Boku operates a billing and identity verification platform that connects merchants with mobile network operators in more than 50 countries. It has c 180 employees, with its main offices in the US, UK, Germany and India.
Boku’s FY19 trading update confirmed that it met consensus expectations for revenue and EBITDA, albeit aided by recognition of one-off revenues of $3.2m in H2. The Payments business showed strong underlying revenue growth driving a 90% increase in adjusted EBITDA while the Identity business made progress in building out supply outside of the US. We have revised our forecasts and reduce group EBITDA by 40% in FY20 to $10.5m and 43% in FY21 and normalised EPS by 50% and 49%, respectively. We continue to consider the Payments business as the engine for profits while we view the Identity business as a longer-term investment in growth.
Direct carrier billing is an alternative payment method that uses a consumer’s mobile bill (pre-paid credit or post-paid monthly bill) as the means to pay for digital content or services such as games, music or apps. Growth in the underlying digital content markets as well as the increasing penetration of smartphones is expected to drive growth in DCB transactions. Its identity verification service enables merchants to sign up and transact with users while meeting regulatory requirements and avoiding fraud.