Boku Inc (LON:BOKU), a leading global mobile payment and mobile identity company, has provided the following unaudited trading update for the six months ended 30 June 2021.
Group
· Group Revenues for H1 2021 are expected to be at least $34.0m, an increase of 37% vs. H1 2020 ($24.7m)
o Underlying Group revenue* growth strong at 21.0% (excluding acquired Fortumo revenues)
· Group adjusted EBITDA** expected to be at least $9.6 million, an increase of 50% vs. H1 2020 ($6.4 million)
· Group revenue and adjusted EBITDA for the full year expected to be ahead of expectations.
· Group cash of $48.6 million at 30 June 2021 (30 June 2020: $36.2 million***)
o $11.25 million of the $20 million debt used to acquire Fortumo paid down
· The average daily cash balance – a measure which smooths out the effect of carrier and merchant payments, was $38.0 million in June 2021 (June 2020: $25.7 million)
Payments division
· H1 2021 Payments revenue increased to at least $30.5m, an increase of 39% vs. H1 2020 ($22.0m)
o Underlying Payments revenue* growth of 20.0% (excluding Fortumo revenues acquired 1 July 2020)
· Total Payment Volume (“TPV”)**** of $4.0 billion in H1 2021, an increase of 29% vs. H1 2020 ($3.1 billion)
· 29.7 million Monthly Active Users (“MAU”) of the Boku platform in June 2021 (June 2020: 20.3 million), a 46% increase
o Underlying growth in MAUs (excluding Fortumo) of 28%
· 20.8 million new users made their first transaction with the Group during the first half of the year, 92% up on the prior year
o At Group level the number of new users increased materially due to the inclusion of transactional merchants from Fortumo; excluding Fortumo data, new users increased by 8% to 11.7 million
· H1 2021 take rate stable at 0.7%, in line with H2 2020 (including Fortumo volumes)
· Launches in H1 2021 with Google, Netflix, DAZN, Spotify, Epic Games, Amazon, Riot Games and Tinder across both DCB and Wallets
· Boku has materially expanded its regulated payment activities with licences that now cover 35 markets in Europe and Asia, up from one market, the UK, at the start of the year
· Fortumo’s twelve month earnout period concluded on 30 June 2021:
o The final earn-out payment, based on Fortumo EBITDA performance, is still to be finalised, however is not expected to exceed 50% of the $5.4 million currently held in escrow
o The agreed payout percentage will be applied and paid to Fortumo’s former shareholders by 30 September 2021, with the balance returned to Boku
Identity division
· Identity revenue of up $3.5 million, an increase of 30% vs. H1 2020 ($2.7 million) and EBITDA losses reduced from H1 2020; performance in line with the Board’s expectations
· Connections added in Spain, Italy and Indonesia, together with a strengthening of the global partnership with Vodafone Group
· Strong growth from key existing customers complemented by a ramp up in transaction volumes from new mobile wallet customers in Indonesia
* 2020 H1 comparative excludes any revenues from Fortumo Holdings Inc (‘Fortumo’) which was acquired on 1st July 2020
** Adjusted EBITDA (Earnings before interest, taxation, depreciation and amortization): Adjusted for stock option expenses, Forex gains/losses and Exceptional items
*** Comparative group cash balance at 30 June 2020 of $80.44 million included $44.5 million of cash held to pay for the acquisition of Fortumo on 1 July 2020. Excluding this cash, the balances were $36.2 million
**** TPV is the US$ value of transactions processed by the Boku platform
Jon Prideaux, Boku’s CEO, commented: “We are pleased with the first half results, with revenues and EBITDA expected to be well ahead of the same period last year. With both Identity and Payments showing strong growth, and with Group revenue and EBITDA both running ahead of expectations, there is much to be pleased about.
“Results look backwards to past achievements, but, looking forward, I am even more excited about our prospects. The main task of our Payments business has always been to help our merchants to reach mobile consumers. We are now broadening the range of payment methods that we support to include not just direct carrier billing (‘DCB’), but increasingly e-wallets and now also real time bank payments – helping our merchants to reach more customers for a greater portion of their spending.
“Building out this network of ‘Mobile First’ payment methods and simplifying its implementation to be more plug-and-play unlocks an opportunity which could be many times the size of our current business. By first cross selling into our existing digital merchants, then expanding our scope to cover new sectors, such as digital booking services and ecommerce, we can increase the value of transactions that we process. We will be investing in both our product suite and in sales and marketing in the second half and into 2022 to take advantage of the many opportunities available.
“The acquisition of Fortumo last year has been successful and has consolidated our strong market position in mobile payments. Part of the total consideration was based on Fortumo’s adjusted EBITDA performance for the 12 month period ended 30 June 2021. To achieve full payout of the $5.4 million held in escrow, Fortumo had to achieve adjusted EBITDA significantly ahead of market expectations. The results have still to be finalised, but the payout is expected be no more than 50% of the maximum amount. The unpaid escrow balance will be returned to Boku.
“Our Identity division performed strongly returning to growth with revenues up 30% in the first half and further reduced EBITDA losses. We are particularly encouraged by the growth in revenues from new products to new customers, primarily in Asia, as we expand the business away from its US base. As a result we expect the Identity business to show increased revenues and further reduced losses for the full year.
“With growth in both Payments and Identity divisions I am confident that the full year Group performance will be ahead of expectations.”
