Boku swings to operating loss despite 24pc revenue jump

Boku reported a 24% increase in first-half revenue on Tuesday, reaching $47.3m, driven by higher transaction volumes across its local payment methods.

The AIM-traded firm said that when adjusted for constant exchange rates, revenue growth stood at 30%.

Revenues from digital wallets and account-to-account (A2A) payments surged 64% to $11.9m, reflecting strong merchant adoption of such services.

Adjusted EBITDA rose 18% to $14.2m, maintaining a robust margin of 30.1%, as the company continued to invest in expanding its offerings.

Despite the strong revenue growth, Boku reported an operating loss of $0.4m, swinging from a $2.1m operating profit in the same period last year.

That was put down to foreign exchange revaluation losses, increased share-based payment expenses, and accelerated amortisation charges related to a legacy platform.

The company’s cash position remained strong, with Boku’s ‘own’ cash increasing to $75m, up from $54.4m a year earlier.

Total group cash stood at $148.5m, and the company remained debt-free.

Operationally, Boku saw a significant increase in user engagement, with monthly active users (MAUs) rising 30% to 79.6 million in June.

New users making their first payment or bundling transaction reached 39.9 million, up from 32.7 million in the prior year.

Total payment volume grew 16% to $5.8bn, with a take rate increase to 0.81%, primarily driven by higher contributions from digital wallet revenues.

The company launched over 50 new local payment solutions in the first half, partnering with major merchants including Netflix, Sony, and Google.

It said the success in digital wallets and A2A connections was highlighted by an 86% increase in MAUs for the services, reaching 8.8 million in June 2024, and a 46% rise in new users to 9.2 million.

“Following on from a very positive 2023, the first half of 2024 has seen Boku continue to demonstrate strong revenue growth, largely driven from existing merchants,” said chief executive officer Stuart Neal.

“We are committed to supporting merchant growth and are lifting our ambition to be the world's best localised payments partner for global commerce.

“The first half has therefore also seen us increase our investment in our products and the infrastructure required to scale whilst maintaining our adjusted EBITDA margin above 30%.”

Neal said it was “pleasing to see” continued double-digit growth in the company’s direct carrier billing (DCB) product.

“Digital wallets and A2A payments have kicked on again and comprised 25% of total group revenues in the first half.

“We have expansion plans for these products with all our key merchants, most of which we would expect to see rolled out over the coming two years; thus, it is our expectation that the product mix within our business will continue to see an increasing shift towards these payment types.

“We reiterate our expectation that 2024 will be a year of solid top line growth that is in turn funding an increase in investment, with adjusted EBITDA margins staying broadly flat on 2023.”

Boku also implemented a new restricted share unit plan approved by shareholders, aimed at aligning executive management incentives with company performance.

The plan was designed to reward the leadership team fairly and transparently as they drove growth and expanded Boku’s presence.

At 1100 BST, shares in Boku were down 1.54% at 160p.

Reporting by Josh White for Sharecast.com.