Boku new payment methods will be a significant portion of overall growth (LON:BOKU)

Boku Inc (LON:BOKU) Chief Executive Officer Jon Prideaux caught up with DirectorsTalk for an exclusive interview to discuss the highlights from their full-year results, becoming a pure-play payments business, more about the mobile first payments network ‘M1ST’ and what we can expect from the company in the next year.

Q1: Jon, Boku have released 2021 full year results, can you just talk us through the highlights?

A1: I think it’s a pretty good set of results. Basically, all of the numbers are up and to the right so group revenues were up by 23% to $69.2 million and within that, Payments was up to $62 million and Identity to $7.1 million. The group adjusted EBITDA up 31% to $20 million and for the first time we were showing a net profit before tax of $4.4 million.

One of the key things to come out was the sale of our Identity division which happened after the period close but we eventually went through and sold the Identity division to Twilio for $32.3 million. That’s something that will be accretive to our results going forward.

Q2: As you mentioned, you sold the business to Twilio, that was in January this year, which makes the business a pure-play payments company now. Can you tell us what this means for the group?

A2: In practical terms, the company now is an all-in, not just on direct carrier billing the business of buying stuff and charging to your phone bill, but also now across a range of local payment methods; e-wallets and realtime banking solutions, both of which are very popular, particularly within Asia. In fact, those other payment methods are the predominant way in which people buy things online.

So, this move to being a pure-play payments company allows us to sell new products to our existing customers who comprise many of the world’s largest digital companies so Apple, Sony, Spotify, Microsoft, Facebook and so on. All of those companies use us and we’re now in a position to be able to start cross-selling this new more popular payment methods to them which should all go well for future growth.

Q3: Can you explain in a little bit more detail about your mobile first payments network M1ST?

A3: So, we call the M1ST, the mobile first payment network because what we’re trying to do is assemble together a network of local payment methods which are used by people who came to the internet first through their mobile device.

In a sense, those are the new middle-class that emerged in Asia, the Middle East, Africa and Latin America, these are the people who are driving forward consumer spending around the globe at the moment, at a much faster rate than in the West. The thing about them is these people don’t use cards typically to be able to buy things online, they use these wallets and realtime payment mechanisms.

So, we have assembled together a M1ST now, a reach which is really quite extraordinary, we can get through to 7 billion user accounts and importantly, 3 billion of those accounts are not telephone accounts – our traditional business that people might know us for – but actually for the new payment methods of e-wallets and realtime payments.

We’ll continue to add other payment methods to this network, really to help our customers to be able to reach those consumers and help them pay in the way that they want to.

Q4: Just looking at the results statement, you’ve said that this year has started strongly. Looking forward, what can we expect to see from Boku in the next year?

A4: Continued growth and particularly, continued growth in the new local payment methods. One statistic that I did reveal is that at the year-end, we had something like 1.1 million monthly actives out of a total of about 32 million monthly active users, about 1.1 million of those were using the new payment methods: the wallets and the realtime payment methods. By the time we’d got through to February, that had increased to 1.4 million monthly active users, ten times the figure there was previously.

So, this new part of our business is really starting to reach a point of ignition and it’s growing very very rapidly, albeit off a relatively small base. One thing is clear, in 2022 these new payment methods will be a significant portion of our overall growth and help to drive our business forward.

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