TIDMBOKU
RNS Number : 6550N
Boku Inc
26 September 2023
This announcement contains inside information
26 September 2023
Boku, Inc.
("Boku" or the "Company" and, together with its subsidiaries,
the "Group")
Interim results for the six months ended 30 June 2023
Investment in Local Payment Methods reaping rewards
Boku, a leading provider of global mobile payment solutions, is
pleased to announce the following unaudited interim results for the
six months ended 30 June 2023.
Group Highlights
Financial Highlights
-- Revenues up 26% to $38.2m in H1 (H1 2022: $30.3m) and up 32%
on a constant currency**** basis driven by increasing transaction
volumes from our major global merchants.
-- Revenues include $7.2m from Local Payment Methods ('LPMs) up
350% from $1.6m in H1 2022 following the launch of 15 new LPMs and
increasing adoption of these products by our key merchants.
-- Adjusted EBITDA* increased 28% to $12.2m in H1 (2022 H1:
$9.5m ) as a result of prudent cost control whilst continuing to
invest in Boku's mobile-first payment network.
-- Group profit after tax of $2.3m (H1 2022: $28.0m which
included the profit on the disposal of Boku's Identity division of
$24.6m).
-- Group cash balances were $113.9m at 30 June 2023 up from
$67.8m at 30 June 2022. Of this, approximately $54.4m is Boku's
'own cash' with the balance being merchant cash in transit. The
Group is debt free.
-- The average daily cash balance*****, a measure which smooths
out carrier collections and merchant payments, was $105.8m in June
2023, up from $63.3m in June 2022.
-- Final 'holdback' payment of $5.6m received from Twilio after
period end in full payment of the final balance of the sale of
Boku's Identity business in February 2022.
-- In H2 2022 Boku commenced a 'share buyback' scheme to
purchase its own shares to cover employee RSU awards annually so
that the annual RSU awards are non-dilutive to shareholders. In the
first half of 2023 Boku purchased 3,088,359 shares for a total
consideration of GBP4,416,626.
Operational Highlights
-- Continued significant growth in users and payments volume in H1:
o 32% increase in monthly active users*** ("MAUs") in June 2023
to 61.2m (June 2022: 46.3m).
o 32.7m new users made their first payment or bundling
transaction with Boku during the first half of the year.
o Total Payment Volume ("TPV")** up 16% to $5.0bn (H1 2022:
$4.3bn).
-- Growth driven by strong performance from Local Payment Methods ("LPMs"):
o Total LPMs connected to the mobile-first network increased to
40 connections in 17 countries, up from 25 connections in 14
countries in June 2022
o MAUs***** of eWallets and Account to Account ('A2A') solutions
increased 122% to over 4.7m in the month of June 2023, compared to
the same month in 2022.
o New users***** of LPMs increased by over 100% to 6.3m in H1
2023 (up from 3.1m in the same period in 2022).
-- Average take rate increased to 0.76% in H1 2023 from 0.70% in
H1 2022 as a result of higher take rates from eWallets.
-- Almost 50 new launches for Direct Carrier Billing ("DCB"),
eWallets and A2A in H1 2023 with existing and new merchants
including Apple, Amazon, Netflix, Sony, Spotify, Sky and Tencent.
Launches took place in 27 countries across Asia, Europe and the
Middle East; two thirds of these launches were for LPMs.
-- Most of our biggest merchants now use Boku for the newer LPMs
as well as DCB and we are confident of our ability to add more of
the global tech giants to this line of business.
-- 'M obile-first' payments network expanded to reach over 7.5bn
end user accounts, 46% of which are non-DCB.
-- As announced previously on 4 July 2023, Jon Prideaux is to
retire as CEO on 31 December 2023. He will -remain on the Board as
a Non-executive Director. Stuart Neal, former CFO of Boku, will
take over as CEO from 1 January 2024.
Jon Prideaux, Boku's CEO, commented : "I am delighted with
Boku's performance in the first half and that strong performance
has continued in the second half. All parts of the business are
performing well, and ahead of our internal budget at the time of
the capital markets day earlier this year. The triple digit growth
from wallets and account to account payments now means that these
newer payment methods have come from next to nothing this time last
year to account for nearly 20% of our revenue. We traded at record
levels in July and August. It is undeniable that our strategy is
working well. As I prepare to move from an executive to a
non-executive position, I have strong conviction that the Company
will continue on this growth path under Stuart's leadership. With
more merchants poised to adopt the newer payment methods and strong
momentum from existing live connections, the full year picture is
looking very healthy. As a result of the strong trading conditions
we are seeing, the Board now expects the Company's performance for
the full year to be slightly ahead of its previous expectations,
and we reiterate the medium term guidance communicated at the
capital markets day."
Following the disposal of Boku's Identity division on 28
February 2022 the prior year comparative Condensed Consolidated
Statement of Comprehensive income includes revenues and Adjusted
EBITDA relating only to the continuing Payments business.
* Adjusted EBITDA (Earnings before interest, taxation,
depreciation and amortization): Adjusted for stock option expenses,
foreign exchange gains/losses and Exceptional items. See
reconciliation per the Condensed Consolidated Statement of
Comprehensive income This is an APM
** TPV is the US$ value of transactions processed by the Boku
platform and includes transactions from DCB, Bundling, eWallets and
Account to Account payments. This is an APM.
*** Monthly Active Users (MAU) data includes all users who
successfully processed a payment or had an active bundle during the
last month of the period. This is an APM.
**** Constant currency calculated by applying the monthly
average foreign exchange rates in H1 2022 to the actual H1 2023
monthly results. This is an APM.
***** Alternative Performance Measure (APM)
Investor Webinar
Boku's management will be hosting an online presentation and
Q&A session at 5.30 p.m. BST today, Tuesday 26 September 2023.
This session is open to all existing and prospective shareholders.
Those who wish to attend should register via the following link
where they will be provided with access details:
https://us02web.zoom.us/webinar/register/WN_vhdCRQpoQRGN2H-W0VxBBQ
Participants will have the opportunity to submit questions
during the session, but questions are welcomed in advance and may
be submitted to: boku@investor-focus.co.uk
Enquiries:
Boku, Inc.
Jon Prideaux, Chief Executive Officer +44 (0)20 3934 6630
Stuart Neal, Chief Executive Officer Designate
Keith Butcher, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Broker) +44 (0)20 7418
8900
Paul Gillam / Tom Ballard / James Smith
IFC Advisory Limited (Financial PR & IR) +44 (0)20 3934
6630
Tim Metcalfe / Graham Herring / Florence Chandler
Notes to Editors
Boku Inc. (AIM: BOKU) is a leading global provider of mobile
payment solutions. Boku's mobile-first payments network, including
mobile wallets, direct carrier billing, and account to
account/real-time payments schemes, reaches over 7.5 billion mobile
payment accounts through a single integration.
Customers that trust Boku to simplify sign-up, acquire new
paying users and prevent fraud include global leaders such as
Amazon, Apple, Meta Platforms, Google, Microsoft, Netflix, Sony,
Spotify and Tencent.
Boku, Inc. was incorporated in 2008 and is headquartered in
London, UK, with offices in the US, India, Brazil, China, Estonia,
France, Germany, Indonesia, Japan, Singapore, Spain, Taiwan and
Vietnam.
To learn more about Boku Inc., please visit:
https://www.boku.com
This Announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 which is
part of UK law by virtue of the European Union (withdrawal) Act
2018. The person responsible for arranging the release of this
Announcement on behalf of the Company is Keith Butcher, Chief
Financial Officer.
Chief Executive Officer's Report
Boku had a successful start to 2023. The momentum that built
throughout the previous year has continued. Revenue growth exceeded
30% in constant currency terms (26% at reported rates), up from 21%
in the second half of the previous year (7% at reported rates) and
7% in the first half of 2022 (-1% at reported rates).
This growth has been driven by a more than 3X increase in
revenues from Local Payment Methods ("LPMs") such as mobile wallets
and account to account based payments ("A2A"). These methods,
rather than Direct Carrier Billing ("DCB"), are now the primary
driver of our growth and strategic focus. What is particularly
pleasing is that this LPM growth is not driven by any one
particular customer or sector, but is broadly based across multiple
merchants in games, digital advertising, music and video streaming,
operating in about a dozen countries. Although we are pleased to
announce that we are now live with Amazon in twelve wallets in five
countries as we had anticipated, these connections are maturing and
do not yet make a significant contribution to revenue - that is yet
to come. Our global merchants continue to expand with us into new
geographies and we are a trusted partner in their own expansion
plans, providing access to ever greater numbers of customers
worldwide.
The triple digit growth in LPM's means that eWallets and A2A now
account for almost 20% of total revenue. That this growth has not
affected the performance in Carrier Commerce (comprising Direct
Carrier Billing ("DCB") and Carrier Bundling) has been encouraging
too. Revenues from those methods grew at 12% on a constant currency
basis (7% at market rates), with Carrier Bundling performance being
particularly strong.
All the non-financial indicators are also up and to the right,
flashing green: Monthly Active Users ("MAUs") have grown by 32% to
exceed 61m. New users - a good leading indicator - in the first
half were up by 10% to 32.7 million, with bundling take up being
particularly strong. Total Payment Volume ("TPV") was $5 billion,
up 16%. We continued our pace of delivery with around 50 new
deployments covering Apple, Amazon, Netflix, Sony, Spotify, Sky and
Tencent.
The Journey to the Big Pond
Back in our Annual Report for 2020, I talked about the feeling
of trepidation that one gets as one starts at the big school. No
longer the big fish in a small pond, you have to make your mark in
a bigger pond. Back in 2020, it was an aspiration for Boku to step
up and compete with much bigger payment companies. But wanting
something and delivering on it are not the same thing. It is now
clear that we have moved beyond aspiration: our investments are
manifestly starting to pay off.
The Quiet Revolution in Payments
Back in 2020, somewhat unnoticed in North America and Europe,
where most electronic payments were made using credit cards like
Visa and MasterCard, a quiet revolution was happening in the way
that people were paying for things online. The emergent middle
classes in Asia, the Middle East, Africa and Latin America were
buying online and using a bewildering array of different mobile
wallets and account to account based payments methods to do so.
And, since most people live in those regions, this fragmented set
of new local payment methods (LPMs) collectively came to account
for more than half of all online payments. Card usage had grown;
the growth of LPMs was greater still.
Fast forward to today and we can see increased usage of non-card
payments even in the card markets in the West. In the UK, many
people use Faster Payments to pay their friends and tradesmen; they
use Zelle or Venmo in the US for much the same thing. In Sweden,
Swish, a mobile payment scheme launched in 2012 is used by more
than two thirds of the population and is growing in popularity for
purchases from merchants and in the Netherlands, iDeal, a bank
based non-card payment method has long been the default online
payment tool for the Dutch. In the future, the possibilities of
Open Banking in the UK and the EU and the recently launched FedNow
in the US could disrupt cards over the longer term. Cards are here
to stay, but the era of card dominance is waning.
A substitute not an alternative
Card processors looked at these new payment types and called
them Alternative Payment Methods. Boku realised that the billions
of people who preferred to pay with Alipay, Dana or UPI or dozens
of other mobile wallets or A2A based payment systems did not see
them as an alternative to cards. They saw them as a better way to
pay. These new payment methods were all that these consumers knew.
Being mobile native, using the phone's facial recognition as
security and the camera to initiate a transaction from a QR code,
seemed natural. It was the simplest, most secure way to pay. It was
cards that looked antiquated.
The overlooked opportunity
As a DCB company, some payment companies looked at Boku as a bit
of an oddity. DCB worked differently to the payment methods that
they normally worked with. DCB was more expensive, settled more
slowly, could only be used for digital products and had low
transaction limits. Mainstream card processors choose to leave DCB
alone, seeing it as an anomaly, a curiosity. They didn't take us
that seriously. But Boku understood that mobile network operators
could be a valuable source of new customers and persuaded the
world's tech giants to adopt the service. Our focus on DCB won us a
priceless asset: direct payment integrations to the world's leading
digital companies.
Transferable skills: better results, easy to deal with
It turned out that the capabilities developed to work in the
fragmented world of DCB, where no two carrier systems were the
same, perfectly equipped Boku for the similarly fragmented
landscape of local payments. We developed the ability to optimise
different connections so that they performed better and helped our
merchants to recruit more users and sell more stuff.
If there is one universal law of business - at least in my
experience - it is this: there is never enough IT resource. In
every company on the planet, the management has to make decisions
about which projects to prioritise and which projects don't quite
make the cut. We help to fix that. Critical to Boku's success is
that we are prepared to do reverse integrations to our merchants.
Instead of having to deploy their engineers, our merchants can let
the Boku team take some of the burden of connecting their system to
the 7.5bn accounts that can be accessed through our Issuer
network.
A winning formula
Our formula of being a specialised payment company processing
only LPMs for the world's largest digital companies has proved to
be very compelling. Most of our biggest merchants - Amazon,
Spotify, Netflix, Meta, Tencent - use Boku not just for DCB but
also for the newer LPMs and I am increasingly confident of our
ability to secure at least some of the wallet and A2A business of
other tech giants as well.
A race without end
Business is often described as a race. But that, in my view, is
a poor analogy. Races have an end. A defined endpoint. A time when
we can say who won, who lost and by how much. If business is a
race, it is a race without end. We do report on our progress every
so often, but our value is as much about the expectation, the
promise of the future, as it is on past results. But careers do
have an end: in 2024, the fifteen-year journey that I have
travelled with Boku culminating in being CEO for nearly a decade is
to end. I will pass on the baton in the continuing relay race to
Stuart Neal. He has a long career in payments, including at both
Barclaycard and Vocalink. He understands the company's culture. I
am confident that he will be able to take the company forward to
new heights.
Growth: a longer perspective
During my time with Boku, we have seen tremendous growth in our
business. Annual TPV has grown from less than $100 million to a $10
billion run rate. The average number of monthly active users has
grown from 1.4 million to exceed 60 million. Monthly transactions
processed now exceed 100 million, up from around 2 million. The
Company has become profitable and cash generative. Business is a
team sport and the job of the CEO, in large measure, is to pick the
team and take credit for other people's work. I have been blessed
to work with many talented people and those people will continue,
alongside Stuart, to help drive the Company's fortunes forward. In
a very real sense, the true measure of a CEO's tenure is not to be
seen in the numbers and percentages achieved during his time at the
helm but, rather, from how the Company performs after he has
departed.
Outlook
As I move from an executive to a non-executive position, I
continue to believe that Boku's best days are ahead of it. With the
strong momentum that we currently enjoy, our relationships with
merchants and expertise in optimising specialised payment types,
the opportunities presented by A2A and the leadership provided by
Stuart and the rest of the management team, I have strong
conviction that the company will continue to go from strength to
strength and achieve the targets set out at our capital markets
day..
Chief Financial Officer's Report
The first half of 2023 saw extremely strong performance with
revenues up 26% to $38.2 million (and up 32% in constant currency)
as we started to reap the rewards of our investment in moving into
Local Payment Methods for global merchants, and a 28% jump in
Adjusted EBITDA to $12.2 million as the operating leverage inherent
in our model came through.
These results were underpinned by a 32% increase in monthly
active users to 61.2 million in the first half (H1 2022: 46.3
million) as we continue to add connections for our global merchants
to new payments methods and into new geographies. 32.7 million new
users made their first payment or bundling transaction with Boku
during the first half of the year.
We completed more than 50 new launches for DCB, eWallets and A2A
in H1 2023 with existing and new merchants including Apple, Amazon,
Netflix, Sony, Spotify, Sky and Tencent. Launches took place in 18
countries across Asia, Europe and the Middle East; two thirds were
for LPMs. These drove a 16% increase in Total Payment Volume
("TPV")** to $5.0 billion (H1 2022: $4.3 billion).
Much of the strong revenue growth in the first half was driven
by the exceptional growth in LPMs, including eWallets and A2A,
where revenue increased 350% to $7.2m up from $1.6m in the first
half of 2022. Monthly active users increased 122% to over 4.7
million in June 2023, compared to the same period in 2022. New
users of LPMs increased by over 100% to 6.3 million in H1 2023 (up
from 3.1 million in the same period in 2022). Our 'm obile-first'
payments network expanded to reach over 7.5bn end user accounts,
46% of which are non-DCB.
Financial review
Following the disposal of Boku's Identity division on 28
February 2022 the prior year comparative Condensed Consolidated
Statement of Comprehensive income includes revenues and Adjusted
EBITDA relating only to the continuing Payments business.
Group Condensed Consolidated Statement of Comprehensive income
to Adjusted EBITDA(*)
Revenues increased by 26% to $38.2 million (H1 2022: $30.3
million) and up 32% on a constant currency basis, with Adjusted
EBITDA* increasing 28% to $12.2 million in the first half (H1 2022:
$9.5 million) reflecting the strong revenue growth combined with
our continued planned investment in our mobile-first payments
platform. Gross margins for the continuing Payments business
remained at 97% (2022: 97%).
Average take rate (revenue divided by TPV) increased slightly to
0.76% as a result of higher take rates from LPMs. Our merchant
relationships and connections remain highly 'sticky' and as a
result, since IPO, Boku has not lost a material merchant.
Adjusted operating expenditure***** increased as per our stated
strategy, as we invested in our expanded 'mobile-first' payments
network, which now includes eWallets and A2A, with planned
increases in operational headcount and sales and marketing spend as
Boku moves into new markets. However, the operational leverage
inherent in our platform business remains strong and, as a result,
we expect Payments Adjusted EBITDA(*) margins to increase over the
medium term as outlined in our Capital Markets Day presentation in
February this year.
Adjusted Operating Expenditure (Payments only)*****
Unaudited Unaudited
Period ended Period ended
30-Jun 30-Jun
2023 2022
$'000 $'000
Gross profit 36,858 29,379
Adjusted EBITDA* (12,216) (9,506)
Adjusted Operating Expenditure 24,642 19,873
------------ ------------
Identity division (discontinued)
Boku's Identity division was divested during the first half of
2022 to Twilio. We received the final indemnity holdback payment
from Twilio in full on 05 September 2023 and there are no further
balances due.
Group Operating Profit (from Continuing Operations)
Group operating profit for H1 2023 was $2.1 million compared to
$4.1 million for the same period in 2022. This can be broken down
as follows:
-- Other income of $0.1 million relates to income from providing
ongoing accounting services to Twilio following the sale of the
Identity business in February 2022 to enable a smooth transition.
These services and associated fees ended in April 2023. This amount
has been excluded from Adjusted EBITDA* as a non-trading,
non-recurring item. The H1 2022 comparative of $0.4 million also
related to the provision of the same services to Twilio.
-- Gross margin increased to $36.9 million (H1 2022: $29.4
million) with gross margin percentage stable at 97% (H1 2022:
97%)
-- Depreciation and Amortisation charges increased marginally to
$3.1 million (H1 2022: $2.7 million)
-- Share Based Payments expense increased to $4.0 million in H1
2023 from $1.9 million in H1 2022 primarily because the number of
share awards increased in line with our increased staff headcount
and the effect of a of a National Insurance accrual as a result of
the lower share price at that period end. Boku has a policy of
making annual RSU awards to all staff which vest in full after
three years. These share awards are planned to be satisfied from
treasury stock as part of Boku's share buyback programme. See
Consolidated Statement of Financial Position and Condensed
Consolidated Statement of Cash Flows section below.
-- Foreign exchange movements resulted in a loss of $3.13
million made up of realised and unrealised losses primarily on
revaluation of non USD balances during the period (H1 2022: $0.06
million gain)
-- Exceptional Items in the period were $0.018 million credit
which relates to the fair value movement at the period end in
relation to the Amazon warrants (see note 7) (2022: expense $1.26
million). The 2022 comparative period charge related to the
impairment of the intangible relating to the Fortumo 'brand' which
was discontinued in that period. There were no Amazon warrants at
30 June 2022 the comparative prior period end.
-- Financing expenses decreased to $0.15 million in H1 2023 (H1 2022: $0.52 million).
Net Profit after tax
-- The Group reported a net profit after tax of $1.8 million for
the period (H1 2022: $28.0 million which was primarily driven by
profit from the discontinued Identity division of $24.6
million).
Condensed Consolidated Statement of Financial Position and
Condensed Consolidated Statement of Cash Flows
-- Group cash balances were $113.9 million on 30 June 2023 up
from $67.8 million on 30 June 2022 and slightly down from 31
December 2022 of $116.6 million. The Group is debt free.
-- The average daily cash balance, a measure which smooths out
the effect of carrier and merchant payments, was $105.8 million in
June 2023, up from $98.8 million in 31 December 2022 and up from
June $63.3 million in June 2022..
-- In the second half of 2022 Boku commenced a 'share buyback'
scheme to purchase its own shares to cover employee RSU awards
annually so that the annual RSU awards are non-dilutive to
shareholders. In the first half of 2023 we purchased 3,088,359
shares for a total consideration of GBP4,416,626.
-- Intangible assets
Unaudited Audited
Period ended Period ended
30-Jun 31-Dec
2023 2022
$'000 $'000
Goodwill 41,978 41,733
Other intangibles 15,204 14,497
Intangible assets 57,182 56,230
------------ -------------
We assessed our goodwill and other remaining intangibles for
impairment and deemed that there were no indicators of impairment
at 30 June 2023.
-- Deferred tax asset
During the course of our change in auditors to PWC, it was
identified that there was an under-recognised deferred tax asset
from prior years. Accordingly, the opening balances in the
Condensed Consolidated Statement of Changes in Equity for years
ended 31 December 2021 and 31 December 2022 have been restated.
Please see note 9 for full details.
Principal Risks and Uncertainties
Since the end of 2022, the Board have been monitoring and
mitigating the effects of global events on the Group's business,
including the global macro-economic environment, inflation and the
cost of living crisis across Europe and believe the principal risks
and uncertainties facing the Group remain consistent with the
Principal Risks and Uncertainties reported in Boku's 2022 Annual
Report. Boku is an international business operating in 92 countries
so any risk is spread and to date Boku has seen no discernible
impact from the macro-economic environment. Boku charges a
percentage of its merchants' transaction value, so as its
merchants' increase prices, Boku's revenues increase.
Going concern
In reaching their going concern assessment, the Directors have
considered the foreseeable future, a period extending at least 12
months from the date of approval of this interim financial report.
This assessment has included consideration of the forecast
performance of the business, as noted above and the cash and
financing facilities available to the Group. Considering all this
analysis, the Directors are satisfied that the Group has sufficient
cash resources over the period of at least 12 months from the date
of approval of the condensed consolidated interim financial
statements. As such, the condensed consolidated interim financial
statements have been prepared on a going concern basis.
Looking forward
These results show that Boku's strategic investment into adding
connections to Local Payment Methods globally for our major
international digital merchants is paying off and we expect the
strong growth we have seen in the period to continue. This has
resulted in a strong return to Adjusted EBITDA growth as a result
of the operating leverage inherent in our platform business.
Keith Butcher
Chief Financial Officer
25 September 2023
* Adjusted EBITDA (Earnings before interest, taxation, depreciation
and amortization): Adjusted for stock option expenses, Foreign
exchange gains/losses and Exceptional items. See reconciliation
to profit per the income statement
** TPV is the US$ value of transactions processed by the Boku platform
***** Adjusted operating expenditure is Gross Profit less Adjusted
EBITDA
Cautionary Statement
Boku has made forward-looking statements in this financial
information, including statements about the market and benefits of
its products and services; financial results; product development
plans; the potential benefits of business relationships with third
parties and business strategies. The Group considers any statements
that are not historical facts as "forward-looking statements". They
relate to events and trends that are subject to risk and
uncertainty that may cause actual results and the financial
performance of the Group to differ materially from those contained
in any forward-looking statement. These statements are made by the
directors in good faith based on the information available to them
and such statements should be treated with caution due to the
inherent uncertainties, including both economic and business risk
factors underlying any such forward-looking information.
Condensed Consolidated Statement of Comprehensive Income
(Unaudited) (Unaudited)
Period ended
Period ended 30 -Jun 2022
30-Jun 2023 $'000
Continuing Operations Note $'000
------- -------------
Revenue 3 38,174 30,339
----------------------------------------- ------- -------------- -------------
Cost of sales (1,316) (960)
-------------------------------------------------- -------------- =============
Gross profit 36,858 29,379
-------------------------------------------------- -------------- -------------
Other Income (non-recurring) 3 103 385
----------------------------------------- ------- -------------- -------------
Administrative expenses (34,836) (25,692)
-------------------------------------------------- -------------- =============
Operating profit analysed as:
----------------------------------------- ------- -------------- -------------
Adjusted EBITDA* 12,216 9,506
-------------------------------------------------- -------------- -------------
Other Income 3 103 385
----------------------------------------- ------- -------------- -------------
Depreciation and amortisation (3,102) (2,718)
-------------------------------------------------- -------------- -------------
Share based payments expense (3,978) (1,898)
-------------------------------------------------- -------------- -------------
Foreign exchange loss/(gain) (3,132) 61
-------------------------------------------------- -------------- -------------
Exceptional items 18 (1,264)
-------------------------------------------------- -------------- =============
Operating profit 2,125 4,072
-------------------------------------------------- -------------- -------------
Finance income 474 81
-------------------------------------------------- -------------- -------------
Finance expense (150) (518)
-------------------------------------------------- -------------- =============
Profit before tax 2,449 3,635
-------------------------------------------------- -------------- -------------
Tax expense (649) (216)
-------------------------------------------------- -------------- =============
Net Profit from continuing operations 1,800 3,419
-------------------------------------------------- -------------- =============
Discontinued operations
----------------------------------------- ------- -------------- =============
Profit from discontinued operations
after tax - 24,605
-------------------------------------------------- -------------- =============
Total Profit for the year 1,800 28,024
-------------------------------------------------- -------------- -------------
Other comprehensive profit/( losses)
net of tax
----------------------------------------- ------- -------------- -------------
Items that may be reclassified to
profit or loss
----------------------------------------- ------- -------------- -------------
Foreign currency translation gain/(loss) 1,141 (3,978)
-------------------------------------------------- -------------- -------------
Total other comprehensive gain/(loss)
for the period 1,141 (3,978)
-------------------------------------------------- -------------- -------------
Total comprehensive profit for
the period attributable to equity
holders of the parent company 2,941 24,046
-------------------------------------------------- -------------- -------------
EPS - Total
----------------------------------------- ------- -------------- -------------
Basic EPS ($) 0.0060 0.0941
-------------------------------------------------- -------------- -------------
Diluted EPS ($) 0.0055 0.0921
-------------------------------------------------- -------------- -------------
EPS from continuing operations
----------------------------------------- ------- -------------- -------------
Basic EPS ($) 0.0060 0.0115
-------------------------------------------------- -------------- -------------
Diluted EPS ($) 0.0055 0.0112
-------------------------------------------------- -------------- -------------
*Adjusted EBITDA (Earnings before interest, taxation,
depreciation, amortisation): Adjusted for share-based payment
expense, foreign exchange gains/(losses), exceptional items and
'other income' in 2023 and 2022. See reconciliation to profit per
income statement.
The accompanying notes are an integral part of these condensed
consolidated financial statements
Condensed Consolidated Statement of Financial Position
(Unaudited) (Audited)
30-Jun 2023 31-Dec 2022
Note $'000 $'000
Restated
----- --------------------
Non-current assets
Property, plant and equipment 654 696
Right of use assets 3,084 3,662
Intangible assets 57,182 56,230
Warrant contract asset 7 2,677 1,519
Deferred tax assets 15,991 16,481
----------------------------------------- ----- -------------------- ------------
Total non-current assets 79,588 78,588
================================================ -------------------- ------------
Current assets
----------------------------------------- ----- -------------------- ------------
Trade and other receivables 97,264 90,080
Financial asset at fair value through
profit or loss 5,600 5,600
Warrant contract asset 196 192
Cash and cash equivalents - unrestricted 5 99,167 99,551
Cash and cash equivalents - restricted
cash 14,699 16,962
----------------------------------------- ----- -------------------- ------------
Total current assets 216,926 212,385
------------------------------------------------ -------------------- ------------
Total assets 296,514 290,973
------------------------------------------------ -------------------- ------------
Current liabilities
----------------------------------------- ----- -------------------- ------------
Trade and other payables 159,767 156,263
Current tax payable 216 222
Lease liabilities 1,374 1,277
Bank Loans - -
----------------------------------------- ----- -------------------- ------------
Total current liabilities 161,357 157,762
================================================ -------------------- ------------
Non-current liabilities
----------------------------------------- ----- -------------------- ------------
Other payables 1,331 1,194
Deferred tax liabilities - -
Warrant liabilities 7 6,427 5,206
Lease liabilities 1,835 2,272
Bank Loans - -
----------------------------------------- ----- -------------------- ------------
Total non-current liabilities 9,593 8,672
================================================ -------------------- ------------
Total liabilities 170,950 166,434
================================================ -------------------- ------------
Net assets 125,564 124,539
------------------------------------------------ -------------------- ------------
Equity attributable to equity
holders of the company
----------------------------------------- ----- -------------------- ------------
Share capital 29 29
Other reserves 250,976 252,385
Foreign exchange reserve (5,149) (6,290)
Treasury share reserve (2,018) (1,835)
Retained losses (118,274) (119,750)
----------------------------------------- ----- -------------------- ------------
Total equity 125,564 124,539
------------------------------------------------ -------------------- ------------
The accompanying notes are an integral part of these condensed
consolidated financial statements
Condensed Consolidated Statement of Changes in Equity
Treasury Foreign
Share Other shares exchange Retained Total
capital reserves reserve reserve losses Equity
--------- ---------- -------- --------- ----------
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------ --------- ---------- -------- --------- ---------- --------
Equity as at 1 January 2022
as previously reported 29 246,883 - (2,714) (161,752) 82,446
------------------------------ --------- ---------- -------- --------- ---------- --------
Impact of correction - - - - 14,828 14,828
------------------------------ --------- ---------- -------- --------- ---------- --------
Equity as at 1 January 2022
(restated) 29 246,883 - (2,714) (146,929) 97,274
------------------------------ --------- ---------- -------- --------- ---------- --------
Profit for the period - - - - 28,024 28,024
Other comprehensive expense - - - (3,978) - (3,978)
Issue of share capital upon
exercise of stock options - 315 - - - 315
Share based payment expense - 2,352 - - - 2,352
------------------------------ --------- ---------- -------- --------- ---------- --------
Equity as at 30 June 2022
(restated) 29 249,550 - (6,692) (118,900) 123,988
------------------------------ --------- ---------- -------- --------- ---------- --------
Treasury Foreign
Share Other shares exchange Retained Total
capital reserves reserve reserve losses Equity
------------------------------ --------- ---------- -------- --------- ---------- --------
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------ --------- ---------- -------- --------- ---------- --------
Equity as of 31 December
2022 as previously reported 29 252,385 (1,835) (6,290) (132,848) 111,441
------------------------------ --------- ---------- -------- --------- ---------- --------
Impact of correction - - - - 13,098 13,098
------------------------------ --------- ---------- -------- --------- ---------- --------
Equity as at 31 December
2022 (restated) 29 252,385 (1,835) (6,290) (119,750) 124,539
------------------------------ --------- ---------- -------- --------- ---------- --------
Profit for the period - - - - 1,800 1,800
Other comprehensive income - - - 1,141 1,141
Issue of share capital upon
exercise of stock options - 40 - - - 40
Share based payment expense - 3,559 - - - 3,559
Deferred tax asset adjustment - - - - (55) (55)
Purchase of treasury shares - - (5,460) - - (5,460)
Issue of treasury shares to
employees - (5,008) 5,008 - - -
Loss on treasury shares - - 269 - (269) -
(2,018
Equity as at 30 June 2023 29 250,976 ) (5,149) (118,274) 125,564
--------- ---------- -------- --------- ----------
The accompanying notes are an integral part of these condensed
consolidated financial statements
Condensed Consolidated Statement of Cash Flows
(Unaudited) (Unaudited)
Period ended Period ended
30-Jun 2022
30-Jun 2023 $'000
Note $'000
============================================= --------------- ------------------ ==============
Cash generated from/(used in) operations 6 2,235 (7,761)
--------------------------------------------- --------------- ------------------ --------------
Income taxes paid (118) (185)
============================================= --------------- ------------------ ==============
Net cash generated from/(used in) operating
activities 2,117 (7,946)
============================================= --------------- ------------------ ==============
Investing activities
--------------------------------------------- --------------- ------------------ --------------
Purchase of property, plant and equipment (133) (104)
--------------------------------------------- --------------- ------------------ --------------
Capitalised software development (2,617) (2,677)
--------------------------------------------- --------------- ------------------ --------------
Proceeds from discontinued operations
(net of cash disposed) - 25,790
--------------------------------------------- --------------- ------------------ --------------
Proceeds from sale of assets - 1
--------------------------------------------- --------------- ------------------ --------------
Interest received 474 81
============================================= --------------- ------------------ ==============
Net cash used (in)/from investing activities (2,276) 23,091
--------------------------------------------- --------------- ------------------ --------------
Financing activities
--------------------------------------------- --------------- ------------------ --------------
Payment of principal to lease creditors (625) (649)
--------------------------------------------- --------------- ------------------ --------------
Payment of interest to lease creditors (99) (130)
--------------------------------------------- --------------- ------------------ --------------
Issue of share capital on exercise of
options and RSUs 40 315
--------------------------------------------- --------------- ------------------ --------------
Interest paid on borrowings (51) (76)
--------------------------------------------- --------------- ------------------ --------------
Purchase of treasury shares (5,460) -
--------------------------------------------- --------------- ------------------ --------------
Cash received on exercise on sale options 2,333 -
--------------------------------------------- --------------- ------------------ --------------
Loan settlement costs - (25)
--------------------------------------------- --------------- ------------------ --------------
Repayment of line of credit - (8,125)
--------------------------------------------- --------------- ------------------ --------------
Net cash used in financing activities (3,862) (8,690)
============================================= --------------- ------------------ ==============
Net (decrease)/increase in cash and cash
equivalents (4,021) 6,455
--------------------------------------------- --------------- ------------------ --------------
Effect of foreign currency translation
on cash and cash equivalents 1,374 (1,096)
--------------------------------------------- --------------- ------------------ --------------
Cash and cash equivalents at beginning
of period 116,513 62,440
============================================= --------------- ------------------ ==============
Cash and cash equivalents at end of period 113,866 67,799
--------------------------------------------- --------------- ------------------ --------------
The accompanying notes are an integral part of these condensed
consolidated financial statements
Notes to the Consolidated Financial Information
1. Corporate Information
The condensed consolidated interim financial statements
represents the results of Boku Inc. (the "Company") and its
subsidiaries (together referred to as the "Group").
Boku Inc. is a company incorporated and domiciled in the United
States of America. The business office of the Company is located at
660 Market St, Suite 400, San Francisco, CA 94105, United
States.
The Company's shares are quoted on the AIM Market of the London
Stock Exchange ("AIM").
The principal business of the Group is the provision of local
payment solutions for its merchants. These solutions enable
merchants to accept online payments, especially on mobile devices.
Boku's payments network provides multiple mobile payment methods,
including via mobile wallets, direct carrier billing and real-time
payment schemes.
The Board of Directors approved the condensed consolidated
interim financial statements on 25 September 2023.
2. Basis of preparation and accounting policies
The condensed consolidated interim financial statements have
been prepared using accounting policies consistent with
international accounting standards. While the financial figures
included in this half-yearly report have been computed in
accordance with international accounting standards applicable to
interim periods. This condensed consolidated interim financial
report for the half-year reporting period ended 30 June 2023 has
been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting'. The interim report does not
include all of the notes of the type normally included in an annual
financial report.
They do not include all disclosures that would otherwise be
required in a complete set of financial statements and should be
read in conjunction with the Annual Report and Financial Statements
for 2022. The financial information for the half years ended 30
June 2023 and 30 June 2022 does not constitute full financial
statements and both periods are unaudited.
The annual financial statements of Boku Inc., (the "Group") are
prepared in accordance with IFRS as issued by the IASB. The Annual
Report and Financial Statements for 2022 have been issued and are
available on the Group's investor relations' website:
https://www.boku.com/investor-relations/reports-documents. The
Independent Auditors' Report on the Annual Report and Financial
Statements for the year ended 31 December 2022 was unqualified and
did not draw attention to any matters by way of emphasis.
The same accounting policies, presentation and methods of
computation are followed in these condensed consolidated interim
financial statements as were applied in the Group's latest annual
audited financial statements, except for the income tax which is
recognised based on management's estimate of the weighted average
effective annual income tax rate expected for the full financial
year and those that relate to new standards and interpretations
effective for the first time for periods beginning on (or after) 1
January 2023 and will be adopted in the 2023 financial statements.
There are deemed to be no new and amended standards and/or
interpretations that will apply for the first time in the next
annual financial statements that are expected to have a material
impact on the Group.
Going concern
The condensed consolidated interim financial statements have
been prepared on a going concern basis. The Group meets its
day-to-day working capital requirements through its own cash
balances and has a bank facility that it can use.
The Directors have prepared cash-flow forecasts covering a
period of at least 12 months from the date of approval of the
financial statements, with the forecasts and projections, taking
account of reasonable possible changes in trading performance. They
show that the Group expects to be able to operate within the level
of its current cash resources and bank facilities.
Furthermore, in carrying out the going concern assessment, the
directors have considered a number of scenarios, including changes
in sales volumes and the timing of settlement of existing debts
together with cost savings associated with these changes and the
directors have the ability to identify cost savings if necessary,
to help mitigate any impact on cash outflows.
Having assessed the principal risks and the other matters
discussed in connection with the going concern statement, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and for at least 12 months from the date of approval of
these financial statements. For these reasons, they continue to
adopt the going concern basis of accounting and deem there to be no
emphasis over going concern, in preparing the financial
information.
Adjusted financial measure/Non-GAAP
Management regularly uses adjusted financial measures internally
to understand, manage and evaluate the business and make operating
decisions. These adjusted measures are among the primary factors
management uses in planning for and forecasting future periods. The
primary adjusted financial measures are EBITDA, Adjusted EBITDA,
Adjusted Operating expenses and Constant currency revenues which
management considers are relevant in understanding the Group's
financial performance. Management uses the adjusted financial
measures by excluding certain one-off items from the actual
results. The determination of whether one-off material or
non-recurring items should form part of the adjusted results is a
matter of judgement and is based on whether the inclusion/exclusion
from the results represent more closely the consistent trading
performance of the business. The definitions of adjusted items and
underlying adjusted results are disclosed at the end of this
report.
Accounting estimates, assumptions and judgements
In preparing these Condensed Consolidated financial statements,
the Group has made its best estimates and judgements of certain
amounts included in the financial statements, giving due
consideration to materiality. The Group regularly reviews these
estimates and judgements and updates them as required. Actual
results could differ. Unless otherwise indicated, the Group does
not believe that there is a significant risk of a material change
to the carrying value of assets and liabilities within the next
financial year related to the accounting judgements and assumptions
described below. The Group considers the following to be a
description of the most significant estimates and judgements, which
require the Group to make subjective and complex judgements related
to matters that are inherently uncertain.
3. Revenue
The Group's revenue is principally its service fees earned from
its merchants. All revenue is earned at the time the transaction is
processed and as a result, all revenue is recognised at that point
in time. The group has only one continuing operating segment, the
Payments business segment.
(Unaudited) (Unaudited)
30-Jun 30-Jun 2022
2023
Revenue from continuing operations $'000 $'000
------------
Revenue arises from:
------------ ------------
Provision of services 38,174 30,339
------------------------------------ ------------ ------------
Income earned from performing accounting services for the buyer
of Boku's Identity business, (sold on 28 February 2022), for the
period 1 January 2023 to 30 June 2023 has been recorded as 'Other
income' and amounted to $103,392. Prior year 'Other Income' relates
to performing the same accounting services for the period 1 March
2022 to 30 June 2022.
On 16 September 2022, the Group entered into a stock warrant
agreement with Amazon in conjunction with a commercial service
level agreement for the Group to provide payment processing
services to Amazon. The group outlines a detailed explanation of
the Amazon warrants and the accounting policy for warrants and the
valuation method used, in the Group's most recent 2022 Annual
Report (please refer to Note 3 for Accounting estimates,
assumptions and judgements and Note 4 for Revenue from contracts
with customers in the Annual Report and Accounts for the year ended
31 December 2022).
(https://wp-boku-2020.s3.eu-west-2.amazonaws.com/media/2023/06/Boku-Annual-Report-2022.pdf).
A reduction of revenue related to the amazon contract assets
amortization of $76,492 was recorded for the period 1 January 2023
to 30 June 2023 (see Note 7 for more details).
4. Key management personnel costs
(Unaudited) (Unaudited)
30-Jun 30-Jun
2023 2022
$'000 $'000
------------------------------------------------ ------------ -----------
Salaries 2,036 1,620
Short-term employee benefits (health insurance) 50 48
Social Security costs 686 366
Share based payments expense 1,605 1,246
Long term employee benefits (pension) 8 9
------------------------------------------------ ------------ -----------
4,385 3,289
5. Cash and cash equivalents and restricted cash
(Unaudited) (Audited)
30-Jun 2023 31-Dec 2022
$'000 $'000
Cash and cash equivalents 99,167 99,551
------------- ------------
Restricted cash 14,699 16,962
------------- ------------
Total cash 113,866 116,513
========================== ============= ============
Restricted cash primarily includes money received but not yet
paid to merchants (segregated funds, in transit), for Boku's
licenced entities, cash held in the form of a letter of credit to
secure a lease agreement for the Company's San Francisco office and
a certificate of deposit held at a financial institution to
collateralize Company credit cards.
6. Cash from operations
(Unaudited) (Unaudited)
30-Jun
2022
30-Jun 2023 $'000
$'000
========================================================= ============= ===========
Profit after tax 1,800 28,024
------------- -----------
Add back:
------------- -----------
Tax expense 649 216
------------- -----------
Amortisation of intangible assets 2,061 1,935
------------- -----------
Depreciation of property, plant and equipment 1,041 1,021
------------- -----------
Loss on disposal of property, plant and equipment 2 3
------------- -----------
Finance income (474) (81)
------------- -----------
Finance expense (includes interest on lease liabilities) 150 518
------------- -----------
Fair value adjustment on warrants valuation (18) -
------------- -----------
Gain on discontinued operations - (26,614)
------------- -----------
Amortization of warrant asset 76 -
------------- -----------
Foreign exchange (gain)/loss (707) 855
------------- -----------
Impairment of intangible assets - 1,264
------------- -----------
Employer taxes on stock options and restricted
stock units (accrual release) (113) (1,205)
------------- -----------
Share based payment expenses 3,559 2,352
------------- -----------
Cash from operations before working capital changes 8,026 8,288
------------- -----------
Increase in trade and other receivables (3,012) (6,253)
------------- -----------
Decrease in trade and other payables (2,779) (9,796)
------------- -----------
Cash from/(used in) operations 2,235 (7,761)
------------- -----------
The share based payment expense has been split between the
charge using the Black Scholes method for the period ($3,558,760)
and the change in the accrual for employer taxes on stock option
and restricted stock units (-$113,250). The total share based
payment expense in the Condensed Consolidated Statement of
Comprehensive Income includes $532,424 employer taxes paid via
payroll to tax authorities (30 June 2022: $406,087).
The impairment of intangible assets in the 2022 comparative
relates to the full impairment of the Fortumo trade name which was
discontinued in the period.
7. Amazon warrants
On 16 September 2022, the Group entered into a stock warrant
agreement with a subsidiary of Amazon Inc, Amazon.com NV Investment
Holdings LLC ('Amazon') in conjunction with a commercial service
level agreement for the Group to provide payment processing
services to Amazon.
Under the agreement, the Group issued warrants to Amazon
allowing them to purchase common stock that will vest
incrementally, based on the amount of revenue earned by the Group
from Amazon via Boku payment processing methods. The full details
of the award are disclosed in Note 25 of the Annual Report and
Accounts for the year ended 31 December 2022. There have been no
changes to the agreement. 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 Group's total common stock as at
the inception of the warrant agreement). 747,676 shares 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 $1 million of 'qualifying' revenue generated by the
Group under its service level agreement with Amazon over a seven
year vesting period ending 15 September 2029. No further warrants
will vest if $50 million of qualifying 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.
The increase in fair value from 31 December 2022 to 30 June 2023
was primarily due to an increase in the number of warrants expected
to vest from 4,992,086 to 6,180,045. The warrants are classified as
Level 3 derivative liabilities as there is no current market for
the warrants, such that the determination of fair value requires
significant judgment or estimation. The Group values the warrants
using a combination of Monte Carlo Simulation and Black-Scholes
Model valuation methods
A significant increase, in isolation, in volatility used in
arriving at the fair value of warrants as at 30 June 2023 would
result in a significant change in fair value. If equity volatility
and revenue volatility were both to decrease by 5% to 35% and 25%
respectively, the total fair value of warrants would decrease to
$6,192,405, representing a decrease in fair value of $234,842. If
equity volatility and revenue volatility were both to increase by
5% to 45% and 35% respectively, the total fair value of warrants
would increase to $6,705,349, representing an increase in fair
value of $278,102.
The group outlines a detailed explanation of the Amazon warrants
and the accounting policy for warrants and the valuation method
used, in the Group's most recent annual report (please refer to
Note 3 Accounting estimates, assumptions and Judgements, Note 4
Accounting policies and Note 25 Warrants in the Annual Report and
Accounts for the year ended 31 December 2022).
(https://wp-boku-2020.s3.eu-west-2.amazonaws.com/media/2023/06/Boku-Annual-Report-2022.pdf).
8. Extended Share buyback programme
On 8 June 2023, the Board of directors approved an extension to
it's share buyback programme, which commenced on 7 July 2022, for a
further 12 months from the expiry of the original programme term.
The purpose of the Buyback Programme is to hold the Common Stock in
treasury for the purpose of satisfying future obligations in
relation to the staff equity remuneration programme.
The extended programme will involve the purchasing of common
stock with par value of $.0001 per share in the capital of the
Company ("Common Stock") up to an additional maximum aggregate
consideration of GBP10.5 million and up to an additional maximum of
5.25 million Common Stock (the "Extended Buyback Programme").
The Company instructed Peel Hunt LLP, the Company's broker, to
conduct the Extended Buyback Programme on its behalf. The Buyback
programme will be effected within certain pre-set parameters,
including that the maximum price paid per Common Stock shall be 105
per cent. of the trailing 5 day average mid-market price, and in
accordance with the authority granted by the Company's Board (the
"Authority").
The programme is effective from 8 June 2023 and will expire on
30 June 2024, or earlier, if either the maximum aggregate number of
Common Stock have been purchased or the maximum aggregate
consideration has been reached.
9. Deferred tax asset
During the course of our change in auditors, it was identified
that there was an under-recognised deferred tax asset from prior
years. Accordingly, the opening balances in the Condensed
Consolidated Statement of Changes in Equity f or years ended 31
December 2021 and 31 December 2022 have been restated. The year
ended 31 December 2021 has increased deferred tax assets recognised
from $2.47 million to $17.48 million and the year ended 31 December
2022 has increased deferred tax assets recognised from $3.38
million to $16.48 million. The net deferred tax asset recognised as
at 30 June 2023 is $15.99 million.
10. Post Balance Sheet Events
On 5 September 2023 the Company received $5,600,000 from Twilio
which represented full payment of the final indemnity holdback
payment due on the disposal of Boku's Identity business and which
is included in current assets in the Condensed Consolidated
Statement of Financial Position.
Non-GAAP Financial measures (alternative performance
measures)
Management present non-GAAP financial measures 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. These
measures are also used internally to establish forecasts, budgets
and operational goals to manage and monitor the business, as well
as to evaluate the Group's underlying historical performance.
Management believes that these non-GAAP financial measures depict
the true performance of the business by encompassing only relevant
and controllable events, enabling us to evaluate and plan more
effectively for the future.
The primary adjusted financial measures are EBITDA, Adjusted
EBITDA, Adjusted Operating expenses and Constant currency measures
(Revenue only), which management considers are relevant in
understanding the Group's financial performance.
We define "EBITDA" as net income / (loss) for the year, less
discontinued operations gains, net of tax, before finance expenses
(including finance costs related to lease liabilities),
depreciation and amortisation (including depreciation of
right-of-use assets), and income tax expense / (benefit).
We define "Adjusted EBITDA" as EBITDA before the effect of the
following items: foreign exchange losses share based payments
expense, non recurring income and exceptional costs (see note 8).
We use Adjusted EBITDA internally to establish forecasts, budgets
and operational goals to manage and monitor our business, as well
as evaluate our underlying historical performance. We believe that
Adjusted EBITDA is a meaningful indicator of the health of our
business as it reflects our ability to generate cash that can be
used to fund recurring capital expenditures and growth. Adjusted
EBITDA from continuing operations also disregards non-cash or
non-recurring charges (exceptional costs) that we believe are not
reflective of our long-term performance. We also believe that
Adjusted EBITDA is widely used by investors, securities analysts
and other interested parties as a supplemental measure of
performance and liquidity.
We define "Adjusted Operating expenses" as Gross profit less
Adjusted EBITDA (as defined above).
Constant currency measures (Revenue only) are calculated by
applying the monthly average foreign exchange rates for each month
of 2022 to the actual 2023 monthly results.
Average daily cash balance is a measure which removes the daily
cash balances fluctuations and is used by management because it
reflects better the effect of carrier and merchant payments on the
month end balances.
Independent review report to Boku, Inc.
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Boku, Inc.'s condensed consolidated interim
financial statements (the "interim financial statements") in the
interim results of Boku, Inc. for the period from 1 January 2023 to
30 June 2023 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial Reporting
as issued by the IASB, and the AIM Rules for Companies.
The interim financial statements comprise:
-- the Condensed Consolidated Statement of Financial Position as at 30 June 2023;
-- the Condensed Consolidated Statement of Comprehensive Income for the period then ended;
-- the Condensed Consolidated Statement of Cash Flows for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim
financial information of Boku, Inc. have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB and the AIM Rules for
Companies.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim
financial information and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim financial information, including the interim
financial statements, is the responsibility of, and has been
approved by the directors. The directors are responsible for
preparing the interim financial information in accordance with the
AIM Rules for Companies which require that the financial
information must be presented and prepared in a form consistent
with that which will be adopted in the company's annual financial
statements. In preparing the interim financial information,
including the interim financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the interim financial information based on
our review. Our conclusion, including our Conclusions relating to
going concern, is based on procedures that are less extensive than
audit procedures, as described in the Basis for conclusion
paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of
complying with the AIM Rules for Companies and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
25 September 2023
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