802)
Proceeds from warrant exercise 3,000 -
Proceeds from the sale of treasury shares - 2,333
Interest paid on loan (37) (78)
Net cash used in financing activities (8,987) (8,790)
Net increase in cash and cash equivalents 29,116 33,430
Cash and cash equivalents at the beginning of the year 150,859 116,513
Effect of foreign exchange rate changes (2,642) 916
Cash and cash equivalents at the end of the year 177,333 150,859
The accompanying notes form an integral part of these consolidated financial
statements.
Notes to the Consolidated Financial Statements
For the Year ended 31 December 2024
1. Corporate information
Boku, Inc. (the Company or the Parent) is a public limited company
incorporated and domiciled in the United States of America. The shares of the
Company are quoted on AIM, a market of the London Stock Exchange Group plc.
The Company's registered office is at 660 Market Street, Suite 400, San
Francisco, CA 94104, United States.
These consolidated financial statements comprise the Company and its
subsidiaries (the Group or collectively Boku).
The principal activity of Boku is the provision of digital payment solutions
to its merchants, allowing consumers to make purchases through Local Payment
Methods (LPMs), such as Direct Carrier Billing (DCB), Digital Wallets, and
Account to Account (A2A) payments. These solutions support a broad range of
payment preferences and enable Boku's merchants to acquire new customers and
accept payments from consumers who prefer alternatives to traditional payment
methods.
Boku operates through its subsidiaries under various regulatory licenses
across multiple jurisdictions, each allowing operations within the respective
territories. In the European Economic Area (EEA), Boku is authorised as a
Payment Institution by the Central Bank of Ireland, permitting cross-border
services across EEA member states. In the United Kingdom, Boku is authorised
as an Electronic Money Institution by the Financial Conduct Authority,
facilitating operations within the UK market. Similarly, Boku holds regulatory
approvals in Hong Kong, India, the Philippines, Singapore, Taiwan, Argentina,
Malaysia, the United States, and Japan, enabling it to provide payment
services in those jurisdictions.
These consolidated financial statements for the year ended 31 December 2024
were approved by the Board of Directors and authorised for issue on 18 March
2025
2. Basis of preparation
2.1 Statement of Compliance
These consolidated financial statements have been prepared in accordance with
the International Financial Reporting Standards (IFRS) and International
Financial Reporting Interpretations Committee (IFRIC) as issued by the
International Accounting Standards Board (IASB).
2.2 Basis of measurement
These consolidated financial statements are prepared under the historical cost
convention except when otherwise disclosed in the accounting policies and in
accordance with the accounting policies set out herein. These policies have
been consistently applied to all years presented unless otherwise stated.
2.3 Basis of presentation
The consolidated financial statements are presented in USD, which is the
Company's functional currency. All amounts are rounded to the nearest
thousands (expressed as $'000) unless otherwise indicated.
2.4 Going concern
Boku finances its day-to-day working capital requirements through its own cash
balances. The directors have undertaken a detailed going concern assessment,
evaluating Boku's current and projected financial performance and position,
including forecast cash flows. This assessment included a downside scenario,
which considered a potential revenue decline between 11.6% and 36.5% against
forecasts, over a 5-year period, which would bring net profits to break even.
The downside scenario, outlining the impact of a severe but plausible adverse
case, shows sufficient headroom for liquidity for at least the next 12 months
from the approval date of these consolidated financial statements. Given the
strength of our cash generation and position the $10m revolving credit
facility previously available to the group was not renewed following its
expiry on 17 September 2024. This facility remained undrawn throughout the
year.
Based on this assessment, the directors are satisfied that Boku has adequate
resources to continue operations for the foreseeable future and meet its
financial obligations as they fall due for a period of at least 12 months from
the date of approval.
Accordingly, these consolidated financial statements have been prepared on a
going-concern basis.
2.5 Alternative performance measures (APMs)
Management 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 adjusted EBITDA, adjusted operating expenses,
constant exchange rate revenues, own cash and average cash balances which
management considers relevant in understanding the Boku's financial
performance. Further information about these APMs is disclosed in the APM
section of this report.
2.6 Critical accounting judgments and key sources of estimation uncertainty
In preparing these consolidated financial statements, management has made
judgments and estimates about the future that affect the application of Boku's
accounting policies and the reported amounts of assets, liabilities, income,
and expenses. Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed regularly, and revisions are
recognised prospectively.
Judgements
Significant judgments made in applying accounting policies that have the most
significant effects on the amounts recognised in the financial statements are
as follows:
- Assessing the likelihood of future taxable profits to support
the recognition of deferred tax assets (Note 3.5 and 10)
- Determining whether development costs meet the capitalisation
criteria under IAS 38 (Notes 3.7 and 13)
- Determining the appropriate cash-generating units (CGUs) for
goodwill impairment testing (Notes 3.7 and 13)
Estimates
Key assumptions and estimation uncertainties at the reporting date, which
could result in material adjustments to the carrying amounts of assets and
liabilities within the next financial year, include:
- Fair value estimation of share-based payment awards and the
associated expense for each year (Notes 3.4 and 22)
- Estimating future taxable profits and changes in temporary
differences for deferred tax calculations (Note 3.5 and 10)
- Fair value estimation of warrants (Note 18)
2.7 New and amended standards and interpretations
New and amended standards issued and effective
The following new and amended standards have been adopted in the consolidated
financial information.
- Classification of Liabilities as Current or Non-current and
Non-current liabilities with covenants (Amendments to IAS 1)
- Lease Liability in Sale and Leaseback (Amendments to IFRS 16)
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
There has been no material impact on Boku's consolidated financial statements
upon the adoption of the above new and amended standards.
New and amended standards issued but not yet effective
At the date of these consolidated financial statements, the following
standards, amendments, and interpretations have not been effective and have
not been early adopted:
New and amended standards not effective and not yet adopted by Boku Effective date
Lack of Exchangeability (Amendments to IAS 21) 1 January 2025
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 1 January 2026
and IFRS 7)
Subsidiaries without Public Accountability: Disclosures (IFRS 19) 1 January 2027
Presentation and Disclosure in Financial Statements (IFRS 18) 1 January 2027
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing
new requirements that will help to achieve comparability of the financial
performance of similar entities and provide more relevant information and
transparency to users. Even though IFRS 18 will not impact the recognition or
measurement of items in the financial statements, its impacts on presentation
and disclosure are expected to be pervasive, in particular those related to
the statement of financial performance and providing management-defined
performance measures within the financial statements. Management is currently
assessing the detailed implications of applying the new standard on the Boku's
consolidated financial statements. Boku will apply the new standard from its
mandatory effective date of 1 January 2027. Retrospective application is
required, and so the comparative information for the financial year ending 31
December 2026 will be restated in accordance with IFRS 18.
Other new and amended standards are not expected to have a significant impact
on Boku's consolidated financial statements.
3. Material accounting policies
The material accounting policies adopted in the preparation of these
consolidated financial statements are set out below.
3.1 Basis of consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiaries. Subsidiaries are entities controlled by the
Company, where control is defined as having power over the investee, exposure
to variable returns, and the ability to influence those returns through power.
Subsidiaries are consolidated from the date effective control is transferred
to the Company and excluded from consolidation from the date that control
ceases. Intercompany transactions, balances, and any unrealised income and
expenses (except for foreign currency transaction gains or losses) between
Group entities have been eliminated in the consolidated financial statements.
For more information on the Company's subsidiaries, refer to Note 15.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with those used by
the Company.
3.2 Foreign currency
Foreign currency transactions and balances
The functional currency of each subsidiary is determined based on the primary
economic environment in which it operates (its functional currency). The main
functional currencies for the Company's subsidiaries are US Dollar, Euro,
Japanese Yen, and Pound sterling. Transactions in foreign currencies are
translated into the respective functional currencies of the Group companies at
the exchange rate prevailing at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange
rate when the fair value was determined. Non-monetary items measured based on
historical cost in a foreign currency are translated at the exchange rate at
the date of the transaction. Exchange differences arising from settlement or
translation are recognised in profit or loss within administrative expenses.
Foreign operations
The assets and liabilities of foreign operations with functional currencies
other than USD are translated into the presentation currency (USD) at the
exchange rate prevailing at the reporting date. The income and expenses of
foreign operations are translated into USD at average exchange rates for the
year unless exchange rates fluctuate significantly.
Exchange differences arising on translation are recognised in other
comprehensive income and accumulated in the foreign currency translation
reserve within equity.
On disposal of a foreign operation, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit or loss as
part of the gain or loss on disposal.
3.3 Revenue from contracts with customers
Boku provides digital payment solutions by acting as an agent between
merchants and Local Payment Methods (LPMs or issuers), including mobile
network operators (MNOs), Digital Wallets, Account to Account (A2A) schemes
and aggregators. Boku's revenue is derived from service fees for facilitating
payment transactions between the merchant and their end users and related
services.
Boku's contracts with merchants clearly outline the transaction price and
typically involve a single performance obligation, i.e. processing payment
transactions from merchant's customers. However, certain contracts may have
additional, distinct performance obligations based on the settlement
preferences of the merchants. Revenue is recognised at a point in time upon
the completion of the underlying transaction. Boku does not have deferred
revenue as of 31 December 2024 (31 December 2023: $Nil), as all performance
obligations are fulfilled when completing each transaction.
The different types of service fees can be categorised as follows:
i. Settlement fees
Settlement fees represent contractual fees earned where Boku acts as an
intermediary collecting funds from issuers and remitting them to merchants,
thereby facilitating transactions from merchants' customers. The contractually
agreed service fee is the difference between the amount collected from issuers
and the amount remitted to merchants, and it is recognised at the time of the
transaction.
ii. Transactional fees
Transactional fees represent fees earned from merchants who receive payments
directly from issuers. Boku provides technical integration and charges a fee,
which is recognised at the time of the transaction. Where discounts for early
settlement are offered, Boku estimates the expected discount at the time of
the transaction and accounts for it as a reduction in the service fee.
iii. Other revenue
Other revenue includes:
- Advance Payment Service (APS): Fees charged for early settlement to merchants
before Boku receives funds from issuers.
- Foreign Exchange (FX) Fees: Fees charged when a merchant requests settlement
in a currency different from the original transaction currency, based on
agreed mark-up percentages.
- Merchant Integration Fees: Fees charged to merchants for setting up new
integrations.
- Amazon warrant revenue: As part of a multi-year agreement signed with Amazon
in 2022, Boku issued warrants under a stock warrant agreement tied to the
revenue generated from payment processing services provided to Amazon. These
warrants represent both a derivative financial instrument, accounted for at
fair value through profit or loss (FVPL) in accordance with IAS 32 and IFRS 9,
and non-cash consideration payable to a customer under IFRS 15. The non-cash
consideration is initially measured at fair value and amortised to revenue as
a reduction over the vesting period. For more information, refer to Note 18.
3.4 Employee Benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid if Boku has a
present legal or constructive obligation to pay this amount as a result of
past service provided by the employee, and the obligation can be estimated
reliably.
Share-based payments
Boku operates equity-settled share-based payment arrangements, including share
options and Restricted Stock Units (RSUs), awarded to employees and other
eligible participants. The accounting treatment depends on the type of award
and the conditions attached to vesting.
i. Measurement and Recognition
Share Options: The fair value of share options is determined at grant date
using appropriate valuation models, such as Black-Scholes or Monte Carlo
Simulation, which incorporate assumptions including expected volatility,
risk-free interest rates, and the likelihood of meeting market-based
performance conditions. The expense is recognised in profit or loss over the
vesting period, with a corresponding credit to equity.
RSUs with non-market vesting conditions: The fair value of RSUs with
non-market vesting conditions is based on the market value of the underlying
equity at the grant date. Adjustments are made to reflect service conditions
(e.g. continued employment) and where relevant non-market performance
conditions (e.g. financial or operational targets). These conditions are
reassessed at each reporting date, with the cumulative expense adjusted to
reflect the number of awards expected to vest.
RSUs with Market-Based Conditions: RSUs with market-based conditions, such as
share price targets, are valued at the grant date using appropriate valuation
models (e.g. Monte Carlo Simulation). The expense is recognised over the
vesting period and adjustments are made to reflect service conditions (e.g.
continued employment). No adjustments are made for changes in the likelihood
of meeting the market-based conditions.
ii. Modifications, Forfeitures, and Cancellations
When terms or conditions of share options or RSUs are modified before vesting,
any increase in the fair value, measured immediately before and after the
modification, is recognised over the remaining vesting period. If awards are
cancelled during the vesting period, any remaining unrecognised expense is
accelerated and recognised in profit or loss in the period of cancellation.
Unvested awards forfeited due to employee departures result in the reversal of
the cumulative share-based payment expense as of the forfeiture date.
In cases where the grant date is delayed until the vesting date, where
material the fair value of the award is estimated at each reporting date from
the date that services are provided and final measurement occurs at the end of
the vesting period.
Where equity instruments are granted to persons other than employees, the
consolidated statement of comprehensive income is charged with the fair value
of goods and services received.
Share options and RSUs which will incur future employer payroll taxes on
exercise, are accrued for the future cost of Employer's National Insurance
from the point the options are granted over their vesting period. This
liability is then amended at each subsequent reporting date under IFRS 2.
Retirement Benefits: Defined contribution schemes
Boku operates defined contribution pension schemes across various
jurisdictions. Under these plans, Boku pays fixed contributions to publicly or
privately administered pension funds on a mandatory, contractual, or voluntary
basis. Once the contributions are paid, Boku has no further payment
obligations, as it bears no legal or constructive liability for insufficient
fund assets to meet employee benefits.
In the United States, Boku operates a 401(k) plan, a defined contribution
scheme. Eligible employees may defer a portion of their salary, subject to
regulatory limits. Boku matches contributions to the plan, with matching
contributions made for the years ended 31 December 2024 and 2023.
Contributions are recognised as employee benefit expenses and are recognised
in profit or loss in the year to which they relate.
3.5 Income Tax
The income tax expense represents the sum of the tax currently payable and
deferred tax. Deferred tax relating to the timing differences arising on
share-based payments recognised in equity, is also recognised in equity and
not as a tax expense.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in profit or loss because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible.
Current taxes are calculated according to local tax rules, using tax rates
enacted or substantially enacted at the reporting date.
A provision is recognised for those matters for which the tax determination is
uncertain, but it is considered probable that there will be a future outflow
of funds to a tax authority. The provisions are measured at the best estimate
of the amount expected to become payable. The Group's method for calculating
the tax provision under IFRS on an individual entity basis for the year ending
31 December 2024, involves the following approach.
Entities are categorised according to a materiality threshold, considering
current tax impacts and deferred tax effects from categories such as
share-based payments, carried forward losses, and Property, Plant and
Equipment. Tax provisioning calculations for immaterial entities utilise
profit/(loss) before tax figures multiplied by foreign tax rates. Material
entities include corporations in the UK and USA. These entities undergo a more
detailed calculation process, with US and UK group entities preparing the tax
provision closely aligned with their actual tax return. This approach ensures
that the Group's tax provision aligns accurately with its tax obligations
under IFRS on an individual entity basis.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the consolidated statement of financial position
differs from its tax base, except for differences arising on:
· the initial recognition of goodwill;
· the initial recognition of an asset or liability in a transaction which is not
a business combination and at the time of the transaction affects neither
accounting or taxable profit; and
· investments in subsidiaries where the Group is able to control the timing of
the reversal of the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences and unused tax loses can be utilised.
The amount of the deferred asset or liability is determined using tax rates
that have been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities or assets are settled or
recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable group company; or
· different company entities which intend either to settle current tax assets
and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets and liabilities are expected to be settled or
recovered.
3.6 Property, plant, and equipment
Property, plant, and equipment are stated at cost less accumulated
depreciation and any impairment losses. Cost comprises acquisition and other
directly attributable costs.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to Boku and the cost of
the item can be measured reliably. All other repairs and maintenance costs are
recognised in profit or loss during the period in which they are incurred.
Depreciation is provided on a straight-line basis and is recognised in profit
or loss to write off the depreciable amount of each asset over its estimated
useful life as follows:
Office equipment and fixtures and fittings 3-5 years
Computer equipment and software 3 years
Leasehold improvement 3-5 years or over the lease term
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
Depreciation methods, useful lives, and residual values are reviewed at each
reporting date and adjusted if appropriate. Carrying amounts are reviewed on
each reporting date for impairment. Where the carrying amount of an asset is
greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount.
3.7 Intangible assets
Goodwill
Goodwill arising on consolidation represents the excess of the cost of an
acquisition over the fair value of Boku's share of net identifiable assets of
the acquired subsidiary at the date of acquisition. Goodwill is initially
recognised as an asset at cost and subsequently measured at cost less any
accumulated impairment losses.
Goodwill is not amortised but is tested annually for impairment or more
frequently if events or changes in circumstances indicate potential
impairment. Impairment losses are recognised in profit or loss and are not
subsequently reversed.
For impairment testing, goodwill is allocated to the cash-generating unit
(CGU), which represents the lowest level within Boku, at which the goodwill is
monitored for internal management purposes. The goodwill arising from
acquisitions is allocated to the Payment Services operating segment, which is
the identified CGU.
Impairment is assessed by comparing the carrying amount of the CGU with its
recoverable amount. The recoverable amount is determined using value-in-use
calculations, which involve estimating future cash flows and applying a
pre-tax discount rate to calculate their present value. See note 13 for
further details.
Internally generated intangible assets - Development costs
Boku develops software that is used to provide its services. Development costs
directly attributable to the design, development, and testing of internally
developed software and or substantial enhancements to existing software
controlled by Boku are capitalised if all of the following conditions are met:
- an asset is created that can be identified;
- it is probable that the asset created will generate future
economic benefits and
- the development cost of the asset can be measured reliably.
Capitalised costs include direct costs of materials, services, and payroll for
employees involved in the development. Costs are capitalised from the point
when criteria are met until the asset is ready for use. Development costs not
meeting these criteria are expensed as incurred, and previously expensed
development costs are not reclassified as assets. Subsequent expenditure is
capitalised only when it increases the asset's economic benefits. All other
expenditures, including those related to internally generated goodwill and
brands, are expensed as incurred.
Trademarks
Trademarks are not amortised due to their indefinite useful life, as they
retain value indefinitely with continued use and contribute to cash inflows
without a set expiration.
Other intangible assets
Other intangible assets include domain names, developed technology, and
merchant relationships. Intangible assets acquired through business
combinations are initially measured at their fair value at the acquisition
date, while separately acquired intangible assets are recognised at their
purchase cost.
Following initial recognition, these intangible assets are carried at cost
less accumulated amortisation and accumulated impairment losses and amortised
on a straight-line basis over their estimated useful lives.
The carrying values are tested for impairment when there is an indication that
the value of the assets might be impaired.
Amortisation rates
Amortisation is recognised in profit or loss within administrative expenses.
Significant intangible assets and their estimated useful economic lives are as
follows:
Intangible asset Useful economic life
Trademarks Indefinite life - not amortised
Merchant relationships 5 -10 years
Developed technologies 2-10 years
Domain names 10 years
Internally developed software 3 years
3.8 Leases
Right of use asset
Boku assesses whether a contract is or contains a lease at the inception of
the contract. If Boku assesses that a contract contains a lease and meets the
requirements of IFRS 16, Boku recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of
property, plant, and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
Lease liabilities
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease, or if that rate cannot be readily
determined, Boku's incremental borrowing rate. Generally, Boku uses its
incremental borrowing rate as the discount rate.
Lease payments in the measurement of the lease liability comprise the
following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;
- amounts expected to be payable under a residual value guarantee
and
- the exercise price under a purchase option that Boku is
reasonably certain to exercise, lease payments in an optional renewal period
if Boku is reasonably certain to exercise an extension option, and penalties
for early termination of a lease unless Boku is reasonably certain not to
terminate early.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Boku's
estimate of the amount expected to be payable under a residual value
guarantee, or if the Boku changes its assessment of whether it will exercise a
purchase, extension or termination option. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recognised in profit or loss if the
carrying amount of the right-of-use asset has been reduced to zero.
Variable lease payments are recognised in profit or loss in the period in
which the condition that triggers those payments occurs.
Boku has opted not to recognise right-of-use assets for short-term leases,
i.e. leases with a term of twelve (12) months or less and applies low-value
assets recognition exemption to leases of office equipment with a value below
$5,000. Lease payments for short-term leases and leases of low-value assets
are recognised as an expense on a straight-line basis over the lease term.
For service charges, Boku capitalises fixed service charges as part of the
lease liability and right-of-use asset in accordance with IFRS 16. Variable
service charges, however, are excluded from the lease liability and are
expensed as incurred.
3.9 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash with banks on current,
saving, and deposit accounts, restricted cash, and other short-term highly
liquid investments that are readily convertible to known amounts of cash and
which are subject to insignificant risk of change in value.
3.10 Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when Boku becomes a party to the contractual provisions of
the instrument.
Financial assets and financial liabilities are initially measured at fair
value, except for issuer and trade receivables that do not have a significant
financing component that are measured at transaction price. Transaction costs
that are directly attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable
to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.
a) Financial assets
All recognised financial assets are measured subsequently in their entirety at
amortised cost, at fair value through profit or loss (FVTPL), and at fair
value through other comprehensive income (FVOCI), depending on the
classification of the financial assets.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows. Financial assets
are not reclassified subsequent to their initial recognition unless Boku
changes its business model for managing financial assets, in which case all
affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
i. Financial assets at amortised cost
Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are subsequently
measured at amortised cost under the effective interest method. The effective
interest rate is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial instrument to
the gross carrying amount of the financial asset. The gross carrying amount
is reduced by impairment losses. Interest income, foreign exchange gains and
losses, and impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
ii. Fair value through other comprehensive income (FVOCI)
Debt instruments that are held for the collection of contractual cash flows
and for selling the financial assets, where the assets' cash flows represent
solely payments of principal and interest, are subsequently measured at FVOCI.
Interest income calculated under the effective interest method, foreign
exchange gains and losses, and impairment are recognised in profit or loss.
Other net gains and losses are recognised in OCI. When the financial asset is
derecognised, the cumulative gain or loss accumulated in OCI is reclassified
from equity to profit or loss.
On initial recognition, Boku may make an irrevocable election (on an
instrument-by-instrument basis) to designate investments in equity instruments
as at FVOCI. Dividends on these investments are recognised in profit or loss
unless the dividends clearly represent a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are never
reclassified to profit or loss.
iii. Fair value through profit and loss (FVTPL)
All financial assets not classified as measured at amortised cost or FVOCI as
described above are subsequently measured at FVTPL. Net gains and losses,
including any interest or dividend income, are recognised in profit or loss.
Boku may irrevocably designate a debt investment that meets the amortised cost
or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Recognition and derecognition
All regular way purchases or sales of financial assets are recognised and
derecognised on a trade date basis. Regular way purchases or sales are
purchases or sales of financial assets that require delivery of assets within
the time frame established
by regulation or convention in the marketplace.
Boku's financial assets mainly comprise cash, issuer, trade, and other
receivables. For more information on the details and classification of Boku's
financial assets, refer to Note24.
Impairment of financial assets
At each balance sheet date, financial assets classified as either amortised
cost or FVOCI and contract assets are assessed for impairment based on
Expected Credit Losses (ECL). Boku adopts a simplified approach for issuer and
trade receivables whereby allowances are always equal to lifetime ECL. The
expected credit losses on these financial assets are estimated using a
provision matrix based on Boku's historical credit loss experience, adjusted
for factors that are specific to the debtors and other receivables, general
economic conditions, and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value
of money where appropriate. The losses are recognised in profit or loss with
a corresponding adjustment to the carrying amount through a loss allowance
account.
Other amortised costs assets, including cash and cash equivalents and other
receivables, are deemed low risk; hence, credit risk is assumed not to have
increased significantly since initial recognition. If Boku identifies evidence
of significant increase in credit risk on the assets, lifetime ECL is used to
calculate allowance on the asset.
Boku writes off financial assets, in whole or in part, when it has exhausted
all practical recovery efforts and has concluded that there is no reasonable
expectation of recovery. The assessment of no reasonable expectation of
recovery is based on the unavailability of the debtor's sources of income or
assets to generate sufficient future cash flows to repay the amount.
Subsequent recoveries of amounts previously written off will result in
impairment gains.
b) Financial liabilities
All recognised financial liabilities are measured subsequently at amortised
cost or FVTPL, depending on the classification of the financial liability.
i. Fair value through profit or loss
A financial liability is classified as FVTPL if it is classified as
held-for-trading, it is derivative, or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value, and
net gains and losses, including any interest expense, are recognised in the
profit or loss.
ii. Financial liabilities at amortised cost
Other financial liabilities are subsequently measured at amortised cost using
the effective interest method. Interest expense and foreign exchange gains and
losses are recognised in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.
Boku's financial liabilities comprise merchant, trade and other payables
(excluding other taxes and social security costs), lease liabilities, and
warrant liability.
Derecognition of financial liabilities
Boku derecognises a financial liability when its contractual obligations are
discharged, cancelled, or expire. Boku also derecognises a financial liability
when its terms are modified and its cash flows are substantially different, in
which case, a new financial liability based on the modified terms is
recognised at fair value. On the derecognition of a financial liability, the
difference between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed) is
recognised in profit or loss.
Offsetting of financial assets and liabilities
Financial assets and liabilities are offset, and the net amount is reported in
the statement of financial position if Boku has a legally enforceable right to
set off the recognised amounts, and Boku either intends to settle on a net
basis or realise the asset and settle the liability simultaneously.
3.11 Provisions
A provision is recognised in the statement of financial position when Boku has
a legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation, and a reliable estimate can be made of the amount of obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, considering
the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (when the effect of
the time value of money is material). The provision for employer taxes on
future employee share instruments is not discounted as it is not considered
material. Provisions are reviewed at each reporting date and adjusted to
reflect the current best estimate.
3.12 Contingent liabilities
A contingent liability is disclosed when the Boku has a possible obligation as
a result of past events, the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events, not
wholly within the control of Boku or when the Boku has a present legal or
constructive obligation, that arises from past events, but it is not probable
that an outflow of resources embodying economic benefits will be required to
settle the obligation, or the amount of the obligation cannot be measured with
sufficient reliability.
3.13 Share Capital
Ordinary shares are classified as equity and are stated at the proceeds
received net of direct issue costs. Income tax relating to transaction costs
of an equity transaction is accounted for in accordance with IAS 12.
a) Share buyback
Buy-back scheme 2024
On 18 November 2024, the Group announced a share buyback programme to
repurchase common stock in the capital of the Company (Boku, Inc.) up to a
maximum of four million Common Stock. On 11 February 2025, the Company
announced an extension to the share buyback programme to repurchase a further
four million Common Stock principally as we consider it to the most
appropriate use of our cash when we believe shares are undervalued.
Shares purchased under the buyback programme, held in treasury, may be used to
satisfy future obligations concerning the staff equity remuneration programme
or warrant holders. The buyback programme is being effected within certain
pre-set parameters, including that the maximum price paid per Common Stock
shall be no more than 105 per cent of the trailing 5-day average mid-market
price, and in accordance with the authority granted by Boku's Board.
The buyback programme is effective from 18 November 2024 and will expire on 30
June 2025 (following the extension), or earlier, if either the maximum
aggregate number of Common Stock has been purchased. At that point, the Board
intends to assess whether or not to commence a further buyback, within the
Board authority to hold up to 5% of the Common Stock in Treasury, based on the
circumstances at the time
Due to the limited liquidity in the issued Common Stock, a buy-back of Common
Stock pursuant to the Authority on any trading day may represent a significant
proportion of the daily trading volume in the Common Stock on AIM and may
exceed 25 per cent of the average daily trading volume. Accordingly, the
Company will not benefit from the exemption contained in Article 5(1) of the
UK version of the Market Abuse Regulation (Regulation (EU) No 596/2014) as
incorporated into UK domestic law by virtue of the European Union (Withdrawal)
Act 2018.
Buy-back scheme 2022
On 7 July 2022, the Group announced a share buyback programme to repurchase
common stock in the capital of the Company (Boku, Inc.) up to a maximum
aggregate consideration of £8 million and up to a maximum of five million
Common Stock.
The programme aimed to hold the Common Stock in treasury to satisfy future
obligations concerning the staff equity remuneration programme. The buyback
programme operated within certain pre-set parameters, including that the
maximum price paid per Common Stock should be no more than 105 percent of the
trailing 5-day average mid-market price, and in accordance with the authority
granted by Boku's Board.
The buyback programme became effective on 7 July 2022 with an expiration date
of 30 June 2023, or earlier, if either the maximum aggregate number of Common
Stock has been purchased, or the maximum aggregate consideration has been
reached. On 8 June 2023, it was announced that the buyback programme was to be
extended for a further 12 months and would expire on 30 June 2024, or
earlier, if either the maximum aggregate number of Common Stock had been
purchased, or the maximum aggregate consideration had been reached. The
extended programme involved repurchasing of additional Common Stock up to a
maximum aggregate consideration of £10.5 million, and up to an additional
maximum of 5.25 million Common Stock. The buyback expired on 30 June 2024 and
was not renewed.
Due to the limited liquidity in the issued Common Stock, a buy-back of Common
Stock pursuant to the Authority on any trading day may represent a significant
proportion of the daily trading volume in the Common Stock on AIM and may
exceed 25 percent of the average daily trading volume. Accordingly, the
Company will not benefit from the exemption contained in Article 5(1) of the
UK version of the Market Abuse Regulation (Regulation (EU) No 596/2014) as
incorporated into UK domestic law by virtue of the European Union (Withdrawal)
Act 2018.
The cost of treasury shares held is presented as a separate reserve (the
treasury share reserve) and recorded in equity. Any excess of the
consideration received on the sale of treasury shares over the weighted
average cost of the shares sold is credited to other reserves.
4. Segment information
Boku operates as a single operating segment - Payments Services. This segment
includes all activities related to providing digital payment solutions,
allowing consumers to make purchases through Direct Carrier Billing (DCB) or
other Local Payment Methods (LPMs), such as Digital Wallets and Account to
Account (A2A) payments.
The Chief Operating Decision Maker (CODM), identified as the Global Leadership
Team (GLT), monitors the performance of Boku as a whole for the purpose of
resource allocation and decision-making. As such, no additional segment
reporting disclosures under IFRS 8 are provided.
Boku's revenue by geographical region is disclosed in Note 5. As of the
reporting date, the majority of Boku's non-current assets are located in the
USA. The geographical breakdown of non-current assets, based on their
location, is as follows:
2024 2023
Non-current assets by geographical region(1) $'000 $'000
Americas 50,210 48,400
Europe, Middle East & Africa (EMEA) 8,289 11,504
APAC 1,195 258
Total non-current assets by geographical region 59,694 60,162
( )
(1) Non-current assets exclude deferred tax and warrant contract assets
5. Revenue
2024 2023
$'000 $'000
Revenue 99,273 82,720
Revenue disaggregation by major geographical market(1) is as follows:
2024 2023
$'000 $'000
Americas 4,397 3,204
Asia-Pacific (APAC) 57,998 47,230
Europe, Middle East & Africa (EMEA) 36,878 32,286
Total Revenue by geographical market 99,273 82,720
(1) The geographical market depends on the type of service provided and is
based either on customer location or the source
currency.
In 2024, 4 customers (2023: 4) accounted for more than 10% of the total
revenue from Payment Services, contributing $68,594k (2023: $59,890k).
6. Cost of providing services
The cost of sales is primarily related to the monthly fees, service charges
from MNOs and other providers, customer service fees, marketing expenses, and
bad debts.
7. Administrative expenses
Operating profit is stated after charging:
2024 2023
Note(s) $'000 $'000
Employee benefit expenses 8 52,952 43,514
Depreciation and amortisation 12,13,14 7,899 7,557
Foreign exchange loss 5,964 1,034
8. Employee benefit expenses
Included in administrative expenses are costs related to employee benefits,
analysed as follows:
Restated
2024 2023
$'000 $'000
Salaries 34,072 28,474
Short-term benefits 2,203 1,767
Social security costs 4,859 4,293
Pension costs 357 249
Other staff costs 935 1,136
Share-based payment expense (1) 10,526 7,595
Total employee benefit expenses (2) 52,952 43,514
(1) For more information, refer to Note 22 for details on awards granted to
employees and Note 3.4 for the accounting policy on shared-based payments.
(2) In 2024, Boku changed the presentation of the employee benefit expenses to
exclude contractor costs from salaries to improve the usefulness of disclosed
information. The comparative amounts for 2023 have been re-represented
accordingly. For information on the remuneration of key management personnel,
refer to Note 25.
(
)
The average number of employees (including executive directors) during the
year was 452 (2023: 384). As of the reporting date, the total number of
employees was 472 (2023: 416).
9. Finance income and expense
2024 2023
$'000 $'000
Finance income
Interest income from bank deposits 3,654 1,887
Total finance income 3,654 1,887
Finance expenses
Interest on credit facility(1) (37) (78)
Interest on lease liabilities (184) (171)
Total finance expenses (221) (249)
Net finance income 3,433 1,638
(1)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 year.
10. Income tax expense
2024 2023
$'000 $'000
Current tax
Current tax on profits for the year 241 427
Foreign tax 2,133 903
Adjustments in respect of prior years 261 (7)
Total current tax 2,635 1,323
Deferred tax
Origination and reversal of temporary differences 6 355
Adjustments in respect of prior years (234) (357)
Total deferred tax (228) (2)
Total tax expense/(credit) 2,407 1,321
The tax assessed for the period is higher (2023: lower) than the standard rate
of corporation tax in the US. The Group's effective tax rate (ETR) on profit
is 38.9% (2023: 11.6%). The 2024 ETR is 27.6% once the effect of the Estonia
distribution tax is removed.
The reasons for the difference between the actual tax charge for the year and
the applicable rate of income tax of the US reporting entity applied to the
results for the year are as follows:
2024 2023
$'000 $'000
Profit before tax 6,186 11,407
Tax rate (US income tax rate) 21% 21%
Profit before tax multiplied by the applicable rate of tax: 1,299 2,395
Variance in overseas tax rates 129 28
Impact of change in tax rates 24 (204)
Impact of difference between CT & DT rate (841) 1,010
Expenses not deductible for tax purposes 1,045 1,003
Utilisation of tax losses 475 (3,532)
Non qualifying depreciation 11 7
Adjustments in respect of prior years 28 (364)
Foreign tax 174 249
Other differences (677) 288
Distribution tax 698 -
US state taxes/ Withholding taxes 42 441
Total tax (credit)/ expense 2,407 1,321
2024 2023
Deferred Tax $'000 $'000
Net opening position 15,124 15,518
Net recognition in the year 733 (394)
P&L 228 2
Equity 496 (396)
Foreign exchange revaluation 9 -
Net closing position 15,857 15,124
The net closing position is made up of:
- The deferred tax liability at 31 December 2024 is $239k (2023:
$182k) relates primarily to undistributed BNS Estonia OU profits.
- The deferred asset at 31 December 2024 of $16,096k (2023:
$15,306k) relates primarily to the recognition of the US and UK available
losses which management believe that can be utilised within the next six
years. Each year management assesses the recoverability of the deferred tax
assets.
A deferred tax asset/ (liability) has not been recognised for the following
items:
2024 2023
$'000 $'000
Other temporary and deductible differences - (7,925)
Unused tax losses 15,494 6,197
Total deferred tax assets 15,494 (1,728)
The Group has carried forward tax losses and other timing differences at the
reporting date. In respect of its UK subsidiary, these can be carried forward
and offset against UK taxable income indefinitely. In respect of its US
entities, net operating loss carry forwards can be carried forward and offset
against taxable income for 20 years for losses incurred up to and including 31
December 2017. These expire on various dates through to 2037. All net
operating loss carry forwards incurred after 31 December 2017 can be carried
forward and offset against US taxable income indefinitely. Utilisation of US
net operating loss or tax credit carry forwards may be subject to annual
limitations if an ownership change had occurred pursuant to the section 382
Internal Revenue Code and similar state provisions.
Deferred tax assets are recognised to the extent of the deferred tax liability
arising on temporary differences in the same entity, and there is a legal
right of offset and the temporary differences are expected to unwind in the
same entity and period. Remaining deferred tax assets are recognised to the
extent there are sufficient taxable profits available in which the temporary
difference can be utilised, based on profit forecasts and probability
weightings. Management have based the forecasts on the Group's five-year plan,
which is aligned with the detailed going concern assessment, evaluating Boku's
current and projected financial performance and position, including forecast
cash flows.
At the reporting date, undistributed reserves on non-US subsidiaries
(excluding BNS Estonia OU) of $3,685k may attract withholding tax. No deferred
tax liabilities have been recognised because the timing of any distribution is
under the Group's control and there are no plans to distribute in the
foreseeable future.
UK corporation tax rates increased from 19% to 25% with effect from 1 April
2023, in accordance with the Finance Act 2021. Current and deferred taxes have
been computed at 25%. There have been no significant changes in tax rates
enacted or effective in the current or prior year that are expected to have a
material impact on the financial statements. The company will continue to
monitor any potential changes in tax legislation that may impact its future
financial performance.
11. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
the equity holders of the Company by the weighted average number of ordinary
shares issued during the year after deducting shares held in treasury.
Diluted earnings per share is calculated by adjusting basic earnings per share
for the potential dilution from share options, RSUs, and warrants. For the
purposes of the diluted earnings per share calculation, it is assumed that all
performance conditions attached to these schemes have been met as of the
reporting date.
The weighted average number of shares in issue during the year and the
resulting earnings per share calculations are as follows:
2024 2023
Profit for the year attributable to shareholders of the Company ($,000) 3,779 10,086
Weighted average number of shares in issue 300,389,412 297,942,357
Dilutive effect of share plans (options and RSU's) and warrants(1) 16,569,341 15,337,750
Diluted weighted average number of shares in issue 316,958,753 313,280,107
Basic earnings per share ($) 0.01 0.03
Diluted earnings per share ($) 0.01 0.03
( )
(1)The Amazon Warrants increase the number of diluted shares reported, which
has an effect on our fully diluted earnings per share. If Amazon exercises its
right to acquire shares pursuant to the Amazon Warrant agreement, it will
dilute the ownership interests of existing shareholders and reduce earnings
per share.
12. Property, plant, and equipment
Computer equipment and software Office equipment and fixtures and fittings Leasehold improvement Property, plant, and equipment Total
$'000 $'000 $'000 $'000
Cost
At 1 January 2023 1,546 286 228 2,060
Additions 372 62 - 434
Disposals (37) (4) - (41)
Exchange adjustment 20 12 9 41
At 31 December 2023 1,901 356 237 2,494
Additions 448 56 25 529
Disposals (353) (6) - (359)
Exchange adjustment (48) (16) (4) (68)
At 31 December 2024 1,948 390 258 2,596
Accumulated depreciation
At 1 January 2023 992 227 145 1,364
Charge for year 305 38 42 385
Disposals - - - -
Exchange adjustment (25) 6 6 (13)
At 31 December 2023 1,272 271 193 1,736
Charge for year 382 47 55 484
Disposals (349) (5) - (354)
Exchange adjustment (28) (13) (5) (46)
At 31 December 2024 1,277 300 243 1,820
Net book value
At 31 December 2023 629 85 44 758
At 31 December 2024 671 90 15 776
No impairment has been recorded during the years 2024 and 2023.
13. Intangible assets
Domain name Developed technology Merchant relationships Trade-marks Goodwill Internally developed software Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Cost
At 1 January 2023 140 5,793 14,899 110 41,733 16,401 79,076
Additions - - - - - 5,430 5,430
Exchange adjustment - 389 444 - 450 (167) 1,116
At 31 December 2023 140 6,182 15,343 110 42,183 21,664 85,622
Additions - - - - - 7,016 7,016
Write-offs - - - - - (303) (303)
Exchange adjustment - (355) (865) - (876) (109) (2,205)
At 31 December 2024 140 5,827 14,478 110 41,307 28,268 90,130
Accumulated amortisation
At 1 January 2023 140 2,817 10,204 - - 9,685 22,846
Charge for year - 1,276 904 - - 3,562 5,742
Exchange adjustment - 383 (15) - - 46 414
At 31 December 2023 140 4,476 11,093 - - 13,293 29,002
Charge for year - 802 644 - - 4,461 5,907
Write-offs - - - - - (303) (303)
Exchange adjustment - (9) (651) - - (301) (961)
At 31 December 2024 140 5,269 11,086 - - 17,150 33,645
Net book value
At 31 December 2023 - 1,706 4,250 110 42,183 8,371 56,620
At 31 December 2024 - 558 3,392 110 41,307 11,118 56,485
Developed technology
In 2023, Boku initiated a project to migrate the merchants acquired through
the Fortumo acquisition from the Fortumo platform to the Boku platform. Upon
completion, the Fortumo payments platform will become obsolete. The project is
expected to conclude in 2025, and the amortisation of the Fortumo payments
platform was accelerated in 2023 to reflect its remaining useful life.
Goodwill
This represents the excess of the consideration paid over the fair value of
net assets of Mopay AG (Mopay), acquired in October 2014, and Fortumo Holdings
Inc., acquired on July 1, 2020, and is allocated to the Payment Services
cash-generating unit (CGU). The recoverable amount of the Payments Services
CGU was determined to exceed its carrying value, indicating no impairment is
required.
14. Leases
Boku's leases relate to offices across locations where it operates.
2024 2023
Right-of-use assets - Offices $'000 $'000
Cost
At 1 January 6,249 6,178
Additions 1,292 957
Disposals (920) (975)
Exchange adjustment (173) 89
At 31 December 6,448 6,249
Accumulated depreciation
At 1 January 3,465 2,945
Charge for year 1,508 1,430
Disposals (976) (971)
Exchange adjustment 18 61
At 31 December 4,015 3,465
Net book value - Right-of-use assets 2,433 2,784
The additions related to renewal of India office, together with the 1-year
renewal of the office leases for Ireland, Germany, Japan, and Singapore.
Additions in the prior year related to the renewal of the Estonia office,
together with the 1-year renewal of the office lease for Ireland, Germany,
Japan, and Singapore.
Reconciliation for discounted lease liabilities included in the statement of
financial position is set out as below:
2024 2023
Lease Liabilities - Offices $'000 $'000
Lease liabilities as at 1 January 3,052 3,549
Additions 1,213 937
Interest expense 184 171
Payments to lease creditors (1,747) (1,649)
Exchange adjustment (55) 44
Lease liabilities as at 31 December 2,647 3,052
Current portion of lease liabilities 1,035 1,370
Non-current portion of lease liabilities 1,612 1,682
During the year, short-term and small-value leases expensed in other operating
expenses amounted to $321k (2023: $329k).
The table below represents the maturity analysis of contractual undiscounted
lease payments:
2024 2023
$'000 $'000
Less than one year 1,035 1,370
One to five years 1,839 1,692
Over five years 63 -
Total undiscounted lease liabilities as at 31 December 2,937 3,062
The amounts recognised in the consolidated statement of cash flows are
presented below:
2024 2023
$'000 $'000
Payment of principal 1,563 1,478
Payment of interest 184 171
Total lease cash outflows 1,747 1,649
15. Subsidiaries
The subsidiaries of the Company, all of which have been included in the
consolidated financial information, are presented below.
Name Ownership Principal activity Place of Incorporation
Boku Payments, Inc. 100% owned by Boku, Inc. Holding Company United States
Boku Network Services, Inc. 100% owned by Boku, Inc. Holding Company United States
Boku Account Services, Inc. 100% owned by Boku, Inc. Holding Company United Stated
Boku Account Services UK Ltd. 100% owned by Boku Account Services, Inc. Digital payment solutions United Kingdom
Boku Brasil Participações Ltda. 100% owned by Boku Network Services, Inc. Holding company Brazil
Boku Network Brasil Instituição De Pagamento Ltda. 100% owned by Boku Brasil Participações Ltda. Digital payment solutions Brazil
Boku Network Services GmbH 100% owned by Boku, Inc. Digital payment solutions Germany
Boku Network Services UK Ltd 100% owned by Boku Network Services, Inc. Digital payment solutions United Kingdom
Boku Network Services AU Pty Ltd 100% owned by Boku Network Services, Inc. Digital payment solutions Australia
Boku Network Services IN Pvt. Ltd. 100% owned by Boku Network Services, Inc. Digital payment solutions India
Boku Network Services SG Pte. Ltd. 100% owned by Boku Network Services, Inc. Digital payment solutions Singapore
Boku Network Services HK Limited 100% owned by Boku Network Services, Inc. Digital payment solutions Hong Kong
Boku Network Services Taiwan Branch Office 100% owned by Boku Network Services, Inc. Digital payment solutions Taiwan
Boku Network Services Japan Branch Office 100% owned by Boku Network Services, Inc. Digital payment solutions Japan
Mopay AG Beijing Representative Branch 100% owned by Boku Network Services AG (Germany) Digital payment solutions China
Boku Network Services IE Limited 100% owned by Boku Network Services, Inc. Digital payment solutions Ireland
Boku Network Services MY Sdn. Bhd. 100% owned by Boku Network Services, Inc. Digital payment solutions Malaysia
Boku Network Services EE Holdings, Inc. 100% owned by Boku Network Services, Inc. Holding Company United States
Boku Network Services TH Co Ltd.(1) 49.9% owned by Boku Network Services, Inc. Digital payment solutions Thailand
Boku Network Services PH, Inc. 99.99% owned by Boku Network Services, Inc. Digital payment solutions Philippines
Boku Network Services MX S. de R.L. de C.V. 50% owned by Boku Network Services, Inc. 50% owned by Boku, Inc. Dormant Mexico
Boku Network Services Estonia OÜ (previously Fortumo OÜ) 100% owned by Boku Network Services EE Holdings, Inc. Digital payment solutions Estonia
Boku Network Services ES S.L. 100% owned by Boku Network Services Estonia OÜ Dormant Spain
Fortumo Mobile Services Pvt. Ltd. 100% owned by Boku Network Services Estonia OÜ Digital payment solutions India
Fortumo Singapore Pte. Ltd. 100% owned by Boku Network Services Estonia OÜ Digital payment solutions Singapore
Boku Network Services PE S.A.C. 100% owned by Boku Network Services, Inc. Dormant Peru
Boku Network Services CO S.A.S. 100% owned by Boku Network Services, Inc. Digital payment solutions Colombia
Boku Network Services CL S.P.A. 100% owned by Boku Network Services, Inc. Dormant Chile
Boku Network Services ZA (Pty) Ltd 100% owned by Boku Network Services, Inc. Dormant South Africa
Boku Network Services KE Limited 100% owned by Boku Network Services, Inc. Dormant Kenya
Boku Network Services TZ Limited 99.999% owned by Boku Network Services, Inc. 0.001% owned by Boku, Inc. Dormant Tanzania
Boku Network Services AR S.R.L. 95% owned by Boku Network Services, Inc. 5% owned by Boku, Inc. Dormant Argentina
Boku Network Services UG Limited 99.95% owned by Boku Network Services, Inc. 0.05% owned by Boku, Inc. Dormant Uganda
Boku Network Services UY S.A. 100% owned by Boku Network Services, Inc. Dormant Uruguay
(https://bokucorp.atlassian.net/wiki/spaces/LEGPAYMO/pages/7396950457)
Boku Network Services Nigeria Limited 100% owned by Boku Network Services, Inc. Dormant Nigeria
(1) Boku Network Services TH Co Ltd is considered a subsidiary of Boku Network Services, Inc. as it has control over its activities under IFRS 10.
16. Issuer, trade and other receivables
2024 2023
$'000 $'000
Receivables from issuers(1) 134,672 130,971
Trade receivables 12,122 12,974
Less: allowance for expected credit losses (1,385) (2,047)
Net accounts receivable 145,409 141,898
Other receivables 187 125
Deposits held 646 604
Sales taxes receivable 1,266 1,102
Prepayments 3,689 3,185
Total trade and other receivables 151,197 146,914
(1)Receivables from issuers represent amounts due from issuers for processed
transactions, which are expected to be settled within one year. In 2024, Boku
revised the presentation of trade and other receivables to enhance the clarity
and usefulness of financial disclosures. As part of this change, trade and
other receivables were represented on the statement of financial position as
issuer, trade and other receivables and issuer receivables were reclassified
from trade and other receivables into a separate line item in the note.
Comparative figures for 2023 have been represented to reflect this
reclassification.
In 2023, $5,600k was received relating to the final settlement from the sale
of the Identity business.
Allowance for expected credit losses:
2024 2023
$'000 $'000
Opening balance 2,047 1,238
Increase/(decrease) in loss allowance(1) (572) 1,017
Utilised during the year(1) (90) (208)
Closing balance 1,385 2,047
(1)Movements in expected loss provisions and provision utilisation /write-off
are recorded in the cost of providing services.
Information about Boku's exposure to credit and market risk and loss allowance
for trade receivables is included in Note 24.
17. Cash and cash equivalents and restricted cash
2024 2023
$'000 $'000
Cash and cash equivalents 142,308 117,360
Restricted cash 35,025 33,499
177,333 150,859
The restricted cash primarily includes safeguarded customer funds received but
not yet paid to merchants for Boku's licensed entities, cash held at the bank
to secure a lease agreement for Boku's San Francisco office, and monies held
at a financial institution to collateralise Company credit cards.
18. Warrants
On 16 September 2022, Boku entered into a stock warrant agreement with Amazon
in conjunction with a commercial service level agreement for Boku to provide
payment processing services to Amazon.
Under the agreement, Boku issued warrants to Amazon allowing them to purchase
common stock that will vest incrementally, based on the amount of revenue
earned from Amazon via Boku payment processing methods. The warrant agreement
grants Amazon the right to acquire up to 11,215,142 shares of common stock in
the Group (equivalent to 3.75% of the Boku's total common stock as at the
inception of the warrant agreement). 747,676 warrants of common stock vested
immediately on the signing of the warrant agreement on 16 September 2022.
209,350 additional shares of common stock will vest for every $1m of revenue
generated by Boku under its service level agreement with Amazon over a 7-year
vesting period ending 15 September 2029. During the year 418,700 (2023:
209,350) additional warrants of common stock vested for revenue generated
under the agreement. No further warrants will vest after $50m of revenue is
generated under the service level agreement, which results in a final vesting
increment of 209,316 shares of common stock. The exercise price of vested
warrants is 81.20p per share, based on the 30-day volume weighted average
trading price as at 16 September 2022.
Boku has determined that the 747,676 warrants of common stock that vested
immediately on signing of the warrant agreement, are equity instruments under
IAS 32, as they represent a fixed number of shares that will be exercised at a
fixed price. The warrants will therefore not be accounted for until they are
exercised and paid, at which point share capital and share premium will be
recorded.
Boku has determined that the remaining warrants linked to revenue under the
service level agreement are within the scope and revenue recognition and
financial instruments accounting standards. The warrants represent a
derivative financial instrument classified as a financial liability in
accordance with IAS 32 and IFRS 9, remeasured to fair value with gains and
losses recognised in profit or loss. The warrants also represent non-cash
consideration payable to a customer under IFRS 15, which is recorded as a
reduction to revenue and measured at fair value, but not subsequently
remeasured.
At inception of the warrant, an equal and opposite derivative financial
liability and corresponding contract asset are recorded at fair value, based
on the total number of warrants expected to vest (linked to forecasted Amazon
revenues under the service level agreement) and the fair value of a single
warrant.
The contract asset, which effectively represents a prepaid or deferred volume
rebate, is amortised to revenue based on Amazon revenues to date as a
proportion of total expected Amazon revenues over the 7 year vesting
period.
The derivative financial liability is remeasured to fair value at each
reporting date. The fair value movement attributable to the change in the
number of shares expected to vest due to a change in estimated Amazon revenues
over the 7-year vesting period is recorded as an equal and opposite increase
to the financial liability and contract asset, based on the fair value of the
warrant at inception. The fair value movement attributable to the change in
the fair value of the underlying warrants is recognised as gains or losses in
profit or
loss.
The fair value of warrant obligations as at 31 December 2024 was $9,130k
(2023: $5,511k), 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 4.41%), combined with an increase in the number of warrants
expected to vest from 5,334K to 5,571k. The fair value of 1 warrant increased
to $1.639 at 31 December 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 by $216k. The remaining increase in the
fair value of underlying warrants of $3,403k represented a charge to the
statement of comprehensive income. The warrants are classified as Level 3
derivative liabilities, as they require significant judgement or estimation
due to the absence of an active market. The fair value was determined using a
combination of Monte Carlo Simulation and Black-Scholes Model valuation
methods.
Significant unobservable inputs used in the valuation included an equity
volatility of 40% (2023: 40%), revenue volatility of 35% (2023: 30%), a
risk-free rate of 4.41% (2023: 3.81%), and forecasted revenue from Amazon over
the 7-year vesting period.
A significant change in volatilities would materially impact the fair value of
the warrants. At 31 December 2024, a 5% decrease in both equity and revenue
volatilities (to 35% and 30%, respectively) would have resulted in a fair
value reduction to $8,956k, a decline of $174k. Conversely, a 5% increase (to
45% and 40%, respectively) would have increased the fair value to $9,348k, an
increase of $218k.
The movement of the contract asset for Amazon and warrant liabilities during
2024 and 2023 is as follows:
2024 2023
Warrant contract asset $'000 $'000
Balance at January 1 1,962 1,711
Change in the number of warrants expected to vest 216 359
Amortisation to revenue (164) (108)
Balance as at 31 December 2,014 1,962
2024 2023
Warrant Liability $'000 $'000
Balance at January 1 5,511 5,206
Change in the number of warrants expected to vest 216 358
Change in fair value of underlying warrants 3,403 (53)
Balance as at 31 December 9,130 5,511
Exercise of other warrants in the year
Danal Company Ltd exercised a total of 1,634,699 warrants (2023: Nil),
exercisable at 141p, for a total compensation of $3,000k. 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 Boku's acquisition of
Danal, Inc., announced on 6 December 2018 and completed on 1 January
2019.
19. Other non-current liabilities
Other non-current liabilities represent accrued taxes on Stock options and
RSUs amounting to $1,676k (2023: $979k)
20. Merchant, trade and other payables
2024 2023
$'000 $'000
Payables to merchants(1) 243,878 221,885
Trade payables 1,344 1,644
Total account payable classified as financial liabilities 245,222 223,529
Accruals 5,664 5,357
Other payables including taxes and social security costs 1,268 1,967
Provision for social security costs on stock options & RSUs 728 588
Total current trade and other payables 252,882 231,441
(1)Payables to merchants represent amounts due to merchants for processed
transactions, which are expected to be settled within one year. In 2024, Boku
revised the presentation of trade and other payables to enhance the clarity
and usefulness of financial disclosures. As part of this change, trade and
other payables were represented on the statement of financial position as
merchant, trade and other payables and merchant payables were reclassified
from trade and other payables into a separate line item in the note.
Comparative figures for 2023 have been represented to reflect this
reclassification.
21. Equity
a) Share Capital
Authorised share capital
The authorised share capital comprises 500,000,000 shares (2023: 500,000,000).
Boku has a single class of ordinary shares with a par value of $0.0001 each.
Ordinary shares issued and fully paid
Boku's issued share capital is summarised in the table below:
2024 2023
Common shares of $0.0001 each Number of Shares Number of Shares
'000 '000
$'000 $'000
Opening balance 301,067 29 299,270 29
Issue of share capital 1,635 - - -
Exercise of options and RSUs 409 - 1,797 -
Closing balance 303,111 29 301,067 29
b) Nature and purpose of reserves
Below is a description of the nature and purpose of various equity reserves.
Movements on these reserves are set out in the consolidated statement of
changes in equity.
Other reserves
The other reserves disclosed in the consolidated statement of financial
position include a share premium representing the difference between the issue
price and the nominal value of the shares issued by Boku. It also includes all
stock option expenses reserves.
Foreign currency translation reserve
The foreign currency translation reserve comprises cumulative foreign currency
translation differences arising from the translation of financial statements
of overseas
operations.
Treasury reserve
Treasury reserve relates to the amounts paid to buy back shares from the
market. At 31 December 2024, Boku holds 4,548,434 shares in treasury (2023:
4,007,868).
Retained losses
Retained losses represent cumulative net losses in the consolidated income
statement.
c) Dividends
No dividends were declared or paid in the current year (2023: Nil).
22. Share-based payment
As part of the total remuneration package, Boku has the following share-based
compensation schemes for employees, directors, and non-employees:
i) 2009 Equity Incentive Plan (2009
Plan)
ii) 2017 Equity Incentive Plan (2017
Plan)
iii) Stretch Restricted Share Unit Plan (2024
Plan)
2009 Plan
2009 equity incentive plan (2009 Plan) for the granting of stock options,
restricted stock awards (RSA), and restricted stock units (RSU). No options
were available to be issued under this plan as at 31 December 2024 or 2023.
There are 1,788k options vested but not exercised under this plan as at 31
December 2024 (FY2023: 2,218k).
Movements in the number of share options outstanding and their related
weighted average exercise prices under the 2009 plan are as follows:
2024 2023
Share options Number of options Weighted average Number of options Weighted average
outstanding
(thousands)
exercise price
(thousands)
exercise price
per share option
per share option
(in USD) (in USD)
Balance January 1 2,218 $0.30 3,771 $0.34
Exercise (420) $0.29 (1,513) $0.31
Forfeited (10) $0.28 (40) $0.28
Balance 31 December 1,788 $0.30 2,218 $0.30
The fair value of each option (excluding RSUs) has been estimated on the date
of grant using the Black-Scholes option pricing model with the following
assumptions: expected terms ranging from 4.99 to 6.89 years; risk-free
interest rates ranging from 0.73% to 3.05%; expected volatility of 58%; and no
dividends during the expected term. The weighted average remaining contractual
life of options under the plan is 1.3 (2023: 2.4) years.
2017 Plan
2017 Equity Incentive Plan (2017 Plan) for the granting of stock options and
restricted stock units (RSUs). The Group reserved an initial ten million
shares of common stock for issue under the plan.
Options were granted in the 2017 Plan only in January 2018. Since then, only
RSUs have been granted under the plan. The options granted under this plan
vest over 3 years and contain a one-year cliff. Therefore, 25% of the options
vest at the end of one year, and from year two, graded quarterly vesting takes
place, where each instalment of vesting is treated as a separate stock option
grant. Options under the 2017 Plan may be outstanding for periods of up to ten
years from the grant date. There are 476k options (FY 2023: 836k) outstanding
as at 31 December 2024.
Movements in the number of share options outstanding and their related
weighted average exercise prices under the 2017 plan are as follows:
2024 2023
Share options Number of options Weighted average Number of options Weighted average
outstanding
(thousands)
exercise price per share option
(thousands)
exercise price per share option
(in USD) (in USD)
Balance January 1 836 $1.205 837 $1.205
Exercised (322) $1.205 (1) $1.205
Forfeited (38) $1.205 - -
Balance 31 December 476 $1.205 836 $1.205
The fair value of each option (excluding RSUs) has been estimated on the date
of grant using the Black-Scholes option pricing model with the following
assumptions: expected terms ranging from 5.04 to 6.01 years; risk-free
interest rates ranging from 1.87% to 1.92%; volatility of 45%; and no
dividends during the expected term. The weighted average remaining contractual
life of options under the plan is 3.1 (2023: 4.0) years.
RSUs under the 2017 Plan remain outstanding for periods of up to three years
following the grant date. Outstanding RSU grants generally vest over three
years in three equal portions or one-third after two years and two-thirds in
the third-year anniversary from the grant date. There are 12,570k (2023:
11,597k) RSUs outstanding as at 31 December 2024.
Movements in the number of RSUs awards under the 2017 plan are as follows:
2024 2023
RSUs outstanding Number of RSUs Weighted-average Number of RSUs Weighted-average
(thousands)
grant-date fair value (in USD)
(thousands)
grant-date fair value (in USD)
Balance January 1 11,597 $1.978 10,069 $1.919
Granted 5,792 $2.131 5,832 $1.860
Vested (3,783) $1.990 (3,290) $1.319
Forfeited (1,036) $2.003 (1,014) $1.937
Balance 31 December 12,570 $2.043 11,597 $1.978
The number of available RSUs for future use in the plan at the end of 2024
were 61,423k (2023: 54,259k)
2024 Plan
On 2 October 2024, the Company granted Restricted Share Units (RSUs) under the
Stretch Restricted Share Unit Plan (SRSU Plan). The RSUs vest based on a
market-based performance condition, requiring the Company's 40-day VWAP share
price after the 2027 financial results to reach a specified multiple of the
base share price of 180.4p. 25% of the awards vest if the share price reaches
3x the base price, 100% vest if it reaches 5x, and vesting occurs on a
straight-line basis for outcomes between these thresholds.
Awards will vest in in two instalments:
- 50% in July 2028 (after 4.5 years)
- 50% in July 2029 (after 5.5 years)
The fair value of the RSUs was determined using a Monte Carlo simulation,
incorporating market-based performance conditions, with the following
assumptions: risk-free interest rates 4.19%; volatility of 33.74%; and no
dividends during the expected term.
The expense is recognised over the vesting period using a straight line
vesting approach.
Movements in the number of RSUs awards under the 2024 plan are as follows:
2024 2023
RSUs outstanding Number of RSUs Weighted-average Number of RSUs Weighted-average
(thousands)
year-end fair value (in USD)
(thousands)
year-end fair value (in USD)
Balance January 1 - - - -
Granted 7,220 $0.137 - -
Vested - - - -
Forfeited - - - -
Balance 31 December 7,220 $0.137 - -
The breakdown of total share-based payment expense is as follows:
2024 2023
$'000 $'000
Share-based payment expense (excluding national insurance) 8,903 7,467
National insurance benefit/(reversal) 908 (435)
National insurance paid in the year 715 563
Total share-based payment expense 10,526 7,595
23. Cash generated from operations
2024 2023
Note $'000 $'000
Cash flows from operating activities
Profit for the year 3,779 10,086
Adjustments for:
- Depreciation of property, plant, and equipment 12 484 385
- Amortisation of intangible assets 13 5,907 5,742
- Depreciation of right-of-use assets 14 1,508 1,430
- Loss on disposal of property, plant, and equipment 3 1
- Amortisation of warrant contract asset 18 164 108
- Fair value loss/(gain) on warrants 18 3,403 (53)
- Share-based payment expense 22 8,903 7,467
- Net Finance income 9 (3,433) (1,638)
- Employer taxes on stock options and restricted stock units 908 (435)
benefit/(charge)
- Income tax expense 10 2,407 1,321
Changes in net working capital(1):
- Increase in Issuer, trade and other receivables including (7,139) (54,356)
contract assets
- Increase in merchant, trade and other payables including 25,765 70,877
contract liabilities
Cash generated from operations (2) 42,659 40,935
(1) Net working capital includes both short-term and long-term items.
(2) In 2024, Boku changed the presentation of the cash flows relating to
operations activities to improve the usefulness of disclosed information. The
comparative amounts for 2023 have been re-represented accordingly.
24. Financial instruments - Fair values and risk management
a) Classes and categories of financial instruments and their fair values
Fair value measurements are categorised into Level 1, 2, and 3 based on the
degree to which the inputs to the fair value measurements are observable and
the significance of the inputs to the fair value measurement in its entirety,
which is as follows:
- Level 1 - Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
- Level 2 - Inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
- Level 3 - Inputs for the asset or liability that are not based
on observable market data (i.e. unobservable inputs)
At the end of each reporting period, Boku categorises its financial assets and
liabilities according to the appropriate level of fair value hierarchy, which
is summarised in the table below.
Carrying Amounts Fair Value ((1))
Amortised Fair value
through profit or loss((3))
2024 Cost Level 1 Level 2 Level 3 Total Total
Cash and cash equivalents 177,333 - - - 177,333 177,333
Issuers and Trade receivables -net 145,409 - - - 145,409 145,409
Deposits 646 - - - 646 646
Total financial assets 323,388 - - - 323,388 323,388
Merchant and Trade payables 245,222 - - - 245,222 245,222
Lease liabilities 2,647 - - - 2,647 2,647
Warrant liability ((2)) - - - 9,130 9,130 9,130
Total financial liabilities 247,869 - - 9,130 256,999 256,999
Carrying Amounts Fair Value ((1))
Amortised Fair value
Cost
through profit or loss
2023 Level 1 Level 2 Level 3 Total Total
Cash and cash equivalents 150,859 - - - 150,859 150,859
Issuers and Trade receivables - net 141,898 - - - 141,898 141,898
Deposits 604 - - - 604 604
Total financial assets 293,361 - - - 293,361 293,361
Merchant and Trade payables 223,529 - - - 223,529 223,529
Lease liabilities 3,052 - - - 3,052 3,052
Warrant liability ((2)) - - - 5,511 5,511 5,511
Total financial liabilities 226,581 - - 5,511 232,092 232,092
(1)Items carried at fair value are measured at fair value at the end of each
reporting period. The fair value of items not carried at fair value is
estimated to equal the carrying amount due to limited credit risk and short
time to maturity.
(2)Warrants are classified as Level 3 derivative liabilities and valued using
a combination of Monte Carlo Simulation and Black-Scholes Model valuation
methods. For more information, refer to Note 18.
(3) There were no transfers between levels 1, 2 & 3 for fair value
measurements during 2024 and 2023.
b) Financial risk management
The principal financial risks to which Boku is exposed are as
follows:
· Market risk (Interest rate risk & Foreign currency risk)
· Credit risk
· Liquidity risk
Risk management within Boku is the responsibility the Board of Directors,
whose primary objective is to establish policies that mitigate financial
risks. All funding requirements and financial risks are managed in accordance
with the policies and procedures approved by the
Board.
Market Risk
Market risk is the risk that the value of financial instruments may fluctuate
due to changes in market conditions, including interest rates and foreign
exchange rates. Boku faces market risk primarily from foreign currency and
interest rate exposures that arise through its operational activities.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate due to changes in market interest rates.
Although Boku does not have borrowings, it is exposed to interest rate risk
primarily through its interest-earning cash balances held across multiple
jurisdictions.
Rising interest rates have had a positive effect on Boku's cash position.
During 2024, Boku earned bank interest income of $3,654k (2023: $1,887k). A
change of 100 basis points in interest rates at the reporting date, with all
other variables held constant, would have increased / (decreased) interest
income by the amounts shown below:
- Increase of 100 basis points (1%): Increase in interest income
by approximately $656k
- Decrease of 100 basis points (1%): Decrease in interest income
by approximately $628k
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of
a financial instrument will fluctuate due to changes in exchange rates. This
risk arises from transactions denominated in foreign currencies and from
receivables and payables that exist due to such transactions. Operating
globally, Boku faces both transaction and translation foreign exchange risks.
Boku is exposed to transactional foreign currency risk to the extent that
there is a mismatch between the currencies in which revenues, receivables, and
payables are denominated and Boku's functional currency. To mitigate this
exposure, Boku settles payments over short periods and applies mark-up fees to
cover currency fluctuations.
Additionally, Boku is exposed to foreign currency translation risk due to
subsidiaries that have functional currencies other than the U.S. dollar. As a
result, shareholders' equity is subject to fluctuations in exchange rates,
with translation differences reported as currency translation adjustments in
the consolidated financial statements. This translation risk does not give
rise to a cash flow exposure.
Boku operates in 58 currencies (2023: 60 currencies), with primary exposure
arising from the Euro (EUR), British pound (GBP), and Japanese yen (JPY). The
table below summarises Boku's net exposure (difference between financial
assets and liabilities) across these currencies and shows the sensitivity to a
potential 10% change in exchange rates, assuming all other variables remain
constant:
2024
EUR GBP JPY Others
$'000 $'000 $'000 $'000
Accounts receivable 39,307 26,903 24,561 53,963
Cash and cash equivalent 36,587 1,028 23,750 27,889
Accounts payable (61,026) (21,205) (35,500) (77,713)
Net FX exposure 14,868 6,726 12,811 4,139
10% impact +/- 1,652 747 1,423 460
2023
EUR GBP JPY Others
$'000 $'000 $'000 $'000
Accounts receivable 41,076 15,933 15,042 60,108
Cash and cash equivalent 25,220 8,379 24,238 13,393
Accounts payable (54,702) (19,074) (29,586) (79,968)
Net FX exposure 11,594 5,238 9,694 (6,467)
10% impact +/- 1,288 582 1,076 (718)
The following significant exchange rates were applied during the year:
2024 2023
Average Reporting Average Reporting
Rate Date Rate Rate Date Rate
USD per EURO 1.04759 1.03872 1.09161 1.10372
USD per GBP 1.26401 1.25359 1.26634 1.27314
USD per JPY 0.00650 0.00638 0.00695 0.00709
If the functional currency, at the reporting date, had fluctuated by 10%
against the EUR, GBP, and JPY with all other variables held constant, the
impact on profit after taxation for the year would have been $4,282k (2023:
$2,228k) respectively higher / lower, mainly as a result of exchange
gains/losses on translation of foreign exchange denominated financial
instruments.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is exposed to credit risk from its operating activities
(primarily issuer, trade and other receivables) and from its financing
activities, including deposits with banks and financial institutions.
The maximum exposure to credit risk by class of financial asset is as follows:
2024 2023
$'000 $'000
Cash and cash equivalents 177,333 150,859
Issuer and Trade receivables - net 145,409 141,898
Deposits 646 604
323,388 293,361
Cash and cash equivalents
The credit risk on liquid funds is limited as counterparties are highly rated
banks with credit ratings assigned by reputable credit rating agencies,
including Fitch Ratings and Standard & Poor. Boku regularly monitoring
their creditworthiness to mitigate financial loss, and while cash and cash
equivalents fall under IFRS 9 impairment requirements, no impairments were
recognised due to their insignificant risk of value changes. Boku's cash and
cash equivalent breakdown by credit ratings is as follows:
2024 2023
$'000 $'000
AA- 6,096 3,472
A+ 25,314 40,977
A 140,326 103,883
BBB 3,289 2,174
BB+ 855 36
D 125 124
Unrated 1,328 193
177,333 150,859
Issuer and trade receivables
Boku is exposed to credit risk primarily through receivables from issuers and
trade receivables. Boku limits its exposure to credit risk from issuer and
trade receivables by entering into contracts with creditworthy counterparties
and where possible by limiting its liability contractually to merchants in the
event of non-payment from issuers. Credit terms for issuer and trade
receivables are standard and short-term, with no significant financing
component.
Boku applies the simplified approach under IFRS 9 in calculating expected
credit losses (ECL) for receivables from issuers and trade receivables,
recognising a lifetime ECL as they do not contain a significant financing
component. Receivables are grouped by days past due and historical loss
experience. The expected credit loss model was updated at year-end, to reflect
reasonable and supportable information, including forward-looking information,
available on credit risk of the issuer and trade receivable balances.
For the year ended 2024, the total ECL provision was $1,385k (2023: $2,047k),
representing 0.94% (2023: 1.42%) of total receivables. The majority of
receivables aged less than 60 days had no significant credit risk, while
higher loss rates were applied to older balances based on historical default
patterns. Receivables over 150 days past due had the highest loss rate,
reflecting increased credit risk. The decrease in provision was primarily due
to improved collection patterns and a lower proportion of overdue balances in
the high-risk category. The Company continues to monitor credit risk closely,
applying adjustments where necessary to reflect changes in the current and
future macroeconomic environment and debtor-specific risks.
Liquidity risk
Liquidity risk is the risk that Boku will not be able to meet its financial
obligations as they fall due. Boku's approach to managing liquidity is to
maintain, as far as possible, sufficient liquidity to meet liabilities when
due under both normal and stressed conditions without incurring unacceptable
losses or compromising its reputation.
As an intermediary, Boku considers cash flows related to merchant funds as
generally balanced from a liquidity perspective. In most cases, merchant
payables are settled after cash is collected from issuers; however, for
certain merchants, payments can be made before corresponding receipts are
received. This mixed payment approach is carefully monitored to ensure
liquidity remains adequate. The liquidity risk of each group entity is managed
by the Treasury team at the entity level to meet any liquidity obligations.
The following table presents the remaining contractual maturities of Boku's
financial liabilities as of the reporting date. These amounts are gross,
undiscounted, and include estimated future interest payments where applicable.
Within 1 year 2-5 years More than 5 years Total
31 December 2024 $'000 $'000 $'000 $'000
Merchant and Trade payables 245,222 - - 245,222
Warrant liability - - 9,130 9,130
Leases liabilities 1,035 1,839 63 2,937
Total(1) 246,257 1,839 9,193 257,289
Within 1 year 2-5 years More than 5 years Total
31 December 2023 $'000 $'000 $'000 $'000
Merchant and Trade payables 223,529 - - 223,529
Warrant liability - - 5,511 5,511
Lease liabilities 1,370 1, 692 - 3,062
Total(1) 224,899 1,692 5,511 232,102
( )
(1) No material difference between discounted and undiscounted fair value.
Capital Management
Boku's capital structure consists of share capital, other reserves, treasury
shares, foreign exchange reserve, and retained losses. Boku's objectives in
managing capital are:
· To safeguard its ability to continue as a going concern, enabling
it to provide returns for shareholders and benefits for other stakeholders and
· To provide adequate shareholder returns by pricing products and
services appropriately for the level of risk.
Boku's capital is detailed in the consolidated statement of changes in equity.
Boku is debt-free and working capital requirements are met through existing
cash resources. Boku manages its capital structure proactively, adjusting to
economic conditions and projected cash needs across operational, financing,
and investment activities. Factors influencing capital adequacy include
capital expenditures, market developments, and potential
acquisitions.
25. Related party transactions
Related parties of Boku include its key management personnel, subsidiaries,
and entities with significant influence over the Company. Transactions and
balances between Boku and its subsidiaries, which are related parties, have
been eliminated on consolidation and are not disclosed in this note. For
more information on principles of consolidation and subsidiaries, refer to
Note 3.1 and Note 15, respectively.
Transactions and balances between Boku and other related parties are disclosed
below.
a) Transactions with key management personnel
Key management personnel include the directors and global leadership team of
Boku. Compensation to key management personnel is set out below:
2024 2023
$'000 $'000
Salaries 4,737 5,104
Short-term benefits 119 101
Social security costs 810 1,108
Share-based payments 3,179 3,402
Long-term employee benefits 13 18
Total 8,858 9,733
For further information on the remuneration of each director, refer to the
remuneration report.
There were no other transactions with related parties during the year (2023
Nil).
26. Commitments and contingencies
In the normal course of business, the Group may receive inquiries or become
involved in legal disputes regarding possible patent infringements. In the
opinion of management, any potential liabilities resulting from such claims,
if any, would not have a material adverse effect on the Group's consolidated
statement of financial position or results of operations.
From time to time, in its normal course of business, the Group may indemnify
other parties with whom it enters into contractual relationships, including
customers, aggregators, MNOs, lessors, and parties to other transactions with
the Group. Boku has also indemnified its Directors and executive officers, to
the extent legally permissible, against all liabilities reasonably incurred in
connection with any action in which such individual may be involved by reason
of such individual being or having been a Director or executive officer. The
Group believes the estimated fair value of any obligation from these
indemnification agreements is minimal; therefore, these consolidated financial
statements do not include a liability for any potential obligations at 31
December 2024 and 2023.
In addition, the Group may provide credit support instruments, including
parent guarantees and standby letters of credit, to counterparties as part of
its contractual obligations. Management does not expect any claims under these
arrangements to have a material impact on the Group's financial position.
The Group had no contractual commitments for the acquisition of property,
plant, and equipment and intangible assets in the current year or prior.
27. Events after the reporting date
Management has assessed the events occurring between the reporting date and
the date of approval of the financial statements. No material events have been
identified that would require adjustment to or disclosure in the financial
statements.
Alternative Performance Measures
Management regularly uses Alternative Performance Measures (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. These measures are not
defined under the requirements of IFRS and may not be comparable with the APMs
of other companies and should be viewed as supplemental to, but not a
substitute for, measures presented in the financial statements which are
prepared in accordance with IFRS.
The primary APMs are EBITDA, adjusted EBITDA, adjusted operating expenses,
constant exchange rate revenues, own cash, and average cash balances 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.
Boku uses the following APMs
APM Definition
Adjusted EBITDA A measure of profitability from continuing operations which is calculated as
operating profit before non-recurring other income, depreciation and
amortisation, share-based payments expense, foreign exchange gains/losses
and exceptional items.
In calculating adjusted EBITDA we exclude certain non-cash and non-recurring
items that we believe are not reflective of our long term performance.
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. 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 Calculated as gross profit less adjusted EBITDA.
Adjusted EBITDA margin Calculated as adjusted EBITDA over revenue for the year.
Constant exchange rate revenues Constant exchange rate is calculated by applying the monthly average foreign
exchange rates in the prior year to the current year revenues.
Own cash Calculated as cash held plus gross amounts due to Boku from issuers and
merchants less amounts owed to merchants
Average Cash Balances Average cash is the average cash balance for each day
2024 2023
Alternative performance measures $'000 $'000
Adjusted EBITDA 31,412 25,799
Adjusted EBITDA margin (%) 31.64% 31.19%
Adjusted operating expenses 65,442 54,871
Constant exchange rate revenues 102,408 82,720
Own Cash 80,249 72,919
Average Cash Balances 153,941 131,665
Reconciliation of adjusted EBITDA to operating profit
2024 2023
Note $'000 $'000
Adjusted EBITDA 31,412 25,799
Other income adjustment (non-recurring) - 103
Depreciation and amortisation 7 (7,899) (7,557)
Share-based payments 8 (10,526) (7,595)
Foreign exchange loss 7 (5,964) (1,034)
Exceptional items (867) -
Operating profit 6,156 9,716
Exceptional items are included in administrative expenses and include the
following items:
2024 2023
Exceptional Items $'000 $'000
Employee Restructuring Costs (998) -
Finance Transformation Costs (337) -
One-Off Refund from an Issuer 468 -
Total exceptional items (867) -
Adjusted operating expenses calculation
2024 2023
$'000 $'000
Gross Profit 96,854 80,670
Adjusted EBITDA (31,412) (25,799)
Adjusted operating expenses 65,442 54,871
Constant Exchange Rate Revenues
2024 2024 2023 Constant Currency Revenue Growth
Revenue Revenue at FY2023 Rates Revenue
Operating Segment $'000 $'000 $'000 %
Payments Services 99,273 102,408 82,720 24%
Own Cash Calculations
2024 2023
$'000 $'000
Cash and cash equivalents 177,333 150,859
Receivables from Issuers 134,672 130,971
Trade receivables 12,122 12,974
Payable to Merchants (243,878) (221,885)
Total own cash 80,249 72,919
Average Cash Balances
2024 2023
$'000 $'000
Average Cash Balances 153,941 131,665
Forward Looking statements
Certain statements contained in this report constitute "forward-looking
statements." Forward-looking statements provide Boku's current expectations of
future events and trends based on certain assumptions and include any
statement that does not directly relate to any current or historical fact. The
words "believe," "expect," "expectations," "anticipate," "foresee," "see,"
"target," "estimate," "designed," "aim," "plan," "intend," "influence,"
"assumption," "focus," "continue," "project," "should," "is to," "will,"
"strive," "may," "could," "forecast," or similar expressions as they relate to
us or our management are intended to identify these forward looking
statements, as well as statements regarding:
a) business strategies, projects, market expansion, growth management, and
future industry trends and our plans to address them;
b) future performance of our business and any future distributions and
dividends;
c) expectations and targets regarding financial performance, results,
operating expenses, cash flows, taxes, currency exchange rates, hedging, cost
savings and competitiveness, as well as results of operations including
targeted synergies and those related to market share, prices, net sales,
income and margins;
d) expectations, plans, timelines or benefits related to changes in our
organisational and operational structure;
e) market developments in our current and future markets and their
seasonality and cyclicality, as well as general economic conditions, future
regulatory developments and the expected impact, timing and duration of
potential global pandemics and geopolitical conflicts on our business, our
customers' businesses and the general market and economic conditions;
f) our position in the market, including product portfolio and
geographical reach, and our ability to use the same to develop the relevant
business or market;
g) any future collaboration or business collaboration agreements or patent
license agreements or arbitration awards, including income from any
collaboration or partnership, agreement or award;
h) timing of the development and delivery of our products and services;
i) the outcome of pending and threatened litigation, arbitration,
disputes, regulatory proceedings or investigations by authorities;
j) restructurings, investments, capital structure optimisation efforts,
divestments and our ability to achieve the financial and operational targets
set in connection with any such restructurings, investments, and capital
structure optimisation efforts;
k) future capital expenditures or other R&D expenditures to develop or
rollout new products; and
l) sustainability and corporate responsibility.
These statements, which are made on the date of this report, are based on
management's best assumptions and beliefs in light of the information
currently available to it and are subject to a number of risks and
uncertainties, many of which are beyond Boku's control, which could cause
actual results to differ materially from such statements. These statements are
only predictions based upon our current expectations and views of future
events and developments and are subject to risks and uncertainties that are
difficult to predict because they relate to events and depend on circumstances
that will occur in the future. Risks and uncertainties that could affect these
statements include but are not limited to the risk factors specified under the
section "Principal Risks & Uncertainties" of this report. Other unknown or
unpredictable factors or underlying assumptions subsequently proven to be
incorrect could cause actual results to differ materially from those in the
forward-looking statements. We do not undertake any obligation to publicly
update or revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent legally
required.
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 via Boku. 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.
CAGR Compound annual growth rate.
Carriers Carriers are the consumer's mobile network operator (MNO), through which
purchases can be charged to a phone bill. See DCB.
CER Constant exchange rate is calculated by applying the monthly average foreign
exchange rates in the prior year to the current year results.
CEO Chief Executive Officer.
CFO Chief Financial Officer.
CGU Cash generating unit.
COO Chief Operating Officer.
CT Corporation tax.
DCB (Bundling) DCB bundling refers to the distribution of merchant services via third
parties, such as telecom providers typically as part of a new tariff or
promotional offer (e.g., 'Get six months of streaming music included with your
mobile phone plan'). Boku's services facilitate this process by seamlessly
connecting the distributor with the entertainment company's systems.
DCB (Payments) 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.
ECL Expected credit loss
EGM Extraordinary General Meeting.
EPS Earnings per share.
Digital Wallet A Digital Wallet is a type of payment method that allows a user to undertake
transactions online and, sometimes, offline. A user will link their wallet 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, these
wallets 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 network 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, Digital Wallet providers and A2A schemes.
LPMs Local Payment Methods are those which typically operate in a single region.
They include domestic card schemes, domestic voucher schemes, mobile network
operators, Digital Wallets, Account to Account based payment systems and Buy
Now Pay Later operators. Local Payment Methods 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 A merchant is a business or entity that sells products or services to
consumers and integrates various payment methods.
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 third 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 has built to connect Merchants and Issuers via 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/Share 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.
SRSU Stretch restricted share units subject to market based vesting conditions
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 where Boku provides technical connectivity services
to a merchant, while the merchant directly arranges settlement with the
issuer.
WACC Weighted average cost of capital.
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