Boku operates a billing platform that connects merchants with mobile network operators and alternative payment methods in more than 70 countries. It has c 450 employees, with its main offices in the US, UK, Estonia, Germany and India.

EDISON VIEW

In FY25, growing adoption of local payment methods (LPMs) drove an acceleration in revenue growth for all three of Boku’s payment products, with digital wallets and account-to-account (A2A) now making up more than a third of revenue. The company has been actively investing to exploit the opportunity for LPMs, including building up direct sales and channel partners to grow and diversify the merchant base, strengthening its platform and payments infrastructure and developing fx and money movement services to complement the existing portfolio of payment products. We expect medium-term performance to be supported by growth from the existing merchant base, potential new enterprise merchants and the opportunity to layer on additional services. The H126 trading update highlighted that the growth path is not always smooth and we expect management to update its medium term outlook when it reports interims in September.

Find more in our last note on Boku — Rebasing expectations

Q&A

What is Boku's core business model?

Boku has developed a platform that supports local payment methods (LPMs), connecting merchants with issuers around the world. Boku processes payments according to two methods:

1) Settlement: Boku provides the technical connection and settles the transaction

2) Transactional: Boku provides the technical connection but the merchant and issuer settle directly with each other.

How does Boku make money, and how is revenue split?

The company earns a small percentage of the value of each transaction it processes, with a higher rate for the settlement method. Boku also charges fees for additional services such as currency conversion, early settlement and new integrations. In FY25, 66% of revenue was generated from Direct Carrier Billing (of which 11% was from Bundling) and 34% from digital wallets/account-to-account.

What are the key growth drivers for Boku?

Near-term growth catalysts include new merchants starting to use the platform, existing merchants using new LPM connections and to a lesser extent, merchants adopting treasury services. As merchants expand into countries where cards are not the dominant payment mechanism, they need help connecting to local payment methods (LPMs).

Boku's payment platform supports multiple local payment methods: direct carrier billing, digital wallets and account-to-account (A2A) payments. LPMs currently account for just over half of e-commerce transaction value globally and this is expected to grow to 59% by 2028.

What are the primary risks facing the business?

The primary risks facing the company include the loss of a major merchant (two merchants accounted for more than 10% of revenue, totalling 52% of revenue in FY25), regulatory non-compliance, competition, and the rate at which merchants grow and adopt additional services from Boku.

What are the primary regulatory and compliance risks for Boku's payment network?

Operating globally, Boku comes under the remit of a number of different regulatory regimes. It must also comply with anti-money laundering and counter-terrorism financing regulations in the countries in which it operates. DCB tends to be exempted from money transmission regulations as long as transaction limits are respected. As Boku has expanded its offering to digital wallets/A2A, it is going through the process of obtaining the necessary licences in the territories in which it operates. It can currently process regulated payments in more than 40 markets and has applications and partnerships in several other countries.

What is Boku's medium-term guidance for revenue growth and EBITDA margin?

In March 2025, management upgraded its growth outlook, targeting medium-term organic revenue growth exceeding 20% on a compound annual growth rate basis (with FY24 the start point) and an adjusted EBITDA margin exceeding 30%, with progressive accretion from 2026 as it benefits from the operational leverage of ongoing investments. In July 2026, the company reported that H126 revenue had fallen short of expectations for several reasons, and reduced its guidance for FY26. We expect further clarity on the medium-term outlook when the company reports H126 results in September.

Can UK investors buy Boku shares, and how does Regulation S affect them?

As a US company listed in the UK, Boku is classified by the SEC as a domestic issuer with Reg S Cat 3/144A status. Any investor from outside the US can invest in the company but in the US, only qualified institutional buyers (QIBs) can buy the stock. Retail platforms in the UK will typically require an investor to certify that they are not a US person and that they are not buying for a US person.

Does Boku pay a dividend, and what is its capital allocation policy?

The company does not pay a dividend. Management's primary focus is on driving organic growth and it is reinvesting returns to support this. Share buybacks are undertaken to satisfy staff equity schemes to avoid shareholder dilution. Management considers that disciplined acquisitions could be possible in the medium term to support the organic growth strategy.

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Boku (AIM: BOKU)

Q&A

What is Boku's core business model?

How does Boku make money, and how is revenue split?

What are the key growth drivers for Boku?

What are the primary risks facing the business?

What are the primary regulatory and compliance risks for Boku's payment network?

What is Boku's medium-term guidance for revenue growth and EBITDA margin?

Can UK investors buy Boku shares, and how does Regulation S affect them?

Does Boku pay a dividend, and what is its capital allocation policy?

Latest Insights

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