Boku growth in mobile payment volumes pushes up revenue

Continuing the growing shift to financial tech solutions, Mobile payment platform Boku Inc (LON: BOKU) posted its results for the first half of FY19, and reported growth in revenues alongside spikes in payment volumes and active usership.

The Group stated that their Total Payment Volume was up 49% on a year-on-year basis for H1, up from $1.5 billion to $2.3 billion. Further, Monthly Active Users of the Boku platform in June 2019 were 48% higher than in June 2018, at 15.3 million compared to 10.3 million.

Regarding Boku Identity, monitoring activity increased more than sixfold during the quarter, with 74 million numberrs monitored in June 2019, compared to 12 million monitored in June 2018. Processed transactions were also doubled on-year on a proforma basis, up from 70.6 million in H1 2018, to 140.9 during H1 2019.

As a result, Group Revenue for H1 was expected to finish at between $22.5 million and $23 million, up by over 33% from $16.9 million for H1 2018. The Company added that it expected Mobile Identity to represent between 14% and 16% of total reveneus for the period. Adjusted EBITDA was also noted to be on track to meet full year expectations.

However, the Group’s cash at 30 June 2019 was $27.8 million, down from $32.3 million at 30 June 2018. Moreover cahs balance was $22.2 million in June 2019, down from $24.4 million for December 2018.

Boku comments

Jon Prideaux, Boku’s CEO, commented,

“I am delighted with our first half results which show Boku maturing into a multi-product company, without missing a step in our Payments business.”

“With Monthly Active Users continuing to grow strongly, we are proving once again the value that Boku brings to our global digital clients. Of course, the law of large numbers dictates that Payments volumes will not continue to grow at such high percentages indefinitely, but with our significant scale driving operational gearing, the incremental revenues we generate from Payments will continue to drop straight through to EBITDA, affording us the opportunity to make ongoing investments in future growth.”

“Our first such investment, Boku Identity, is off to a flying start and yet we have barely begun to realise the full potential of this new venture. Having acquired Danal Inc, now fully integrated as Boku Identity, at the beginning of the year, the first half of 2019 has been focused on setting ourselves up for sustainable global expansion in what is a new and emerging market. We expect this progress on Identity to continue and accelerate in the second half.”

“Identity is not the only innovation we are pursuing. Our recently announced partnership with Grab in South East Asia demonstrates that there is plenty of potential to grow our Payments business through partnerships with mobile wallets and other alternative payment methods.”

“I am hugely excited by the pipeline of opportunities that we have created in both Payments and Identity and I look forward to providing further updates as the year progresses.”

“We maintain our full year guidance for revenues and adjusted EBITDA, with the normal seasonal bias and further scale up in identity revenues expected in H2 2019.”

Investor notes

The Company’s share price dipped 5.12% or 6.6p following the update, down to 122.40p a share 18/07/19 14:27 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on Boku stock.

Elsewhere in the tech sector, there were updates from; Telit Communications Plc (LON: TCM), TP Group PLC (LON: TPG), Mobile Streams Plc (LON: MOS), Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO) and Vela Technologies Plc (LON: VELA).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.