Interim Results

24 September 2024

Boku, Inc.

("Boku" or the "Company" and, together with its subsidiaries, the "Group")

Interim results for the six months ended 30 June 2024

Continued revenue growth as we lift our ambition to be the world's best localised payment partner for global commerce

Boku (AIM: BOKU), a global network of local payment solutions, is pleased to announce the following unaudited interim results for the six months ended 30 June 2024 ("H1 2024").

Financial Highlights

Operational highlights

The shareholders have approved the board's proposal for a new stretch restricted share unit plan. This plan will support and reward the performance of the executive management team of the Company in a fair, transparent and proportionate manner.

Stuart Neal, Boku's CEO, commented: 

"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. 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%.

"It is pleasing to see continued double-digit growth in our Direct Carrier Billing ("DCB") product, proving once again its resilience and the value it adds for our merchants. Digital wallets and A2A payments have kicked on again and comprised 25% of total Group revenues in H1 2024. 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. We remain confident that we will achieve expectations for the full year."

¹ These represent alternative performance measures ("APMs") for the Group. Refer to the Non-IFRS financial information section of Boku's 2024 Interim Report for a summary of APMs used, together with their definitions.

² For a full list of definiitons and abbreviations used by the Group, refer to the Glossary at the end of Boku's 2024 Interim Report.

Investor Presentation

The Company will be hosting an online investor presentation and Q&A session at 5.30 p.m. BST, today, Tuesday 24 September 2024. 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_nTiw40r8QsqXtvpPZKXyww

Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: [email protected].

Enquiries:

Note 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, reaching 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, 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, Germany, Indonesia, Ireland, Japan, Singapore, Spain, Taiwan and Vietnam.

To learn more about Boku, Inc., please visit: https://www.boku.com

CHIEF EXECUTIVE OFFICER'S REPORT

The first half of 2024 has seen Boku continue to demonstrate solid revenue growth, following on from a very strong 2023. As presented at the FY 2023 results, 2024 will be a year of continued top line growth, largely from existing merchants, coupled with increased investment in the business as we lift our ambition to be the world's best localised payments partner for global commerce.

The planned investment comes in four focused areas:

·      Investment in the functionality required to deliver the next wave of growth opportunities for our existing merchants (some of which are scheduled to technically land in Q4 2024)

·      Investment to scale our business to attack the global commerce market, allowing for a wider range of LPMs and market-leading money movement capabilities

·      Investment to fund R&D projects to design and build an off-the-shelf Boku product that can target a wider set of global merchants (either directly or via channel partners)

·      Investment in our delivery capability to ensure that the whole company can scale efficiently and maintain good operational gearing

We believe that the above initiatives are fully costed within existing analyst projections and covered with existing cash reserves.

More of the same in H1

Revenues in the period were up 24% (30% if you remove the impact of exchange rate movements, largely the negative impact of a depreciating Japanese Yen over the period).

It is pleasing to see continued double-digit growth in our Direct Carrier Billing (DCB) product, proving once again its resilience and the value added for our merchants. DCB allows consumers to make digital purchases and charge those purchases to their phone bill, which is settled at the end of the billing period. In that regard, DCB is the original Buy Now Pay Later (BNPL) product. It is for this reason that it proves to be a highly effective way for merchants to attract more users in any given market.  We have seen continued strong performance in heritage DCB markets such as Germany, UK, Japan, Taiwan, Switzerland and Saudi Arabia, as well as a general ramp in demand across the Middle East.

Digital wallets and Account to Account (A2A) payments have kicked on again and during H1 comprised 25% of total Group revenues. We now have expansion plans for these products with all of our key merchants in new and existing markets. Thus, it is our expectation that the product mix within our business will continue to see an increasing shift towards these payment types.

It is by design that our success is directly linked to the success of our merchants. Being useful for our merchants is key to the ongoing success of our business, which is why Monthly Active Users are tracked as a measure of how we have performed for our merchants. In June 2024, 79.6m users successfully completed a transaction using the Boku platform to access the services provided by our merchants, 30% more users than did so in June 2023.

An operating loss of $0.4m was reported for the six months to 30 June 2024 (H1 2023: operating profit $2.1m). This was primarily due to increases in foreign exchange revaluation losses on non-USD balances, accelerated amortisation charges relating to a legacy platform and higher share-based payment expenses driven by increases in both the number of awards granted and our share price.

Innovate or die

Juniper research points to the global ecommerce market growing to $11 trillion (tn) by 2028 and 59% of this total payment volume is expected to be via Local Payment Methods (LPMs). (Boku & Juniper Research, 2024)¹

Boku already possesses a formidable set of assets to be successful in this market - we serve some of the largest and most exacting merchants in the world, we have high quality connections to c.300 individual LPMs, licenses to move money in 60 countries and a flexible set of connections that offer card-like conversion rates. Put simply, we remove complexity for our merchants as they attempt to grow their businesses internationally.

To fully maximise the long-term potential for Boku, we are now adding scaling capabilities as described below.

With the addition of A2A payments to our network, consumer funds will be flowing through our regulated bank accounts in real time. A significant emphasis is being placed on compliance, segregation of funds, automated reconciliation and faster settlement of funds, both domestically and cross border.

To deliver a differentiated global money movement capability, over the next 6-9 months we are building a sophisticated treasury platform, supported by a number of tier one banking partners, offering best in market payments capability and foreign exchange rates for our merchants.

Scaling the back end of our platform will allow for strong margin growth as Boku rolls out to the broader ecommerce market and adds new payment products in new geographies such as UPI in India and PIX in Brazil.

In addition to scaling the platform, we also welcomed some new executives to the Boku leadership team during H1, who will add vast experience and knowhow when it comes to helping the business navigate the tricky step from start up to scale up. Victoria Rogers (formerly AO.com) joined as Chief People Officer, Paul Jarrett (formerly Zepz) joined as Global Head of Banking and Rob Whittick (formerly NatWest Bank) joined as our new Chief Financial Officer.  I am excited to see what the combination of existing Boku leadership talent and our new executives will deliver as we grow.

Outlook for the year

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. We remain confident that we will achieve  expectations for the full year.

Once again, I would like to offer a huge note of thanks to the 452 Boku colleagues around the world, whose incredible talent and energy have helped to deliver these results and provide a springboard for what's to come.

Stuart Neal

Chief Executive Officer

24 September 2024

¹ Boku & Juniper Research, 2024. 2024 Global Ecommerce Report. Available at: https://www.boku.com/boku-knows/2024-boku-global-ecommerce-report.

CHIEF FINANCIAL OFFICER'S REPORT

Introduction and thank you

I am pleased to present my first interim report as CFO of Boku. Since my arrival in July, I have been warmly welcomed by colleagues across the company. My particular thanks to Keith for ensuring a smooth transition.

I have been thoroughly impressed by the dedication, talent, and innovative spirit that defines the Boku team. Our global payments platform is market leading in the DCB and other LPM arenas with an impressive list of merchants and an extensive, growing network of issuers across the world. 

As we look forward, I am excited about the future of Boku. Together, we will continue to build on our successes, leveraging our strengths to drive sustainable growth for our customers and long-term value for our shareholders. We aim to become the world's best network for localised payment methods, and I am delighted to be part of that journey. With over 25 years of experience in the financial services sector, I look forward to contributing to our shared vision and helping steer the company towards new and ambitious goals.

A summary of our financial and operational highlights for the six months to 30 June 2024 are set out below:

² The prior period to 30 June 2023 has been restated to exclude the fair value gain on warrants from administrative expenses, further details can be found in note 2. Additionally, right-of use assets have been restated, resulting in a reduction in depreciation, further details can be found on pages 18 to 19.

³ 30% on a constant exchange rate basis

⁴ Adjusted EBITDA is a non-IFRS measure defined as earnings before interest, tax, depreciation, amortisation, non-recurring income, share-based payment expense, foreign exchange gains/ (losses) and exceptional items (see pages 18 to 19 for further details).

⁵ Defined as gross profit less Adjusted EBITDA.

⁶ Calculated as Adjusted EBITDA over revenue for the period.

⁷ Own cash is a non-IFRS measure calculated as cash held plus amounts due from issuers less amounts owed to merchants

⁸ 26% on a constant exchange rate basis

Comments on overall performance

Our growth remains positive, with revenue increasing by 24% to $47.3m (30% on a constant exchange rate basis) over the first six months of the year (H1 2023: $38.2m). Building on the momentum from last year, we achieved meaningful revenue growth from other LPMs which now accounts for 25% of total revenues. This was underpinned by our strategic initiatives focused on enhancing and expanding our product offering in this area. Our DCB product also continues to perform well reporting double digit growth in the period. Despite investment we have increased our Adjusted EBITDA by 18% to $14.2m (H1 2023: $12.1m) and maintained an Adjusted EBITDA margin of greater than 30% underscoring our efficient operational management and cost-control measures. 

The growth trajectory is maintained 

Supporting our customers has always been the cornerstone to Boku's growth story. By continuously enhancing our offering we have not only retained our loyal customer base but also attracted new customers in new markets. This is reflected in our revenue growth of 24% (30% on a constant exchange rate basis) which has been primarily driven by a 16% increase in TPV (26% on a constant exchange rate basis) to $5.8bn (H1 2023: $5bn).

The increased TPV is underpinned by a 30% increase in MAU to 79.6m in June 2024 (H1 2023: 61.2m), together with adding 39.9m new users in the six-month period (H1 2023: 32.7m), reflecting our continued efforts in adding new connections for our global merchants across existing and new markets.  We completed over 50 new launches in multiple jurisdictions across all LPMs - DCB, digital wallets and A2A in H1 2024 with both new and existing merchants including Netflix, Sony and Google. 

A significant portion of our revenue growth came from other LPMs - digital wallets and A2A - where revenue increased by 64% to $11.9m. This was supported by increases in new users of 46% to 9.2m and increased MAU of 86% to 8.8m across these other LPMs.

Our take rate has also increased to 0.81% in the six months to 30 June 2024 (from 0.76% H1 2023) which was largely due to higher take rates in other LPM products - specifically digital wallets. 

Looking ahead, our growth trajectory remains positive and promising. The expanding addressable market together with our relentless focus on meeting customer needs through innovation and operational excellence will continue to drive us forward.

Investment continues while maintaining Adjusted EBITDA margin

To support and sustain our growth, we are committed to continued investment while maintaining an Adjusted EBITDA margin of over 30%. Consequently, while our Adjusted operating expenditure has increased by 28% to $31.7m (H1 2023: $24.8m) our Adjusted EBITDA increased by 18% to $14.2m (H1 2023 $12.1m), resulting in an Adjusted EBITDA margin of 30.1% (H1 2023: 31.6%).

As noted by Stuart above, our investment strategy is centred on both enhancing our product offering and strengthening our delivery capability to make it scalable for the future. This approach ensures that we can drive innovation and expansion, allowing us to capitalise on growth opportunities while maintaining strong financial performance. 

Review of operating expenses and other items

Boku reported a small operating loss of $0.4m for the first six months of 2024 compared to an operating profit of $2.1m in the previous half year. Key items contributing to this loss are as follows:

Other notable items below the operating loss line are as follows:

The Group reported a Basic loss per share of $(0.0036) (H1 2023: EPS $0.0060). 

Ongoing cash generation continues to strengthen our balance sheet

Cash Generation

Boku continues to operate debt-free and generate positive cash flows. As at 30 June 2024 the group held cash balances of $148.5m which was up 30% from $113.9m in H1 2023 (FY 2023: $150.9m) and average daily cash balances in June of $138.6m which were up 31% from $105.8m in June 2023 (December 2023: $131.7m). At 30 June 2024, $75.2m is Boku's 'own' cash which was up 38% from $54.4m in H1 2023 (FY 2023: $70.4m). It is encouraging to see the business enhancing its cash generating capabilities which will allow us to make the necessary investments to drive future growth as noted above.

The 30 June 2024 cash balance includes $3m of cash received from Danal relating to the exercise of warrants granted upon acquisition of Danal.  See note 8 for further details.  

Share Buyback

The cash balance above is stated after the purchase of 700,000 of Boku's own shares in the first six months of 2024 for a total consideration of $1.6m as part of its share buyback programme. As explained in Note 10, this programme has now expired. 

Intangibles

As at 30 June 2024, the Group had goodwill of $41.8m (FY 2023: $42.2m) and other intangibles of $14.8m (FY 2023: $14.4m). As at 30 June 2024, no impairment was required.

Deferred Tax Asset

Our deferred tax asset increased to $17.7m from $15.3m as at 31 December 2023. This is primarily due to recognition of previously unrecognised tax losses.

Principal Risks and Uncertainties

For the six months to 30 June 2024, the principal risks and uncertainties of the Group remain consistent with those previously reported in the Annual Report and Accounts for the year-ended 31 December 2023. For more details on the Group's risk management, please refer to the 'Principal Risks and Uncertainties' section on pages 16 to 20 of the Annual report.

Going Concern

The Group has undertaken a detailed going concern assessment, reviewing its current and projected financial performance and position, including forecast cash flows. 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 financial statements. As such, the condensed consolidated interim financial statements have been prepared on a going concern basis.

Looking forward

As I look ahead, our investment narrative remains clear. We anticipate continued volume increases as we tap into an expanding addressable market. Our commitment to supporting merchant growth will drive our ongoing investment in our products, while we also enhance our delivery capability to ensure scalability. Our goal is to be the leading network for localised payment methods globally and I am confident we can meet that ambition.  

Robert Whittick

Chief Financial Officer

24 September 2024

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

^*The prior period to 30 June 2023 has been restated to exclude the fair value gain on warrants from administrative expenses. Further details can be found in note 2.

¹Adjusted EBITDA is a non-IFRS measure defined as earnings before interest, tax, depreciation, amortisation, non-recurring income, share-based payment expense, foreign exchange gains/ (losses) and exceptional items (see pages 18 to 19 for further details).

The accompanying notes form an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The accompanying notes form an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The accompanying notes form an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

The accompanying notes form an integral part of these condensed consolidated financial statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  General information

Boku, Inc., a public limited company, incorporated and domiciled in the United States of America, is the parent company (Parent Company or Parent) for all of its subsidiaries (together Boku or the Group). The shares of the Company are quoted on AIM, a market of the London Stock Exchange Group plc. The registered office of the Company is 660 Market Street, Suite 400, San Francisco, CA 94104, United States.

The principal activity of the Group is the provision of digital payments, including mobile wallets, real-time payment schemes, and direct carrier billing for global merchants. These solutions enable merchants to acquire new customers and accept online payments from customers who prefer to pay without credit cards.

The condensed consolidated financial statements were approved for issue on 23 September 2024.

2.  Basis of preparation

The annual financial statements of the Group will be prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The condensed consolidated financial statements included in this interim report are for the six months ended 30 June 2024 and have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34"). The condensed consolidated financial statements have been independently reviewed, not audited.

The disclosures in these condensed consolidated financial statements do not include the information reported for full annual financial statements and should therefore be read in conjunction with the annual financial statements of the Group for the year ended 31 December 2023. Comparative condensed consolidated statement of financial position is extracted from annual financial statements as at 31 December 2023 whereas comparative condensed consolidated statement of comprehensive income, consolidated condensed statement of changes in equity and condensed consolidated statement of cash flows are extracted from un-audited condensed consolidated financial statements of the Group for the six-month period ended 30 June 2023.

In the six months ended 30 June 2024 the Group did not adopt any new standards or amendments issued by the IASB or interpretations by the IFRS Interpretations Committee ("IFRIC") that would have had a material impact on the condensed consolidated financial statements.

2.1 Going concern

The Group meets its day-to-day working capital requirements through its own cash balances. The Group has undertaken a detailed going concern assessment, reviewing its current and projected financial performance and position, including forecast cash flows. The downside scenario considered revenue falling between 31% and 55%. The downside scenario, outlining the impact of a severe but plausible adverse case, shows that there is sufficient headroom for liquidity for at least the next 12 months from the date of approval of these condensed interim financial statements. Thus, the directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future and meet its financial obligations as they fall due for a period of not less than 12 months from the date of approving this interim report. Accordingly, the Directors continue to adopt the going concern basis in preparing the condensed consolidated financial statements.

2.2 Alternative performance measures (APMs)/ Non-GAAP measures

Management regularly 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 EBITDA, Adjusted EBITDA, Adjusted Operating expenses and Constant exchange rate revenues which management considers are relevant in understanding the Group's financial performance. Further information about these APMs together with a reconciliation to operating profit are disclosed at the end of this report.  

2.3 Restatement

The condensed consolidated statement of comprehensive income for the six months ended 30 June 2023 has been restated to move the fair value gain on warrants from exceptional items in administrative expenses to a separate line below operating profit, to more appropriately reflect the accounting judgement.

This adjustment had no impact on the condensed consolidated statement of cash flows or condensed consolidated statement of financial position.

Fair value gain on warrants

2.4 Critical accounting estimates and judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results might differ from these estimates. In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2023, with the exception of changes in estimates that are required in determining the recognition of deferred tax assets. 

3.    Significant Accounting Policies

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

4.    Operating Segments

These condensed consolidated financial statements have been prepared on the basis of a single reportable segment being the Payments Business.

5.   Revenue from contracts with customers

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 geographical analysis of the revenue by location of the users is presented below:

The amortisation of the warrant contract asset to revenue during the six months ended June 2024 amounted to $0.08m (H1 2023: $0.08m). See note 8 for more information on warrants.

6.   Finance income and expense

7.   Cash and cash equivalents and restricted cash

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 collateralise Company credit cards.

8.   Warrants

Amazon Warrants - Derivative Liabilities

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 includes a detailed explanation of the Amazon warrants and its accounting policy for such warrants in the Group's most recent annual report and has therefore not replicated those disclosures within these condensed consolidated financial statements.

The fair value of the warrant liability was $9.1m as at 30 June 2024, and $5.5m as at 31 December 2023. The increase in fair value from 31 December 2023 to 30 June 2024 was 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 4.25%), combined with an increase in the number of warrants expected to vest from 5,333,781 to 5,622,828. The fair value of 1 warrant increased to $1.616 at 30 June 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 of $0.3m. The remaining increase in the fair value of underlying warrants of $3.3m represented a charge to the statement of comprehensive income. 

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 and estimation. The Group values the warrants using a combination of Monte Carlo Simulation and Black-Scholes Model valuation methods. Significant unobservable inputs as at 31 December 2023 included volatility of the Company's common stock of 40%, revenue volatility of 30%, a risk-free rate of 3.81%, and forecasted revenue from Amazon over the 7-year vesting period. Significant unobservable inputs as at 30 June 2024 included volatility of the Company's common stock of 40%, revenue volatility of 30%, a risk-free rate of 4.25%, and forecasted revenue from Amazon over the 7-year vesting period.

A significant increase in volatilities in isolation as at 30 June 2024 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 $8.8m, representing a decrease in fair value of $0.2m. 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 $9.4m, representing an increase in fair value of $0.3m.

Exercise of other warrants in the period

Danal Company Ltd exercised a total of 1,634,699 warrants, exercisable at 141p, for a total compensation of $3m. 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 the Company's acquisition of Danal, Inc, announced on 6 December 2018 and completed on 1 January 2019.

9.   Dividends

No interim dividend has been paid or proposed in respect of the current financial period (H1 2023: nil).

10.  Share Capital

At 30 June 2024, Boku, Inc. had 303,028,613 (FY23: 301,066,914) common shares issued and fully paid. Boku, Inc. has only one class of shares with par value of $0.0001 each. The authorised share capital is 500,000,000 shares. Boku, Inc. holds 747,451 shares in treasury (FY23: 4,007,868 shares). During the year the Boku, Inc. purchased back 700,000 shares under the Share buyback programme. The programme was extended on 8 June 2023 and expired on 30 June 2024.

11.  Contingent liabilities

The Group does not believe it has any potential liabilities or obligations that would have a material adverse effect on its financial position or results of operations, including those related to legal disputes, patent claims, or indemnification agreements.

12.  Events after the reporting date

Executive award plan

On 11 September, the shareholders approved the adoption of the new stretch restricted share unit plan. This plan will support and reward the performance of the executive management team of the company in a fair, transparent and proportionate manner. The awards granted under new share scheme will be RSUs. The aggregate number of shares that will be allocated under the new plan will not exceed 3% of issued share capital as at 31 July 2024.

All awards are subject to the same performance condition being a comparison of the 40-day Volume-Weighted Average Price ("VWAP") following the release of the results announcement for the 2027 financial year (expected to be released in March 2028) (the "Tested Share Price") against 180.4p (being the 40-day VWAP following the release of the results announcement for the 2023 financial year on 19 March 2024) ("Base Share Price") as follows:

Credit facility

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 period.

NON-IFRS FINANCIAL INFORMATION

Management regularly 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.

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.

The primary APMs are EBITDA, Adjusted EBITDA and Adjusted Operating expenses, and Constant exchange rate 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.

The Group uses the following APMs

A reconciliation of Adjusted EBTIDA to operating (loss)/ profit is as follows:

^*The prior period to 30 June 2023 has been restated to exclude the fair value gain on warrants from administrative expenses. Additionally, right-of-use assets have been restated resulting in a reduction in depreciation, further details are set out below.

Restatement of APMs:

Amounts previously accounted for under IFRS 16 as right-of-use assets were restated to prepayments in the condensed consolidated statement of financial position. The impact on Adjusted EBITDA as a result of the related reduction in depreciation for the six months ended 30 June 2023 is shown below.

INDEPENDENT REVIEW REPORT

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 Report 2024 of Boku, Inc. for the 6 month period ended 30 June 2024 (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 2024;

·    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 Report 2024 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 Report 2024 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 Report 2024, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Interim Report 2024 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 Report 2024, 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 Report 2024 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

24 September 2024