Boku, Inc. Annual Report and Accounts for the year ended 31 December 20232023 Annual Report A global mobile
payments network
through our
mobile-first platform
Most purchases online are not paid for with cards, they are paid through many
different local payment methods. There are scores and scores of them, all
different and incompatible.
Boku builds custom connections to these payment methods, incorporating
bespoke features that help our merchants to reach more customers worldwide.
Our Network
Connecting to over 300 funding sources, creating a global network of local
payment methods to help many of the world’s largest digital merchants grow in
territories where connecting to card networks simply isn’t enough.
Our Customers
Boku helps the world’s largest merchants to grow their businesses in every
corner of the globe by:
• facilitating payments that reach mobile-first consumers;
• targeted marketing programs that attract, engage, and retain digital
subscription users; and
• providing services that ease the complexities of global settlement,
compliance, tax, and fraud mitigation.
Geography
Our mobile-first payments network now reaches over 340 payment methods
worldwide, enabling merchants to transact and receive funds from over 90
countries through a single contract and a single integration.
Our Values
Customer first, flexible, assume positive intent, collaborate, be ambitious.
Contents
Strategic Report
Chair’s Statement ................................. 2
Strategic Report ................................... 4
Chief Executive Officer’s Report ............. 8
Chief Financial Officer’s Report ............ 11
Principal Risks & Uncertainties ............. 16
Governance
Board of Directors .............................. 21
Senior Management ........................... 26
Corporate Governance Report ............ 27
Audit Committee Report ...................... 37
Remuneration Report .......................... 41
Environmental, Social
and Governance Report (ESG) ............ 50
Directors’ Report ................................ 58
Financials
Independent Auditors’ Report
to the Directors of Boku, Inc. ............... 61
Consolidated Statement
of Comprehensive Income .................. 67
Consolidated Statement
of Financial Position ............................ 68
Consolidated Statement
of Changes in Equity ........................... 69
Consolidated Statement
of Cash Flows .................................... 70
Notes to the
Consolidated Financial Statements ...... 71
Non-IFRS Financial Information .......... 119
Glossary .......................................... 121
Boku, Inc. Company Information ........ 124
Highlights
Revenue ($USD millions)
90
80
70
60
50
40
30
20
10
0
+33%
constant
currency
+30%
$82.7
million
62.1
63.8
43.4
50.2
2019
2020
2021
2022
2023
Profit before tax from continuing operations ($USD millions)
+178%
9.9
2021
4.1
2022
$11.4
million
2023
15.0
10.0
5.0
-
-5.0
-10.0
-15.0
-20.0
2019
2020
(1.3)
(17.3)
-
Adjusted EBITDA ($USD millions)
30
25
20
15
10
5
-
+28%
$25.8
million
22.9
20.2
19.2
12.7
2019
2020
2021
2022*
2023
Monthly Active Users (millions)
TPV ($USD billions)
70
60
50
40
30
20
10
0
+29%
67.4
million
52.3
41.0
33.6
21.9
2019
2020
2021
2022
2023
12
10
8
6
4
2
-
+18%
$10.5
billion
8.9
8.2
6.9
5.0
2019
2020
2021
2022
2023
*Right-of-use assets were restated to prepayments in the year ended 31 December 2022, see note 2 for further details.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
1
2Strategic ReportBoku Inc Annual Report and Accounts for the year ended 31 December 2023www.boku.comChair’s StatementBoku has seen significant change since the last Annual Report setting us up well for sustainable future growth.Our revenue growth has accelerated considerably thanks to broadening our range of local payment methods. As a result of our strong operational gearing, we are thus seeing strong adjusted EBITDA growth and increasing cash balances. I am very proud of the team effort that has achieved this.We expect this growth to continue so we have embraced important changes in our organisation and how we present ourselves to the world. As a result, we are confident we are in great shape to deliver the next phase of our growth.Now I would like to comment on some of the changes. First, I would like to thank Jon Prideaux, who retired as CEO at the end of 2023, for his enormous contribution to Boku’s development. He was responsible for overseeing its growth over the past decade. Under his leadership, the Company has become an increasingly important player in the specialised payments world and he has built a team who perform with great skill and commitment and which has a culture to be admired. When Jon shared his intention to retire it is fair to say the Board was very cognisant of the high regard staff and shareholders have for him in shaping our future plans. However, we were very fortunate to persuade Stuart Neal to return as CEO. He had been the CFO at the time of Boku’s flotation in 2017 and then migrated internally to run our Identity division. With his help, that division was sold in 2022 and Stuart went with it. Fortunately for us, he left Twilio Inc, the new owner, early in 2023 which meant we could invite him back. Not only do the Board, staff and many investors hold Stuart in high regard, but this meant we avoided the risk of hiring someone unfamiliar with Boku. To make for a smooth transition, Jon, as CEO, and Stuart, as CEO designate worked together for the second half of 2023 and we are delighted that we have achieved a smooth and seamless transition and pleased that Jon is remaining on the Board as a Non-Executive Director.We are also about to see the retirement of Stewart Roberts at the AGM as Senior Independent Director and Audit Committee Chair. I would like to thank him for his support and willingness to challenge our approach and decisions. That and his deep financial knowledge and experience of the payments industry will be missed, and I would like to wish him the very best in the future.Again, we had the good fortune to be able to fill Stewart’s roles from within our ranks. I am pleased that Charlotta Ginman, an existing Independent Non-Executive Director, has agreed to take on both of Stewart’s roles for which she is well qualified.Turning to the overall Board composition, after the AGM we shall have eight Directors in total, two Executives and six Non-Executives, four of which (myself included) are independent. I am proud of the wide range of experience of our Non-Executive team which includes the payments industry, telecoms, internet, Far East operations, accounting, HR, customer experience, ESG and public company board exposure. This depth of experience is complemented by a wide range of personal backgrounds from different countries and cultures.As well as handling changes in the internal Boku team, we have also changed our auditors to PwC and appointed Investec as our NOMAD with Peel Hunt staying in place as one of our two brokers. I am pleased to welcome the new advisers to our support team and to thank Peel Hunt for agreeing to continue with us. Revenue and profit growth are crucial to Boku’s existence.
However, we shall continue to pay close attention to each of
the following:
Relevance and resilience: Boku prides itself on its ability to
satisfy customers’ demanding requirements to support their
growth. As our merchants include many of the major western
digital companies, with some of the largest platforms on
earth, they demand the highest standards.
Compliance and service: As a payments company, we are
proud of our ability to comply with regulatory requirements in
the more than 50 countries where we operate. Compliance
with regulations and high standards of customer service are
central to our culture and are two of the secrets of our success.
Our people: We value all our staff and treat them with the
respect and consideration they deserve. We have, and intend
to retain, high levels of staff loyalty and diversity. The Boku
culture is, in my opinion, one of the most attractive features of
this business.
We also welcome the recently revised QCA Code with which
we shall comply. In particular, the Board has determined that
all the Directors should be subject to an annual re-election
starting this year at our AGM in 2024. To facilitate this, as a US
incorporated company, we need to modify our constitution
and the resolution for this will be put to shareholders at this
year’s AGM.
In conclusion, we are a company with the highest standards
of technical skills, customer service and integrity. This
underlines why we continue to supply payment services to
the world’s largest digital companies. Alongside this we have
a culture which makes Boku an attractive place to work and
allows us to hire and retain the very best staff wherever they
may be based and whatever their backgrounds are.
In my opinion the outlook for Boku is extremely exciting.
We have demonstrated through our impressive customer
list that we have the skills to exploit changing opportunities
in the payments world where demanding merchants are
selling products to people in many countries with a wide
range of regulations to adhere to. I expect to see our current
rapid growth continuing, but I acknowledge the challenge
of growing our staff at the pace we shall need. That is one
reason our culture is so important to our future.
I remain extremely proud to be a member of the Boku
team and would like to thank all my colleagues, Executive
and Non-executive, for their continuing commitment to our
exciting journey.
Richard Hargreaves
Non-Executive Chair
19 March 2024
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
3
Strategic Report
Strategic Report
Boku – Enabling businesses to
unlock growth by freeing their
customers to pay the way they
want, wherever they are in the world
The world of payments is changing before our eyes.
Ever since the mobile revolution of the 1990s and the
introduction of smartphones in the 2000s, across the world,
consumers are choosing increasingly to manage their lives
via apps (or ‘Super Apps’) on their mobile devices …and that,
importantly, also includes how they choose to pay for goods
and services. After 50 years of standardisation in payments,
driven by global card networks, who offered a harmonised
user experience aimed initially at face-to-face transactions
via point-of-sale devices, the modern consumer is seeking
something different: Payment choice and the familiarity of
their local brands.
Enter the Local Payment Method (“LPM”)
revolution
LPM is a broad term to capture a preferred domestic (or
perhaps regional) payment type that is popular among
consumers, but is not part of a globally harmonised payment
brand, such as Visa or MasterCard. Included within this
definition (but not exhaustively) are digital wallets, domestic
Bank-run Account to Account (“A2A”) (real time payments)
schemes and Direct Carrier Billing (“DCB”).
In a world now dominated by mobile commerce, the use of
plastic cards seems a somewhat old-fashioned concept when
it comes to completing a transaction, and relying on them
excludes many people around the world from participating
in global digital platforms. Payments are becoming an
embedded part of the way in which companies attract,
onboard, service and retain consumers. Global organisations
are acutely aware of the need to offer payment choice as
a means of accessing and retaining the largest pool of
consumers in each individual country they choose to operate
within. That’s where Boku comes in.
The problem for such large global merchants is how to
access what are disparate and non-standardised LPMs.
After all, the beauty of the card networks is that everything
works the same, wherever you happen to be in the world.
Standardisation is the key.
However, no two LPMs are the same; have the same
technology; same way of operating; same APIs; same
underlying commercial framework. To solve this, Boku has
created a platform which connects to over 300 funding
sources, creating a global network of LPMs to help many of
the world’s largest digital merchants grow in territories where
connecting to card networks simply isn’t enough. The Boku
network offers merchants one simple API connection that
provides a slick, tokenised payments experience for an end
customer that allows for repeat transactions and subscriptions,
irrespective of the underlying funding source. Put simply, Boku
deals with the complexity of LPMs and harmonises connectivity
for our global merchants and their customers.
Importantly, the shift toward LPMs is not just a developing
markets phenomenon. Whilst it is true that, in certain
countries, the emergence of LPMs has been to leapfrog the
investment in card-based technology, driven by the need for
respective governments to drive financial inclusion through
rapid deployment of new payment technologies (India
for example). In many developed markets (Italy, Sweden,
Switzerland, Spain, China, Korea, to name a few) the rise of
the digital wallet has been driven by demographic preference,
the ‘Gen Z’ effect, whereby an entire generation is growing
up with no affinity to plastic cards, but a high expectation
when it comes to user experience and convenience. It is also
reasonable to say that technology and regulation have been
equally influential in instigating the rapid emergence of direct
A2A banking payments, which allow for a wallet-style mobile
experience, but with a direct link to a user’s bank account
(ref UPI in India, PIX in Brazil, PromptPay in Thailand, Open
Banking in the EU).
4
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
5Stock code: BOKUBoku Inc Annual Report and Accounts for the year ended 31 December 2023Why our merchants choose Boku - The bundle of servicesAt Boku, we see ourselves as a growth partner to our large global merchants and not merely a supplier of payment services. This tying of our own success to the success of our merchants ensures that our goals are mutual and clearly linked.It may not be immediately obvious, even to those who study the payments landscape closely, but there is a subtle but important difference between the role of Boku and that played by more mainstream card (payment) processors. Over the past 20 years, the goal of the global payment processor has been to generate economies of scale through large M&A combinations and standardisation of product and processes, hinged around well-established protocols issued by the card networks (e.g. Visa and MasterCard). Boku, to the contrary, has been aggregating disparate local payment methods (and bank operated schemes) globally, creating a network that adds value by dealing with complexity and tailoring our offering to each of our large global merchants. In this arena, Boku’s focus is on customisation and specialisation.Over the same 20-year period, LPMs have grown in popularity to now comprise over two-thirds of global online payment volume. (source: Worldpay)The role of Boku is therefore threefold: 1. ‘Before a transaction’ To help our merchants to commercialise in places where customer payment choice is key to commercial success. Offering better payment choice also brings with it the opportunity for consumer acquisition. During 2023, Boku helped our merchants to add over 66 million new paying consumers through a number of targeted bundling and user acquisition programmes.2. ‘During a transaction’ To create ‘effective simplicity’ by connecting to popular local payment methods around the world and then working with our merchants to build APIs that provide a frictionless user experience and consequently have the highest possible user conversion rate (payment success).3. ‘After a transaction’ To move money, convert currencies and remit funds in multiple countries. Allowing consumers to pay in local currencies and enabling merchants to receive funds in whichever currency they wish. Strategic Report
At the heart of our momentum is the incredible set of assets
that have been created by Boku. Boku’s network now spans
more than 70 countries and connects to around 300 LPMs,
including over 240 Mobile Network Operators plus 52 digital
wallets & local Banking (A2A) schemes. Supporting this
technical infrastructure are licences to move money in over
60 countries worldwide, underpinned by banking facilities
covering 34 currencies via 190 distinct bank accounts.
The Next Stages of Growth:
To capitalise on the significant foundations and momentum
that we have created, the Company has identified a number
of key strategic focus areas to ensure success over the
coming years.
• Continued development of the LPM network
Our heritage in delivering complex connectivity to mobile
operator billing capability globally has created an expertise
in-house that places the business in a unique position to
be successful when it comes to connecting to local digital
wallets and domestic bank schemes. We will continue to
grow our global reach in line with demands of our merchants.
• Deliver Account to Account (A2A) payments for mobile
commerce
Banks around the world are investing $millions in developing
‘open banking’ style real time networks that are increasingly
being used to power commerce – reference UPI in India or
PIX in Brazil. This new style of payment methods comes
with some added nuances – such as real time cleared funds
and the requirement for direct scheme participation.
• Marketing via LPMs
This may be the world’s fastest growing marketing
channel. Boku’s network can now connect to seven billion
standalone consumer accounts. That equates to a lot of
eyeballs and a significant opportunity for our merchants to
market services using Boku’s network.
• Expand Banking and settlement capabilities – moving
the money
To fully capitalise on the opportunity generated by the
LPM network, Boku will be adding increasing value to our
merchants by continuing to invest in our ability to process,
reconcile, convert and settle funds globally.
‘You’re going to need a bigger boat!’
Of course, executing on all of the above is not straightforward
or easy. There is a reason that many of the most successful
payments companies in the world are themselves giant global
organisations. Servicing a global payments network for large
global companies requires scale itself, to efficiently connect
demand and supply, authenticate, secure and process a
material value of commerce through one centralised platform
takes enormous corporate muscle.
To ensure that we continue to win in Direct Carrier Billing
(“DCB”) and digital wallets, but also to press our advantage
in emerging A2A commerce, Boku will be making strategic
investments for long term growth in core back-end
processing capabilities, driving automation in the back office,
introducing sophisticated tooling for our engineers (including
early exploration of AI), adding bench strength in our finance
operations, governance and compliance teams whilst layering
on dedicated customer success capabilities.
To get ourselves ready for the next period of expansion – it’s
not sufficient to simply reach the ‘Big Pond’ of global cross-
border payments – we have to win in the Big Pond! Boku
is no longer a start-up, we are scaling up. To access the
material opportunity provided by the world of local payments,
the company is increasing scalability across all facets of the
organisation – from sales & product, through to engineering,
legal/regulatory & finance.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
7Stock code: BOKUBoku Inc Annual Report and Accounts for the year ended 31 December 2023 8Strategic ReportBoku Inc Annual Report and Accounts for the year ended 31 December 2023www.boku.comChief Executive Officer’s ReportI am delighted to present my first set of financial results as CEO of Boku, in a year where the business achieved significant momentum, as demonstrated by growth in monthly active users, total processed volume, revenue, EBITDA and cash balances. But the financial results are an output measure delivered as a consequence of a clear strategy and lots of hard work by Boku colleagues around the world.Taking up the baton from Jon was always going to be challenging. After all, for the past ten years, Jon and Boku have been synonymous. Fortunately, however, my previous stints in senior leadership roles at Boku, including my time as CFO, have given me a deep appreciation and sensitivity to what makes the Company great, the embedded culture, the drivers of success and the heritage in carrier billing…more on this later.It was with the thoughts of a winning relay team in mind that Jon has taken great care to ensure the Boku baton has been placed firmly in my palm so that I can take the Company on to the next phase in our growth story. My appointment as CEO comes after a six-month transition period, during which time I had the pleasure of being able to spend time with many of the 416 incredibly talented Boku colleagues from all over the world, hear from our global merchants about what’s important to them and speak to many of our investors, including those who have been with us since IPO.What I hear consistently from many of our key stakeholders is that they are excited about the future of Boku and the opportunity in front of us to establish ourselves as the number one global payment network for LPMs. Global-localisation will be the driver of growth in the payments industry over the coming years! Picking up the baton - A smooth transition I wish to formally recognise the significant contribution made by Jon Prideaux, Boku’s CEO from 2014 to 2023, to these impressive results. It is true that financial results are a lagging indicator of strategic decisions and operational execution that happened in the past, and this is certainly the case with regards to our 2023 financial results.The seeds of our current growth, specifically the ramp in Local Payment Method (“LPM”) revenues, were sown way back in 2018, when, post a solid IPO, Boku began to search for routes to longer term strategic diversification. The ongoing themes covered in this report began life some time ago and are now beginning to bear fruit. When Jon took charge of Boku, the Company had just over 100 staff, with revenues that were less than $20m annually and falling. It is testament to Jon’s belief, drive and undying optimism that the Company posted 2023 revenues of over $82m, which equates to growth of 30% between 2022 and 2023. A Values Based Company
At the heart of our success are our incredibly talented people,
who drive the business forward by embracing the company
values – putting merchants first (with their end customers
at front of mind), being ambitious, always collaborating and
showing flexibility in how we operate. The Boku values are
the cornerstone of how we do things, how we work with
merchants to deliver world-class solutions and how we
operate effectively as a globally distributed organisation. We
are where our merchants need us to be.
We have strong momentum and proven product-market fit
for our LPM payment network, which now incorporates both
DCB and acceptance of local digital wallets and bank oriented
A2A schemes. The challenge for Boku going forward is to
ensure that we effectively scale the operations of the business
in line with the size of the commercial opportunities that we
have created for ourselves.
The acid test for LPMs – will DCB lead to
Digital Wallets which will lead to A2A?
The question we asked ourselves was – can we take what we
have learned from winning in the Direct Carrier Billing (DCB)
world and win in the materially bigger ‘pond’ of cross-border
payments? In addition to this, can we broaden our reach
beyond digital products and make our network relevant to
more merchants, more use cases, more segments?
The answer to both of the above questions has been a
resounding YES. During the course of 2023, we broadened
our partnership with ALL of our key global merchants beyond
DCB and into LPMs. We have expanded our use cases
from digital and gaming and into advertising, with broader
e-commerce scheduled for mid-2024 launch.
We also witnessed significant inbound demand for marketing
style services, that have seen Boku power consumer
acquisition (bundling) programmes for the likes of Amazon
Prime and more recently ComCast/Peacock’s NFL streaming
campaign for the 2023/4 SuperBowl playoffs. Supporting
the biggest live streaming event in the history of the internet,
demonstrates the resilience and scale of our platform.
We have the proof points that we need to have every
confidence in our mid-term strategy.
The Network effect
Success for any payments company comes from building a
virtuous circle – adding more payment methods brings more
connected consumers which attracts more global merchants
which attracts more payment methods, and so on…
During 2023 we added 27 new connections to our network,
which now totals around 300 LPMs. We also enabled 125
new payment launches for our merchants during the year.
Across our network, monthly active users (“MAUs”)
continued to grow strongly by 29%, reaching 67.4 million
in December, which included 6.7 million users from LPMs
alone, growth of 78%.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
9
10Strategic ReportBoku Inc Annual Report and Accounts for the year ended 31 December 2023www.boku.comThe culmination of all of the above increases in activity across our network, led to Total Payment Volume (“TPV”) processed growing to $10.5 billion, an increase of 19% compared with 2022. This includes TPV in relation to DCB which grew by 19% and other LPMs (digital wallets and A2A) which grew by more than 250% over the period.Our financial performance is predicated on more people using our network, combined with our ability to generate margin by being increasingly useful to our merchants. The fact that we have simultaneously grown TPV and margins in 2023 is especially pleasing as it tells me that, right now, we continue to add value for our merchants.Outlook – Steady as she goes, the strategy is workingI am delighted to be taking up the reins of a company that I truly believe in, with the incredible momentum we are currently experiencing.The future of Boku will be one of evolution and not revolution. 2024 will see the Company continue along its current path – helping our merchants to grow cross-border, bringing Chief Executive Officer’s Reportthem more users by adding more local payment connectivity. To ensure that we can continue to provide best in class service to our global merchants, with growing volumes and growing complexity across our platform, we will be investing in back-office processing and automation capabilities, incorporating a focus on continuous enhancement of our banking, treasury and settlement capabilities, making life easier for many of our merchants when it comes to doing business globally. We will continue to invest in those core capabilities that will provide enablers to achieving long term sustainable growth and ensuring success in the Big Pond of cross-border payments, an exponentially bigger market than where we came from.As we expand and grow, we will continue to respect and value the culture that got us to this point and allowed us to win at DCB. It is those very DCB genes that have equipped us to successfully add digital wallets and A2A to our network of LPMs. Being creative, collaborative and ambitious enough to turn messy, complex and dis-aggregated technologies into harmonised engines for growth.I would like to reaffirm my belief in the previously stated ambitions to double the business in the mid-term. If we get this right, Boku can be a rocket ship and to quote a Pixar classic “to infinity and beyond!!”Stuart Neal Chief Executive Officer19 March 2024 Chief Financial Officer’s Report
Strong revenue and EBITDA growth driven by growth
in Local Payments Methods
Group results
2023 was a highly successful year for Boku as we saw a 30%
increase in revenues of $18.9 million to $82.7 million (FY22:
$63.8 million). The primary driver of that success was growth
of our connections to Local Payment Methods (“LPMs”) for
our global merchant base but we also saw good growth from
Direct Carrier Billing (“DCB”).
Adjusted EBITDA* also grew strongly to $25.8 million (FY22
restated: $20.2 million1), in line with revenue growth, and this
was net of one-off non-contractual bonuses to all of our staff
in recognition of the highly successful year, together with a
significant increase in contractual executive bonuses related to
overperformance against both budget and market consensus
expectations at the beginning of 2023. It’s worth recalling that
as we headed into 2023, market consensus expectations were
revenues of $69.2 million and adjusted EBITDA of $22.9 million,
so the actual over performance in 2023 was substantial. Group
profit before tax from continuing operations for 2023 increased
to $11.4 million (FY22: $4.1 million). Year-end cash balances
increased considerably to $150.9 million (FY22: $116.5 million)
even though we purchased £7.9 million of our own shares as
part of our continuing share buyback programme.
Consolidated Statement of
Comprehensive Income
Payments division (continuing operations)
Following the disposal of Boku’s Identity division on 28
February 2022 Boku now only has one division – Payments.
Boku’s Payments business was founded on Direct Carrier
Billing (“DCB”) which enables end user customers of Boku’s
merchants to charge payments to their phone bills, but our
payments network has expanded in recent years to offer
connections to offer other Local Payment Methods (“LPMs”)
such as digital wallets and real time Account to Account
(“A2A”) payments through its ‘mobile-first’ payments platform.
These services are provided to many of the world’s largest
digital entertainment merchants including Amazon, Netflix,
Meta/Facebook, Google, Spotify, Microsoft and Sony.
In 2023 the Company performed strongly with revenues
increasing to $82.7 million (FY22: $63.8 million) an increase
of 30% and 33% on a constant currency basis, which in
turn delivered increased adjusted EBITDA of $25.8 million
(FY22 restated: $20.2 million1). Growth comes from both the
existing merchant base and from adding new carrier and LPM
connections to new and existing merchants.
Total Payments Volume (“TPV”) increased to $10.5 billion
(FY22: $8.9 billion) while Monthly Active Users (“MAUs”) grew
by 29% to 67.4 million (FY22: 52.3 million) and 66.1 million new
users made their first payment or bundling transaction with
Boku during 2023 (FY22: 56.7 million).
We saw particularly strong growth in digital wallets and
real time A2A payments: Revenues of $16.5m up 152%
from $6.7m in 2022 following increasing adoption of these
products by our key merchants; a 154% increase in volumes
processed, compared to 2022; a 76% increase in MAUs
of LPMs, to 6.7 million in December 2023 compared to 3.8
million in December 2022, while new users of LPMs increased
64% to 13.8 million in FY23 (FY22: 8.4 million).
1 Right-of-use assets were restated to prepayments in the year ended 31 December 2022, see note 2 for further details.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
11
Strategic Report
Chief Financial Officer’s Report
In 2023 Boku completed approximately 125 new payment
launches with existing and new merchants including Google,
Meta, Microsoft, Amazon, Disney, Netflix, Spotify, Samsung, Sky
and EA Games, through Boku’s expanded mobile-first payments
network. Of these launches, around half were for LPMs.
Our take rate increased to 0.79% in 2023, with H2 take rate of
0.81%, as a result of higher take rates from digital wallets which
are all settlement model where we handle the cash and so
charge higher fees. (FY22: take rate 0.72% with H2 at 0.74%).
We continued to invest in Boku’s mobile-first payments
platform in 2023 as we further expanded our LPM capabilities
and continued our investment in Boku’s regulated payment
capabilities which now cover more than 60 markets where Boku
is able to process regulated payments either directly or indirectly.
Adjusted Operating Expenses (continuing
operations)
Adjusted operating expenses* for the continuing Payments
business increased to $54.9 million (FY22: $41.8 million).
Year ended
31 Dec
2023
$’000
restated1
Year ended
31 Dec
2022
$’000
80,670
61,993
(25,799)
(20,238)
Gross profit
Adjusted EBITDA
Adjusted Operating Expenses
54,871
41,755
This was due to a number of factors including significant
payroll increases due to high wage inflation in all locations
and additional headcount as we continued to invest in
building out Boku’s ‘mobile-first’ payments network globally.
We also added capabilities in digital wallets and real time
A2A payments globally, including a further expansion of
our regulatory footprint by adding new licences and legal
entities. These regulated payment capabilities now cover
more than 60 markets.
The Group capitalised $5.4 million of internally generated
intangible assets during the year compared with $4.9
million in 2022.
Discontinued operations (Identity division)
Following the disposal of Boku’s Identity division to Twilio on 28
February 2022 the prior year comparatives included in the con-
solidated statement of comprehensive income include the results
relating only to the continuing Payments business. The Identity
results are shown separately under “discontinued operations”.
The final payment from Twilio was received in full on 9 September
2023. There was no gain or loss on disposal in 2023.
Adjusted EBITDA
Adjusted EBITDA for the full year 2023 was up 28% to $25.8
million (FY22 restated: $20.2 million1). This includes a one-
time non-contractual bonus payment to all staff to recognise
the considerable over achievement against budget and
market expectations as well as contractual over performance
bonuses to senior executives. In total these over-performance
bonuses totalled approximately $2.0 million, which directly
impacted EBITDA.
We continued our investment into expanding Boku’s mobile-
first network but still managed to achieve adjusted EBITDA
margins of almost 32%. Adjusted EBITDA is earnings before
interest, tax, depreciation and amortisation, non-recurring
other income, share-based payments expense, forex gains/
losses and exceptional items.
Profit before tax from continuing
operations
Profit before tax from continuing operations for 2023 was $11.4
million (FY22: $4.1 million). This can be broken down as follows:
• Gross margin increased to $80.7 million/98%
(FY22: $62.0 million/97%).
• Share Based Payments expense increased to $7.6 million
from $5.2 million in 2022 as we grew our headcount. The
Share Based Payments expense comprises the IFRS 2
charge and related National Insurance expense. Boku
continued with its policy of offering all staff share based
awards annually. RSU and stock option charges are spread
over three and four years respectively, and in line with their
vesting conditions, from the date of grant. Of the $7.6
million booked in 2023, $0.6 million was paid out cash
(FY22: $0.3 million) (relating to NI), the remainder was non-
cash. All comparatives are for the continuing Payments
business only.
1 Right-of-use assets were restated to prepayments in the year ended 31 December 2022, see note 2 for further details.
12
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
• Depreciation and amortisation charges increased to $7.6
million (FY22 restated: $5.4 million1)
• Foreign exchange movements resulted in a loss of $1.0
million (FY22: $0.8 million loss) mainly unrealised differences
on the currency balances we hold.
• No amounts relating to intangibles were impaired in the year
(FY22: $1.3 million related to impairment of the Fortumo
domain and ‘brand’ which was discontinued). See also
intangibles section below.
• Charitable donations were similar to 2022 at $0.3 million
(FY22: $0.3 million).
• Financing expenses fell to $0.3 million in FY23
(FY22: $0.7 million). These costs relate to interest and set
up fees on leases and bank loans/overdraft facility.
• Interest income increased significantly to $1.9 million
(FY22: $0.2 million) as interest rates improved and we were
able to move more funds onto longer term deposits.
• A fair value adjustment credit of $0.1 million
(FY22: charge of $3.47 million) in relation to warrants
granted in September 2022 to a subsidiary of Amazon Inc,
Amazon.com NV Investment Holdings LLC (see note 3).
• Other income of $0.1 million (FY22: $0.8 million) related to
income from Boku providing ongoing accounting services
to Twilio following the sale of the Identity business to enable
a smooth transition (also in FY22). This amount has been
excluded from adjusted EBITDA as a non-trading, non-
recurring item. These services to Twilio have now ceased.
• Tax charge of $1.3 million in the year
(FY22: $0.2 million credit). Please see Note 7 for details.
Profit from discontinued operations, net
of tax (comparative)
The 2022 comparative for profit from the discontinued Identity
business of $24.6 million included a $25.2 million profit on
disposal of Boku’s Identity business to Twilio on 28 February
2022 net of disposal costs and offset by the Identity trading loss
for the two months to the end of February 2022 (see note 8).
Profit after tax
The Group reported a net profit after tax of $10.1 million for
the period (FY22: $28.9 million, primarily driven by profit from
the disposal of the discontinued Identity division of $24.6
million, excluding this profit on disposal, profit after tax was
$4.3 million).
Consolidated Statement of Financial
Position
• Closing cash balances were $150.9 million at the end of
2023 (including restricted cash balances of $33.5 million)
up from $116.5 million on 31 December 2022 (including
restricted cash of $17.0 million). Boku also has a Revolving
Credit Facility (“RCF”) of £10.0 million with Citibank. At year
end the RCF facility remained undrawn.
• The average daily cash balance, a measure which smooths
out the effect of carrier, digital wallet and merchant payments,
was $131.7 million in December 2023, up from $105.8 million
in June 2023 and $98.8 million in December 2022.
• Deferred tax assets of $15.3 million were recognised at
31st December 2023 (FY22 restated: $15.5 million2). This
restatement reflected an error in the usability of certain tax
losses and future transaction volumes through its US and
UK incorporated entities) and deferred tax liabilities of $182
thousand were recognised (FY22: $Nil).
• From a working capital perspective, current assets exceeded
current liabilities at 31 December 2023 by $64.6 million
compared with $55.1 million1 at the 2022 year end.
• Intangible assets were $56.6 million as at 31 December
2023, compared to $56.2 million at 31 December 2022 due
to year end revaluation into USD. The Payments CGU (cash
generating unit) was assessed using discounted cashflows
and determined that no impairment was required at 31
December 2023. Following the disposal of the Identity CGU
in 2022 only the Payments CGU remains.
• Goodwill and other intangibles were assessed for
impairment and it was determined no impairment was
required as at 31 December 2023.
• Intangible assets are broken down as follows
Goodwill
Other intangibles
Intangible assets
31-Dec
2023
$’000
42,183
14,437
56,620
31-Dec
2022
$’000
41,733
14,497
56,230
1 Right-of-use assets were restated to prepayments in the year ended 31 December 2022, see note 2 for further details.
2 Deferred tax in the year ended 31 December 2022 was restated, see note 2 for further details
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
13
Strategic Report
Chief Financial Officer’s Report
Consolidated Statement of Cashflows
During the year there was a net increase in the cash and cash
equivalents of $33.4 million (FY22: $59.6 million), excluding
the effect of foreign currency translations.
Cash from operations before working capital changes was
$23.1 million broadly in line with prior year at $22.0 million,
however we saw large increases in trade and other payables
of $70.9 million (FY22: increase of $40.3 million) due to timing
of payables to merchants as daily settlement to merchants
of funds received from digital wallets was delayed over the
Christmas shut down at the merchants’ request. This was
largely offset by an increase in receivables of $53.0 million
(FY22: increase of $12.3 million) for similar reasons as receipts
from carriers and wallets were delayed. This situation largely
reversed after year end when Boku paid funds delayed over
Christmas to merchants and received the delayed funds from
carriers and wallets.
We purchased £7.9 million (FY22: £1.6 million) of our own
shares in 2023 to cover employee RSU awards and Amazon
warrants, per notes 20 and 23.
Amazon contract and warrants
On 16 September 2022, an Amazon Inc. subsidiary, Amazon.
com NV Investment Holdings LLC (“Amazon”), signed a multi-
year agreement with Boku to connect to new Local Payment
Methods in multiple geographies which validated Boku’s
move into offering the new Local Payments Methods including
digital wallets and real-time A2A payments via our expanded
mobile-first network. In conjunction with the agreement,
Boku entered into a stock warrant agreement with Amazon
allowing them to acquire up to 3.75% (11,215,142 shares) of
Boku common stock at 81.20p per share based on Amazon
spend with Boku over a seven-year period. 747,676 shares
of common stock vested immediately on the signing of the
warrant agreement on 16 September 2022.
The warrant valuation resulted in recognition of a warrant
contract asset of $2.0 million (FY22: $1.7 million) and a $5.5
million (FY22: $5.2 million) contract liability as at 31 December
2023. Please refer to Note 23 for full details.
Looking Ahead
In 2023 revenues grew $18.9 million to $82.7 million
compared to growth of $1.0 million in 2022. That 2023
revenue growth was a significant achievement and we
rightfully rewarded all of our staff with a one-off bonus to
reflect the significant over-performance against our internal
budget and external market consensus expectations at
the start of 2023. This revenue success has seen similar
percentage growth in EBITDA despite Boku also continuing
to invest in its mobile-first platform in order to take advantage
of the opportunities in Local Payment Methods worldwide,
in particular Account to Account, as well as investment to
allow Boku to scale to meet the significant transaction and
cash processing volumes we expect to see over the next
few years. In our Capital Markets Day in February 2023, I
outlined how we believed Boku could double its revenues in
the medium term and that in turn would result in an expansion
of adjusted EBITDA margins once the heaviest investment
phase was over – and with 30% revenue growth in 2023 we
remain confident that goal is achievable and quicker than we
imagined back in February.
We are pleased with the 2023 financial results and
the substantial progress we have made and believe
the Company is well positioned for 2024 to exploit the
substantial opportunities it has. We look forward to the
future with confidence.
Keith Butcher
Chief Financial Officer
19 March 2024
14
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
15Stock code: BOKUBoku Inc Annual Report and Accounts for the year ended 31 December 2023HighlightsFinancial Highlights• Revenues up $18.9 million (30%) to $82.7 million (FY22: $63.8 million). • On a constant currency basis*, revenues were 33% higher than 2022. • Full year revenues include $16.9 million from digital wallets and A2A connections, up 153% from $6.7 million in 2022 following increasing adoption of these payment methods by our key merchants.• Adjusted EBITDA* of $25.8 million up $5.6 million (FY22 restated: $20.2 million1) at almost 28% adjusted EBITDA margin despite continued investment in Boku’s global LPM payment network and after payment of substantial contractual and non-contractual bonuses to all staff related to company over-performance in 2023.• Profit before tax from continuing operations for 2023 increased 178% to $11.4 million (FY22: $4.1 million)., • Net profit after tax of $10.1 million (FY22: $4.3 million, which excluded the profit after tax from discontinued operations of $24.6m).• Total Group cash was $150.9 million at year-end, up from $113.9 million at 30 June 2023 and $116.5 million at 31 December 2022. The Group is debt free. In 2023 Boku spent £7.9 million on purchasing its own shares under the share buyback scheme (FY22: £1.8 million).• The average daily cash balance*, a measure that smooths out the effect of carrier and merchant payments, was $131.7 million in December 2023, up from $105.8 million in June 2023 and $98.8m in December 2022.• Cash generated from operations before working capital movements during the year was $23.1 million (FY22: $22.0 million).• Interest income increased to $1.9 million (FY22: $0.2 million) as interest rates increased and more funds were moved onto longer term deposits.Following the disposal of Boku’s Identity division on 28 February 2022, the comparative results shown are for the continuing Payments division only. Non-Financial KPIs• 67.4 million Monthly Active Users (“MAUs”) of the Boku platform in December 2023 (December 2022: 52.3 million), a 29% increase.• 66.1 million new consumers made their first payment or bundling transaction with Boku during 2023.• TPV of $10.5 billion in 2023, up 18% from $8.9 billion in 2022. On a constant currency basis*, TPV was 23% higher than 2022.• Particularly strong growth in digital wallets and A2A connections:• 78% increase in MAUs of digital wallets and A2A connections, to 6.7 million in December 2023 compared to 3.8 million in December 2022.• New users of digital wallets and A2A connections increased 64% to 13.8 million in 2023 (2022: 8.4 million).• Take rate increased to 0.79% in 2023 as a result of higher take rates from digital wallets and A2A connections, with H2 take rate of 0.81%. (FY22: take rate 0.72% with H2 at 0.74%).• In 2023 Boku completed approximately 125 new payment launches with existing and new merchants including Google, Meta, Microsoft, Amazon, Disney, Netflix, Spotify, Samsung, Sky and EA Games, through Boku’s expanded global network of localised solutions. Of these launches, around half were for digital wallets and A2A connections.* These represent alternative performance measures (“APMs”) for the Group. Refer to the Non-IFRS financial information section on page 119 for a glossary of the Group’s APMs, their definition the criteria for how adjusted EBITDA is considered, together with definitions of abbreviations.1 Right-of-use assets were restated to prepayments in the year ended 31 December 2022, see note 2 for further details.2 Deferred tax in the year ended 31 December 2022 was restated, see note 2 for further details Strategic Report
Principal Risks & Uncertainties
Risk management in our business
Identifying and managing our risks
Our risk identification process is a combination of a ‘top
down’ approach (driven by the Audit Committee and the
Board) and a ‘bottom up’ process (originating from the
business’ operations).
Risks are classified on two dimensions risk level and risk
tolerance. The former is classified high, medium or low and
relates to the potential impact, the latter is classified as red,
amber, green and relates to the likelihood of the risk occurring.
The risk champion of each department shares their most
significant risks after having considered a set of external
factors from the various jurisdictions in which Boku operates
to the internal ways of operating.
All risks are then consolidated into a Group-wide register
which is then presented to our Senior Management and the
Board which in turn will perform their own review and add
further input on the risks before agreeing the Principal Risks.
Effective risk management is critical to achieving the Group’s
objectives. Boku operates a Group-wide risk management
framework across all its lines of business and covering all
departments, ensuring the strategic and operational risks are
identified, evaluated, mitigated, monitored and reported in a
consistent way.
This framework allows us to take a holistic approach to
risk management and to make meaningful analysis and
comparisons of the risks we face and how we manage
them across our footprint, which is essential to achieve our
strategic objectives.
It is an evolving framework as we continuously seek to
improve and enhance our risk management processes.
Responsibility
Risk management at Boku is reviewed and approved at Board
level but delegated to the Audit Committee for ongoing review
through the year.
The Board has oversight responsibility for the effective
management of all major risks affecting the Group. In each
area, the Board is supported by members of the Senior
Management team and other managers with key functional
responsibilities to ensure that an effective risk management
is embedded, considering both opportunities and threats,
throughout the organisation.
The Audit Committee monitors and promotes the highest
standards of integrity, financial reporting, risk management
and internal control.
16
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Risk
Mitigation
Competitive and rapidly changing environment
• Investing in new products, markets and technologies and improving
The Group operates in rapidly evolving payments
markets where service provision is subject to
rapid technological change and use is dependent
on user behaviour. The impact of changes to
the structure of the app store payment market,
competition, pricing pressure, Payments market
changes, could result in a material loss of revenue
and profit for the Group. Loss of market share
and/or a major merchant customer account and/
or a major issuer relationship to competitors
would have a significant affect with regard to loss
in revenue.
Risk level: Medium
Risk tolerance: Amber
Risk movement: Unchanged
relationships with key merchants, carriers, and LPMs.
• Launching new payment products and developing the Group’s
offerings to meet changing client demands and market preferences.
• Develop the necessary expertise and experience to sell and deliver
new products on new technologies to new and existing clients.
• Analysis of the external environment to understand where the
market is heading.
• Attending tech fairs, discussion groups etc. to be up to date
with recent technology, find new sources of ideas to create new
products addressing customers needs.
• Experienced sales team that builds close relationship with our
merchants to better understand their needs.
• Engage with merchants potentially impacted by potential app store
market changes
Inability to evolve the organisations’
processes, systems and tools to scale
efficiently to bring on new customers and
make new connections.
• Identify current and future needs of new systems and processes
(production, etc.) to ensure these can support the transactional and
settlement solution requirements of target customers and issuers
(LPM, A2As) in new markets.
As Boku is growing and continuously evolving,
systems and production, need to keep up with
scaling demand. Failing to keep up with the
growth, could cause transaction processing
failures that could lead to loss of revenue and
even loss of merchants.
Risk level: High
Risk tolerance: Amber
Risk movement: Unchanged
• Grow employee skills and experience through recruitment of
industry experts from competitors and market.
• Continue to invest significantly in 2024 in back office systems and
automation
• Investing significantly in 2023 in back office systems automation
and headcount
• Invested significantly in 2021 and 2022 in Technology, both in
Product and Platform (AWS)
• Further team optimisation plans
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
17
Strategic Report
Principal Risks & Uncertainties
Risk
Mitigation
• Continuing to invest, significantly where required, in solutions that
improve the Group’s ability to manage risks and ensure compliance
with regulations.
• Liaise with local outside counsels, attending industry events and
associations member meetings to stay current with any significant
changes relevant to our business.
• Increase Compliance team to 8 and employ an internal audit function
• Ensure sufficient compliance support and addition of 3 Line
of Defence mechanism. That is, Ops Staff, Compliance and Internal
audit to test regulatory compliance and report as required to the
Group Boards.
• Establish internal task force to review ahead of launch of a new
service/product in order to determine any regulatory, legal and
operational impact and assess timeline and project feasibility.
• Invest in solutions such as third-party horizon scanning that
improve the Group’s ability to manage risks and ensure compliance
with regulations.
• Follow European Commissions template of Standard Contractual
Clauses (SCC) and external DPO to provide expert advice.
Increase in regulation
Additional regulatory license requirements
for Boku due to expansion of product offering and
target markets. These additional requirements
could require changes to the Group’s existing
processes and systems to comply.
Changes in the regulatory landscape could have
adverse effects on Group’s existing processes
and provision of services.
Examples can be:
- Privacy/ Data residency (Privacy shield
invalidity in EU, data residency requirements in
India and other regions.
- AML and customer due diligence (stricter
requirements from Central Banks & non-
financially regulated bodies introducing new
requirements).
-
Finance obligations and reporting
requirements differ depending on the
regions we operate in which increase the risk
of errors.
Risk level: High
Risk tolerance: Amber
Risk movement: Increased
Failure of issuer intermediaries to pay the
amount due to merchants
• Develop strong relationships with MNOs, aggregators and Local
Payment Methods (LPMs)
The company is reliant on third parties, including
MNOs, SMS aggregators, Local Payment
Methods (LPMs) to pay significant amounts due
from them in a timely manner as specified under
contract. A large-scale failure to do so may have
an impact on the Group’s financial condition or
operating results.
Risk level: Low
Risk tolerance: Green
Risk movement: Unchanged
• An increasing proportion of Boku’s issuer intermediaries are
regulated, and as a result the risk of failure in settlement is
decreased due to safeguarding obligations of regulated entities.
• Effective credit control and management of receivables.
• Creating direct relationships with issuers and reducing dependency
on intermediaries.
• Our merchant contracts limit the liability to Boku for non payment
by carriers or intermediaries
• Use Creditsafe tool for a credit check during onboarding of new
third parties.
18
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Risk
Mitigation
Significant fraud events or social engineering
attack
• Recruiting specialised, experienced fraud prevention staff
• Review investment opportunities in solutions that improve the
A large fraud incident or social engineering attack
could lead to reputational damage, losses in
revenue, costs of dealing with the fraud, and
potential loss of merchant confidence.
Risk level: Medium
Risk tolerance: Amber
Risk movement: Unchanged
Group’s ability to manage risk
• Develop comprehensive internal policies, procedures and controls
• Ensuring there are systems and experienced staff in place to
defend against potential cyber security threats.
• Regularly review risk rules to ensure they are effectively monitoring
customer behaviour
• Address external auditor control findings in respect to IT general
control investing as required in system architecture and back
office systems
Cyber Security and Data Protection breaches
• Building resilience within the Platform to mitigate the impact of an
The Group IT environments may be subject to
hacking, data theft or other cyber security threats
which may harm customer relationships and
the market perception of the effectiveness and
resilience of the Group’s products and services.
Such an attack may also have a material adverse
effect on the Group’s financial position
Risk level: High
Risk tolerance: Amber
Risk movement: Unchanged
attack in the event of a successful penetration
• Continuous testing and assurance activities (internally and
externally)
• Continuous education on and raising awareness of cyber threats
and data theft for staff.
• Continuing investment after significant investment in 2022 in cyber
security tools and systems to mitigation potential risks
• Broaden existing ISO 27001 certification to cover all Boku
business lines.
Failure to attract and retain the best talent
• Creating opportunities within the Group for personal development
The Group’s success depends on its ability to
attract and retain key management and skilled
technical employees. If the Group is unable to
identify, attract, develop, motivate and adequately
compensate and retain well-qualified and
engaged personnel, this could have a material
effect on the Group’s reputation, business,
operations and financial performance.
Risk level: Low
Risk tolerance: Green
Risk movement: Reduced
and career enhancement.
• Recruiting experienced HR staff and working with specialised
recruitment agencies
• Simplified our recruitment approach to attract and provide a better
experience for potential candidates
• Flexible working provides more opportunities of attracting and hiring
employees from new locations, outside of the main office locations
• Ensuring that all Employees have equity in the company through
our RSU programme
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
19
Strategic Report
Principal Risks & Uncertainties
Risk
Mitigation
Unforeseen disasters and other Black Swan
events
Boku is a global company, operating in a
number of jurisdictions. Because of that global
scale and the current post pandemic world,
we face a number of uncertainties where an
unforeseen disaster (Black Swan) might impact us
significantly and in an immediate way, or emerging
risks may potentially impact us in the longer term.
Risk level: High
Risk tolerance: Amber
Risk movement: Increased
• There might be cases where we have insufficient information to
understand the likely scale or impact the risk could have in our
business and people. We also might not be able to fully define a
mitigation plan until we have a better understanding of the threat.
However, currently we are doing the below:
• We have created a “risk universe” which list of risks and their
velocity we monitor regularly
• We have created a watchlist of those emerging risks which we
review on a regular basis so that future strategies take into account
future technological, environmental, regulatory or political changes.
• We have created a Business Continuity Program and develop
disaster recovery plans to respond to events as necessary.
• The Russia/Ukraine conflict that started in 2022 is an example of
a ‘Black Swan’ event. Boku operates in 91 countries globally and
therefore its revenues are well spread. Connections to carriers in
Russia have been impacted.
20
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Governance Report
Board of Directors
Dr. Richard Lawrence Hargreaves
Independent Non-Executive Chairman
Charlotta Ginman FCA
Senior Independent Non-Executive Director
Committee appointments
None
Meeting attendance
Board – 6/6
Board skills and experience
Richard Hargreaves began his career at ICFC (now 3i
plc), which was then the principal source of equity for UK
unquoted companies. He next started Baronsmead plc,
which he developed until its sale. He was actively involved in
the growth of the venture capital industry through the British
Private Equity & Venture Capital Association (BVCA), where
he became chairman. He was involved with their tax incentive
lobbying, which saw the birth of the Venture Capital Trust, and
Baronsmead’s name is still on several of the best performing
VCTs. He currently serves as Boku’s Independent Non-
Executive Chairman.
More recently, he co-founded Endeavour Ventures Ltd, which
invests in young technology companies for its client base
of high-net-worth individuals. He retired from Endeavour
in 2018 to focus on being a professional business angel.
Richard has nearly 50 years’ experience investing in young
technology companies and helping them to grow. He is a
very experienced non-executive director with significant
understanding of the US market. He is a graduate of the
University of Cambridge and has an MSc and PhD from
Imperial College, London.
AC Chair and RC member effective from the upcoming AGM
Committee appointments
Audit Committee member
Meeting attendance
Board – 6/6
Audit Committee – 7/7
Board skills and experience
Charlotta began her career at Ernst & Young, where she
qualified as a Chartered Accountant. She was then appointed
to a series of senior roles in investment banking with UBS,
Deutsche Bank and JP Morgan both in London and Singapore,
where she gained considerable M&A transactional experience.
Charlotta has also held senior roles within Nokia Corporation,
including acting as CFO of its luxury mobile phone division
Vertu Corporation Limited.
Charlotta will replace Stewart Roberts as Chair of the Audit
Committee (in which Charlotta is currently a member) and as
a member of the Remuneration Committee upon Stewart’s
resignation from the Board at the upcoming AGM in May 2024.
Charlotta is a Non-Executive Director of two investment trusts
(Polar Capital Technology Trust PLC and Pacific Asset Trust
PLC), and a Venture Capital Trust (Unicorn AIM VCT PLC).
She is also a Non-Executive Director of two AIM quoted
companies: Gamma Communications plc and Keywords
Studios plc.
As three of Charlotta’s roles are with investment companies
that have only 4-5 meetings a year and the other are all AIM
listed, with less regulatory burden than a premium listing,
Charlotta has sufficient time to devote to each of her roles.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
21
Governance Report
Board of Directors
Stewart Roberts
Independent Non-Executive Director
To resign at the upcoming AGM
Committee appointments
Audit Committee chair
Remuneration Committee member
Meeting attendance
Board – 5/6
Audit Committee – 7/7
Remuneration Committee – 4/4
Board skills and experience
Stewart has over 30 years of experience in payments, banking
and technology, across both start-ups and institutional
employers and is a recognised payments industry expert in
both the traditional and emerging payments space, as well as
the mobile application sector.
Stewart had previous roles as Global Director of Innovation
for Barclaycard and Head of International – Merchant
Services for the Royal Bank of Scotland Group. More
recently, Stewart was CFO and then Executive Vice President
of iZettle AB and was a key member of the team that agreed
the sale of iZettle to PayPal in May 2018 for US$2.2 billion.
Stewart is the Chair of Boku’s Audit Committee and a
member of the Remuneration Committee.
Stewart is Chair at HappyOrNot AY.
Stuart Neal
Chief Executive Officer
appointed 1 January 2024
Committee appointments
None
Meeting attendance
NA
Board skills and experience
Stuart re-joined the board in January 2024 and brings with
him 19 years of experience in senior leadership roles within
Payments and Fintech. He assumed the role of CEO at Boku
following a six-month spell as CEO Designate. He was also
Chief Financial Officer of Boku between 2012 and 2014
and between 2017 and 2019, both periods of considerable
growth for the Company, and saw the company through its
IPO, before being appointed Chief Business Officer of Boku’s
Identity division, where he returned that business to growth,
culminating in its successful disposal to Twilio in 2022.
Previously, he was Chief Commercial Officer at Vocalink
PaybyBankapp (acquired by Mastercard), building distribution
channels and creating merchant demand. Stuart was also
Commercial Director at Barclaycard, then Europe’s second
largest payment acceptance company, where he oversaw the
roll out of contactless payments to merchants across the UK
market. In his earlier career, he held senior Commercial and
Finance positions within a number of blue-chip corporations
including GlaxoSmithKline, Worldcom and Virgin Media.
22
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Keith Butcher
Chief Financial Officer
Committee appointments
None
Meeting attendance
Board – 6/6
Board skills and experience
Keith has had considerable experience as a listed company
CFO and of online payments businesses. His experience
includes six years as CFO of AIM listed online payments
company DataCash Group plc during its period of rapid growth
and ultimate sale to MasterCard.
More recently, he was CFO of LSE listed payments company
Paysafe Group plc (formerly Optimal Payments plc), which
grew its market capitalisation from £40 million to £2 billion
during his tenure through a combination of organic growth
and a number of acquisitions including the €1.1 billion
acquisition of Skrill.
Keith became CFO of Boku in 2019, having originally joined
the Board as a Non-Executive Director on Boku’s admission
to AIM in 2017, where he was Audit Committee Chair. Keith
also joined the Board of LHV UK Ltd in May 2022 as a Non-
Executive Director. Keith was awarded Finance Director of the
Year at the Quoted company Alliance Awards (QCA) 2014.
Keith joined the Board of LHV UK Ltd in May 2022 as a Non-
Executive Director
Jon Prideaux
Non-Executive Director
former CEO, resigned 31 December 2023
appointed NED 1 January 2024
Committee appointments
None
Meeting attendance
Board – 6/6
Board skills and experience
Jon has more than 30 years of payments experience. He was
an early Visa Europe employee and a key contributor to its
growth, leaving in 2006 as EVP Marketing. He started Visa
Europe’s eCommerce division, was the lead executive on the
introduction of Chip and PIN technology and oversaw product
launches such as Visa Electron and V PAY.
He served on the Board of EMVCo, was the Chair of the
Compliance Committee, and was a member of Visa’s Global
Product and Brand Councils.
After leaving Visa in 2006, Jon served as Deputy CEO for
SecureTrading, where he doubled transaction numbers and
quadrupled profitability. He then led a management buy-in at
Shopcreator, the ecommerce software platform.
Jon joined Boku in 2012, becoming CEO in 2014 and led the
company’s IPO in 2017. He stepped back to become a Non-
Executive Director at the end of 2023.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
23
Governance Report
Board of Directors
Mark Britto
Non-Executive Director
Committee appointments
None
Meeting attendance
Board – 6/6
Board skills and experience
Mark Britto has over 20 years as an entrepreneur, sales and
financial services executive. Mark served as a senior executive
for PayPal in various capacities for 5 years. He also served as
Boku’s Non-Executive Chair.
Mark founded Boku after six years as the CEO of Ingenio, a
service marketplace and performance advertising company,
which he led to a 2007 acquisition by AT&T.
Prior to Ingenio, Mark spent 4 years as SVP of worldwide
services and sales at Amazon.com.
Mark’s first start-up, Accept.com, was bought by Amazon.
com in 1999 and served as the primary backbone of Amazon’s
global payments platform. Mark began his career in senior
credit and risk management roles at leading national banks
FirstUSA and Bank of America.
Meriel Lenfestey
Independent Non-Executive Director
Committee appointments
Remuneration Committee chair
Audit Committee member
Meeting attendance
Board – 6/6
Audit Committee – 7/7
Remuneration Committee – 4/4
Board skills and experience
Meriel’s career has been built bringing customer centred
business thinking to organisations of all shapes and sizes;
across public, private and third sectors; and across many
different industries.
After starting her career with spells at Microsoft in Seattle
and the BBC in London, she founded, grew and sold a user
experience design (UCD) consultancy (Flow Interactive) over 13
years. This company was considered a pioneer in the space of
UCD and worked with many of the best-known brands at the
time on use cases including banking, health, communications,
education and ecommerce. For the last ten years she has
maintained a portfolio of Non-Executive Director roles across
telecoms, energy, arts, infrastructure, renewables, transport
and technology.
As a designer, researcher and entrepreneur she brings diverse
thinking to the Boku board.
Meriel is Non-Executive Director of two FTSE 250 listed
investment funds (International Public Partnerships and
Bluefield Solar Income Fund) and a special purpose acquisition
company (Ikigai).
She is also Chair at Jersey Telecom, and a Non-Executive Director
for a charity (Art for Guernsey), neither of which are listed
24
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Loren I. Shuster
Independent Non-Executive Director
Committee appointments
Audit Committee member
Remuneration Committee member
Meeting attendance
Board – 5/6
Audit Committee – 6/7
Remuneration Committee – 4/4
Board skills and experience
Loren I. Shuster currently serves as the Chief People As
Executive Vice President and Chief People Officer, Loren I.
Shuster leads the People, Places and Culture organisation,
which brings together expertise, passion and creativity to build
an inspiring and engaging work environment for more than
25,000 global employees. Loren has been a member of the
LEGO Group’s Executive Leadership Team since 2015, first
as Chief Commercial Office, followed by leading the People
agenda and Corporate Affairs.
Loren oversees the development and implementation of the
company’s people strategy, which focuses on attracting,
developing and retaining diverse and talented people and
ensuring they have workplaces in which they can thrive. He
is also responsible for the LEGO Group’s social responsibility
efforts which focuses on developing children’s critical skills in
the community with learning through play initiatives, in addition
to the company’s Corporate Brand Communications function
which works to build and protect the LEGO Brand.
Previous to the LEGO Group, Loren held senior leadership
positions within commercial and marketing at Google, Nokia
and other multinationals. Additionally, Loren has an MBA
(1996) and Executive Masters in Organizational Psychology
(2015) from INSEAD.
Loren is a member of the International Advisory Council of the
Institute of Business Ethics.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
25
Governance Report
Senior Management
Adam Lee
Chief Product Officer
Mark Stannard
Chief Business Officer
Skills and experience
Adam has been developing new products and services for
Adam has been developing new products and services for
startup ventures for over 20 years. At Boku, Adam leads
product, design, and marketing, charged with finding
innovative new applications for the 7B+ consumer payment
accounts connected to Boku’s Payments Network.
Before joining Boku, Adam was at Intuit where he
launched the world’s first consumer medical wallet used
to understand, manage, and pay for healthcare expenses,
distributed by two of the largest US healthcare networks,
UnitedHealthcare and CIGNA.
Skills and experience
Mark has nearly 25 years’ experience in mobile, digital, and
fintech services and is a leading member of the team that
has brought the biggest digital brands to Local Payment
Methods including Amazon, Meta, Spotify, Sony, Google,
Netflix, and Microsoft.
He played a critical role in building Boku’s market-leading
payment network of over 300 local payment methods, and
as Chief Business Officer, has direct responsibility for Boku’s
Worldwide payments business. This includes the deployment
of new Payment Types onto the Boku platform, such as digital
eWallets and account-to-account banking payments.
Prior to Intuit, Adam had also worked for two major industry
backed B2B platform companies, Neoforma and more notably
GlobalNetXchange where he developed technology and
services to drive better supply chain performance between
companies around the world including Carrefour, Sears,
Sainsburys, Metro AG, Karstadt Quelle, Unilever, Proctor &
Gamble, and Diageo.
Previously, Mark held positions at Deutsche Telekom &
Buongiorno Vitaminic (now part of NTT-DOCOMO) where he
managed BD and led marketing & licensing for music and
digital entertainment services. He launched Europe’s first
mobile music service in 2001, signing deals with all five major
record labels, and later brought leading film, TV & toy brands to
mobile, including Spider-Man, Pink Panther, and Transformers.
26
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Corporate Governance Report
Chair’s Introduction
Dear Shareholder,
As Chair of the Board, it is my responsibility to ensure that the Group has both sound corporate governance and an effective
Board, including leading the Board effectively, overseeing the Group’s corporate governance model, communicating with
shareholders and to ensure that the highest levels of corporate governance are maintained throughout the Group and also at
Board level.
As an AIM-quoted company, the Board, has decided to adopt the Quoted Companies Alliance Corporate Governance (the “QCA
Code”), which requires AIM-quoted companies to adopt a ‘comply or explain’ approach in respect of the application of guidance
contained within. The following report sets out how we have applied the 10 principles of the QCA Code. It also covers how the
Board and its committees operated in 2023 and how we have continued to comply with the principles of the QCA Code.
In addition to our adherence to the current QCA Code, it is important to note that a new iteration of the QCA Corporate
Governance Code is set to come into effect. This updated code reflects evolving best practices and aims to further enhance
corporate governance standards for AIM-quoted companies like Boku. We are actively preparing to align with these
revised guidelines, ensuring our governance practices remain at the forefront of industry standards, fostering transparency,
accountability, and trust among our stakeholders. The Board of Directors is fully committed to achieving high standards of
governance expected for the size and stage of development of the Group.
Information of Boku’s compliance with the principles of the QCA Code can also be found on our website at:
https://www.boku.com/investor-relations/corporate-governance-statement.
Dr. Richard Hargreaves
Non-Executive Chair
19 March 2024
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
27
Governance Report
Corporate Governance Report
Statement of Compliance
Application of the QCA Corporate Governance Code
Principle
Application/Evidence
Deliver Growth
1. Establish a strategy and
business model which
promote long-term value for
shareholders
2. Seek to understand and
meet shareholder needs and
expectations
At Boku we seek to develop an entrepreneurial and supportive culture across our business
so that these values are integral to everything else we do.
An explanation of the Company’s business model and strategy, including key challenges in
their execution (and how those will be addressed) is included on pages 4 to 6.
The Chief Executive Officer is responsible for the leadership and day-to-day management
of the Group, including formulating and recommending the Group’s strategy to the Board
and executing the approved strategy.
The Board is committed to regular, open and effective communication with shareholders
to ensure that the Company’s strategy and performance are clearly understood. The
Board engages with shareholders via a variety of channels and activities including the
annual general meeting, updates to shareholders via its reporting and the regulatory news
services, institutional and retail investor presentations and investor roadshows, all of which
provide an opportunity for shareholders to engage directly with senior management and
the Board.
The main day-to-day engagement with shareholders and prospective investors is carried
out by the Chief Executive Officer and Chief Financial Officer and from time to time by our
Chair. During the year, meetings with analysts and institutional shareholders take place
immediately after the results announcements, supplemented by ad hoc meetings and calls
at other times.
The Board encourages participation by shareholders at the Annual General Meeting where
all Board members are present and are available to answer questions from shareholders.
Regular market reports are prepared by Company’s Nominated Advisor and which are
provided to the Board for consideration and discussion to ensure that the Directors have a
clear understanding of shareholders’ views and expectations.
The Board believes that they have successfully engaged with the Company’s shareholders
in the past and will continue to do so going forward.
28
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Principle
Application/Evidence
Deliver Growth
3. Take into account wider
stakeholder and social
responsibilities and their
implications for long term
success
The Board regularly considers resourcing requirements of the business including the key
stakeholder relationships which give Boku its competitive advantage and thereby contribute
to its long-term success. The key stakeholders are the skilled people employed by Boku, its
merchant and carrier relationships, together with other service providers. These relationships
are regularly monitored and discussed at senior Executive and Board meetings.
Boku regularly approaches its key stakeholders for feedback through regular employee
surveys, companywide all-hands meetings and progress workshops with merchants and
carriers. Initiatives that have been developed following feedback include employee social
events, updates to Company policies and improvements to the Company’s product offering.
Our approach to the Group’s environmental and social responsibilities are described in the
ESG Report on pages 50 to 57.
4. Embed effective risk
management, considering
both opportunities and
threats, throughout the
organization
The Board retains overall responsibility for identifying the major business risks faced by
the Group by setting both the framework and risk appetite of the Group, in line with best
practice. Our risk management framework and approach to risk is summarised on pages
16 to 20.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
29
Governance Report
Corporate Governance Report
Principle
Application/Evidence
Maintain a Dynamic Management Framework
5. Maintain the Board as a
well-functioning, balanced
team led by the Chair
The QCA Code requires that Boards have an appropriate balance between executive
and Non-Executive Directors and that each Board should have at least two Independent
Directors. The Board is currently made up of an Independent Non-Executive Chair (Richard
Hargreaves), two Executive Directors: the Chief Executive Officer (Stuart Neal) and the
Chief Financial Officer (Keith Butcher), four Independent Non-executive Directors (Stewart
Roberts, Charlotta Ginman, Meriel Lenfestey and Loren I. Shuster) and two Non-Executive
Directors (Mark Britto and Jon Prideaux), however it is noted that Stewart Roberts intends
to retire from the Board at the upcoming Annual General Meeting.
The Board has sufficient members to contain the appropriate balance of skills and
experience to effectively operate and control the business.
The roles of the Chair and the Chief Executive Officer are separate, with their roles and
responsibilities clearly defined.
The Chair’s main responsibility is the leadership and management of the Board and its
governance. He meets regularly and separately with the Executive and Non-Executive
Directors to discuss matters for the Board.
The Chief Executive Officer is responsible for the leadership and day-to-day management
of the Group and executing the strategy of the Group as approved by the Board.
The roles and responsibilities of the Chair, Chief Executive and any other Directors who
have specific individual responsibilities or remits (e.g. for engagement with shareholders or
other stakeholder groups) are set out on page 35
The Board holds at least six regular meetings per year and has also created separate
Audit and Remuneration Committees comprising of Directors with the necessary skills and
knowledge to discharge their duties and responsibilities effectively.
Both Executive Directors are full time employees. Non-Executive Directors are required to
devote sufficient time to prepare for and attend regular Board meetings, any ad hoc Board
sessions, their Committee duties and other stakeholder engagement.
Further details of the current Directors and a note of those who are considered to be
independent are set out on page 21.
30
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Principle
Application/Evidence
6. Ensure that between
them the Directors have
the necessary up-to-date
experience, skills and
capabilities
The Board is satisfied that its Directors have an effective and appropriate balance of skills
and experience, and that there is a suitable balance between independence of character
and judgement, and knowledge of the Company, to enable it to discharge its duties and
responsibilities effectively. All directors are encouraged to use their independent judgement
and to constructively challenge all matters, whether strategic or operational.
The current Directors, their background and experience are described on pages 21 to 25.
Collectively, our team has all the necessary skills and experience, to carry out the Group’s
strategy and business model effectively.
The Directors keep their skills up to date through appropriate training, including an annual
refresher training on the AIM rules provided by the Nominated Advisor as well as receiving
periodic updates on corporate governance matters.
The Senior Independent Director is available to speak with shareholders concerning
the corporate governance of the Company. The Company Secretary, Deepa Kalikiri is
responsible for advising the Board on governance matters and ensuring that decisions of
the Board in relation to governance matters are implemented. During the financial year,
Stewart Roberts acted as the Senior Independent Director, however, Charlotta Ginman
assumed the role of Senior Independent Director on February 1, 2024
The Remuneration Committee engaged an external remuneration consultant to provide
advice on the structure and presentation of Executive and Non-executive compensation.
The latest review of Board effectiveness did not highlight any areas of concern. Additionally,
neither the Chair nor Chief Executive have received any representations to this effect.
In line with its standard practice, during the financial year, the Board undertook a formal
annual evaluation survey of the Board’s performance and effectiveness, including that of
Boku’s committees.
The evaluation which was discussed by the Board demonstrated an overall positive
performance by the Board and the committees, recognising both current areas of strengths
as well as areas suggesting improvements where appropriate, such as increased focus on
strategic matters at Board meetings.
The Board evaluation process reviews performance against a set of criteria which includes
Group strategy, board skillset, composition and succession planning, stakeholder
engagement and the effectiveness of the Board committees. The criteria is reviewed to
ensure that the evaluation survey remains relevant. Following a review of the survey by the
Board, an ESG criteria was also added to the evaluation survey.
Following completion of the Board evaluation survey, the Board reviews the composition of
the Board and the committees and considers matters pertaining to its succession planning.
Appropriate training is available to all Directors to develop their knowledge and skills to
ensure they stay up to date on specific matters for which they have responsibility.
The Board will engage an external consultant to conduct the next Board annual evaluation
survey in Q2 2024.
7. Evaluate Board
performance based on clear
and relevant objectives,
seeking continuous
improvement
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
31
Governance Report
Corporate Governance Report
Principle
Application/Evidence
8. Promote a corporate
culture that is based on
ethical values and behaviours
Boku’s culture is one of acting ethically and with integrity, not only in our business
relationships but also in our relationships with our employees. We strongly believe that our
people are what makes Boku great. Fostering a diverse, equitable, and inclusive workplace
is crucial for our success.
The Boku’s culture is guided by many different activities, which include regular senior
management meetings and feedback following employee surveys. Such surveys provide an
insight to the views of the workforce on Boku.
The Boku’s policies set out its zero-tolerance approach towards any form of discrimination
or unethical behaviour relating to bribery, corruption or business conduct in all jurisdictions
in which it operates. In order to embed a culture of ethics and inclusiveness at Boku, we
have implemented certain policies and training in the areas of recruitment diversity, equity
and inclusion, whistleblowing and anti-bribery.
An outline of the corporate culture promoted by the Board is set out in Boku’s website in
the section headed “Our Values” (which can be viewed at:
https://www.boku.com/careers
The Chair and other Non-Executive Directors regularly meet with employees without
Executive Directors present so as to gauge the health of Boku’s culture and allow
opportunities for more open discussions by employees.
More information in relation to diversity, equity and inclusion at Boku are described in the
ESG Report on pages 50 to 57.
32
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Principle
Application/Evidence
9. Maintain governance
structures and processes
that are fit for purpose and
support good decision-
making by the Board
Formal Board meetings are held every two months to review strategy, management
and performance of the Group. Additional meetings between those dates are
convened as necessary. We have two Board committees: the Audit Committee and the
Remuneration Committee.
The terms of reference of both these committees have been revised to reflect the principles
of the QCA Code. The terms of reference can be viewed at https://www.boku.com/
investor-relations/reports-documents/
Due to the current size of the Group, the Board still considers a nominations committee is
not required, any decisions relating to appointments to the Board will be a matter for the
consideration of the whole Board.
From time to time, ad hoc committees are set up by the Board to consider specific issues
when the need arises.
The roles and responsibilities of the Chair, Chief Executive and any other Directors who
have specific individual responsibilities or remits (e.g. for engagement with shareholders or
other stakeholder groups) are set out on page 35.
The principal responsibilities of Board members are as set out below:
Amongst other things the Chair is responsible for:
• Promoting the highest standards of corporate governance and ethical leadership
• Developing effective working relationships with the Executive Directors
• Promoting effective relationships between all Board members
• Setting the agenda for Board meetings and ensuring that sufficient time is devoted to
the consideration of agenda items and that each Director can express their views on
matters
• Ensuring that the Board monitors and determines the nature of the significant risks the
Company embraces in the implementation of its strategy
• Ensuring the Company maintains effective communications with shareholders and
other stakeholders and that the Board as a whole is made aware of shareholder and
stakeholder issues and concerns.
The Chief Executive is responsible for the following matters amongst others:
• Developing and implementing strategy following approval by the Board
• Reporting on a regular basis to the Board of progress in respect of strategy, Group
performance and business matters
• Developing the senior management teams and creating the appropriate organisational
environment to deliver the strategy
• Acting as the principal spokesman for the Company
The Chief Financial Officer is primarily responsible for the delivery of high-quality information
to the Board on the financial position of the Group.
The Non-Executive Directors are responsible for providing a challenge to the Executives
where required and to make the Board aware of their views on matters before Board
decisions are made. They must be able to devote sufficient time to develop their
knowledge and skills to be able to make a positive contribution to the Board.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
33
Governance Report
Corporate Governance Report
Principle
Application/Evidence
9. Maintain governance
structures and processes
that are fit for purpose and
support good decision-
making by the Board
(continued)
Build Trust
10. Communicate how the
company is governed and is
performing by maintaining a
dialogue with shareholders
and other relevant
stakeholders
The Board has a schedule of matters reserved for the Board which requires the following
key matters to considered and approved by the Board:
• Strategy and overall management of the Group
• Financial reporting and controls
• Ensuring a sound system of internal controls
• Approval of major capital projects and contractors
• Communication with shareholders
• Board membership and appointments
• The Remuneration Policy
• Delegated authorities
• Corporate governance matters
• Approval of key policies
The Board and its committees receive appropriate and timely information before each
meeting, a formal agenda is produced for each meeting, and Board and committee
papers are distributed several days before meetings take place allowing all Board
members to prepare effectively. Any Director can challenge proposals, and decisions
are taken democratically after discussion. Any Director who feels that any concern
remains unresolved after discussion may ask for that concern to be noted in the minutes
of the meeting, which are then circulated to all Directors. Specific actions arising from
such meetings are agreed by the Board or relevant committee and then followed up by
management.
The Board continues to receive departmental ‘deep dives’ during the Board meetings,
which has strengthened the Board’s exposure to the executive committee and other senior
management.
The Board Is satisfied that the governance arrangements for the business remain
appropriate and that the delegations in place are effective and with strong oversight and
controls. This is, of course, subject to regular Board and managerial oversight and review.
Reports on the work of the Board and its committees are set out as follows:
• Board: pages 35
• Audit Committee: pages 37
• Remuneration Committee: pages 41
Information about shareholder voting at the 2023 Annual General Meeting of the Company
is set out on Boku’s website.
The Group’s approach to investor and shareholder engagement is described under
Principle 2 above. Annual Reports, Annual General Meeting notices, regulatory
announcements, trading updates and other governance related materials for 2023 and
previous years are available from the Company’s website.
34
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
The Board Composition and
Responsibilities
The Board currently consists of a Non-Executive Chair, the
Chief Executive Officer, the Chief Financial Officer and six
Non-Executive Directors, which from a gender composition
perspective, is comprised of seven male directors
(representing 78%) and two female directors (representing
22%). There is a clear division of responsibilities between the
Chair and the Executive officers and the Board considers five
of the Non-Executive Directors to be independent.
The composition of the Board ensures that no single
individual or group of individuals is able to dominate the
decision-making process.
Due to the recent updates to the QCA Code, the Board
has decided that all directors should be put forward for
re-election at this year’s Annual General Meeting (as
opposed to only a third of directors being put forward for
re-election on a rotation process), subject to the necessary
amendments being made to our constitution (and approved
by shareholders).
The Board is responsible for setting the strategic direction
and policies for the business. The Board meets regularly
to attend to any issues which require its attention and
oversees the financial position of the Company, monitoring
performance on behalf of the shareholders, to whom the
Directors are accountable. The primary duty of the Board is
to act in the best interests of the Company at all times. The
Board also addresses issues relating to internal controls and
the Company’s approach to risk management. The day-to-
day management of the Group’s business is delegated to the
Chief Executive Officer and the senior Executives.
The Board meets at least once every two months and Board
meetings are attended by all Directors either in person or
via teleconference. The Board formulates and approves the
Company’s strategy, budgets, corporate actions and monitors
the Company’s progress towards its goals.
It has established an Audit committee and a Remuneration
committee with formally delegated duties and responsibilities
and with written terms of reference.
From time to time, separate committees may be set up by the
Board to consider specific issues when the need arises. Due
to the size of the Company, the Directors have decided that
issues concerning the nomination of Directors will be dealt
with by the Board rather than by a separate committee.
Audit committee
The Audit Committee is chaired by Stewart Roberts and its
other members are Charlotta Ginman, Meriel Lenfestey and
Loren I. Shuster, all of whom are independent Non-Executive
Directors. It is noted that Stewart Roberts intends to retire
from the Board (and thus the Audit Committee) at the next
Annual General Meeting and Charlotta Ginman has taken
over as SID as of 1 February 2024 and shall be appointed as
Chair of the Audit Committee at the Annual General Meeting.
The Audit Committee meets formally at least four times a year
and otherwise as required. It has the responsibility of ensuring
that the financial performance of the Company is properly
reported and reviewed and its role includes monitoring the
integrity of the financial statements of the Company (including
annual and interim accounts and results announcements),
reviewing internal controls and risk management systems,
reviewing any changes to accounting policies, reviewing and
monitoring the extent of the non-audit services undertaken by
external auditors, and advising on the appointment of external
auditors. A full report of the Audit Committee can be found on
page 37.
Board Composition
Board Independence
Board Tenure
Executive
Non-Executive
22%
78%
Independent
Not Independent
5
4
0-3 years
3-6 years
44.4%
33.3%
56% of the Board are independent
Above 6 years
22.2%
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
35
Governance Report
Corporate Governance Report
Remuneration committee
Share Dealing code
The Remuneration Committee is chaired by Meriel Lenfestey
and its other members are Loren I. Shuster and Stewart
Roberts, all of whom are independent Non-Executive
Directors. It is noted that Stewart Roberts intends to retire
from the Board (and thus the Remuneration Committee) at the
next Annual General Meeting and independent Non-Executive
Director Charlotta Ginman will replace Stewart as a member
of the Remuneration Committee.
The Remuneration Committee meets at least twice a year
and at such other times as required. It has responsibility
for determining, within the agreed terms of reference, the
Company’s policy on the remuneration packages of the
Group’s Chief Executive, Chair, and Chief Financial Officer
and such other members of the Executive management as it
is designated to consider. The remuneration of Non-executive
Directors will be a matter for the Chair and Executive
Directors. No Director or manager is allowed to partake in any
decisions relating to their own remuneration. A full report of
the Remuneration Committee can be found on page 41.
The Group has adopted a dealing code for the Directors and
all employees, which is appropriate for a company whose
stock is admitted to trading on AIM. The Company takes all
reasonable steps to ensure compliance by the Directors and
employees with the terms of that dealing code by providing
regular training and making the share dealing code and
associated documents readily available at all times.
Shareholders
The Board is committed to regular, open and effective
communication with shareholders to ensure that the
Company’s strategy and performance are clearly understood.
The Company provides annual and interim statutory financial
reports, investor and analyst presentations, regular trading
and business updates. At the Annual General Meeting all
shareholders have the opportunity to meet and ask questions
of the Board of Directors. The next Annual General Meeting is
scheduled for 22 May 2024.
36
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Audit Committee Report
Committee Chair Introduction
Dear Shareholders,
I am pleased to present the Audit Committee Report for the
year ended 31 December 2023. In the report below we explain
how the committee discharged its responsibilities during the
year, and we cover the significant issues that we considered in
relation to the financial statements and how we safeguarded
the independence and objectivity of the external auditors.
Our external auditors are PwC who were appointed at our
AGM in May 2023, taking over from BDO LLP who retired at
the same meeting, and our PwC Audit Partner brings many
years of relevant experience in auditing FinTech companies.
Composition of the committee
The Audit Committee comprises Stewart Roberts (who serves
as Chair), Charlotta Ginman, Meriel Lenfestey and Loren I.
Shuster who have all served on both the Board and the Audit
Committee throughout the year.
All members of the Audit Committee are Non-Executive
Directors and are independent of management. Both Mr
Roberts and Mrs Ginman have significant accounting,
auditing and other related financial management expertise
and the Board considers that the Audit Committee as a whole
has competence relative to the sector in which the Company
operates. Biographies for each of the committee members
can be found on pages 21 to 25.
Mr Roberts has announced his intention to step down from
the Audit Committee and Board at the next AGM and Mrs
Ginman will take over as Audit Committee Chair on that date
and has assumed the role of Senior Independent Director as
of 1 February 2024.
Executive Directors and senior management attend meetings
by invitation as required, but do not do so as of right.
Representatives of PwC LLP (external auditor) also attend
the majority of committee meetings and meet privately
with committee members, in the absence of executive
management, at the beginning or end of a number of
committee meetings during the year.
The committee is required to meet a minimum of three
times during each financial year but chose to meet seven
times during 2023 which included meetings to discuss the
appointment of the new Auditor.
The role and the responsibilities of the
committee
The Audit Committee Terms of Reference are published on
our website but for clarity the Terms of Reference state:
The main role and responsibilities of the Audit Committee
are to:
a. provide formal and transparent arrangements for
considering how to apply the financial reporting and internal
control principles set out in the QCA Corporate Governance
code, and to maintain an appropriate relationship with the
Company’s auditors;
b. monitor the integrity of the financial statements of the
Company and any formal announcements relating to the
Company’s financial performance, reviewing significant
financial reporting judgments contained in them;
c. review the Company’s internal financial controls and the
Company’s internal control and risk management systems;
d. review arrangements by which staff of the Company may,
in confidence, raise concerns about possible improprieties
in matters of financial reporting or other matters and
ensure that arrangements are in place for the proportionate
and independent investigation of such matters and for
appropriate follow-up action;
e. consider the need for an internal audit function and, if
considered necessary, monitor and review the effectiveness
of the Company’s internal audit function;
f. make recommendations to the board, for it to put to the
stockholders for their approval in a general meeting of
the stockholders, in relation to the appointment, re-
appointment and removal of the external auditor and to
approve the remuneration and terms of engagement of the
external auditor;
g. review and monitor the external auditor’s independence
and objectivity and the effectiveness of the audit process,
taking into consideration relevant UK professional and
regulatory requirements;
h. develop and implement policy on the engagement of the
external auditor to supply non-audit services, taking into
account relevant ethical guidance regarding the provision of
non-audit services by the external audit firm; and
i. report to the Board, identifying any matters in respect of
which it considers that action or improvement is needed
and make recommendations as to the steps to be taken.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
37
Governance Report
Audit Committee Report
External Audit
Non-audit services and fees
The scope of the audit work undertaken by external auditors
is discussed with the Audit Committee and typically covers
the following areas:
• the External Auditor’s overall work plan for the forthcoming
year;
• the External Auditor’s fee proposal;
• the major issues that arose during the course of the audit
and their resolution;
• key accounting and audit judgements and estimates;
• the levels of errors identified during the audit;
• recommendations made by the External Auditor in their
management letters and the adequacy of management’s
response;
• Assessment of the adequacy of the internal controls; and
It can occasionally be more efficient or necessary for a
company to engage the external auditors to provide non-audit
services because of their knowledge and experience and/
or for reasons of confidentiality. However, safeguarding the
objectivity and independence of the external auditors is an
overriding priority. The external auditors will only be appointed
to perform a service when doing so would be consistent with
both the requirements and principles of the relevant external
regulations including the UK FRC Revised Ethical Standards
2019, and when their skills and experience make the firm the
most suitable supplier.
We classify work that the external auditors might be
permitted to perform into one of two categories and manage
these as follows:
• Audit services – the fees for the statutory audit are agreed
• Review and consider management’s fraud risk assessment.
by the committee.
The Audit Committee meets privately with the External Auditor
in the absence of management to review matters within their
sphere of interest and responsibility.
• Audit – related services (including the review of interim
financial information) – the scope of any such services and
the fees must be pre-approved by the committee.
Auditors’ remuneration
Audit of the Group consolidated financial
statements Audit services - core
Audit services – subsidiary audits (other
primary auditor fees)
Audit - related services
(review of interim accounts)
Total audit fees
2023
$’000
2022
$’000
798
428
63
124
127
57
988
609
2023 represents fees paid/ payable to PwC (FY22: BDO)
The Audit Committee met with PwC shortly after their
appointment as new auditor for the financial year 2023 to
discuss the considered approach to the 2023 audit. This
was followed up by an audit planning session in late autumn
whereby we discussed ongoing focus areas and learnings
from the interim review to translate into an agreed plan
for the full year audit. At the end of each audit cycle the
Audit Committee seek input from both the auditor and the
executive finance functions to add to its own views into the
effectiveness of the audit process and to agree learnings for
implementation in the following year.
There is no set internal policy on auditor tenure or rotation
beyond the regulatory guides however as effectiveness and
efficiency tends to improve with some experience in working
together, a forward view over the suitability and quality of
the relationship is normally considered over a four year plus
future window unless something more pressing changes.
The positive shift in Boku’s growth and future potential with
broader methods, clients and complexities developing in the
past 24 months sat behind our decision at the end of 2022 to
seek a new auditor relationship which resulted in PwC being
appointed at our AGM in May 2023.
38
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Internal Audit
In 2022 Boku employed an external company to provide
internal audit services for its Irish entity for the first time
to be compliant with its new regulatory obligations. As is
considered typical for a company of Boku’s size, Boku had
not previously employed an internal audit function. This
situation remained throughout 2023, and while the need for
an internal audit function for the whole company was further
considered during the year, it has been decided and agreed
that in 2024 Boku will continue to employ external companies
to provide internal audit services with a limited scope focused
around the controls and practices required by various local
regulatory requirements for new local payment methods and
real time account to account payments. This decision and
the scope of internal audit will be reviewed periodically by the
Group Audit Committee.
Boku has a Risk & Compliance Team whose primary focus
is to ensure that the Group remains compliant with all
relevant regulations in jurisdictions where Boku has obtained
a license and also with relevant local Telecoms regulation
within each specific market; in addition to broader regulatory
requirements such as PSD2 within the EU.
Risk management and internal controls
As detailed in the Corporate Governance Statement, the
Group’s risk management and controls framework is monitored
by the Committee. The framework is designed to manage the
Group’s risk levels versus its risk appetite, rather than being
designed to eliminate any risk of failure to meet the Group’s
strategic objectives. The principle risks are set out in the Risk
Management section of this report on pages 16 to 20.
Every year, the Audit Committee review in detail the risk
framework processes for suitability and effectiveness with
a dedicated session for this review being introduced during
2023. This allows us to reach agreement on what the most
significant current risks are and where mitigations should be
focused. The continued suitability and prioritisation of the
results of the risk matrix along with the impact of mitigations
are reviewed again before year end and adjusted as agreed.
Changes of accounting policies/
Application of IFRSs
The Committee is satisfied that there are no changes in
accounting policies impacting the current year and that there
are no IFRSs yet to be adopted that the Committee expects to
have a significant impact on the financial statements.
During the course of the change in auditors, an error in
application of deferred tax recognition was identified relating
to the look forward period for future taxable profits considered
for deferred tax asset recognition. Therefore, the prior year
deferred tax balance has been restated.
The consolidated statement of comprehensive income in the
year end 31 December 2022 has been restated to move the
fair value gain/(loss) on warrants from administrative expenses
to a separate line below operating profit, to more appropriately
reflect the accounting judgement.
Prior year balances recognised under right-of-use assets have
been restated to prepayments in the consolidated statement
of financial position. More details can be found in note 2.
Key activities in the year ended 31
December 2023
• Fulfilled each of the business considerations commensurate
with the Audit Committee Terms of Reference.
• Reviewed budgets, forecasts and monthly financial
reporting produced by management, using multiple views
to help track the impact of significant core currency
movements during the year that could otherwise cloud the
clarity of business performance reporting.
• Reviewed the key business risks of the Company and
agreed the subsequent updates to the focus areas. (Please
refer to page 16 for a more detailed review of company’s
principal Risks and Uncertainties).
• Reviewed and refreshed the process and schedule for
monitoring the Group’s risk management and controls
framework to keep it appropriate and current, ongoing
including introducing dedicated review meetings.
• Continued to drive management focus on the enduring
suitability and impact of control processes, regulations and
risks associated with the rapid growth and expansion of
LPMs and Real Time Payments in existing and new markets.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
39
Governance Report
Audit Committee Report
• Reviewed the Group’s Going Concern paper and
Impairment review paper produced by management.
Looking ahead
• Reviewed the management papers prepared on the key
areas of judgement applied to the consolidated financial
statements.
• Reviewed share-based payments, and the appropriateness
of the classification of the exceptional items.
• Introduced further contact options/routes for whistleblowing.
• Reviewed the Group’s recognition of deferred tax and tax
provisions and the corresponding prior year adjustment.
• Reviewed the Group’s classification of the consolidated
financial statements and corresponding prior year
adjustment relating to right-of-use assets and fair value
losses on warrants.
• Reviewed the definitions and disclosures of Alternative
Performance Measures (non-GAAP measures).
• Reviewed the paper, accounting implications and the
estimation in the Amazon warrant contract asset and
Amazon warrant liability.
• Reviewed in detail and agreed the external auditor services
remuneration level for 2023 in light of the change from BDO
LLP to PwC LLP, the enhanced audit efforts required during
the first year of an audit engagement, and the continued
inflationary pressures.
• Discussed control findings of external auditors for action as/
if required.
The Audit Committee will continue to review and monitor the
Group’s ability to maintain suitable control processes, and risk
management with respect to the opportunities and challenges
of continued strong growth.
Personal
For personal reasons I have decided to retire from my Board
role at Boku, effective from the next AGM in May 2024, and as
such, I will no longer be Audit Committee Chair. I am delighted
with the progress Boku has made during my tenure both
with its continued growth in revenues and profits but also in
its structure and approach to good governance. I would like
to thank the other Committee members for their support in
continuing to move us forward and I am delighted to be able
to pass over the position of Chair to my long term Boku Board
colleague Charlotta Ginman. I have every confidence that she
and the Audit Committee will continue the good work.
Stewart Roberts
Audit Committee Chair
19 March 2024
40
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Remuneration Report
Chair’s Introduction
Dear Shareholder,
I am pleased to present the Directors’ Remuneration Report
for the 2023 financial year.
This letter introduces the report, outlines the major decisions
on Directors’ remuneration during the year and explains the
context in which these decisions have been made.
I’m committed to maintain Boku’s high standards of corporate
governance as an AIM-quoted company, transparency
on remuneration disclosures and flexibility to the specific
incentivisation needs of a US-incorporated, high growth,
technology company with a global presence.
Shareholders’ expectations are important in our decision
process and I welcome shareholder feedback at any time. We
will continue our practice of putting an advisory resolution on
remuneration to shareholders at our AGM.
This report sets out the remuneration policy for the
Company, the incentive structures for Directors and
management and the detailed remuneration for both the
Executive and Non-Executive Directors of the Company
for the period to 31 December 2023, and briefly includes
expectations for 2024. The information provided fulfils the
requirements of AIM Rule 19.
Note: Boku, Inc. being US incorporated and quoted on AIM
is not required to comply with the UK’s Companies Act
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008.
The information in this report is unaudited unless expressly
highlighted as such.
Performance and Decisions on
Remuneration Taken during 2023
The Company performed exceptionally well in the year with
revenue and EBITDA growing considerably ahead of market
expectations. Inflation, whilst moderating, is still higher than it
has been in recent years. Inflation in the markets in which we
operate varied between 3% and 7%. In certain markets there
are skills shortages which have driven up average salaries
ahead of these figures. An average rise of between 4% - 10%
was applied to all staff (depending on their location) with the
Executive Directors getting 4%.
During the year the Committee handled the compensation for
the incoming CEO, Stuart Neal and awarded Annual Bonuses
to the two Executive Directors to reflect the successful
delivery of strategy as detailed in note 23.
Awards were made to all employees (other than Executives)
under the company’s Equity Plan in January 2022 and
comprised time based Restricted Stock Units. Additionally,
during the year, the company made long term incentive
awards to Executives and certain other key employees in the
form of Performance Restricted Stock Units (subject to the
meeting of performance conditions). These stock units have
vesting rules which are detailed in note 20. These awards vest
after three years.
The Board agreed to remove the RSU element of Non-
Executive Remuneration and asked the CEO designate to
consider a revised Non-Executive Director remuneration
structure for 2024 which is outlined in this report.
I hope that you find the report helpful and informative.
Meriel Lenfestey
Remuneration Committee Chair
19 March 2024
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
41
Governance Report
Remuneration Report
Remuneration Committee Composition
and Role
The Remuneration Committee consists of Stewart Roberts,
Loren Shuster and is chaired by Meriel Lenfestey, all of
whom are considered Independent Directors. Mr Roberts
has announced his intention to step down from the
Committee and the Board at the next AGM and Charlotta
Ginman (independent Non-Executive Director) will become
a member of the Committee on that date. The Committee
met formally three times during the year to review the
remuneration of the Executive Directors and other executive
team members, to set the overall pay policy. The views
of the Chief Executive Officer are sought in respect of
awards to the other Executive Director and executive team
members. The CEO and CFO may be invited to attend as
appropriate to provide contextual information.
Matters regarding Non-Executive Director remuneration are
decided by the Executive Directors and are not a matter for
the Remuneration Committee.
Remuneration Policy
The Company’s approach to remuneration is that the overall
package should be sufficient to attract, recruit, motivate and
retain individuals of a high calibre with significant technical and
strategic expertise in a competitive and evolving global sector.
The Committee is focused on applying this approach to
attract, recruit, motivate and retain high quality Executive
Management who will deliver value for shareholders, whilst
remaining aligned with AIM principles.
Executive Directors
Executive Director remuneration consists of 5 elements:
• Salary
• Annual Bonus
• Long Term Incentives (LTI)
• Pension
• Benefits
More detail on each is as follows:
Salary: Base salary for each Executive Director is reviewed
annually by the Committee. In considering adjustments
the Committee takes into account salary levels paid by
companies of a similar size and nature; the performance of
the Group as a whole, the Director’s performance, experience
and responsibilities, and any cost-of-living increase applied
to staff pay. External benchmarking was done in 2023 which
confirmed executive salary levels remained aligned with
market norms following the previous year adjustments.
Annual Bonus: Executive Directors participate in the
annual bonus scheme. This delivers a bonus for the
effective delivery of strategy, as demonstrated through
the achievement of annual performance targets. The
Company considers revenue, adjusted EBITDA and personal
performance targets with equal weightings. The Company
does not publish the specific targets but they are broadly
aligned with the figures for expected performance in the
market. If either revenue or adjusted EBITDA fall below
90% of targets no bonus is payable for either, unless
the Committee applies discretion. The Committee has
discretion to adjust the level of bonus to avoid unintended
consequences. The Committee considers ESG factors
alongside other factors in the personal contribution element
and will look at the feasibility of including an ESG element in
the targets as the Company’s ESG policy matures.
Jon Prideaux Chief Executive Officer
On-target performance: up to 50% of salary (split into 2 half
yearly payments)
Over performance cap: up to a further 50% of salary (paid
annually)
Keith Butcher Chief Financial Officer
On-target performance: up to 40% of salary (split into 2 half
yearly payments)
Over performance cap: up to a further 40% of salary (paid
annually)
42
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Long Term Incentives: The Committee sees Long Term
Incentives as an important part of the remuneration of all
staff, to align them with shareholders and reward them
for strong performance. For Executive Directors these are
structured as Performance-based Restricted Stock Units
(PRSU) that have a normal vesting period of three years, after
which they convert into common shares. They are all subject
to performance conditions relating to long term adjusted
EBITDA, aligned to market expectations. Details of awards
currently held by Executive Directors are set out on page 45
of this report.
Pension: The Company operates a stakeholder pension
scheme for all UK employees. Executive Directors participate
on the same basis as other employees.
Benefits: The Company provides the option for all employees
to participate in a private healthcare plan.
Non-Executive Directors
Non-Executive Director remuneration has consisted of 2
elements through most of 2023, but has reduced to fees only
for 2024:
• Fees
RSUs: As an additional element of remuneration, as is normal
practice for US domiciled high growth companies, Non-
Executive Directors have received a one-off equity grant to
align their financial interests with those of all stakeholders
including shareholders since pre-IPO. The Company
noted the assertion made by one proxy adviser in relation
to RSU awards, but explains that an equity component
of remuneration was considered appropriate during the
period up to and including 2023. As Non-Executive Director
RSUs were not material, not tied to performance, vested
in the year of grant and were a single award, the Board is
confident that they did not impact Director independence.
However, to ensure there is no perceived concern regarding
Non-Executive Director independence going forward, the
Company has now removed this element of Non-Executive
Director remuneration and is adjusting the fee element
accordingly for 2024. No Non-Executive Director RSU awards
remain active at year end.
Non-Executive Directors do not participate in any bonus
schemes, nor are their positions pensionable. The overall
remuneration package for Non-Executive Directors has been
carefully constructed in line with the principles of the QCA
code so as not to compromise the independence of the Non-
Executive Director.
• Single issue of Restricted Stock Units (RSU) – discontinued
from December 2023
Service Contracts
They do not receive any performance or retention-based
incentives, or other benefits.
The service contracts and letters of appointment of the
Directors include the following terms:
More detail on each is as follows:
Fees: The fees paid to the Non-Executive Directors are
determined by the Executive Directors. They receive an
annual fee and additional fees for chairing Board committees.
They are entitled to recover reasonable expenses incurred in
the performance of their duties. The cash element has been
set at a level below comparable companies in recognition that
RSUs were also awarded. The fee structure and levels have
been reviewed for 2024.
Date of contract
Notice period
(months)
Executive Directors
Jonathan Prideaux:
1 May 2012
Keith Butcher
1 October 2019
Non-Executive Directors
Mark Britto
30 August 2017
Richard Hargreaves
8 August 2017
Stewart Roberts
1 January 2020
Charlotta Ginman
24 September 2020
Meriel Lenfestey
21 September 2022
Loren Shuster
21 September 2022
6
6
2
2
2
2
2
2
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
43
Governance Report
Remuneration Report
The service contracts of the Executive Directors do not provide for any extra payment on the termination of employment. The
letters of appointment of the Non-Executive Directors have an initial period of 12 months.
Due to the recent updates to the QCA Code, the Board has decided that all directors should be put up for re-election at the
2024 Annual General Meeting (as opposed to only a third of directors on a rotation process which it has done historically),
subject to the necessary amendments being made to our constitution (and approved by shareholders).
2023 Remuneration Summary
2023 was a very good year for Boku. There was strong growth in both revenue and Adjusted EBITDA, ahead of market
expectations, and excellent progress against the strategy of growing new Local Payment Methods, such as wallets and
Account to Account/Real Time Payments. Significant team effort went into launching new connections, maintaining regulator,
merchant and issuer relationships, and developing new products and technologies. The executive team is evolving and
the wider team is growing in order to deliver the next stages of the strategy. This is the context in which the Remuneration
Committee made decisions.
The following sections show how remuneration was managed for year ended 31 December 2023.
Executive Directors
Base Salaries:
Jonathan Prideaux Chief Executive Officer £327,411
£229,399
Keith Butcher Chief Finance Officer
(2022: £309,000)
(2022: £216,500)
Annual Bonus:
In determining bonus payments for 2023, the Remuneration Committee considered underlying 2023 revenue and adjusted
EBITDA growth, including adjustments for the effect of material fluctuations in foreign exchange rates, progress towards
strategy, share price performance and shareholder sentiment and determined to pay on target awards to the Executives for
the revenue and adjusted EBITDA elements of the scheme; over achievement on the revenue element reached the maximum
amount, adjusted EBITDA was 75% of the maximum. The assessment of personal achievement for both Mr. Prideaux and Mr.
Butcher were assessed at 88%, leading to aggregate payouts at 88% of the maximum awardable.
The following annual bonus payments are being made for 2023.
Jonathan Prideaux Chief Executive Officer
Full year award: £308,524 (94% salary) (FY22: £195,700)
Keith Butcher Chief Financial Officer
Full year award: £172,933 (75% of salary) (2022: £109,693)
Stuart Neal joined the company and was appointed CEO designate on 1 July 2023. His salary was £148,846. He also received
joining and performance bonuses totalling £180,628 (121.4% of salary) for the period to 31 December 2023.
44
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Long Term Incentive Plan:
During 2023 the Company granted 2,114,590 (FY22: 1,605,103) Performance-based Restricted Stock Units (“PRSUs”) over
common shares to Executive Directors, other executives, and employees under the Company’s 2017 Equity Incentive Plan.
Jonathan Prideaux Chief Executive Officer
PRSU award in 2023: 210,000 PRSU with vesting date of 01/04/26
Keith Butcher Chief Finance Officer
PRSU award in 2023: 375,000 PRSU with vesting date of 01/04/26
PRSU award in 2024: 175,000 PRSU with vesting date of 01/04/27
Stuart Neal CEO Designate
PRSU award in 2023: 410,000 PRSU with a vesting date of 01/04/26.
A full breakdown of the Directors’ current interests in the long-term incentive awards is set out below.
Pension:
Mr Prideaux opted out from the pension scheme.
Mr Butcher participated for the entire year.
Benefits:
Mr. Prideaux participated in the medical insurance plan for the entire year.
Mr. Butcher did not participate in the medical insurance plan.
Fees:
Name
Richard Hargreaves
Mark Britto
Stewart Roberts
Charlotta Ginman
Loren l. Shuster
Meriel Lenfestey
Fees 2023
£
86,885
44,308
49,112
43,655
43,655
49,112
316,728
Fees 2022
£
67,033
62,419
46,237
41,100
13,733
15,450
245,972
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
45
Governance Report
Remuneration Report
Restricted Stock Units:
Ms. Lenfestey and Mr. Shuster were granted 100,100 Restricted Stock Units, which, in line with the revised policy for Non-
Executive Directors, were vested in the year of issuance. A one-off equity grant at this level is deemed not to compromise the
independence of either Director. There are no unvested Non-Executive Director RSUs at 31 December 2023.
All Directors
Summary of Directors’ Total Remuneration for 2023
Salary
Bonus
Pension
Benefits
Total 2023
Total 2022
Executive Directors
£
£
Jonathan Prideaux
327,411
308,524
£
—
£
£
£
2,858
638,793
506,620
Keith Butcher
229,399
172,933
1,761
—
404,094
326,972
Directors’ Interests in Shares
The interests of the Directors as at 31 December 2023 in the shares of the company were:
Name
Mark Britto
Jonathan Prideaux
Richard Hargreaves
Keith Butcher
Stewart Roberts
Charlotta Ginman
Meriel Lenfestey
Loren Shuster
Number of Common Shares
Percentage of share capital
10,328,145
3,343,103
1,241,998
732,860
80,000
67,257
100,100
52,825
3.431%
1.110%
0.413%
0.243%
0.027%
0.022%
0.033%
0.018%
Jon Prideaux’s interest includes 18,644 shares held by his spouse
Richard Hargreaves’s interest includes 1,083,646 shares held by his family members.
Market value options
Name
Date of Issue
Number of
options
Exercise
price
Start vesting
date
Final vesting
date
Lapsing
date
Mark Britto
28 Oct 2016
500,000
USD $0.28
23 Sep 2016
23 Sep 2020
27 Oct 2026
There were no unexercised vested options at the year-ended 31 December 2023 (FY22: Nil).
46
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Restricted Stock Units
Name
Date of Issue
Number
of options
Share price
on award
date
Value on
award date
Start
vesting date
Final
vesting date Lapsing date
Jonathan Prideaux
24 Jan 2023
210,000
£1.525
£320,250
01 April 2026
01 April 2026 31 Dec 2026
19 Jan 2022
210,000
£1.64
£344,400
01 April 2025
01 April 2025 31 Dec 2025
20 Jan 2021
300,000
£1.40
£420,000
01 April 2024
01 April 2024
20 Jan 2025
Keith Butcher
24 Jan 2024
175,000
£1.67
£292,250
01 April 2027
01 April 2027 31 Dec 2027
19 Jul 2023
200,000
£1.385
£277,000
01 April 2026
01 April 2026 31 Dec 2026
24 Jan 2023
175,000
£1.525
£266,875
01 April 2026
01 April 2026 31 Dec 2026
19 Jan 2022
175,000
£1.64
£287,000
01 April 2025
01 April 2025
23 Jan 2026
20 Jan 2021
250,000
£1.40
£350,000
01 April 2024
01 April 2024
23 Jan 2025
Looking ahead to 2024
In 2023 the team made considerable progress towards executing the strategy of being a leading Local Payment Method
provider focused on global companies. Growth has been considerably above market expectations for both Revenue and
adjusted EBITDA. It’s important that the remuneration schemes enable the recruitment and retention of highly skilled and
motivated people, at all levels, to deliver against the strategy.
The following sections show how remuneration will be managed for the year ending 31 December 2024.
Executive Directors
In February 2023, Jonathan Prideaux announced his wish to step down from the CEO role at the end of the year. A succession
process was undertaken and in July 2023 Stuart Neal was appointed as CEO Designate (before being appointed CEO on 1
January 2024). Mr. Neal’s compensation package was established as part of his recruitment process.
Base Salaries:
Director salaries have been benchmarked in the year and are aligned with market norms. Therefore, the committee awarded an
inflationary increase aligned with employees.
From 1 February 2024 the following Base Salaries will be applied, being a 4% increase in line with employees:
Stuart Neal, Chief Executive Officer
Keith Butcher, Chief Financial Officer
£312,000
£239,795
(2023: £148,846 for six-month period)
(2023: £229,399)
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
47
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Remuneration Report
Annual Bonus:
The bonus policy awards achievement against targets using budgeted foreign exchange rates but retains Remuneration
Committee discretion in the case of unintended consequences. During 2024, the Committee will consider the introduction of
a new Senior Manager Bonus Scheme to attract and retain the leaders required as the Company grows. This will not apply to
Executive Directors but extends the remuneration bonus model further into the organisation.
Long Term Incentives:
The Committee will continue to consider and award, as appropriate, to incentivise long term, shareholder aligned efforts. In
2024, the Committee will consider the introduction of a long-term stretch scheme designed to incentivise exceptional levels of
shareholder return. We plan to engage with shareholders during H1 2024.
Pensions:
No change
Benefits:
No change
Non-Executive Directors
In November 2023, Stewart Roberts told the Board that he wished to step down from the Board at the 2024 AGM. Charlotta
Ginman will take over as Audit Committee Chair and member of the Remuneration Committee at that point and took over as
SID on 1 February 2024.
48
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Fees:
With the removal of the RSU element of Non-Executive Director remuneration and a consideration of the workload and
responsibilities of Directors, the Executive Directors undertook a benchmarking exercise and engaged with a recruitment
consultant in December 2023 to ascertain a fair structure and level of ‘fees only’ remuneration. The conclusion from February
2024 is as follows.
Non-Executive Directors
Chair fee
£100,000
Basic fee
£50,000
SID fee
£5,000
Remuneration (RC)
& Audit (AC) only
Independent
Richard Hargreaves
Yes
–
–
–
–
Yes, at appt
Committee
Chair fee
£10,000
Committee
Member fee
£5,000
Stewart Roberts
Charlotta Ginman
Meriel Lenfestey
Loren Shuster
Mark Britto
Jon Prideaux
–
–
–
–
–
–
Yes
Yes
Yes
Yes
Yes
Yes, until
May 2024
Yes, until
February 2024
Audit Committee
Chair until
May 2024
Remuneration
Committee until
May 2024
From
February 2024
Audit Committee
Chair from
May 2024
Remuneration
Committee from
May 2024
Yes
Yes
–
–
–
–
Remuneration
Committee
Audit Committee
Yes
–
–
–
Audit Committee
and Remuneration
Committee
–
–
Yes
No
No
The inclusion of a Committee Member fee recognises the additional workload for the independent Directors in order to ensure
all committees comprise Independent Directors only.
Restricted Stock Units:
This is no longer an element of Non-Executive Director remuneration with all previously awarded Non-Executive Director RSUs
now fully vested. PRSUs awarded to Jon Prideaux whilst CEO will continue to vest as he moves to be a Non-Executive Director
(non-Independent) from January 2024. The Company encourages Non-Executive Directors to hold equity to ensure continued
stakeholder alignment.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
49
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Environmental, Social
and Governance Report (ESG)
A message from our CEO
Boku is a fast growing, global organisation who supports
and partners with some of the world’s leading brands. Our
values are core to everything that we do and we take great
efforts to ensure that our values are aligned to those of our
key stakeholders. We are, by design, localised and diverse as
an organisation, something that has underpinned our success
to date. We have employees from diverse backgrounds based
in around 30 countries, including China, Taiwan, Japan,
Singapore, India, UAE, Nigeria, Kenya, Germany, Ireland,
Colombia, Brazil, UK and US.
Getting the culture right in such a diverse and globally
dispersed organisation is of upmost importance and getting
our ESG agenda right is a key part of delivering that. We
have been investing heavily over recent years to grow our
compliance and governance teams, adding expertise in
diversity, equity and inclusion (“DEI”) and most recently
employing our very first group Chief People Officer.
We run DEI groups from within the business which include
executive sponsorship. Tracking important metrics, such
as gender pay gap are important embedded KPIs for the
business.
Whilst we do not manufacture or run emission-generating
machinery, and we operate a hybrid working model, where
employees enjoy the flexibility to work remotely, we do
acknowledge our responsibilities as global citizens and are
consequently looking for new ways to optimise our carbon
footprint.
We encourage social participation from our employees and
our management team leads by example through community
engagement experiences, such as packing food parcels
for homeless people in San Francisco, to supporting an
orphanage for street kids in Mumbai, to offering internships
and mentoring to teenagers from inner city London. We will
continue to engage in those places where we do business
around the world.
We recognise that this work is never done and will therefore
strive to do far more than the mere basics to meet our
statutory and regulatory obligations.
Mission – Boku is building the world’s best network of
localised payment solutions.
Vision – Boku is helping to enable borderless commerce
by offering better payment choice.
Energy Consumption
(tCO2e)
Scope 1
Scope 2
Total
Intensity Ratio
(tCO2e per
$m group revenue)
Scope 1
Scope 2
Total
UK
Estonia
USA
India
Germany
Total
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
0.40
0.40
0.00
0.00
0.00
0.00
0.19
0.19
0.00
0.00
0.59
0.59
11.93
6.30
79.09
68.11
14.90
29.82
37.69
49.67
1.95
0.62
145.56 154.52
12.33
6.70
79.09
68.11
14.90
29.82
37.88
49.85
1.95
0.62
146.15 155.11
UK
Estonia
USA
India
Germany
Total
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.01
0.19
0.08
1.24
0.83
0.23
0.36
0.59
0.60
0.03
0.01
2.28
1.87
0.19
0.08
1.24
0.83
0.23
0.36
0.59
0.60
0.03
0.01
2.29
1.88
50
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
FY 23 Highlights
FY 24 Objectives
Hired our first dedicated
independent DEI resource
in FY 23
To conduct full review of
current reporting procedures
and prepare Scope 3
reporting capabilities
New initiative for senior
leadership team to visit
offices on quarterly basis
To identify areas for
improvement within Boku
and build on these for years
to come
4% improvement on
gender diversity within
Boku
External consultant
identified to undertake
Board effectiveness review
in FY 24
To increase employee take
up of ‘make a difference’
days and give back further
to our local communities
To build on this
improvement and identify
areas for further growth.
With that in mind, we
recruited our first Chief
People Officer in 2024 who
will own gender diversity as
a key focus area.
Environmental
Creating a more robust framework
Playing our part in the fight against climate change is
important to us and we want to show that sustainability and
climate-related measures are not just tick box exercises
required by laws and regulations, but important principles
guiding our strategy. We are in a process of developing
our understanding and our reporting capabilities and we
understand that our current programme of voluntary reporting
on Scope 1 and Scope 2 emissions is not enough. We are
committed to reporting on Scope 3 emissions in due course
and taking the appropriate reduction and offsetting initiatives
in order to reduce our impact on the planet.
To assist us with our goals we have engaged with an external
consultancy firm to review our existing reporting processes
and help us build out our Scope 3 reporting capabilities. We
have sought external help in order to ensure that our reported
figures are as accurate and representative as possible.
Our aim is to use this data to identify and assess the most
applicable and relevant emission reduction and offsetting
initiatives for us and to develop a robust sustainability
programme that all of us at Boku truly believe in.
GHG emissions
Since 2021, we have been measuring and reporting on
energy usage across each of our offices. To demonstrate our
commitment to our ESG Framework and transparency, we
have opted to report on our Scope 1 and 2 emissions, despite
not currently being subject to the Streamlined Energy and
Carbon Reporting (SECR) or Task Force for Climate-Related
Financial Disclosures requirements.
Scope 1
The Scope 1 figures capture our refrigerant emissions only,
which were calculated using the screening method, a method
whereby an organisation multiplies the refrigerant amount by
an emission factor, based on the specific type of equipment
and emission event, to determine the operating emissions of
our equipment.
Scope 2
The Scope 2 figures capture emissions from purchased
electricity and heat, which were calculated using location-
based reporting methods.
• The Scope 2 figures for Germany were calculated using an
energy consumption estimate provided by the landlord for
our office building in Munich.
• The Scope 2 figures for USA were calculated using the
area method. This allows users to estimate their energy use
based on their share of the building’s floor space and total
energy consumption, as individual energy consumption data
was not available.
• The Scope 2 figures for Estonia, UK and India were
calculated using monthly bills with individual usage data
from the building landlords (Estonia and UK) and energy
providers (India).
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
51
Governance Report
Environmental, Social and Governance Report (ESG)
Several of our offices are supplied by energy tariffs which
are either powered wholly or partly by renewable sources.
Our London and Munich offices are supplied by a 100%
renewable energy tariff. Our offices are also supplied with
reusable tableware and drinkware to reduce wastage, and
Boku operates on a largely paperless basis in order to further
reduce waste. In an effort to further reduce contributory
carbon emissions, Boku is committed to working with
partners and suppliers to also encourage reduced carbon
footprints and intend to further engage with them in order
to identify how we can further work together to reduce our
impact on the planet.
The Scope 2 emissions across our UK and Germany offices
were reduced to 0 tCO2e for the year due to the use of
renewable energy at both offices. Energy usage across our
Estonian and Indian offices were higher than that of our other
locations due primarily to larger office spaces with a higher
percentage of employees electing to work from the office.
Energy emissions at our San Francisco office doubled in
the year, however, the emissions were calculated using the
area method and the increased usage may not be wholly
attributable to our increased individual usage.
Social
We strongly believe that our people are what makes Boku
great. Fostering a diverse, equitable, and inclusive workplace
is crucial for our success.
Diversity, Equity and Inclusion at Boku
One of our core values is ‘collaborate.’ To bring this value into
practice, we have created a culture in which our employees
feel empowered and safe to be themselves. We are proud of
our openness to learn from and about new cultures, we train
our employees on cultural awareness, and we share cultural
experiences through events. These events vary for each
location, but include celebrating local holidays, alongside
hosting culinary showcases and issuing a quarterly firm-wide
diversity, equity and inclusion (DEI) Newsletter.
We aim to always empower our employees to raise and
discuss matters in a supportive environment. We provide
forums for our employees to do this through anonymous
surveys as well as providing opportunities for them to address
any issue openly and directly to our senior management
during our monthly all-hands meetings. Boku operates with
a flat hierarchical structure and an open-door policy for
employees to approach and discuss topics with our executive
management team. We believe that the positive impact from
this is reflected in our open communication structures and the
frequent engagement from employees on a regular basis.
To safeguard our values and the inclusive culture we
promote, Boku established a DEI Committee in 2020. The
committee plays an important role in bringing awareness to
all DEI-related matters. Through its quarterly newsletter, the
DEI committee helps to generate more awareness towards
DEI matters amongst all Boku employees. In 2023, several
initiatives were organised across our Group, including the
following highlights:
• Mental Health Week for all main offices, including various
socials, internal talks and activities aimed at creating
awareness of the importance of our mental health and
providing a forum for discussion about mental health.
• Wide variety of cultural events aimed at fostering inclusion
and awareness.
• Training sessions on cultural awareness and importance of
open communication within a global team.
• A panel discussion held for all our employees that includes
some of our merchants as guest speakers on the value of
culture and leadership.
• A full time DEI resource hired with the focus of developing a
DEI strategy for the Group.
Local & Global Events
Local and global events play a significant role in the way we
foster DEI throughout the Group. We consider these events
to be our most valuable tool in creating a feeling of belonging
and togetherness amongst our employees. We are aware of
the important role that belonging has in fostering a diverse,
inclusive, collaborative, and innovative workforce. Additionally,
we have found that an increased sense of belonging and
togetherness can create a better work-life balance for all of
our employees and contribute to mental wellbeing.
52
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
When it comes to securing our employees’ mental and
emotional well-being, we want to make sure that every
employee has access to quality healthcare. Therefore, we
provide our employees with insurance that is appropriate for
the location where the employees work.
Supporting the Local Community
At Boku, we care for more than just our own internal
community. We are a global business and we recognise
our responsibility to give back to the local communities
that we operate in. Giving back to our local communities
outside the office is of significant importance, at all levels of
the Group. During 2023, we started a new initiative where
our senior leadership team, whilst visiting the various Boku
office locations across the globe, volunteers some of their
time during these visits to local initiatives identified by
Boku. For example, the senior leadership participated in a
volunteering initiative called Open Heart based in the Bay
Area. They assisted in preparing and packaging meals, as
well as distributing groceries to local communities. Further
and to enable every employee of Boku to support their local
communities, we have also provided our employees with
two volunteering days per year where they can take time off
work, in addition to their annual leave, to allow employees to
volunteer their time for causes that are important to them.
Social Mobility
As a global business, we recognise that fostering social
mobility is one of our corporate responsibilities. In addition to
contributing to societal well-being, fostering social mobility
also helps to attract a broader range of talent and enhances
innovation and creativity in the workforce.
Since several of our employees work fully remotely, we also
consciously organise virtual events that can be attended by
all our employees globally. During the year, we also provide
remote employees with the opportunity to participate
physically in certain events held at our offices and organise
travel and accommodation for those wishing to attend.
On a quarterly basis, our senior leadership team, including
our Executive Directors, host an offsite at a different
office location to give our employees across the globe an
opportunity to meet and consult with the senior leadership
team in person, increasing the sense of belonging and
togetherness that we aim to promote.
Flexibility at work
Another one of our core policies is the freedom and flexibility
to work remotely. This allows employees to organise their
work around external commitments, such as caregiving duties
or educational responsibilities. With approximately 50% of all
employees working remotely full-time, we can confirm that
this policy is highly successful. Additionally, when employees
do attend our offices in person, our informal dress code
policy ensures that each employee can feel comfortable, and
empowered to be themselves.
To make working from home and working remotely as
inclusive and efficient as possible, we have implemented
several systems and technologies that make a hybrid
work environment more convenient for all our employees.
For example, to make sure that remote employees are
suitably equipped we provide them with high quality
equipment and tools as well as an additional remote working
stipend appropriate for the location where any specific
employee works. By enabling different communication
channels, employees also have a variety of tools to contact
their colleagues and stay up to date on any workplace
developments or events, even while they are not physically
present in the office. We also commit to sending out monthly
newsletters to inform all our employees of company-wide
developments and any other important updates. Additionally,
in order to further promote the feeling of togetherness, we
organise remote team events and games sessions, and have
several channels for employees to discuss both work and
non-work-related topics internally.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
53
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Environmental, Social and Governance Report (ESG)
Given the importance of our workforce to Boku, we want to
see our employees grow and develop with the Company.
We encourage and support employees to find seminars and
qualifications relevant to their individual roles. We know that
taking that step into management is not easy and that is
why we provide leadership training and coaching to those in
management to help them in their role and their development
journey. We feel that it is beneficial to both those employees
in management roles as well as their direct reports that the
manager has the skills they need to feel comfortable in their
role. Having provided this training to several employees
across the business, we can see its many benefits and have
decided, this year, to open the training to a wider range of
employees in the hope that we can see more individuals
progress in their careers at Boku. We believe both Boku and
our employees will reap long term rewards from the renewed
focus towards, and the investments made in, our employees’
individual skillsets.
Our most significant programme for social mobility at Boku,
takes place in our London office, where we partner with
Urban Synergy, a youth empowerment charity which has
helped over 20,000 young people between 9-24 years of
age reach their full potential. Every year, we provide work
experience to young students in the aim that this will inspire
and empower them for future success. During the work
experience, we provide these students with meaningful
projects and an opportunity to present these to members
from our senior management. We also provide these
students with opportunities to talk to various teams within
the business that they may not be working with during their
work experience, so that they can see how businesses are
run and find alternate areas of business that may suit them
and that they had not considered before. We want everyone
who comes to Boku to see that the workplace is a place for
everyone, no matter where they come from.
Our Product and Social Impact
According to the World Bank, enabling mobile financial
services is a huge contributor to financial inclusion. Using
mobile phones to create low-cost accounts and enable
payments has created opportunities for customers to
progress from participating in exclusively cash-based
transactions to now increasingly participating in more
alternative, cashless payment services. In many places
in the world, it may be too far or too dangerous to
travel to traditional financial institutions to access their
services. Through the use of Boku’s alternative mobile
payment methods, those ‘underbanked’ communities who
historically have not had the ease of access to traditional
financial institutions now have more opportunities to
participate in the online global marketplace and are now
able to access and enjoy services that we, in developed
economies, often take for granted, such as access to
online gaming and streaming services.
While Boku is proud of its contribution to such communities,
we are committed to further developing our understanding of
our role in this ecosystem and how we can further expand our
contribution and impact on this aspect of society.
Gender Diversity
Operating in the FinTech industry, we are aware that Boku,
and the industry as a whole, has a lot of work to do in
increasing the number of women in tech. The Board and
senior management team at Boku have reiterated the
importance of hiring and retaining more women into the
business, and more specifically into more senior positions.
We hope that by increasing the number of women in senior
leadership, we can inspire and motivate women across the
company, and that both our current, and prospective, female
colleagues view Boku as a viable and appealing organisation
in which women will have real opportunities for career
advancement, from entry level all the way through to senior
leadership roles.
54
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
At Boku, women represent 33% of the global workforce,
a 4% increase from 2022. While we are pleased that more
women are joining the Boku team, we are committed to
investigating the opportunities we present so that we can
continue to build on our progress in future years. Our flexible
working and maternity reintegration policies are key aspects
of demonstrating to our women employees that we are
committed to providing them with a workplace environment
where they are supported in all parenting decisions that they
need to make for the benefit of their family, and that Boku will
give its best efforts to ensure that such employees still feel
like they belong to this organisation. Another key step in this
regard is hiring an independent DEI resource who will identify
gaps in our recruitment and working practices and allow us to
make further progress in increasing our gender diversity.
Representation of Women at Boku
(as at 31 December 2023)
Women
Men
Tech roles
24%
Board
25%
Senior
24%
76%
75%
76%
All
33%
67%
0%
20%
40%
60%
80%
100%
We have reviewed publicly available research in order to
assess where Boku stands in comparison to other technology
companies across the United Kingdom and United States
with regard to gender diversity:
• It is estimated that, in the UK, women generally represent
26%1 of the workforce in across technology companies. At
Boku; 41% of our UK employees are women.
• It is further estimated that in the United States, women
occupy 34.4%2 of the employee positions in the U.S.’s
largest tech companies; at Boku 35.4% our of employees in
the US are women.
• Additionally, we have seen 2% increases in the percentage
of women in our Estonian and Mumbai offices.
While the number of women in the Boku workforce has
increased over the last year, we acknowledge that the
percentage of women in technical roles at the Company has
decreased from 25% to 24%. While this is broadly in line with
benchmarks for similar roles across the EU (22%3) and US
(28%4), we truly believe that women are vital to the long-term
success of the FinTech sector in which we operate and we
are in the process of setting targets to increase the current
representation of women in technical roles here at Boku.
Further, we believe that working mothers provide vital
contributions to diversity of thought and the overall
development of the Company. We strongly believe that
women should not be penalised for having children and,
in certain jurisdictions, the available statutory support for
pregnant women and new mothers only serves to provide
these women with significant workplace barriers. Retention
of key talent is an important issue for us and a such,
providing mothers with an accessible environment in which
they can thrive and feel supported is just one way in which
we can make Boku a better place to work for current and
future employees.
1 https://www.womenintech.co.uk/women-in-tech-survey-2023/
2 https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/07/08/it-is-essential-that-we-pave-a-road-for-women-in-tech-heres-how/
3 https://www.mckinsey.com/~/media/mckinsey/business%20functions/mckinsey%20digital/our%20insights/women%20in%20tech%20the%20best%20bet%20
to%20solve%20europes%20talent%20shortage/women-in-tech-the-best-bet-to-solve-europes-talent-shortage.pdf
4 https://www.zippia.com/advice/women-in-technology-statistics/
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
55
Governance Report
Environmental, Social and Governance Report (ESG)
We have reviewed the statutory maternity leave provisions
across our office locations and have identified jurisdictions
where the statutory support is not satisfactory. In California,
companies are required to provide just 12 weeks of maternity
leave and are not required to provide any paid maternity leave.
In the UK, employers are only obliged to pay 90% of the
average weekly earnings for the first six weeks of maternity
leave and up to £172.48 per week for the next 33 weeks of
maternity leave. In both situations, we have implemented
a policy of paying employees with 100% of their salary for
the first 25 weeks of maternity leave. In addition to changes
to our paid maternity leave, we are currently reviewing our
reintegration processes.
Our current methodology for assessing the gender pay gap
is to use the modal average of all roles across certain filters,
for example, all tech roles, all non tech roles, country of
employment and age. In 2024, we are committed to carrying
out a more extensive review of the gender pay gap at Boku,
including producing a more representative gender pay gap
figure based on comparable figures. Using these statistics, we
hope to be able to identify areas that need to be addressed
and make improvements towards achieving pay parity. Fixing
the gender pay gap is incredibly important to us at Boku and,
in 2024, we hired a new experienced Chief People Officer who
has been tasked with addressing this area of focus as one of
her key priorities going forward.
Gender Pay Gap
Governance
Gender diversity is not the only equity issue that needs to
be addressed across the technology industry, (including
here at Boku), we also need to address the gender pay gap.
In the UK, it is reported that 91.1% of tech companies with
over 250 employees have paid their male employees more
than their female employees1. Across our tech roles, when
reviewed including executive management pay or without
executive management pay, we have achieved gender pay
parity at Boku. As a tech company, we are delighted that we
are able to confirm that women in tech roles at all levels are
being paid at parity with men. However, across all roles at
Boku, the gender pay gap has increased by 4% from 16%
at the end of 2022 to 20% at the end of 2023. In certain
areas of examination, the gender pay gap had decreased, for
example the US decreased from 5% to 2% and employees
aged between 22-35 decreased from 5% to 3%. However, the
pay gap has increased in other areas, such as UK (excluding
executive management) where it increased from 29% to 33%
and India increased from 16% to 20%.
Boku is an AIM-quoted company with several regulated
subsidiaries across the globe. As such, we understand that
a strong corporate governance framework is essential for
our business to succeed. The Board continually reviews
and assesses this framework to ensure that it meets the
standards required by our investors, regulators, customers
and other stakeholders. Boku is a member of Quoted
Companies Alliance (QCA) and chooses to apply its Corporate
Governance Code. A summary of Boku’s compliance with the
QCA Code can be found on pages 27 to 34.
Board and Committees
Throughout the year, we have reviewed the structure,
frequency and proceedings of our Board and committee
meetings. As a result of these reviews, we have added
additional Audit Committee meetings so that the committee
has sufficient time to conduct in depth discussions regarding
the audit process and conduct a review of the Company’s
risk management framework. The Board has also considered
how best to structure Board meetings in order to allow for
additional focus on the Company’s purpose and strategy.
1 https://www.verdict.co.uk/exclusive-how-big-is-the-gender-pay-gap-in-the-tech-industry-in-britain-and-who-are-the-worst-offenders/
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Whistleblowing
Colleagues can make use of our web-based whistleblowing
procedures, to report any criminal offences, ethical
wrongdoings or other instances of malpractice that may
cause harm to others. Concerns can be raised directly, on
a strictly confidential basis, or anonymously, with each case
to be assessed thoroughly by a dedicated ‘triage team’
consisting of Boku’s general counsel, Director of human
resources and head of risk and compliance, who will further
engage with the reporter on the specific concern and the
ensuing process. Boku’s whistleblowing policy is introduced
to all new employees throughout the onboarding process and
is regularly reviewed to ensure that it is suitably adequate for
Boku and its employees.
During 2023, it was announced that Jon Prideaux, Boku’s
former CEO, was to retire from his role as CEO and would
continue as a Non-Executive Director for the remainder of his
term. It was also announced that Stuart Neal, CEO, would
take over as CEO from 1 January 2024 and was to act as
CEO designate until Jon Prideaux formally retired. Following
on from the changes, we felt that it would be beneficial for
Stuart Neal, as incoming CEO, and the Board as a whole to
carry out an external Board effectiveness review.
Policies & Training
We have an established Code of Ethics to make sure we
underline the principles that we wish our staff to adhere. We
also have specific staff conduct policies, on whistleblowing,
information security, and anti-bribery and corruption.
Throughout the course of our investigations that have taken
place since the date of our last annual report, we have found
no instances of any systemic issues or breaches of our
anti-bribery and corruption policy, nor of any anti-bribery
and corruption laws. Compulsory training modules on data
protection, information security and anti-money laundering are
taken by all staff on an annual basis.
Modern Slavery
We are committed to preventing unethical practices within our
own business. Additionally, we want to do the same for the
partners that we work with—across the entire supply chain.
Due to the nature of our business, Boku’s main suppliers are
mostly involved in IT and marketing services, and they are
largely considered to be low risk.
As part of our onboarding process, we conduct due diligence
on all our prospective partners and suppliers. By applying a
risk-based approach, we ensure that all our partners meet
our highest standards. Boku has established and published a
modern slavery statement which can be found on our website.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
57
Governance Report
Directors’ Report
The Directors present their report and the audited
financial statements for Boku, Inc. for the year ended 31
December 2023.
The preparation of financial statements is in compliance with
International Financial Reporting Standards issued by the
International Accounting Standards Board (IASB) (“IFRS”) and
International Financial Reporting Interpretations Committee
(“IFRIC”) Interpretations issued by the International Accounting
Standards Board (IASB).
Principal Activities
The principal activity of Boku, Inc. and its subsidiaries (the
“Group”) is the provision of digital payments, including mobile
wallets, real-time payments schemes, and direct carrier billing
for global merchants. These solutions enable merchants to
acquire new customers and accept online payments from
billions of consumers who prefer to pay without credit cards.
Business review and future developments
The review of the period’s activities, operations, future
developments and key risks is contained in the Strategic
Report on pages 4 to 15.
Directors
Directors’ interests
Directors’ share options and interests in shares can be found
in the remuneration report on page 46.
Directors’ indemnities
The Company has made qualifying third-party indemnity
provisions for the benefit of its Directors which were made
during the period and remain in force at the date of this
report. The Company also purchased and maintained
throughout the financial year Directors’ and Officers’ liability
insurance in respect of itself and its Directors.
Dividends
The Directors do not recommend a final ordinary dividend for
the period (FY22: $nil).
Events after the reporting period
Stuart Neal was appointed CEO on 1 January 2024 and
appointed as a Director of the Company on 17 January 2024.
Financial Risk management
Details of financial risk management are provided in note 23
to the financial statements.
The Directors who held office during the period and
subsequently were as follows:
Internal Control
The Board has overall responsibility for the Group’s system
of internal control and for reviewing its effectiveness. The
processes to identify and manage the key risks of the group
are an integral part of the internal control environment.
1. Richard Hargreaves
2. Jon Prideaux
3. Keith Butcher
4. Mark Britto
5. Stewart Roberts
6. Charlotta Ginman
7. Meriel Lenfestey
8. Loren I. Shuster
9. Stuart Neal (appointed 17 January 2024)
With regard to the appointment and replacement of Directors,
the Company is governed by its Bylaws (the US equivalent of
the Articles of Association) and related legislation. The Bylaws
may be amended by special resolution of the shareholders.
The Remuneration and Audit Committee reports can be found
on pages 41 and 37 respectively.
58
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Purchase of own shares
The Company, on 8 June 2023, announced an extension to
the share buyback programme, which commenced on 7 July
2022, to repurchase common stock with par value of $0.0001
per share in the capital of the Company (“Common Stock”)
up to an additional maximum aggregate consideration of
£10.5 million and up to an additional maximum of 5.25 million
Common Stock. During the period, the Company purchased
a total of 5,512,079 Common Stock on the open market at
an aggregate cost (exclusive of broker commission) of £7.86
million and an average cost of £1.43 per share.
No further shares have been purchased under the scheme
from 1 January 2024 to the date of this report.
Statement of Disclosure to the Auditors
All of the current Directors have taken all the steps that
they ought to have taken to make themselves aware of any
information needed by the Group’s auditors for the purposes
of their audit and to establish that the auditors are aware of
that information. The Directors are not aware of any relevant
audit information of which the auditors are unaware.
Auditors appointment
PricewaterhouseCoopers LLP were appointed during the
period to replace the resigning BDO LLP and have expressed
their willingness to continue in office and a resolution to re-
appoint them will be proposed at the annual general meeting.
Such processes, which are regularly reviewed and improved
as necessary, include strategic planning, approval of annual
budgets, regular monitoring of performance against budget
(including full investigation of significant variances), control
of capital expenditure, ensuring proper accounting records
are maintained, the appointment of senior management
and the setting of high standards for health, safety and
environmental performance. The effectiveness of the internal
control system and procedures is monitored regularly through
a combination of review by management, the results of which
are reported to and considered by the Audit Committee.
The system of internal control comprises those controls
established to provide assurance that the assets of the Group
are safeguarded against unauthorised use and to ensure the
maintenance of proper accounting records and the reliability
of financial information used within the business or for
publication. Any system of internal control can only provide
reasonable, but not absolute, assurance against material
misstatement or loss, as it is designed to manage rather than
eliminate the risk of failing to achieve the business objectives
of the Group.
Going Concern
The Group’s going concern assessment is based on forecasts
and projections of anticipated trading performance. The
assumptions applied are subjective and management applies
judgement in estimating the probability, timing and value of
underlying cash flows.
The Directors confirm that they have a reasonable expectation
that the Group will have adequate resources to continue
in operational existence for at least the next 12 months
from approval of these financial statements and meet its
financial obligations as they fall due for a period of at least 12
months from the date of signing these financial statements.
Accordingly, these financial statements are prepared on a
going concern basis.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
59
Governance Report
Directors’ Report
Substantial shareholdings
The Company has been advised of the following interests in
more than 3% of its ordinary share capital as at 19 February
2024:
Shareholder
Octopus Investments (London)
13.23%
Vitruvian Partners (London)
BlackRock Investment Mgt (London)
Capital Research Global Investors (Los Angeles)
Boku Inc Directors and Related Parties (London)
abrdn plc (Edinburgh)
Danske Capital Mgt (Copenhagen)
Janus Henderson Investors (London)
9.00%
7.99%
6.89%
6.55%
4.75%
3.61%
3.07%
55.09%
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulations.
The Company is incorporated in and subject to the laws
of the State of Delaware, USA, which does not require the
Directors to prepare financial statements for each financial
year. However, the Directors are required to do so to satisfy
the requirements of the AIM Rules for Companies. When
preparing the financial statements, the Directors are required
to prepare the Group financial statements in accordance
with an appropriate set of generally accepted accounting
principles or practice. The Directors have elected to use
International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB) (“IFRS”). The
Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the Group and of the profit or loss of the Group for
that period.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance
with IFRS subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group will
continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and enable
them to ensure that the financial statements comply with
the requirements of the IFRS. They are also responsible for
safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report
and the financial statements are made available on a website.
Financial statements are published on the Group’s website in
accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Group’s website is the
responsibility of the Directors. The Directors’ responsibility
also extends to the ongoing integrity of the financial
statements contained therein.
On behalf of the Board
Stuart Neal
Chief Executive officer
19 March 2024
60
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Financials
Independent Auditors’ Report
to the Directors of Boku, Inc.
Report on the audit of the financial
statements
Our audit approach
Context
Opinion
The Group’s financial statements are a consolidation of 31
legal entities and consolidation entries.
In our opinion, Boku, Inc.’s group financial statements:
• give a true and fair view of the state of the group’s affairs as
at 31 December 2023 and of its profit and cash flows for
the year then ended; and
• have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB).
We have audited the financial statements, included within the
Annual Report, which comprise: the Consolidated statement of
financial position as at 31 December 2023; the Consolidated
statement of comprehensive income, the Consolidated
statement of changes in equity and the Consolidated
statement of cash flows for the year then ended; and the notes
to the financial statements, comprising material accounting
policy information and other explanatory information.
Overview
Audit scope
• Our audit focussed on those entities with the most
significant contribution to the Group’s revenues. Of the
Group’s 31 legal entities, we identified 4, which in our view,
required an audit of their complete financial information for
Group reporting purposes. The Group engagement team
performed all the audits with the exception of the audit for
Boku Network Services Estonia OÜ where we engaged
component auditors.
• The reporting units within the scope of our work accounted
for 87% of Group revenue.
Key audit matters
• Valuation of deferred tax assets
Basis for opinion
Materiality
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s
Ethical Standard, as applicable to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
• Overall materiality: $600,000 based on approximately 5% of
adjusted profit before tax.
• Performance materiality: $420,000.
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
61
Financials
Independent Auditors’ Report to the Directors of Boku, Inc.
This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the key audit matter
Valuation of deferred tax assets
Recognition of the Group’s deferred tax
asset requires management judgement
and is a key area of audit effort due to
the quantum of the balance and the
judgements involved in determining the
likelihood of realisation of the asset.
The expectation that the asset will be
realised is dependent on a number of
factors, including whether there will be
sufficient taxable profits in future periods
to support utilisation of the asset.
Refer to note 2, note 7 and the Audit
Committee Report for further details.
We understood management’s processes in respect of assessing the recoverability
of deferred tax assets.
We tested the measurement of temporary differences and brought forward tax
losses by agreeing the calculation of temporary differences and agreeing positions to
supporting documentation including inputs from tax advisors and tax computations.
In respect of the recoverability of deferred tax assets, we evaluated management’s
assessment as to whether there were sufficient taxable profit forecasts to support
the recognition of the deferred tax assets and performed the following:
• verified the integrity of formulae and the mathematical accuracy of
management’s underlying model;
• evaluated and challenged management’s future cash flow forecasts (which
includes the profit before tax forecast which has been used as a proxy for
taxable profits), including comparing budgeted results to actual performance in
prior periods and the process by which the forecasts were prepared ensuring
consistency of forecasts with those used for the purpose of the Group’s going
concern and impairment assessments;
• tested and assessed the assumptions in relation to the reversal of temporary
differences;
• performed our own independent sensitivity analysis to understand the impact of
alternative profit scenarios on the recovery period; and
• verified the prior year adjustment calculations and disclosures to underlying
workings.
We used our own tax specialists to assist in our audit work.
Based on the procedures performed, we are satisfied that management’s forecast
taxable profits support the recognition of Group’s deferred tax assets and the
related disclosures in the financial statements are appropriate including the prior
year restatement.
62
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of
the group, the accounting processes and controls, and the
industry in which it operates.
The Group is organised into 31 legal entities and the Group
financial statements are a consolidation of these entities. The
legal entities vary in size. We identified 4 entities that required
a full scope audit of their financial information due to their
size. These were Boku Network Services Estonia OÜ, Boku
Network Services UK Ltd, Boku Payments, Inc. and Boku, Inc.
We also scoped in certain financial statement line items within
other legal entities due to their size. We also audited material
consolidation journals.
All legal entities were subject to procedures over cash and
cash equivalents.
Our audit scope was determined by considering the
significance of each legal entity’s contribution to revenue,
and individual financial statement line items, with specific
consideration to obtaining sufficient coverage over significant
risk areas.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing
and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the
effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole as follows:
Overall group
materiality
$600,000.
How we
determined it
Approximately 5% of adjusted profit
before tax
Rationale for
benchmark
applied
We consider that a profit based measure
adjusted for the fair value movement on
warrants to be appropriate and the focus
of investors.
For each component in the scope of our group audit, we
allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across
components was between $70,000 and $570,000. Certain
components were audited to a local statutory audit materiality
that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance
materiality was 70% of overall materiality, amounting to
$420,000 for the group financial statements.
In determining the performance materiality, we considered
a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with those charged with governance that we would
report to them misstatements identified during our audit above
$30,000 as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
63
Financials
Independent Auditors’ Report to the Directors of Boku, Inc.
Conclusions relating to going concern
Reporting on other information
Our evaluation of the directors’ assessment of the group’s
ability to continue to adopt the going concern basis of
accounting included:
• Obtaining management’s analysis of the going concern of
the Group and supporting forecasts;
• Understanding and assessing the key inputs into
management’s base case and severe but plausible
scenario, such as revenue growth rates;
• Considering the consistency of forecasts used in the
going concern model with those used in the recognition of
deferred tax and impairment assessments for goodwill;
• Considering the historical reliability of management’s
forecasting for cash flows by comparison budgeted results
to actual performance for the last year and for actual
performance in 2024; and
• Reviewing the disclosures in the financial statements
relating to the going concern basis of preparation, and
evaluating that these provided an explanation of the
Directors’ assessment that was consistent with the audit
evidence we obtained.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s
ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or
material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
Responsibilities for the financial
statements and the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Directors’ Responsibilities
Statement, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true
and fair view. The directors are also responsible for such
internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the 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.
64
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to the laws and regulations applicable
to payment processing, and we considered the extent to which
non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations
that have a direct impact on the financial statements such
as the AIM Rules for Companies and relevant tax legislation.
We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including
the risk of override of controls), and determined that the
principal risks were related to the posting of inappropriate
journal entries and the misappropriation of cash balances. The
group engagement team shared this risk assessment with the
component auditors so that they could include appropriate
audit procedures in response to such risks in their work. Audit
procedures performed by the group engagement team and/or
component auditors included:
• Review of correspondence with and reports to relevant
regulators across the Group;
• Review of management’s reporting to the Audit Committee
in respect of compliance and legal matters;
• Discussions with management and the Audit Committee,
including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
• Reviewing Board meeting and other relevant Committee
minutes to identify any significant or unusual transactions or
other matters that could require further investigation;
• Identifying and testing journal entries meeting specific
fraud criteria, including those posted to certain account
combinations;
• Reviewing legal expenses and whistleblowing reports;
• Independently confirming in excess of 99.9% of the cash
and cash equivalents financial statement line item with
third party financial institutions and performing alternative
procedures on the remaining immaterial balance to verify
existence;
• Tested 100% of bank reconciliations from the bank
statement to the general ledger at 31 December 2023; and
• Obtaining direct confirmations over selected merchant and
carrier balances.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
65
Financials
Independent Auditors’ Report to the Directors of Boku, Inc.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part
of our auditors’ report.
Use of this report
This report, including the opinion, has been prepared for
and only for the company’s directors as a body to satisfy the
requirements of the AIM Rules for Companies in accordance
with our engagement letter dated 24 September 2023 and for
no other purpose. We do not, in giving this opinion, 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, including without limitation under any contractual
obligations of the company, save where expressly agreed by
our prior consent in writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this
independent auditors’ report is Mark Jordan.
PricewaterhouseCoopers LLP
Chartered Accountants
London
19 March 2024
66
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Consolidated Statement
of Comprehensive Income
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Other Income
Operating profit
Note(s)
3
4
Fair value gain/ (loss) on warrants
3, 23
6
6
7
8
9
Finance income
Finance expense
Profit before tax from continuing operations
Taxation
Profit from continuing operations
Profit from discontinued operations
Total profit for the year
Other comprehensive income/ expense net of tax
Items that will or may be reclassified to profit or loss:
Foreign currency gain/(loss) on translation of foreign operations
Total other comprehensive income/ (expense) for the year
Total comprehensive income for the year attributable to equity holders of
the parent company
Earnings per share
Total
Basic EPS ($)
Diluted EPS ($)
from continuing operations
Basic EPS ($)
Diluted EPS ($)
Alternative performance measures
Adjusted EBITDA1
Year ended
31 December
2023
$’000
restated*
Year ended
31 December
2022
$’000
82,720
63,764
(2,050)
(1,771)
80,670
61,993
(71,057)
(54,742)
103
755
9,716
8,006
53
(3,470)
1,887
201
(249)
(675)
11,407
4,062
(1,321)
237
10,086
4,299
–
24,605
10,086 28,904
1,572
1,572
(3,576)
(3,576)
11,658
25,328
0.0339
0.0322
0.0339
0.0322
25,799
0.0969
0.0934
0.0144
0.0139
restated*
20,238
*The prior year has been restated to exclude the fair value loss on warrants from administrative expenses, further details can be found in note 2.
The accompanying notes form an integral part of these consolidated financial statement
1 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 page 119 for further details).
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
67
Financials
Consolidated Statement
of Financial Position
31 December
2023
restated*
31 December
2022
Note(s)
$’000
$’000
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Warrant contract asset
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Warrant contract asset
Financial asset at fair value through profit or loss
10
10
11
3, 23
7
13
3, 23
restated*
1 January
2022
$’000
669
4,661
63,117
–
758
696
2,784
3,233
56,620
56,230
1,840
1,519
15,306
15,518
15,981
77,308
77,196
84,428
148,522
90,509
82,897
122
–
192
5,600
14
150,859
116,513
299,503
212,814
–
–
62,440
145,337
376,811
290,010
229,765
15
17
16
15
3, 23
7
233,049
156,263
119,641
509
222
–
–
1,370
1,277
234,928
157,762
–
1,125
1,335
122,101
979
1,194
1,700
5,511
5,206
–
182
–
–
–
456
6,688
16
1,682
2,272
8,354
8,672
3,498
12,342
243,282
166,434
134,443
133,529
123,576
95,322
18
19
19
19
29
29
255,249
252,385
(4,718)
(6,628)
(6,290)
(1,835)
29
246,883
(2,714)
–
(110,403)
(120,713)
(148,876)
133,529
123,576
95,322
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Current tax payable
Bank loans and overdrafts
Current lease liabilities
Total current liabilities
Non-current liabilities
Other payables
Warrant liabilities
Deferred tax liabilities
Bank loans
Non-current lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the company
Share capital
Other reserves
Foreign exchange reserve
Treasury shares
Retained losses
Total equity
*Deferred tax positions and right-of-use assets in the year ended 31 December 2022 and opening balances as at 1 January 2022 have been restated, further details
can be found in note 2. The financial statements on pages 67 to 124 were approved by the Board for issue on 19 March 2024
Stuart Neal
Chief Executive Officer
Keith Butcher
Chief Financial Officer
68
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Consolidated Statement
of Changes in Equity
Share capital
Other
reserves
Foreign
exchange
reserve
Treasury
shares
Accumulated
losses Total Equity
Equity as at 1 January 2022
Correction of error
Note(s)
$’000
$’000
29
246,883
–
–
$’000
(2,714)
–
$’000
$’000
$’000
–
(161,752)
82,446
–
12,876
12,876
Equity as at 1 January 2022 (restated*)
29
246,883
(2,714)
–
(148,876)
95,322
Comprehensive income/ (expense)
Profit for the year
–
–
–
–
28,904
28,904
Other comprehensive income/ (expense)
–
–
(3,576)
–
–
(3,576)
Total comprehensive income for the year
attributable to equity holders of the parent
company
Transactions with owners in their capacity as
owners
Issue of share capital upon exercise of stock
options and RSUs
–
–
(3,576)
–
28,904
25,328
–
470
–
–
–
470
Taxation adjustment on share-based payment*
–
–
–
–
(741)
(741)
Share-based payments expense
20
–
5,032
–
–
–
5,032
Purchase of treasury shares
–
–
–
(1,835)
–
(1,835)
Equity as at 31 December 2022 (correction of
error*)
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income for the year
attributable to equity holders of the parent
company
Transactions with owners in their capacity as
owners
Issue of share capital upon exercise of stock
options and RSUs
29
252,385
(6,290)
(1,835)
(120,713)
123,576
–
–
–
–
10,086
10,086
–
–
1,572
–
–
1,572
–
–
1,572
–
10,086
11,658
–
406
–
–
–
406
Share-based payment expense
20
–
7,467
–
–
–
7,467
Taxation adjustment on share-based payment
–
–
–
–
224
224
Purchase of treasury shares
–
–
–
(9,802)
–
(9,802)
Issue of treasury shares to employees
–
(5,009)
–
5,009
–
–
Equity as at 31 December 2023
29
255,249
(4,718)
(6,628)
(110,403)
133,529
*Deferred tax positions in the prior years ended 31 December 2022 and opening balances as at 1 January 2022 have been restated, further details can be found in
note 2.
The accompanying notes form an integral part of these consolidated financial statements.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
69
Financials
Consolidated Statement
of Cash Flows
Operating activities
Cash generated from operations
Income taxes paid
Net cash from operating activities
Investing activities
Purchase of property, plant and equipment
Payments for internally developed software
Proceeds from discontinued operations (net of cash disposed)
Proceeds from sale of assets
Interest received
Net cash (used in)/ from investing activities
Financing activities
Principal elements of lease payments
Interest paid on leases
Issue of share capital on exercise of options and RSUs
Purchase of treasury shares
Cash received on sale of treasury shares
Interest paid on loan
Loan settlement costs
Repayment of bank loan
Net cash used in financing activities
Net increase in cash and cash equivalents
Effect of foreign currency translation on cash and cash equivalent
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form an integral part of these consolidated financial statements.
Year ended
31 December
2023
Year ended
31 December
2022
Note(s)
$’000
$’000
22
10
11
8
6
16
16
6
14
40,935
(338)
40,597
(434)
(5,430)
5,600
49,966
(314)
49,652
(470)
(4,866)
26,545
–
1
1,887
1,623
(1,478)
(171)
406
(9,802)
2,333
(78)
–
–
(8,790)
201
21,411
(1,556)
(235)
470
(1,835)
–
(127)
(25)
(8,125)
(11,433)
33,430
59,630
916
(5,557)
116,513
150,859
62,440
116,513
70
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Notes to the
Consolidated Financial Statements
1. General Information
Boku, Inc. is a public company incorporated and domiciled in the United States of America. The shares of the Company are
traded on AIM, a market of the London Stock Exchange Group plc. The registered office of the Company is located at 660 Market
Street, Suite 400, San Francisco, CA 94104, United States.
These consolidated financial statements comprise the Company (Boku, Inc.) and its subsidiaries (together referred to as the
“Group”).
The principal business of the Group is the provision of local payment solutions for its merchants.
Boku’s payments network provides multiple mobile payment methods, including via digital mobile wallets, direct carrier billing and
real-time account to account payment schemes.
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group meets its day-to-day working
capital requirements through its cash balances and also has a revolving credit facility that it can use. The Group’s forecasts and
projections, taking account of reasonably possible changes in trading performance, show that the Group expects to be able
to operate within the level of its current cash resources and bank facilities. Further information on the Group’s borrowings and
available facilities is given in Note 17 to these consolidated financial statements.
The Directors have prepared cash-flow forecasts covering a period of at least 12 months from the date of approval of the financial
statements to December 2024, to which they foresee that the Group will be able to operate within its existing facilities.
Furthermore, in carrying out the going concern assessment, the Directors considered a number of scenarios, including revenue
falling between 29% and 9% over the forecast, which would bring profit before tax in 2024 to break-even. This is a severe
but plausible scenario and it was concluded that the business would still have adequate resources to continue in operational
existence for at least 12 months from the approval of the accounts. Management also has the ability to identify cost savings, if
necessary, to help mitigate any impact on cash outflows.
The ongoing Russia/Ukraine conflict has not had a material impact on Group revenues.
The Directors confirm that they have a reasonable expectation that the Group will have adequate resources to continue in
operational existence for at least the next 12 months from approval of these financial statements and meet its financial obligations
as they fall due for at least the next 12 months from the date of signing these financial statements. Accordingly, these financial
statements are prepared on a going concern basis.
2. Accounting policies
Basis of preparation
The financial information has been prepared using the historical cost convention, except for derivative financial liabilities
recognised, as stated in the accounting policies below. These policies have been consistently applied to all years presented,
unless otherwise stated.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”)
and International Financial Reporting Interpretations Committee (“IFRIC”) as issued by the International Accounting Standards
Board (“IASB”).
The consolidated financial statements have been prepared on a going concern basis. These financial statements have been
prepared for a 12-month calendar year.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
71
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Basis of preparation continued
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated financial
statements are disclosed below in, “critical accounting estimates, assumptions and judgements”. There are deemed to be no
new standards, amendments and interpretations to existing standards, which have been adopted by the Group, that have had a
material impact on the financial statements effective from 1st January 2023.
The Group’s consolidated financial statements are presented in US Dollars, rounded to the nearest thousands (expressed as
$’000) unless otherwise indicated. The main functional currencies for the Company’s subsidiaries are US Dollar, Euro and Pounds
Sterling.
Basis of consolidation
The consolidated financial statements presents the results of the Company and its entities controlled by the Company (“the
Group”) made up to 31 December 2023.
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of
the following elements are achieved: power over the investee, exposure to variable returns from the investee, and the ability of the
investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that
there may be a change in any of these elements of control. Intercompany transactions and balances between Group companies
are eliminated in full on consolidation.
The consolidated financial information incorporates the results of business combinations using the acquisition method. In the
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their
fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive
income from the date on which control is obtained. They are deconsolidated from the date on which control ceases. The excess
of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. A
list of the subsidiary undertakings is given in Note 12 of the financial information.
There were no business transaction costs accounted for as a deduction from equity in the current or prior year.
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. Costs related to acquisitions, other than those directly attributable to
the issue of debt or equity, are expensed as incurred.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the
business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities
recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the profit or loss.
Restatement
During the change in auditors, an error in application of deferred tax recognition was identified relating to the look forward period
for future taxable profits. As a result, it was identified, that the Group had under-recognised deferred tax assets from prior years.
Accordingly, the opening consolidated statement of financial position as at 1 January 2022 and year ended 31 December 2022
has been restated. The opening balances at 1 January 2022 had increased deferred tax assets recognised from $3,105k to
$15,981k and the year ended 31 December 2022 had increased deferred tax assets recognised from $3,383k to $15,518k. The
net deferred tax asset recognised as at the 31 December 2023 balance sheet date is $15,124k (FY22: $15,518k).
72
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
The consolidated statement of comprehensive income in the year end 31 December 2022 has been restated to move the fair
value gain/(loss) on warrants from administrative expenses to a separate line below operating profit, to more appropriately reflect
the accounting judgement.
Additionally, for the year ended 31 December 2022 and opening balances as at 1 January 2022 amounts previously accounted
for under IFRS 16 as right-of-use assets of $429k and $340k respectively, were restated to prepayments in the consolidated
statement of financial position. In 2022, notes 4, 10 and 13 have also been restated to reflect the movement to prepayments and
the reduction in depreciation of $226k.
None of these adjustments have had any impact on the consolidated statement of cash flows.
Deferred tax
1 January 2022
Consolidated statement of Financial Position (extract)
Deferred tax asset
Accumulated losses
Consolidated Statement of Changes in Equity (extract)
Total equity
Deferred Tax
Net opening position
Net recognition in the year
P&L
Equity
Foreign exchange revaluation
Net closing position
A deferred tax asset (liability) has not been recognised for the following (Gross):
Non-deductible Reserves
Accrued Compensation
Stock Based Compensation
Other temporary and deductible differences
Unused tax credits
Unused tax losses
Total deferred tax assets (not recognised)
As originally
reported
Effect of
restatement
Group restated
amounts
$’000
$’000
$’000
3,105
161,752
12,876
(12,876)
15,981
148,876
82,446
12,876
95,322
253
2,396
2,359
–
37
–
12,876
–
12,876
–
253
15,272
2,359
12,876
37
2,649
12,876
15,525
39
84
1,819
527
189
27,952
30,610
(39)
(84)
227
(527)
(189)
94,840
94,228
–
–
2,046
–
–
122,792
124,838
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
73
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Restratement continued
31 December 2022
$’000
$’000
$’000
As originally reported
Effect of restatement Group restated amounts
Consolidated Statement of Financial Position (extract)
Deferred tax asset
Accumulated losses
3,383
132,848
12,135
(12,135)
Consolidated Statement of Changes in Equity (extract)
Opening balance (Total equity)
82,446
12,876
Profit for the year
Other comprehensive loss
Correction of error
Closing balance (Total equity)
Deferred Tax
Net opening position
Net recognition in the year
P&L
Equity
Foreign exchange revaluation
Net closing position
28,904
(3,576)
3,667
111,441
2,649
734
733
–
1
3,383
A deferred tax asset (liability) has not been recognised for the following (Gross):
Non-deductible Reserves
Accrued Compensation
Stock Based Compensation
Other temporary and deductible differences
Unused tax credits
Unused tax losses
Total deferred tax assets (not recognised)
60
56
1,939
321
189
11,082
13,647
–
–
(741)
12,135
12,876
(741)
–
(741)
–
12,135
(60)
(56)
(1,698)
(321)
(189)
17,976
15,652
15,518
120,713
95,322
28,904
(3,576)
2,926
123,576
15,525
(7)
733
(741)
1
15,518
–
–
241
–
–
29,058
29,299
74
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Fair value gain or loss on warrants
The prior year consolidated statement of comprehensive Income has been restated to exclude fair value loss on warrants of
$3,470k from administrative expenses. The impact on operating profit is detailed below:
31 December 2022
$’000
$’000
$’000
As originally reported
Effect of restatement Group restated amounts
Consolidated Statement of Comprehensive Income (extract)
Gross profit
Administrative expenses
Other Income
Operating profit
Fair value loss on warrants
Finance income
Finance expense
61,993
– 61,993
(58,212)
3,470
(54,742)
755
– 755
4,536
3,470 8,006
–
(3,470)
(3,470)
201
– 201
(675)
–
(675)
Profit before tax from continuing operations
4,062
– 4,062
Right-of-use assets
31 December 2022
$’000
$’000
$’000
As originally reported
(after restatement
from FV g/l warrants)*
Effect of restatement
Group restated amounts
Consolidated Statement of Financial Position (extract)
Non-current assets
Right-of-use assets
Current assets
3,662
(429)
3,233
Trade and other receivables
90,080
429
90,509
Alternative performance measures (extract)
Adjusted EBITDA
20,464
(226)
20,238
1 January 2022
$’000
$’000
$’000
As originally reported
Effect of restatement
Group restated amounts
Consolidated Statement of Financial Position (extract)
Non-current assets
Right-of-use assets
Current assets
5,001
(340)
4,661
Trade and other receivables
82,557
340
82,897
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
75
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Adoption of new and revised standards
New and amended standards that are effective for the current year
A number of new or amended standards became applicable from 1 January 2023 and as a result the Group has applied the
following standards:
• Amendments to IFRS 16: Property, Plant and Equipment – Proceeds before Intended Use
• Amendments to IFRS 3: Reference to Conceptual Framework
• Amendments to IAS 1: Presentation of Financial Statements – Classification of Liabilities
• Amendments to IAS 37: Onerous Contracts – Cost
The above requirements did not have a material impact on the consolidated financial statements . There are no other new or
revised standards or interpretations that are effective for the first time for the financial year beginning on or after 1 January 2023
that would be expected to have a material impact on the Group.
New standards, interpretations and amendments not yet effective
Name
Description
Effective date
IAS 1 (amendments)
Non-current liabilities with covenants
1 January 2024
The Directors do not expect the adoption of these standards and amendments to have a material impact on the consolidated
financial statements.
Critical accounting estimates, assumptions and judgements
In preparing these consolidated financial statements, the Group has made its best estimates and judgements of certain amounts,
giving due consideration to materiality. Actual results may differ from those reported.
The Group regularly reviews these estimates and judgements and updates them as required. Unless otherwise indicated, the
Group does not believe that there is a significant risk of a material change to the carrying value of assets and liabilities within the
next financial year related to the accounting judgements and assumptions described below.
The Group considers the following to be a description of the most significant estimates and judgements, which require the Group
to make subjective and complex judgements related to matters that are inherently uncertain.
Judgements
Goodwill, Intangible assets acquired in a business combination
The useful economic lives of intangible assets (other than goodwill) acquired in a business combination are estimated in order
to calculate the appropriate amortisation charge. Goodwill is subject to an annual impairment review which is performed by
comparing the balance value with the recoverable amount of the asset or CGU.
Annually for Goodwill, or where an indication of impairment exists, value in use calculations are performed to determine the
appropriate carrying value of the asset. The value in use calculation requires the estimations of the future cash flows expected to
arise for the CGU and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than
expected, a material impairment loss may arise. See note 11 for specific judgements and assumptions used to calculate the value
in use of the CGU.
It is necessary to consider the forecasted cashflow of the Group when comparing against the carrying value and why it has been
considered that there is only one payments CGU. This is since the contracts in place with a merchant, regardless of whether they
have been acquired will generally follow the same cashflow for that specific merchant.
76
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Discontinued operations
The Identity business was sold on 28th February 2022 and the result of the sale is presented in Note 8 Discontinued operations.
Capitalised internally generated intangible assets
Other intangible assets include acquired merchant relationships, IT Platforms and Domain names as well as internally developed
intangibles (capitalised development costs). Acquired intangible assets are recognised at fair value at the acquisition date and are
amortised on a straight-line basis over their estimated useful lives. Initial capitalisation cost for internally generated intangibles is
based on the developer estimate of the time spent on development projects.
Deferred tax
In recognising income and deferred tax assets, management makes judgements of the likely outcome of future taxable profits for
certain jurisdictions. Judgements are also made regarding the probability of these forecasts.
Critical accounting Estimates
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments
at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most
appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining
the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield
and making assumptions about them. Where such a model is required, the Group uses the Black Scholes model to calculate its
share-based payments expense (please refer to Note 20 for full details).
Taxation
In recognising income and deferred tax assets, management makes estimates of the likely outcome of future taxable profits for
certain jurisdictions. Where the outcome of such matters is different or expected to be different from previous assessments made
by management, a change to the carrying value of income tax assets and liabilities will be recorded in the period in which such a
determination is made.
Fair value measurement - Amazon warrants
The Group’s accounting for warrants issued to Amazon is determined in accordance with accounting standards for financial
instruments and revenue recognition. The initial fair value of the warrants issued were recognised as a contract asset and liability
respectively (see note 3 for more details). The contract asset is amortised to revenue (reducing revenue) over the 7-year vesting
period based on Amazon revenue earned to date as a proportion of total estimated Amazon revenue over the 7-year vesting
period. The derivative financial liability is remeasured to fair value at each reporting date. The fair value movement attributable to
the change in the number of shares expected to vest due to a change in estimated Amazon revenues over the 7-year vesting
period is recorded as an equal and opposite increase to the financial liability and contract asset, based on the fair value of the
warrant at inception. The fair value movement attributable to the change in the fair value of the underlying warrants is recorded
as gains or losses in profit or loss. The determination of fair values involves assumptions and estimates of revenue and share
price volatility, risk-free rate, and future Amazon revenues. Due to the long-term nature of the warrants, such estimates involve
significant estimation uncertainty.
Revenue from contracts with customers
Boku builds custom digital payment connections between many payment methods (LPMs) and merchants.
The merchant’s end users will make an online purchase via a LPM, Boku will provide the reconciliation, connection and often
transfer of these funds from the LPM to the Merchant. Revenue generated is the service fee from this connection. In this regard,
Boku acts as the agent between the merchant and LPMs.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
77
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Fair value measurement - Amazon warrants continued
For each connection with a merchant, a contract is agreed. It is determined that there is one performance obligation for
each contract, being the facilitation of the payment connection between the merchant and their end users. This service fee is
recognised at a point in time as the obligation is fulfilled when the transaction occurs, since the risks and rewards have been
transferred on completion of the transaction. Therefore, there is no deferred revenue recognised in the current or prior year.
Revenue is initially recorded as accrued income prior to receiving a statement of information from the LPMs. Accrued income is
recognised as a contract asset within trade and other receivables.
Collection of service fees will vary depending on the nature and agreement between each merchant.
The different types of service fees can be categorised as follows:
i. Settlement
For each purchase a merchant’s end user makes, Boku will collect the funds from the LPM, deduct a service fee and pass the
net funds on to the merchant. On initial receipt of a statement of information from the LPM, accrued revenue is recognised as a
percentage of the underlying transaction and a corresponding payable is recognised as a contract liability within trade and other
payables, representing the amount owed from the LPM.
Amounts become due to the merchant on receipt of funds from the LPM and are settled in the original currency of the transaction.
Additional settlement fees may arise under the following circumstances:
a) Foreign currency translation fees
An additional foreign exchange fee is charged when settlement is required by the merchant in another currency.
b) Advanced payment service fees
An additional fee is charged when the merchant requires early settlement, prior to Boku receiving funds from the LPM.
ii. Transactional
Boku will provide the connection between the merchant and their end user and the LPM will pay the funds directly to the
merchant. A service fee is then due from the merchant to Boku.
Identity Revenue (discontinued)
On 28 February 2022, the Group sold its entire Identity business (Boku Identity Inc. and its 100% subsidiary Boku Mobile Solution
Ireland Ltd) to Twilio (see Note 8 for full details).
Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly
distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operations;
• is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified
as held for sale (see Note 8 for details).
When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is represented
as if the operation had been discontinued from the start of the comparative year.
78
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Cost of sales
Cost of sales is primarily related to the monthly fees and some service charges from MNOs and other providers, customer
services fees, some marketing expenses and bad debt.
Operating Segments
The Group determines and presents operating segments-based information provided internally to the Group’s operating decision
makers, defined in the Group as the General Management Committee (“GMC”).
The Board considers that the Group’s provision of a payment platform for the payment processing of virtual goods and digital
goods purchases constitutes one operating and one reporting segment (Payments segment). Management reviews the
performance of the Group by reference to total results of a segment against budget on a monthly basis.
Retirement Benefits: Defined contribution schemes
The Group operates various pension schemes in various jurisdictions, all being defined contribution schemes (pension plans). A
defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has
no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior periods.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognised as an employee benefit expense when they are due.
In the United States, the Group has a 401(k) plan, a type of defined contribution scheme in which all United States employees can
participate after meeting eligibility requirements. Participants may elect to have a portion of their salary deferred and contributed to
the scheme up to the limit allowed by applicable income tax regulations. The Company has made a matching contribution to the
scheme for the years ended 31 December 2023 and 31 December 2022.
Contributions to defined contribution schemes are charged to the consolidated statement of comprehensive income in the year to
which they relate.
Intangible assets and Goodwill
Goodwill
Goodwill arising on consolidation represents the excess of the cost of a business combination over the Group’s interest in the fair
value of identifiable assets, liabilities and contingent liabilities acquired from the business combination, at the date of acquisition.
Costs directly attributable to the acquisition are expensed in the period. Goodwill is initially measured at cost and subsequently
measured at cost less any accumulated impairment losses.
An impairment in carrying value is charged to the consolidated statement of comprehensive income. An impairment loss
recognised for goodwill is not reversed.
For the purposes of impairment testing, Goodwill is allocated to the Group’s cash generating unit (CGU). Goodwill is not amortised
but is tested annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. The recoverable amount is determined based on value in use calculations. The use of this method requires the
estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.
The major assumptions are disclosed in note 11.
Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of
consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
79
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Intangible assets acquired as part of a business combination
Intangible assets acquired in a business combination are identified, valued and recognised separately from goodwill where they
satisfy the definition of an intangible asset. All intangible assets acquired through business combinations are amortised over their
useful lives.
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses. The carrying values are tested for impairment when there is an indication that
the value of the assets might be impaired.
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their
useful economic lives.
Internally generated intangible assets (development costs)
Expenditure on internally developed software products and substantial enhancements to existing software product is recognised
as intangible assets only when the following criteria are met:
1) it is technically feasible to develop the product to be used or sold;
2) there is an intention to complete and use or sell the product;
3) the Group is able to use or sell the product;
4) use or sale of the product will generate future economic benefits;
5) adequate resources are available to complete the development; and
6) expenditure on the development of the product can be measured reliably.
The capitalised expenditure represents costs directly attributable to the development of the asset from the point at which the
above criteria are met up to the point at which the product is ready to use. The costs include external direct costs of materials
and services consumed in developing and obtaining internal-use computer software, and payroll and payroll-related costs
for employees who are directly associated with and who devote time to developing the internal-use software. If the qualifying
conditions are not met, such development expenditure is recognised as an expense in the period in which it is incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in the
statement of comprehensive income as incurred.
Amortisation rates
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line
method over their estimated useful lives and is recognised in the statement of comprehensive income within administrative
expenses. Goodwill is not amortised.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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The significant intangibles recognised by the Group and their useful economic lives are as follows:
Intangible asset
Trademarks
Merchant relationships
Developed technologies
Domain names
Internally developed software
Useful economic life
Indefinite life – not amortised
5 -10 years
2-10 years
10 years
3 years
Trademarks do not expire after a period of time (unlike patents and copyrights). They exist as long as the owner continues to use
the trademark. Therefore, trademarks are considered to have an indefinite life, and are not amortised, as trademarks can retain
their value forever, and contribute to net cash inflows indefinitely. Trademarks will not be amortised as their useful life is determined
to be infinite.
Property, plant and equipment
Property, plant and equipment are held under the cost model and are stated at historical cost less accumulated depreciation and
any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance expenditures are charged to the consolidated statement of comprehensive income
during the financial year in which they are incurred.
Depreciation is calculated using the straight-line method to write off the cost of each asset to its residual value over its estimated
useful life as follows:
Office equipment and fixtures and fittings
Computer equipment and software
Leasehold improvement
Right-of-use assets
3-5 years
3 years
3-5 years
Shorter of useful life of the asset or lease term
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in
the consolidated statement of comprehensive income.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Carrying
amounts are reviewed on each reporting date for impairment. Where the carrying amount of an asset is greater than its estimated
recoverable amount, it is written down immediately to its recoverable amount.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, Restricted Cash (see below and note 14) and
other short term highly liquid investments with original maturities of three months or less.
Restricted cash
The Group holds merchants’ cash in transit and in segregated accounts of some of its regulated subsidiaries and discloses
restricted cash separately from own cash. Other funds not available to the Group are also classified as restricted and presented
as restricted cash.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
81
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
Financial assets
Financial assets are classified on initial recognition at fair value and then subsequently measured at amortised costs, fair value
through other comprehensive income and fair value through profit or loss.
i. Financial assets at amortised cost
The Group’s financial assets mainly comprise of cash, trade and other receivables. These assets are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market (trade receivables), but also incorporate other
types of contractual monetary asset.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost less provisions for
impairment based upon an expected credit loss methodology. The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allowance matrix for all trade receivables (including accrued
receivables). A provision of the lifetime expected credit loss is established upon initial recognition of the underlying asset and is
calculated using historical account payment profiles along with historical credit losses experienced. The loss allowance is adjusted
for forward looking factors specific to the debtor and the economic environment. The amount of the provision is recognised in the
consolidated statement of comprehensive income.
ii. Financial assets at fair value through profit and loss
The holdback receivable asset outstanding from the sale of the Identity business in the prior year and the Amazon warrant
contract asset are held at fair value through profit and loss.
Financial liabilities
The Group classifies its financial liabilities into two categories, depending on the purpose for which the liability was acquired.
Fair value through profit and loss (“FVTPL”):
The warrant liability is classified as a financial liability at FVTPL and valued using a combination of the Black-Scholes Model and
Monte Carlo simulation. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement
(due to changes in the fair value of the warrant) recognised in profit or loss.
Financial liabilities at amortised cost:
The Group includes in this category loans, trade and other payables and liabilities to related parties.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument.
Trade and other payables (excluding other taxes, social security costs and deferred income) and other short-term monetary
liabilities, are initially measured at their fair value plus, if appropriate, any transaction costs that are directly attributable to the issue
of the financial liability. These financial liabilities are subsequently carried at amortised cost.
Bank borrowings and other interest-bearing liabilities are initially recognised at fair value net any of transaction costs directly
attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost ensuring
the interest element of the borrowing is expensed over the repayment period at a constant rate.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement of comprehensive income.
The gain or loss for fair value changes should be classified based on the classification of the underlying instruments. As the fair
value changes of the Amazon warrant liability are highly dependent on the share price of Boku, Inc. rather than the business
performance in the reporting year these gains and losses have been classified as exceptional items and this policy will be applied
consistently going forward.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The provision for employer taxes on future employee share instruments are not
discounted as it is not considered material.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made on or before the commencement date less any lease incentives received. Unless
the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use
assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets
are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. Break clauses may be provided in the lease agreements, calculations are prepared up to the
end of the lease term. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-
substance fixed lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value
assets recognition exemption to leases of office equipment that are considered of low value (i.e., below $5,000). Lease payments
on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
83
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Incremental borrowing rate
IFRS 16 Leases requires that all the components of the lease liability are required to be discounted to reflect the present value of
the payments. The discount rate to use is the rate implicit in the lease, unless this cannot readily be determined, in which case the
lessee’s incremental borrowing rate is used instead.
The definition of the lessee’s incremental borrowing rate states that the rate should represent what the lessee ‘would have to pay
to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment.’ In applying the concept of ‘similar security’, a lessee uses the right-of-use asset granted
by the lease and not the fair value of the underlying asset. This is because the rate should represent the amount that would be
charged to acquire an asset of similar value for a similar period.
In practice, judgement may be needed to estimate an incremental borrowing rate in the context of a right-of-use asset, especially
when the value of the underlying asset differs significantly from the value of the right-of-use asset.
The discount rate will be revised, in line with IFRS 16, and the lease liability remeasured only when:
• there is a change in the lease term,
• a change in the assessment of whether the lessee is reasonably certain to exercise an option to purchase the underlying asset
or
• a change in floating interest rates, resulting in a change in the future lease payments (this approach is consistent with IFRS 9’s
requirement for the measurement of a floating rate financial liabilities subsequently measured at amortised cost)
A lessee is not required to reassess the discount rate when there is a change in future lease payments due to a change in an
index. – e.g. the consumer price index.
Accounting policies continued
Share Capital
Ordinary shares are classified as equity and are stated at the proceeds received net of direct issue costs.
Share buyback
On 7th July 2022 the Group announced the share buyback programme to repurchase common stock in the capital of the
Company (Boku, Inc.) up to a maximum aggregate consideration of £8 million and up to a maximum of five million Common
Stock.
The purpose of the Buyback Programme is to hold the Common Stock in treasury for the purpose of satisfying future obligations
in relation to the staff equity remuneration programme.
The Buyback Programme will operate within certain pre-set parameters, including that the maximum price paid per Common
Stock shall be 105 per cent of the trailing 5-day average mid-market price, and in accordance with the authority granted by the
Company’s Board.
The Buyback Programme became effective from 7th July 2022 with an expiry date of 30 June 2023, or earlier, if either the
maximum aggregate number of Common Stock have been purchased or the maximum aggregate consideration had been
reached. On 8 June 2023 it was announced that the Buyback Programme was to be extended for a further 12 months (the
“Extended Buyback Programme”) and will expire on 30 June 2024, or earlier, if either the maximum aggregate number of
Common Stock have been purchased or the maximum aggregate consideration has been reached. The extended programme will
involve the repurchasing of common stock with par value of $0.0001 per share in the capital of the Company (“Common Stock”)
up to an additional maximum aggregate consideration of £10.5 million and up to an additional maximum of 5.25 million Common
Stock.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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Due to the limited liquidity in the issued Common Stock, a buy-back of Common Stock pursuant to the Authority on any trading
day may represent a significant proportion of the daily trading volume in the Common Stock on AIM and may exceed 25 per cent
of the average daily trading volume. Accordingly, the Company will not benefit from the exemption contained in Article 5(1) of the
UK version of the Market Abuse Regulation (Regulation (EU) No 596/2014) (as in force in the UK and as amended by the Market
Abuse (Amendment) (EU Exit) Regulations 2019 and the Financial Services Act 2021).
The cost of treasury shares held is presented as a separate reserve (the “treasury share reserve”) and recorded in equity. Any
excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited
to other reserves.
Share-based payments
Where equity settled share options and Restricted Stock Units (‘RSUs’) are awarded to employees, the fair value of the options
or RSUs at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options or
RSUs that eventually vest.
Where the terms and conditions of options or RSUs are modified before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income
over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is
charged with the fair value of goods and services received.
Where options are cancelled within the vesting period, the remaining cost of the options is accelerated and charged to the
statement of comprehensive income in the year. When an employee leaves the Group, unvested grants are forfeited and the
cumulative share-based payment expense is reversed on the leaving date. Unvested RSUs are forfeited on leaving the Group for
any reason including as part of discontinued operations.
The Group’s scheme, which awards shares in the parent entity, includes recipients who are employees in the parent company and
subsidiaries. In the consolidated financial statements, the transaction is treated as an equity-settled share-based payment, as the
subsidiary has received services in consideration for Boku, Inc’s equity instruments. An expense is recognised in the consolidated
Group Income statement for the fair value of share-based payment over the vesting year, with a credit recognised in equity. In the
subsidiaries’ financial statements, the awards, in proportion to the recipients who are employees in said subsidiary, are treated
as an equity-settled share-based payment, as the subsidiaries do not have an obligation to settle the award. An expense for the
grant date fair value of the award is recognised over the vesting period, with a credit recognised in equity. The credit is treated as
a capital contribution, as the parent company is compensating the subsidiaries’ employees with no cost to the subsidiaries where
there is no expectation to recharge the cost. In the parent Company’s financial statements, there is no share-based payment
charge where the recipients are employed by a subsidiary, with the parent company recognising an increase in the investment in
the subsidiaries as a capital contribution from the parent and a credit to equity.
RSU’s issued in connection with business combinations as replacements for instruments held by employees are treated as
part of the consideration transferred to the extent that the Company is obliged to issue the replacement awards and that they
compensate for service that has been provided pre-combination. To the extent awards are voluntary or that they relate to the
provision of future services they are treated as a post-combination expense.
Share options and RSUs which will incur future employer payroll taxes on exercise, are accrued for the future cost of Employer’s
National Insurance from the point the options are granted over their vesting period. This liability is then amended at each
subsequent reporting date under IFRS 2.
Taxation
The income tax expense represents the sum of the tax currently payable and deferred tax. Deferred tax relating to the timing
differences arising on share-based payments recognised in equity, is also recognised in equity and not as a tax expense.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
85
Financials
Notes to the Consolidated Financial Statements
2. Accounting policies continued
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. Current taxes are calculated according to local tax rules, using tax rates enacted or substantially
enacted at the reporting date.
A provision is recognised for those matters for which the tax determination is uncertain, but it is considered probable that there
will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to
become payable. The Group’s method for calculating the tax provision under IFRS on an individual entity basis for the year ending
31 December 2023, involves the following approach.
Entities are categorised according to a materiality threshold, considering current tax impacts and deferred tax effects from
categories such as share-based payments, carried forward losses, and PPE. Tax provisioning calculations for immaterial entities
utilise profit/(loss) before tax figures multiplied by foreign tax rates. Material entities include corporations in the UK and USA. These
entities undergo a more detailed calculation process, with US and UK group entities preparing the tax provision closely aligned
with their actual tax return. This approach ensures that the Group’s tax provision aligns accurately with its tax obligations under
IFRS on an individual entity basis.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of
financial position differs from its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting or taxable profit; and
• investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that
the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and unused tax loses can be utilised.
The amount of the deferred asset or liability is determined using tax rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances
are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
• the same taxable group company; or
• different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets
and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities
are expected to be settled or recovered.
Presentational currency
The presentational currency for the Group is US dollars, as the company is incorporated in the USA which is the currency of its
primary economic environment in line with IAS 21. Boku Group has its main contracts, assets, intellectual property.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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Functional currency
The functional currency for subsidiaries is the local currency of the entity’s country of incorporation. Items included in the financial
statement of each of the Group’s entities are measured in the functional currency of each entity.
Foreign currency
Foreign currency transactions and balances
i) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions.
ii) Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange
rate at the reporting date.
iii) Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the exchange rate.
iv) Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at
the date of the transaction.
v) Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the
reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the
income statement within administrative expenses.
vi) Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments (including purchased intangible
assets) to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
Consolidation of foreign entities
On consolidation, the results and financial position of all the Group entities that have a functional currency different from the
presentation currency of the Group are translated into the presentation currency as follows:
i) Assets and liabilities for each Consolidated statement of financial position presented are translated at the closing rate at the
date of that Consolidated statement of financial position.
Income and expenses for each Consolidated statement of comprehensive income item are translated at average exchange
ii)
rates; and
iii) All resulting exchange differences are recognised as a separate component of equity.
Exchange differences are recycled to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
87
Financials
Notes to the Consolidated Financial Statements
3. Revenue from contracts with customers and other segmental disclosures
The Group’s revenue is principally service fees earned from merchants. All revenue is earned at the time the transactions is
processed and as a result, all revenue is recognised at one point in time. Therefore, at 31 December 2023 and 31 December
2022, the Group does not have deferred revenue on the Consolidated statement of financial position.
Fees are calculated as a percentage of the value of transaction. Additional fees are also earned when a merchant requires
settlement in a foreign currency from the currency received, or before the funds are received from LPMs:
Revenue
2023
$’000
82,720
2022
$’000
63,764
The geographical analysis of the revenue by location of the users is presented below:
Group Revenue by Region
Continuing Operations Payments
$’000 USD
Americas
APAC
EMEA
Grand Total
2023
3,204
47,230
32,286
%
3.9%
57.1%
39.0%
82,720
100.0%
Group Revenue by Region
Continuing Operations Payments
$’000 USD
Americas
APAC
EMEA
Grand Total
An analysis of non-current assets by geographical market is given below:
United States of America (continuing operations)
Europe
Rest of the World
Total
2022
628
36,167
26,969
63,764
2023
$’000
50,240
11,504
258
62,002
%
1.0%
56.7%
42.3%
100.0%
restated*
2022
$’000
48,502
12,724
452
61,678
*Right-of-use assets in the prior year were restated to prepayments, see note 2 for further details.
In FY23 there were four customers (FY22: one customer), with revenue amounting to more than 10% of the payments segment
revenue, contributing $57.6m (FY22: $30.9m).
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
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Amazon warrants
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.
Under the agreement, the Group issued warrants to Amazon allowing them to purchase common stock that will vest
incrementally, based on the amount of revenue earned by the Group from Amazon via Boku payment processing methods.
The warrant agreement grants Amazon the right to acquire up to 11,215,142 shares of common stock in the Group (equivalent
to 3.75% of the Group’s total common stock as at the inception of the warrant agreement). 747,676 shares of common stock
vested immediately on the signing of the warrant agreement on 16 September 2022. 209,350 additional shares of common stock
will vest for every $1 million of revenue generated by the Group under its service level agreement with Amazon over a 7-year
vesting period ending 15 September 2029. No further warrants will vest if $50 million of revenue is generated under the service
level agreement, which results in a final vesting increment of 209,316 shares of common stock. The exercise price of vested
warrants is 81.20p per share, based on the 30-day volume weighted average trading price as at 16 September 2022.
The Group has determined that the 747,676 warrants of common stock that vested immediately on signing of the warrants are
equity instruments under IAS 32, as they represented a fixed number of shares that will be exercised at a fixed price. The warrants
are therefore not accounted for until they are exercised and paid, at which point share capital and other reserves will be recorded.
The Group has determined that the remaining warrants linked to revenue under the service level agreement are within the scope
and revenue recognition and financial instruments accounting standards. The warrants represent a derivative financial instrument
classified as a financial liability in accordance with IAS 32 and IFRS 9, remeasured to fair value with gains and losses recorded in
profit or loss. The warrants also represent non-cash consideration payable to a customer under IFRS 15, which is recorded as a
reduction to revenue and measured at fair value, but not subsequently remeasured.
At inception of the warrant, an equal and opposite derivative financial liability and corresponding contract asset were recorded at
fair value, based on the total number of warrants expected to vest (linked to forecasted Amazon revenues under the service level
agreement) and the fair value a single warrant.
The contract asset, which effectively represents a prepaid or deferred volume rebate, is amortised to revenue based on Amazon
revenues to date as a proportion of total expected Amazon revenues over the 7-year vesting period.
The derivative financial liability is remeasured to fair value at each reporting date. The fair value movement attributable to the
change in the number of shares expected to vest due to a change in estimated Amazon revenues over the 7-year vesting period
is recorded as an equal and opposite increase to the financial liability and contract asset, based on the fair value of the warrant at
inception. The fair value movement attributable to the change in the fair value of the underlying warrants is recorded as gains or
losses in profit or loss within operating profit.
The initial fair value of the warrants at inception was $1,755,640, based on a fair value of 1 warrant of $0.348 and a total number
of warrants expected to vest over the 7-year vesting period of 5,049,288. As at 31 December 2022, the total number of warrants
expected to vest decreased to 4,992,086, resulting in a decrease to the contract asset and financial liability of $19,862, and
the fair value of 1 warrant increased to $1.043, resulting in a loss of $3,470,333. As at 31 December 2023, the total number of
warrants expected to vest increased to 5,333,781, resulting in an increase to the contract asset and financial liability of $358,774,
and the fair value of 1 warrant decreased to $1.033, resulting in a gain of $53,476. The fair value of the warrants was determined
using a combination of Monte Carlo Simulation and Black-Scholes Model valuation methods and are classified within Level 3 of
the fair value hierarchy, see Note 23 for further details.
Amounts recognised from amortisation of the warrant contract assets in the year were as follows:
31-Dec-23
31-Dec-22
Amortisation to revenue
$’000
108
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
$’000
25
89
Financials
Notes to the Consolidated Financial Statements
3. Revenue from contracts with customers and other segmental disclosures continued
Identity revenue (discontinued)
On 28 February 2022, the Group sold the entire Identity business segment. As a result, from 1st March 2022, the Group reported
its financial statements on a single segment basis: “Payments segment”. The Identity segment results for the two months of 2022
are presented below under ‘discontinued operations’. The Group operated with only one operating segment through financial year
2023, the Payments Segment. Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker has been identified as the management team including the
Chief Executive Officer and the Chief Financial Officer. The Group CEO and CFO review the monthly management reports for both
segments before sending the results to the Board.
4. Administrative expenses
Operating profit from continuing operations is stated after charging:
Staff costs (excluding share-based payments expense - Note 5)
Depreciation of property, plant and equipment (Note 10)
Right-of-use asset depreciation (Note 10)
Amortisation of intangible assets (Note 11)
Impairment of intangible assets (Note 11)
Share-based payments expense (Note 20)
Foreign exchange loss
2023
$’000
restated*
2022
$’000
39,981
30,946
385
395
1,430
1,411
5,742
3,631
–
1,264
7,595
5,165
1,034
796
*Right-of-use assets in the prior year were restated to prepayments, see note 2 for further details.
5. Employee information
Included in administrative expenses are costs related to employee benefits, analysed as follows:
Payroll costs
Salaries
Short-term benefits
Social security costs
Pension costs
Other staff costs
Staff costs excluding share-based payments
Share-based payments
Total staff costs
2023
$’000
32,536
1,767
4,293
249
1,136
39,981
7,595
47,576
2022
$’000
24,805
1,390
3,339
236
1,176
30,946
5,165
36,111
90
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Key management personnel compensation was made up as follows:
Salaries
Short-term benefits
Social security costs
Share-based payments
Long-term employee benefits
Total compensation
6. Finance income and expense
Finance income
Interest income from bank deposits
Total finance income
Finance expenses
Interest on bank loans
Other interest payables
Interest on operating leases
Amortisation of debt discount
Total finance expenses
2023
$’000
5,104
101
1,108
3,402
18
9,733
2022
$’000
3,847
95
497
2,952
16
7,407
2023
$’000
2022
$’000
(1,887)
(201)
(1,887)
(201)
76
2
171
–
121
6
235
313
249
675
Net finance (income)/ expense
(1,638)
474
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
91
Financials
Notes to the Consolidated Financial Statements
7.Taxation
Current tax
Current tax on profits for the year
Foreign tax
Adjustments in respect of prior years
Total current tax
Deferred tax
Origination and reversal of temporary differences
Adjustments in respect of prior years
Total deferred tax
Total tax expense/(credit)
2023
$’000
427
903
(7)
2022
$’000
239
257
–
1,323
496
355
(357)
(2)
1,321
(1,870)
1,137
(733)
(237)
The reasons for the difference between the actual tax charge for the period and the applicable rate of income tax of the US
reporting entity applied to the results for the period are as follows:
Profit before tax
Tax rate (US income tax rate)
Profit before tax multiplied by the applicable rate of tax:
Variance in overseas tax rates
Impact of change in tax rates
Impact of difference between CT & DT rate
Expenses not deductible for tax purposes
Utilisation of tax losses
Non qualifying depreciation
Adjustments in respect of prior years
Foreign tax
Other differences
US state taxes/ Withholding taxes
Total tax (credit)/ expense
2023
$’000
2022 (restated)*
$’000
11,407
4,062
21%
2,395
21%
853
28
1,182
(204)
–
1,010
–
1,003
1,143
(3,532)
(6,429)
7
–
(364)
1,137
249
77
288
–
441
1,800
1,321
(237)
*Deferred tax positions in the prior years ended 31 December 2022 and opening balances as at 1 January 2022 have been restated, further details can be found in
note 2.
92
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Deferred Tax
Net opening position
Net recognition in the year
P&L
Equity
Foreign exchange revaluation
Net closing position
2023
$’000
2022 (restated)*
$’000
15,518
15,525
(394)
(7)
2
733
(396)
(741)
–
1
15,124
15,518
*Deferred tax positions in the prior years ended 31 December 2022 and opening balances as at 1 January 2022 have been restated, further details can be found in
note 2.
The net closing position is made up of:
• The deferred tax liability at 31 December 2023 is $182k (2022: $NIL Restated). The current year deferred tax liability relates to
tax positions connected with the Boku, Inc. UK fixed temporary differences.
• The deferred asset of $15,306k (2022: $15,518k restated) relates primarily to the recognition of the US and UK available losses
which management believe can be utilised within the next eight years. Each year management assess the usability of the
deferred assets.
A deferred tax asset/ (liability) has not been recognised for the following items:
Stock Based Compensation
Other temporary and deductible differences
Unused tax losses
Total deferred tax assets
2023
$’000
–
(7,925)
6,197
(1,728)
2022 (restated)*
$’000
241
–
29,058
29,299
*Deferred tax positions in the prior years ended 31 December 2022 and opening balances as at 1 January 2022 have been restated, further details can be found in
note 2.
The Group has carried forward losses and accelerated timing differences at the reporting date as shown below. In respect of its
UK subsidiary, these can be carried forward and offset against UK taxable income indefinitely. In respect of its US entities, net
operating loss carry forwards can be carried forward and offset against taxable income for 20 years for losses incurred up to and
including 31 December 2017. All net operating loss carry forwards incurred after 31 December 2017 can be carried forward and
offset against US taxable income indefinitely. Utilisation of net operating loss or tax credit carry forwards may be subject to annual
limitations if an ownership change had occurred pursuant to the section 382 Internal Revenue Code and similar state provisions.
The unused tax losses must be utilised by various dates. U.S. federal tax losses expire in various dates through to 2037.
At the reporting date, undistributed reserves on non-US subsidiaries $7,115k which would attract withholding tax and $810k
undistributed Estonian subsidiary profits for which deferred tax liabilities have not been recognised. No liability has been
recognised in respect of these differences because the timing of any distribution is under the Group’s control and no distribution
which gives rise to taxation is contemplated.
UK corporation tax rates increased from 19% to 25% with effect from 1 April 2023, in accordance with the Finance Act 2021.
Current taxes have been calculated using a blended rate, while deferred taxes have been computed at 25%, aligning with the
substantively enacted rate as of 31 December 2023. There have been no significant changes in tax rates enacted or effective in
the current or prior year that are expected to have a material impact on the financial statements. The company will continue to
monitor any potential changes in tax legislation that may impact its future financial performance.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
93
Financials
Notes to the Consolidated Financial Statements
8. Discontinued operations
On 28 February 2022, the Group sold its entire Identity business (Boku Identity Inc and its 100% subsidiary Boku Mobile Solutions
Ireland Ltd).
As required, at 31 December 2022, discontinued operations were excluded from the results of continuing operations and were
presented as a single entry in the Income Statement as ‘Profit from discontinued operations’ in the income statement.
The financial results related to the discontinued operations for the period to the date of disposal are presented below:
Fee Revenue
Cost of sales
Gross Profit
Administrative Expenses
Operating loss analysed as:
Adjusted EBITDA
Depreciation and amortisation
Share based payments expense
Foreign exchange losses
Operating loss
Profit on disposal
Disposal costs
Share based payments expense reversed
Total Profit before tax on disposal of Identity business
Tax
Net profit for the period attributable to equity holders of the parent company
The net cashflows used in the Identity business disposed in the prior period are as follows:
Net cash used in operating activities
Net cash used in investing activities
Net cash from financing activities
Net cash used in discontinued operations
2022 (2 months)
$’000
1,153
(719)
434
(1,541)
(652)
(238)
(163)
(54)
(1,107)
26,614
(1,408)
506
24,605
-
24,605
31-Dec 2022
$’000
(1,106)
(178)
570
(714)
94
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Reconciliation of consideration received with the total profit and loss from discontinued operations:
Total consideration received in the prior year
Financial asset through profit and loss – holdback receivable
Working capital adjustment
Total consideration
The holdback receivable of $5.6m was received during the year.
Assets and liabilities of disposal
31 Dec 2022
$’000
26,761
5,600
156
32,517
The assets and liabilities relating to the Identity business were reclassified as held for sale at 31 December 2021. As at 31
December 2022, these values were nil as the sale completed in February 2022.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
95
Financials
Notes to the Consolidated Financial Statements
9. Earnings per share
Basic EPS is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the year, excluding shares purchased by the Company (Note 18). As at 31 December
2023 there were 4,007,868 shares held in treasury (FY22: 1,500,000).
Diluted EPS represents the basic EPS, adjusted for the effect of the dilutive shares issuable on exercise from employee share
options under the Group’s share-based payment schemes, weighted for the relevant period.
The weighted average number of shares in issue during the year was as follows:
Weighted average number of shares in issue
Effect of dilutive share options, RSU’s and warrants
Diluted weighted average number of shares in issue
Total
Profit for the year attributable to shareholders of the Company ($,000)
Basic earnings per share ($)
Diluted earnings per share ($)
From continuing operations
Profit for the year attributable to shareholders of the Company ($,000)
Basic earnings per share ($)
Diluted earnings per share ($)
From discontinuing operations
Profit for the year attributable to shareholders of the Company ($,000)
Basic earnings per share ($)
Diluted earnings per share ($)
2023
2022
297,942,357
298,275,521
15,337,750
11,254,745
313,280,107
309,530,266
10,086
0.0339
0.0322
10,086
0.0339
0.0322
–
–
–
28,904
0.0969
0.0934
4,299
0.0144
0.0139
24,605
0.0825
0.0795
The Amazon Warrants increase the number of diluted shares reported, which has an effect on our fully diluted earn-
ings per share. Further, the Amazon Warrants are presented as an asset and derivative financial liability in the audited
consolidated statement of financial position The liability is subject to fair value measurement adjustments during the
periods that it is outstanding. Accordingly, future fluctuations in the fair value of the Amazon Warrant could adversely
impact our results of operations. If Amazon exercises its right to acquire Boku common shares pursuant to the Amazon
Warrant, it will dilute the ownership interests of then-existing shareholders and reduce earnings per share.
96
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
10. Property, plant and equipment
Computer
equipment &
software
Office
equipment and
fixtures and
fittings
Leasehold
improvement
Property, plant
and equipment
Total
Right–of–use
assets
$’000
$’000
$’000
$’000
$’000
*restated
Cost
At 1 January 2022
1,214
276
255
1,745
6,789
Restatement of right-of-use asset
– –
–
–
At 1 January 2022 (restated*)
1,214
276
255
1,745
(305)
6,484
Additions (restated*)
Disposals
Exchange adjustment
422
48
–
470
129
(41)
(49)
(16)
(22)
–
(27)
(57)
(98)
(144)
(291)
At 31 December 2022 (restated*)
1,546
286
228
2,060
6,178
Additions
Disposals
Exchange adjustment
At 31 December 2023
Accumulated depreciation
At 1 January 2022
372
62
–
434
(37)
(4)
–
(41)
957
(975)
20
12
9
41
89
1,901
356
237
2,494
6,249
744
216
116
1,076
1,788
Restatement of right-of-use assets
– –
–
–
At 1 January 2022 (restated*)
744
216
116
1,076
35
1,823
Charge for period (restated*)
313
41
41
395
1,411
Disposals
Exchange adjustment
At 31 December 2022
Charge for period
Disposals
Exchange adjustment
At 31 December 2023
Net book value
(34)
(31)
(16)
(14)
–
(12)
(50)
(57)
(144)
(145)
992
227
145
1,364
2,945
305
38
42
385
1,430
–
–
–
–
(971)
(25)
6
6 (13)
61
1,272
271
193
1,736
3,465
At 1 January 2022 (restated*)
470
60
139
669
4,661
At 31 December 2022 (restated*)
554
59
83
696
3,233
At 31 December 2023
629
85
44
758
2,784
*Right-of-use assets in the prior year were restated to prepayments, see note 2 for further details.
The additions related to the renewal of the Estonia office, together with the 1-year renewal of the office lease for Ireland, Germany,
Japan and Singapore. Additions in the prior year (FY22) related to the 1-year renewal of the office lease for Ireland and Singapore.
The Group had no contractual commitments for the acquisition of property, plant and equipment in the current or prior year.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
97
Financials
Notes to the Consolidated Financial Statements
10. Property, plant and equipment continued
Impairment of Property and Equipment
The carrying amounts of the Group’s assets including right-of-use assets are reviewed at the end of each reporting period to
determine whether there is any indication of impairment loss. If any such indication exists, the asset’s recoverable amount is
estimated in order to determine the extent of the impairment loss, if any. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value
less cost to sell and value in use. Impairment losses are charged to the profit and loss in other operating expenses. During the
years ended 31 December 2023 and 2022, no impairments have been recorded.
Disposals (discontinued operations)
–
(1,918)
–
–
11. Intangible assets
Cost
At 1 January 2022
Additions
Disposals
Exchange adjustment
At 31 December 2022
Additions
Exchange adjustment
At 31 December 2023
Accumulated amortisation
At 1 January 2022
Charge for period
Impairment
Disposals
Exchange adjustment
At 31 December 2022
Charge for period
Exchange adjustment
At 31 December 2023
Net book value
At 31 December 2021
At 31 December 2022
At 31 December 2023
Domain name
Developed
technology
Merchant
relationships Trade-marks
Goodwill
Internally
developed
software
$’000
$’000
$’000
$’000
$’000
$’000
Total
$’000
1,836 8,001 15,750
110
45,379
14,621
85,697
– – –
–
–
4,866
4,866
(1,562)
(19)
–
–
–
(2,784)
(862)
(3)
(2,996)
(87)
(1,584)
(7,698)
(2,205)
(134)
(271)
(851)
–
140 5,793 14,899
110
41,733
16,401
79,076
– – –
–
–
5,430
5,430
– 389 444
–
450
(167)
1,116
140 6,182 15,343
110
42,183
21,664
85,622
395 3,600 10,111
–
–
8,474
22,580
81 494 616
–
–
2,677
3,868
1,264 – –
–
–
–
1,264
(1,562) – –
–
–
–
(38)
(60)
(523)
–
–
(47)
140 2,817 10,204
–
–
9,685
22,846
– 1,276 904
–
–
3,562
5,742
– 383
(15)
–
–
46
414
140 4,476 11,093
–
–
13,293
29,002
1,441 4,401 5,639
110
45,379
6,147
63,117
– 2,976 4,695
110
41,733
6,716
56,230
–
1,706
4,250
110
42,183
8,371
56,620
(1,562)
(2,636)
(668)
Disposals (discontinued operations)
–
(1,217)
–
–
–
(1,419)
98
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
The amortisation charge of intangible assets is recognised in administrative expenses in the consolidated statement of
comprehensive income.
Goodwill
Goodwill acquired in a business combination is allocated to the cash generating units (“CGU’s”) that expect to benefit from that
business combination.
Goodwill mainly consists of the assets from the acquisition of Mopay AG (“Mopay”) in October 2014 and Fortumo Holdings Inc.
on 1st July 2020, absorbed into the payment CGU.
Goodwill is reviewed annually for impairment and at the year-end an impairment test was undertaken by comparing the carrying
value with the recoverable amount of the Group’s CGU. The recoverable amount of the cash generating unit is based on value-
in-use calculations. These calculations have been calculated using pre-tax discounted cash flow projections based on financial
budgets and forecasts approved the Board of Directors. The projections cover a five-year period and a calculation of the terminal
value, for the period following these projections.
The recoverable amount of the Payments CGU was calculated to be in excess of the carrying value, indicating there is no
impairment required. The key underlying assumptions used in the calculations are those regarding projected cash flows, growth
rates, increases in costs and discount rates.
Growth rates consider historic experience and current market trends:
• Revenue growth ranges from 19.2% to 24.9% (FY22: 15.4% to 23.8%).
• Take rate growth rate of 0.1% (FY22: 0.1%)
• Gross profit ranging from 97% to 99% (FY22: 97% to 99%)
The pre-tax discount rate was calculated at 15% (FY22: 15.5%). This is based on the Group’s assessment of risk-free interest
rates and the risks specific to the CGU. The terminal value calculation for 2023 was based on growth rate of post-tax free
cashflow of 2% (FY22: 2%) for the CGU.
Sensitivity analysis has been performed and the net present value of the cashflows would need to fall by a factor of 9.5 to equal
the carrying value of the CGU (FY22: 3.4).
Fortumo domain name
During the prior year management decided to discontinue the Fortumo domain name and to rebrand all the Fortumo products
and rename the acquired entities of Fortumo group to Boku’s name. As a result, the Fortumo domain which was separately valued
as part of the PPA work at the time of the acquisition of Fortumo in July 2020 and included in intangibles, was impaired in full by
$1.26 million ($1.44 million at 31 December 2021 less amortisation $0.18 million) as the Fortumo domain name is no longer being
used internally or externally.
The Group had no contractual commitments for the acquisition of intangible assets in the current or prior year.
Developed technology
During the year it was agreed to begin a project to migrate the merchants purchased under the Fortumo acquisition from the
Fortumo platform to the Boku platform, after which the Fortumo platform would become obsolete. The project is expected to
complete in 2025 and as a result the amortisation has been accelerated to align with the expected remaining useful life of the
platform.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
99
Financials
Notes to the Consolidated Financial Statements
12. Subsidiaries
The subsidiaries of the Company, all of which have been included in the consolidated financial information, are presented below.
Name
Ownership
Boku Payments, Inc.
Boku Network Services, Inc.
Boku Account Services, Inc.
100% owned by Boku, Inc.
100% owned by Boku, Inc.
100% owned by Boku, Inc.
Boku Account Services UK Ltd.
100% owned by Boku Account Services, Inc.
Principal activity
Place of
Incorporation
Holding Company
United States
Holding Company
United States
Holding Company
United Stated
Mobile payment
solutions
United Kingdom
Boku Brasil Participações Ltda.
100% owned by Boku Network Services, Inc.
Holding company
Brazil
Boku Network Brasil Instituição De Pagamento
Ltda.
100% owned by Boku Brasil Participações Ltda.
Boku Network Services GmbH
100% owned by Boku, Inc.
Boku Network Services UK Ltd
100% owned by Boku Network Services, Inc.
Boku Network Services AU Pty Ltd
100% owned by Boku Network Services, Inc.
Boku Network Services IN Pvt. Ltd.
100% owned by Boku Network Services, Inc.
Boku Network Services SG Pte. Ltd.
100% owned by Boku Network Services, Inc.
Boku Network Services HK Limited
100% owned by Boku Network Services, Inc.
Boku Network Services Taiwan Branch Office
100% owned by Boku Network Services, Inc.
Boku Network Services Japan Branch Office
100% owned by Boku Network Services, Inc.
Mopay AG Beijing Representative Branch
100% owned by Boku Network Services AG
(Germany)
Boku Network Services IE Limited
100% owned by Boku Network Services, Inc.
Boku Network Services MY Sdn. Bhd.
100% owned by Boku Network Services, Inc.
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Mobile payment
solutions
Brazil
Germany
United Kingdom
Australia
India
Singapore
Hong Kong
Taiwan
Japan
China
Ireland
Malaysia
Boku Network Services EE Holdings, Inc.
100% owned by Boku Network Services, Inc.
Holding Company
United States
Boku Network Services TH Co Ltd.
100% owned by Boku Network Services, Inc.
Dormant
Thailand
Boku Network Services PH, Inc.
100% owned by Boku Network Services, Inc.
Mobile payment
solutions
Philippines
Boku Network Services MX S. de R.L. de C.V.
50% owned by Boku Network Services, Inc.
50% owned by Boku, Inc.
Dormant
Boku Network Services Estonia OÜ (previously
Fortumo OÜ)
100% owned by Boku Network Services EE
Holdings, Inc.
Mobile payment
solutions
Boku Network Services ES S.L.
100% owned by Boku Network Services Estonia
OÜ
Mobile payment
solutions
Mexico
Estonia
Spain
100
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Name
Ownership
Principal activity
Place of
Incorporation
Fortumo Mobile Services Pvt. Ltd.
Fortumo Singapore Pte. Ltd.
100% owned by Boku Network Services Estonia
OÜ
Mobile payment
solutions
India
100% owned by Boku Network Services Estonia
OÜ
Mobile payment
solutions
Boku Network Services PE S.A.C.
100% owned by Boku Network Services, Inc.
Dormant
Boku Network Services CO S.A.S.
100% owned by Boku Network Services, Inc.
Dormant
Boku Network Services CL S.P.A.
100% owned by Boku Network Services, Inc.
Dormant
Singapore
Peru
Colombia
Chile
Boku Network Services ZA (Pty) Ltd
100% owned by Boku Network Services, Inc.
Dormant
South Africa
Boku Network Services KE Limited
100% owned by Boku Network Services, Inc.
Dormant
Boku Network Services TZ Limited
Boku Network Services AR S.R.L.
Boku Network Services UG Limited
99.999% owned by Boku Network Services, Inc.
0.001% owned by Boku, Inc.
Dormant
95% owned by Boku Network Services, Inc. 5%
owned by Boku, Inc.
Dormant
99.95% owned by Boku Network Services, Inc.
0.05% owned by Boku, Inc.
Dormant
Boku Network Services UY S.A.
100% owned by Boku Network Services, Inc.
Dormant
Kenya
Tanzania
Argentina
Uganda
Uruguay
13. Trade and other receivables
Trade receivables
Accrued income
Accounts receivable
Less: provision for impairment
Net accounts receivable
Other receivables
Deposits held
Sales taxes receivable
Prepayments (restated*)
Total current trade and other receivables
31 December
2023
$’000
53,117
92,527
145,644
(2,047)
143,597
281
448
1,011
3,185
148,522
restated*
31 December
2022
$’000
27,898
59,550
87,448
(1,238)
86,210
100
426
938
2,835
90,509
Financial assets at fair value through profit and loss
–
5,600
*Right-of-use assets in the prior year were restated to prepayments, see note 2 for further details.
Accrued income relates to expected revenue generated from settlement and transaction fees. On receipt of statements from
carriers and eWallets the accrued income is reversed, and actual receivable balances are recognised accordingly.
$5.6m was received in the current year relating to the final settlement from the sale of the Identity business. See note 8 for further
details.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
101
Financials
Notes to the Consolidated Financial Statements
13. Trade and other receivables continued
Provision for receivables:
Opening balance
Utilised during the period
Increase/(decrease) during the period
Closing balance
31 December
31 December
2023
$’000
1,238
(208)
1,017
2,047
2022
$’000
756
(19)
501
1,238
In accordance with IFRS9, the Group reviews the amount of credit loss associated with its trade receivables based on forward
looking estimates that take into account and forecast credit conditions as opposed to relaying on past default rates. The Group
has applied the Simplified Approach, applying a provision matrix based on the number of days past due to measure lifetime
expected credit losses and after taking into account customer sectors with different credit risk profiles and current and forecast
trading conditions.
14. Cash and cash equivalents and restricted cash
Cash and cash equivalents
Restricted cash
31 December
31 December
2023
$’000
117,360
33,499
150,859
2022
$’000
99,551
16,962
116,513
The restricted cash primarily includes segregated client funds and other client money received but not yet paid to merchants (in
transit) for Boku’s licenced entities, cash held at bank to secure a lease agreement for the Company’s San Francisco office and
monies held at a financial institution to collateralise Company credit cards.
102
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
15. Trade and other payables
Current
Trade payables
Accruals
Total financial liabilities classified as financial liabilities
Other taxes and social security costs
Provision for social security costs on issued stock options
Total current trade and other payables
Non-current
Accrued taxes on issued stock options
Total non-current trade and other payables
31 December
31 December
2023
$’000
182,397
48,678
231,075
1,386
588
233,049
2022
$’000
118,829
35,550
154,379
1,024
860
156,263
979
979
1,194
1,194
The carrying values of trade and other payables and accruals approximate to fair values.
16. Lease liabilities
The table below shows a reconciliation for discounted lease liabilities included in the statement of financial position:
Lease liabilities as at 1 January 2022
4,833
–
4,833
Property (office leases)
IT Equipment
$’000
$’000
Total
$’000
Additions
Interest expense
Payments to lease creditors
Exchange adjustment
Lease liabilities as at 31 December 2022
Additions
Interest expense
Payments to lease creditors
Exchange adjustment
Lease liabilities as at 31 December 2023
129
315
444
235
(1,476)
(172)
3,549
937
171
(1,649)
44
3,052
–
(315)
–
–
–
–
–
–
–
235
(1,791)
(172)
3,549
937
171
(1,649)
44
3,052
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
103
Financials
Notes to the Consolidated Financial Statements
16. Lease liabilities continued
The table below represents the maturity analysis of contractual undiscounted lease payments:
Less than one year
One to five years
2023
£’000
2022
£’000
1,294
1,427
1,768
2,407
Total undiscounted lease liabilities as at 31 December 2023
3,062
3,834
There are no leases with a term of more than 5 years.
Lease liabilities included in the statement of financial position:
Current
Non-current
2023
£’000
1,370
1,682
The following represents the lease expenses and depreciation of right-of-use assets in relation to leases charged to the
Consolidated statement of comprehensive income:
Interest on lease liabilities
Expenses related to short term leases
Depreciation of right-of-use assets (Note 10) (restated*)
*Right-of-use assets in the prior year were restated to prepayments, see note 2 for further details.
2023
£’000
171
329
1,430
The amounts recognised in the consolidated statement of cashflows are presented below:
2022
£’000
1,277
2,272
restated*
2022
£’000
235
238
1,411
Payment of principal
Payment of interest
Total cash outflows
2023
£’000
2022
£’000
1,478
1,556
171
235
1,649
1,791
104
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
17. Loans and borrowings
On 26 June 2020 the Group entered into a loan agreement with its bankers for $20.0m to part finance the acquisition of Fortumo
Holdings Inc, and its subsidiaries on 1st July 2020. The loan was structured as a $10.0m term loan repayable in 4 years and
$10.0m revolving facility. Associated costs of $500k were incurred and are amortised over the life of the loan.
On the sale of the Identity division, the outstanding term loan with Citibank of $8.125m was repaid from the consideration. As at
31 December 2023 the Group has no bank loans (FY22: Nil). The Group retains the $10m revolver facility (RCF) which is currently
not drawn upon (FY22: $10m facility, $nil drawn upon). This revolver facility expires on 1 July 2024.
2022
Non-cash changes
2023
Cash flows
Borrowing
costs expensed
in the year
Foreign
Exchange
Movement
Lease
Liabilities
(IFRS 16)
$’000
$’000
$’000
$’000
$’000
$’000
Short-term lease liabilities
1,277
(1,649)
–
44
1,698 1,370
Long-term lease liabilities
2,272
–
–
–
(590)
1,682
Total liabilities from financial activities
3,549
(1,649)
–
44
1,108 3,052
2021
Non-cash changes
2022
Cash flows
Borrowing
costs expensed
in the year
Foreign
Exchange
Movement
Lease
Liabilities
(IFRS 16)
$’000
$’000
$’000
$’000
$’000
$’000
Short-term borrowings
1,125
(1,125)
–
Long-term borrowings
6,688
(7,000)
312
–
–
– –
– –
Short-term lease liabilities
1,335
(1,791)
Long-term lease liabilities
3,498
–
–
–
(129)
1,862 1,277
(43)
(1,183) 2,272
Total liabilities from financial activities
12,646
(9,916)
312
(172)
679 3,549
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
105
Financials
Notes to the Consolidated Financial Statements
18. Share capital
The Company’s issued share capital is summarised in the table below:
Common shares of $0.0001 each
Opening balance
Exercise of options and RSUs
Closing balance
Common Shares
31 December 2023
31 December 2022
Number of
shares issued
and fully paid
‘000
299,270
1,797
301,067
Number of
shares issued
and fully paid
‘000
295,876
3,394
299,270
$’000
29
–
29
$’000
29
–
29
At 31 December 2023, the Company had 301,066,914 (FY22: 299,270,021) common shares issued and fully paid. The Company
has only one class of shares with par value of $0.0001 each. The authorised share capital is 500,000,000 shares. The Company
holds 4,007,868 shares in treasury (FY22: 1,500,000 shares held in treasury).
19. Reserves
The other reserves disclosed in the consolidated statement of financial position includes share premium representing the
difference between the issue price and nominal value of the shares issued by the Company. It includes all stock options expenses
reserves.
Retained losses are the cumulative net profits / (losses) in the consolidated income statement.
Foreign exchange reserve stores the foreign exchange translation gains and losses on the translation of the financial statements
from the functional to the presentation currency.
Movements on these reserves are set out in the consolidated statement of changes in equity.
Treasury reserve relates to the amounts paid to buy back shares in Boku, Inc. from the market.
20. Share-based payment
The Group operates the following equity-settled share-based remuneration schemes for employees, Directors and non-
employees:
1) 2009 equity incentive plan (2009 Plan) for the granting of stock options, restricted stock awards (RSA) and restricted stock
units (RSU). No options were available to be issued under this plan as at 31 December 2023 or 2022. There are 2,218k options
vested but not exercised under this plan as at 31 December 2023 (FY22: 3,771k).
2) 2017 Equity Incentive Plan (2017 Plan) for the granting of stock options and restricted stock units (RSUs). The Group
reserved an initial ten million shares of common stock for issue under the plan. The activity under this plan is presented
separately from the rest of the plans, as explained below. There are 836k options (FY22: 837k) and 11,597k (FY22: 10,069k)
RSUs outstanding as at 31 December 2023.
106
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
2009 Equity Incentive Plan
The options activity under the 2009 Plan (including RSUs) are as follows:
At 1 January 2022
Exercised
At 31 December 2022
Exercised
Cancelled
At 31 December 2023
1. WAEP – weighted average exercise price
2009 Plan (Options)
Number of options
WAEP1
‘000
4,736
(965)
3,771
(1,513)
$0.34
$0.34
$0.34
$0.31
(40)
$0.28
2,218
$0.30
A summary of other information related to the options granted under this plan is presented in the table below:
2009 Plan
Outstanding options at reporting end date:
- total number of options
- weighted average remaining contractual life excluding RSUs (years)
Vested and exercisable (‘000):
- weighted average exercise price
Weighted average share price exercised during the period (excluding RSUs)
Share-based payment expense for the period (‘000)
December 2023
December 2022
2,218
2.43
2,218
$0.30
$0.31
–
3,771
2.49
3,771
$0.44
$0.34
–
The fair value of each option (excluding RSUs) has been estimated on the date of grant using the Black-Scholes option pricing
model with the following assumptions: expected terms ranging from 4.99 to 6.89 years; risk-free interest rates ranging from
0.73% to 3.05%; expected volatility of 58%; and no dividends during the expected term (2017: expected terms ranging from 5.04
to 6.01 years; risk-free interest rates ranging from 1.87% to 1.92%; volatility of 45%; and no dividends during the expected term).
2017 Equity Incentive Plan
Options were granted under the 2017 Equity Incentive Plan only in January 2018. Since then, only RSUs have been granted
under the plan. The options granted under this plan vest over 3 years and contain a one-year cliff. Therefore, 25% of the options
vest at the end of one year and from year two a graded quarterly vesting takes place, where each instalment of vesting is treated
as a separate stock option grant.
RSUs under the 2017 Plan may be outstanding for periods of up to three years following the grant date. Outstanding RSU grants
generally vest over three years in three equal portions or one third after two years and two thirds in the third-year anniversary from
the grant date. Options under the 2017 Plan may be outstanding for periods of up to ten years from the grant date.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
107
Financials
Notes to the Consolidated Financial Statements
20. Share-based payment continued
Performance-based restricted stock units (RSUs)
Performance-based RSUs vest on the completion of a specified service period and the achievement of certain performance
targets, which may include individual performance measures as well as Company measures, and are converted into common
stock upon vesting.
Share based payments expense for RSUs is based on the fair value of the shares underlying the awards on the grant date
and reflects the estimated probability that the performance and service conditions will be met; specifically, where the restricted
stock units are nil-cost awards with a non-market performance condition, so they are valued at the share price as at the day
of grant. The share-based payments expense is adjusted in future periods for subsequent changes in the expected outcome
of the performance related conditions until the vesting date. Performance-based RSUs vest after three years of issue, in one
vesting event, if the performance conditions are met, however these may also vest at the discretion of the Board in the event that
underlying performance conditions are not met.
The activity under the 2017 Plan for both options and RSU are as follows:
Available1
Options
WAEP
At 1 January 2022
Authorised
Granted
Exercised
Cancelled
At 31 December 2022
Authorised
Granted
Exercised
Cancelled
At 31 December 2023
‘000
35,228
12,565
(3,914)
–
2,216
46,095
12,982
(5,832)
–
1,014
54,259
1.The number of available RSUs available for future use in the plan.
2. RSUs are issued with a zero-exercise price and therefore the WAEP is Nil.
RSUs
‘000
WAEP2
$1.205
10,663
‘000
969
–
–
(132)
–
837
–
–
(1)
–
–
–
$1.205
$1.205
$1.205
–
–
$1.205
–
–
3,914
(2,292)
(2,216)
10,069
–
5,832
(3,290)
(1,014)
11,597
836
$1.205
Total
‘000
11,632
–
3,914
(2,424)
(2,216)
10,906
–
5,832
(3,291)
(1,014)
12,433
–
–
–
–
–
–
–
–
–
–
–
108
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
A summary of other information related to the options and RSUs granted under this plan is presented in the table below:
2017 Plan
31 December 2023
31 December 2022
Outstanding options at reporting end date:
- total number of options (excluding RSUs) (‘000)
- weighted average remaining contractual life (years)
Vested and exercisable (‘000):
- weighted average exercise price
Weighted average fair value of options granted during the period (excluding RSU)
Total number of RSUs outstanding
Vested and exercisable – Options
Share-based payment expense for the period (‘000)
Reconciliation of share-based payment expense (continuing operations)
2009 Plan
Options
2017 Plan
Options
RSUs
Total share-based expense (excluding national insurance)
National insurance reversal accrued
National insurance paid in the year (see Note 4)
Total share-based payment charge
21. Dividends
No dividends were declared or paid in the current year (FY22: Nil).
836
4.0
$1.205
$0.44
11,597
836
$7,595
837
5.0
$1.205
$0.44
10,069
837
$5,165
December 2023
$’000
December 2022
$’000
–
–
7,467
7,467
(435)
563
7,595
–
–
5,553
5,553
(639)
251
5,165
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
109
Financials
Notes to the Consolidated Financial Statements
22. Cash generated from operations
Profit after tax
Add back:
Tax charge/ (credit)
Amortisation of intangible assets
Depreciation of property, plant and equipment
Gain on discontinued operations after tax
Loss on disposal of property, plant and equipment
Loss on disposal of intangible assets
Finance income
Finance expense (includes interest on lease liabilities)
Foreign exchange loss (unrealised)
Employer taxes on stock option and restricted stock units (accrual) charge
Fair value adjustment on warrants valuation
Amortisation of warrant asset
Impairment of intangible asset
Share based payment expense
Cash from operations before working capital changes
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Year-ended
31 December
Year-ended
31 December
2023
$’000
10,086
1,321
5,742
1,815
–
1
–
(1,887)
249
(1,352)
(435)
(53)
108
–
7,467
23,062
(53,004)
70,877
40,935
2022
$’000
28,904
(237)
3,868
2,032
(26,614)
6
22
(201)
675
4,407
(639)
3,470
25
1,264
5,045
22,027
(12,328)
40,267
49,966
The share-based payment expense has been split between the charge using the Black Scholes method for the period $7,467k
(FY22: $5,553k) and the change in the accrual for employer taxes on stock option and restricted stock units $-435k (FY22:
-$639k). The total share-based payment expense in the consolidated statement of comprehensive income includes $563k (FY22:
$251k) employer taxes paid via payroll to tax authorities.
The impairment of intangible assets in 2022 relates to the full impairment of the Fortumo domain name which was discontinued in
the comparative period.
110
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
23. Financial Risk Management
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The
overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s
competitiveness and flexibility. The Group reports in US$. All funding requirements and financial risks are managed based
on policies and procedures adopted by the Board of Directors. The Group does not issue or use financial instruments of a
speculative nature.
The Group is exposed to the following financial risks:
• Market risk (Interest rate risk & Foreign Exchange risk)
• Credit risk
• Liquidity risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. The principal
financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Trade and other receivables
• Cash and cash equivalents and restricted cash
• Trade and other payables
• Bank loans
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly; and
• Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data. The Group has classified the warrant liabilities in this category.
The following tables present the Group’s assets and liabilities that are measured at fair value by the level in the fair value hierarchy
as at the reporting date:
Financial instruments by category
Measurement level 1
Financial assets
Cash and cash equivalents
Restricted cash
Total Cash
Other financial assets at amortised cost
Net accounts receivable
Other receivables
Total other financial assets
Cash and other financial assets at amortised cost
31 December
31 December
2023
$’000
117,360
33,499
150,859
143,597
729
144,326
295,185
2022
$’000
99,551
16,962
116,513
86,210
526
86,736
203,249
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
111
Financials
Notes to the Consolidated Financial Statements
23. Financial Risk Management continued
Financial instruments by category continued
Measurement level 3
Financial assets at fair value through profit and loss
Holdback receivable asset
Measurement level 1
Financial liabilities
Trade payables
Current tax payable
Total other financial liabilities
Lease liabilities
Financial liabilities at amortised cost
Measurement level 3
Financial liabilities at fair value through profit or loss
Derivative financial liability (Amazon warrant liability)
Amazon warrants
–
5,600
31 December
31-Dec-22
2023
$’000
2022
$’000
182,397
118,829
509
222
182,906
119,051
3,052
3,549
185,958
122,600
5,511
5,206
The fair value of the warrant obligations was $5,511k as at 31 December 2023, $5,206k as at 31 December 2022 and $1,756k at
the inception of the warrants on 16 September 2022. The increase in fair value from inception to 31 December 2022 was primarily
due to an increase in the spot price from $0.77 to $1.395. The increase in fair value from 31 December 2022 to 31 December
2023 was primarily due to an increase in the number of warrants expected to vest from 4,992k to 5,334k.
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 or estimation. The Group values the warrants using a combination of
Monte Carlo Simulation and Black-Scholes Model valuation methods.
Significant unobservable inputs as at the inception of the warrant agreement on 16 September 2022 included volatility of the
Company’s common stock of 40%, revenue volatility of 30%, a risk-free rate of 3.39%, and forecasted revenue from Amazon over
the 7-year vesting period. Significant unobservable inputs as at 31 December 2022 and 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.
A significant increase in volatilities in isolation would result in a significant change in fair value as at 31 December 2023. 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 $5,281k, representing a decrease in fair value of $230k. 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 $5,771k, representing an increase in fair
value of $259k.
112
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Movement of the contract asset for Amazon and warrant liabilities as at 16 September 2022 (inception) to 31 December 2023
Warrant contract asset
Initial recognition of warrant contract asset
Change in number of warrants expected to vest
Amortisation to revenue
Balance as at 31 December 2022
Change in number of warrants expected to vest
Amortisation to revenue
Balance as at 31 December 2023
Financial Liability
Initial recognition of contract liability
Change in number of warrants expected to vest
Change in fair value of warrants
Balance as at 31 December 2022
Change in number of warrants expected to vest
Amortisation to revenue
Balance as at 31 December 2023
Market risk
$’000
1,756
(20)
(25)
1,711
359
(108)
1,962
$’000
(1,756)
20
(3,470)
(5,206)
(358)
53
(5,511)
Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. There is a risk that the fair
value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk) or foreign
exchange rates (currency risk).
Interest rate risk
The Group has a $10m revolving facility, which can be used if needed (FY22: $10m). Interest rates for the current Boku revolving
facility loan were based on LIBOR, however LIBOR was phased out by the end of 2021. Current rates are based on the Secured
Overnight Financing Rate. The Group manages the interest rate risk centrally. The term loan taken out to part fund the acquisition
of Fortumo in 2020 was repaid in full on 28th February 2022 following the disposal of the Identity division to Twilio. As at 31
December 2023 the Group has no loans (FY22: Nil). The Group’s borrowings are disclosed in note 18.
During the year to 31 December 2023 interest rates increased in many jurisdictions as governments tried to control inflation. The
Group has cash balances in many jurisdictions and the increase in interest rates had a positive effect on the Group cash position.
The bank interest earned during 2023 was $1,887k (FY22: $189k).
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
113
Financials
Notes to the Consolidated Financial Statements
23. Financial Risk Management continued
Foreign currency risk
Foreign exchange risk is the risk that movements in exchange rates affect the profitability of the business.
The Group serves many of our U.S. based clients with global operations using the Group subsidiaries in Singapore, Ireland,
UK, Japan and Hong Kong. Although contracts with these clients are typically priced in U.S. dollars a substantial portion of
client funds receivable and related costs and revenues are denominated in the local currency of the country where services are
provided, resulting in foreign currency exposure which have an impact on our results of operations.
Our primary foreign currency exposures are in Japanese Yen, EURO, GBP, Turkish lira, Thai Baht, Korean Won, Taiwanese dollar
and Philippines Peso. There can be no assurance that we can take actions to mitigate such exposure in the future, and if taken,
that such actions will be successful or that future changes in currency exchange rates will not have a material adverse impact
on our future operating results. A significant change in the value of the U.S. Dollar against the currency of any one or more of
these currencies mentioned above may have a material adverse effect on our financial condition and results of operations. A 10%
impact on foreign currency balances is detailed further in this note.
Foreign currency exchange risk arises mainly where receivables and payables exist in different currencies due to transactions
entered into in foreign currencies. As such, management believe that the Group is exposed to the following foreign currency
exchange risks:
a) Transaction foreign currency risk is the exchange risk associated with the time delay between entering into a contract and
settling it. Greater time differences exacerbate transaction foreign currency risk, as there is more time for the two exchange
rates to fluctuate. The Group manages this risk in various ways:
• by implementing procedures to receive funds faster (daily where possible) and settle the funds to merchants daily by
shortening the settlement times.
• By implementing a mark-up fee to cover the FX fluctuations when the settlement currency is different from the transaction
currency
• by contractual agreement to convert the funds at the foreign exchange rate received from the aggregators or other suppliers.
b) by using foreign exchange contracts timely to the extent that any remaining impact on profit after tax is not material
Translation foreign currency risk is the risk that the Group’s non-U.S. Dollar assets and liabilities, revenues and costs will
change in value as a result of exchange rate changes on converting them to US Dollars, which is the reporting currency of the
Group. Monetary assets and liabilities are valued and translated into U.S. Dollars at the applicable exchange rate prevailing at
the applicable date. Any adverse valuation moves due to exchange rate changes at such time are charged directly and could
impact our financial position and results of operations.
For the purposes of preparing the consolidated financial statements, the Group convert subsidiaries’ financial statements as
follows:
Statements of financial position are translated into U.S. Dollars from local currencies at the period-end exchange rate,
shareholders’ equity is translated at historical exchange rates prevailing on the transaction date and income and cash flow
statements are translated at average exchange rates for the period. The Group manages all treasury activities centrally, with the
exception of the acquired Fortumo entities where treasury processes are in the process of being aligned with Group treasury
policies and procedures.
114
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
As of 31 December 2023, the Group’s gross exposure to foreign exchange risk was as follows:
31 December 2023
Euro
$’000
GBP
$’000
Other Currency
$’000
Total
$’000
Trade and other receivables
41,076
15,933
75,150
132,159
Cash and cash equivalents and restricted cash
25,220
8,379
37,631
71,230
Trade and other payables
Net financial assets
10 % impact +/-
As at 31 December 2022
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Net financial (liabilities)/ assets
10% impact +/-
(54,702)
11,594
(19,074)
5,238
(109,554)
3,227
(183,330)
20,059
1,288
582
358
2,228
Euro
$’000
GBP
$’000
Other Currency
$’000
Total
$’000
23,113
12,242
46,900
82,255
21,284
8,521
32,225
62,030
(49,100)
(16,877)
(68,917)
(134,894)
(4,703)
3,886
10,208
9,391
(523)
432
1,135
1,044
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
115
Financials
Notes to the Consolidated Financial Statements
23. Financial Risk Management continued
The Group operates in 60 currencies (FY22: 48 currencies). We have identified Euro and GBP as the main affected currencies
by fluctuations in exchange rates for 2023. In 2022 the main currencies were GBP and EUR. Other currencies are included in
the ‘Other’ column. The impact of 10% movement in foreign exchange rate of US$ will result in an increase/decrease of total
comprehensive profit/loss after tax and financial assets/(liabilities) of $2,228k for December 2023 (FY22: $1,044k).
c) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations.
The Group is exposed to credit risk in respect of these balances such that, if one or more the aggregators, MNOs or wallet
providers encounters financial difficulties, this could impact the Group’s financial results. The Group mitigates its credit risk by
assessing the credit rating of new customers and MNOs prior to entering into contracts, by entering contracts with customers
with agreed credit terms and also primarily by limiting its liability contractually to its customers/merchants in the event of non-
payment from wallet providers, MNOs or aggregators.
To minimise this credit risk, the Group endeavours only to deal with companies that are demonstrably creditworthy and this,
together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of
the outstanding receivables amount from carriers/aggregators less the value of corresponding outstanding amounts payable to
merchants, which equals the revenue amount recorded in the financial statements in respect of the uncollected funds. An APS
fee is also charged to merchants for early settlement.
At the reporting date, the exposure was represented by the carrying value of trade and other receivables, against which
$2,047k was provided at 31 December 2023 (FY22: $138k). The provision amounts represent an estimate of potential bad
debt in respect of the year-end Group trade receivables. The Group’s customers are concentrated to certain sectors, however
the concentration of credit risk from trade receivables relating to carriers and aggregators is mitigated by a corresponding trade
payable to merchants. Boku only settles merchant payable balances after corresponding funds are collected from carriers and
wallets, mitigating credit risk.
A debt is considered to be bad when it is deemed irrecoverable, for example when the debtor goes into liquidation, or when
a credit or partial credit is issued to the customer for goodwill or commercial reasons. The Group has applied the simplified
approach applying a provision matrix based on number of days past due being greater than 150 days to measure expected
credit losses and after taking into account customer sectors with different credit risk profiles, history of collections and current
and forecast trading conditions.
The Group’s receivable provision matrix is as follows:
31 December 2023
< 60 days
61–90 days
91–150 days
> 150 days
Total
Expected credit loss % range
Gross carrier receipts ($’000)
Expected credit loss rate ($’000)
0%
130,844
–
0.30%
7,395
(22)
0.72%
4,066
(30)
59.7%
3,339
(1,995)
145,644
(2,047)
31 December 2022
< 60 days
61–90 days
91–150 days
> 150 days
Total
Expected credit loss % range
Gross carrier receipts ($’000)
Expected credit loss rate ($’000)
0%
84,792
–
0%
1,384
–
0%
34
–
95%–100%
1,238
(1,238)
87,448
(1,238)
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
At 31 December 2023 the Group had a net provision for $1,712k (FY22: $138k) of which $1,574k was provided for in the year
(FY22: $11k was reversed in the year). The Company revenue is recorded as the net between the amounts received from carriers
and aggregators less the amounts payable to merchants. This represents management’s best estimate of the potential revenue
loss for the Group if the $2,047k (FY22: $1,238k) old receivables were not received from carriers.
Other receivables are considered to be low risk. Management do not consider that there is any concentration of risk within other
receivables. No other receivables have been impaired.
The maximum credit risk exposure is the amount of cash held with at the bank (cash and cash equivalents). To date, the Group
has not experienced any losses on its cash and cash equivalent deposits. $122.4m (FY22: $89.6m) of cash and cash equivalents
were held in A+ rated bank accounts.
d) Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to
meet its liabilities when they become due.
The statement of financial positions related to merchant funds flows are considered to be neutral from a liquidity perspective as
these cash balances and related payables are interrelated from a liquidity perspective. This is due to the fact that Boku only settles
merchant payables after cash is collected from carriers and wallets.
The table below analyses the Group’s financial liabilities by contractual maturities (all amounts disclosed in the table are
the undiscounted contractual cash flows):
31 December 2023
Within 1 year
2-5 years
More than 5 years
$’000
$’000
$’000
Trade and other payables
233,049
–
–
Financial liability (Amazon warrant liability)
–
–
5,511
Leases liabilities
Total*
1,294
1,768
–
234,343
1,768
5,511
*No material difference between discounted and undiscounted fair value.
31 December 2022
Within 1 year
2-5 years
More than 5 years
Trade and other payables
Financial liability (Amazon warrant liability)
Lease liabilities
Total*
*No material difference between discounted and undiscounted fair value.
$’000
154,379
–
1,427
155,806
$’000
–
–
2,407
2,407
$’000
–
5,206
–
5,206
Total
$’000
233,049
5,511
3,062
241,622
Total
$’000
154,379
5,206
3,834
163,419
The Board receives financial reports on a monthly basis as well as information regarding cash balances and investments. The
liquidity risk of each group entity is managed by the Group treasury team at the entity level to meet any liquidity obligations. Where
facilities of group entities need to be increased, approval must be sought by the entity’s CFO. Where the amount of the facility is
above a certain level, agreement of the Group CFO and the Board is needed.
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Boku Inc Annual Report and Accounts for the year ended 31 December 2023
117
Financials
Notes to the Consolidated Financial Statements
23. Financial Risk Management continued
Capital Management
The Group’s capital is made up of share capital, other reserves, treasury shares, foreign exchange reserve and retained losses.
The Group’s objectives when maintaining capital are:
• To safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and
• To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The capital structure of the Group consists of shareholders’ equity as set out in the consolidated statement of changes in equity.
All working capital requirements are financed from existing cash resources and borrowings.
The Group manages its capital structure and makes the necessary adjustments in the light of changes of economic
circumstances, the risk characteristics of underlying assets and the projected cash needs of the current and prospective
operational / financing / investment activities. The adequacy of the Group’s capital structure will depend on many factors,
including capital expenditures, market developments and any future acquisition.
24. Related party transactions
In 2023, the Group was remitted $119,711,637 in net payments from 2 suppliers who are shareholders of the Company (FY22:
$132,800,653 - from 3 suppliers). At 31 December 2023, the Company had receivables of $23,853,885 (FY22: $13,594,020) due
from these companies.
25. Ultimate controlling party
There is no ultimate controlling party of the Company.
26. Contingent liabilities
In the normal course of business, the Group may receive inquiries or become involved in legal disputes regarding possible patent
infringements. In the opinion of management, any potential liabilities resulting from such claims, if any, would not have a material
adverse effect on the Group’s consolidated statement of financial position or results of operations.
From time to time, in its normal course of business, the Group may indemnify other parties, with whom it enters into contractual
relationships, including customers, aggregators, MNOs, lessors and parties to other transactions with the Group. The Company
has also indemnified its Directors and executive officers, to the extent legally permissible, against all liabilities reasonably incurred
in connection with any action in which such individual may be involved by reason of such individual being or having been a
Director or executive officer. The Group believes the estimated fair value of any obligation from these indemnification agreements
is minimal; therefore, this consolidated financial information do not include a liability for any potential obligations at 31 December
2023 and 2022.
27. Events after the reporting date
Stuart Neal was appointed CEO on 1 January 2024 and appointed as a Director of the Company on 17 January 2024.
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Non-IFRS Financial Information
Management regularly uses adjusted financial measures internally to understand, manage and evaluate the business and make
operating decisions. These adjusted measures are among the primary factors management uses in planning for and forecasting
future periods.
Management present non-GAAP financial measures 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.
These measures are used internally to establish forecasts, budgets and operational goals to manage and monitor the business, as
well as evaluate underlying historical performance. It is believed these non-GAAP financial measures 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 adjusted financial measures are EBITDA, Adjusted EBITDA and Adjusted Operating expenses, which management
considers are relevant in understanding the Group’s financial performance. Management uses the adjusted financial measures
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 form part of the adjusted results, 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.
“EBITDA” is defined as net income / (loss) for the year, less discontinued operations gains, net of tax, before finance expenses
(including finance costs related to lease liabilities), depreciation and amortisation (including depreciation of right-of-use assets),
and income tax expense / (benefit).
“Adjusted EBITDA” is defined as earnings before interest, tax, depreciation and amortisation, non-recurring other income,
share based-payments expense, foreign exchange losses and exceptional costs. Adjusted EBITDA is used internally to establish
forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical
performance. We believe that Adjusted EBITDA is a meaningful indicator of the health of our business as it reflects our ability to
generate cash that can be used to fund recurring capital expenditures and growth. Adjusted EBITDA from continuing operations
also disregards non-cash or non-recurring charges (exceptional costs) that we believe are not reflective of our long-term
performance. We also believe that Adjusted EBITDA is widely used by investors, securities analysts and other interested parties as
a supplemental measure of performance and liquidity.
“Adjusted Operating expenses” is defined as Gross profit less Adjusted EBITDA.
Constant currency measures (Revenue only)
Constant currency revenues are calculated by applying the monthly average foreign exchange rates for each month of 2022 to the
actual 2023 monthly results.
“Average daily cash” is the average cash balance for each day.
“Adjusted EBITDA margin” is gross profit less Adjusted EBITDA.
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
119
Financials
Non-IFRS Financial Information
A reconciliation of Adjusted EBITDA to operating profit is as follows:
Alternative performance measures
Adjusted EBITDA
Other Income
Depreciation and amortisation (restated*)
Share-based payments
Foreign exchange loss
Exceptional items
Operating profit
restated*
Year ended
Year ended
31 December 2023
31 December 2022
Note
$’000
$’000
25,799
20,238
103
755
10, 11
20
(7,557)
(7,595)
(1,034)
–
(5,437)
(5,165)
(796)
(1,589)
9,716
8,006
*Right-of-use assets in the prior year were restated to prepayments and depreciation was restated, see note 2 for further details.
Exceptional items are included in administrative expenses and include the following items:
Exceptional items
Impairment of intangible assets
Exceptional items
Professional costs
Total exceptional items
Year ended
Year ended
31 December 2023
31 December 2022
$’000
–
–
–
–
$’000
(1,264)
(317)
(8)
(1,589)
Charitable contributions of $Nil (FY22: $317k) were classified as exceptional. These represent monies donated to charities in aid
of the Ukraine war.
Impairment of intangible assets of $Nil (FY22: $1,264k) was recognised, (further details can be found in note 11).
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Glossary
Abbreviation
Definition
A2A
AGM
AIM
AISP
ATV
Bundling
Carriers
Account to Account based payment systems allow payments to be made from one bank account
to another, generally in real time. They are contrasted with card-based payment systems where the
payment is mediated through a card scheme. In A2As the payment is direct. A2A payments can
be organised as schemes, typically under the jurisdiction of the Central Bank (UPI in India or Pix in
Brazil), as interbank initiatives (Twint in Switzerland, Blik in Poland) or as infrastructure (Open Banking
access to Faster Payments in the UK)
Annual General Meeting
Alternative Investment Market
Under Open Banking, an Account Information Service Provider, with consumer consent can access
information about the transactions and balances in the consumer’s bank account. AISPs can then
provide services that provide a consolidated view of a consumer’s activity across multiple banks, or
analysis that might not be available from their financial institution. In the UK, AISPs are authorised by
the FCA
The Average Transaction value is the TPV divided by the total number of successful transactions
The distribution of a digital entertainment company’s services through a 3rd party such as a Telco,
TV company, Bank or retailer, typically as part of a new tariff (e.g. “Get 6 month’s streaming music
as part of your mobile phone service”). Boku’s services link the distributor and the entertainment
company’s systems.
Carriers are the consumers phone company where purchases can be charged to a phone bill, see
DCB
Constant currency
Constant currency is calculated by applying the monthly average foreign exchange rates in 2022 to
the actual 2023 results
CEO
CFO
CGU
COO
CT
DCB
DEI
DT
EPS
Chief Executive Officer
Chief Finance Officer
Cash generating unit
Chief Operating Officer
Corporation tax
Direct Carrier Billing is a form of payment method whereby consumers can purchase digital goods
using their post-paid mobile phone account or pre-paid mobile phone balance.
Diversity, equity and inclusion
Deferred tax
Earnings per share
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
121
Financials
Glossary
Abbreviation
Definition
eWallet/digital wallet
An eWallet is a type of payment method that allows a user to undertake transactions online and,
sometimes, offline. A user will link their eWallet to a funding source which might be a bank account,
debit card or cash top up. The balance in the wallet is then used to fund the purchase. In some
cases, eWallets will have an auto top up feature that allows funds to be withdrawn from the funding
source if there is insufficient balance. Examples include Alipay, PayPal, Dana or Gopay.
GMC
Global management committee
Gross margin
The difference between revenue and cost of sales divided by revenue
Group
IFRS
Issuer
LPMs
LTIP
MAU
Merchant
MNOs
Nomad
NPV
Open Banking
PISP
Boku, Inc. and its controlled entities
International Financial Reporting Standards
The Issuer is the entity within the Boku system who has the relationship with the consumer, issues
them with payment credentials, collects the amounts owed by the consumer and settles them. The
Issuers within the Boku network include Mobile Network Operators, eWallet providers and A2A
schemes.
Local Payment Methods are those which typically operate in a single country. They embrace
domestic card schemes, domestic voucher schemes, mobile network operators, eWallets, Account
to Account based payment systems and Buy Now Pay Later operators. Local Payment schemes
typically operate to their own standard and are not interoperable with other schemes.
Long term incentive plan
Boku defines a Monthly Active User as one who has undertaken one or more successful payment
transactions or who has an active bundle within the month in question. Users who have registered
and still have an active payment method on file are not defined as active unless they have
successfully transacted
The merchant is the party in the system who wishes to sell products or services to consumers and
needs to support various payment methods in order to collect the money.
Mobile network operator, see carrier.
Nominated adviser
Net present value
In Open Banking markets, banks are required to provide interfaces to authorised 3rd parties to
access account information (AISP) or initiate payments (PISP)
Under Open Banking, a Payment Initiation Service Provider, with consumer consent, can initiate
payments from the consumer’s bank account. In the UK, PISPs are authorised by the FCA
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www.boku.com
Abbreviation
Definition
Platform
The platform that Boku have built to connect Merchants and local payment methods
PPA
PSP
PwC
RCF
RSU
Price purchase allocation
A Payment Service Provider acts as a technical layer connecting a merchant to various issuers. The
base level of service is the transaction model where only technical services are provided. It can be
supplemented by the settlement model whereby funds are collected and settled to those merchants.
PricewaterhouseCoopers LLP
Revolving credit fund
Restricted Stock Units are share awards subject to a vesting schedule and certain vesting conditions
Settlement Model
In the Settlement model, Boku provides not only technical transaction processing services but also
collects the funds due from the Issuers and settles them to the merchant in the currency of their
choice.
SID
Senior Independent Director
SMS aggregator
Company used by Boku used to purchase SMS messages in bulk
Take Rate
TPV
Take rate is defined as revenue divided by TPV. It is a measure of the average price obtained
Total Payment Volume is total value transacted through the system in US dollars. For payments, this
is the total amount successfully transacted by consumers translated into USD at average FX rates
for the month. For bundling transactions, it represents the total retail value of the bundles. In some
case this value is inferred from revenue.
Transaction model
The Transaction Model is when Boku provides solely technical connectivity services to a merchant
who arranges for settlement directly with the issuer.
WACC
Weighted average cost of capital
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
123
Financials
Boku, Inc. Company Information
Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London
England
WC2N 6RH
Principal Bankers
Citi
388 Greenwich Street
New York, NY 10013
USA
Registered Address
660 Market Street
4 Floor, Suite 400
San Francisco
CA, 94104-50004
USA
Nominated Adviser and Joint Broker
Investec Bank plc
30 Gresham Street
London
England
EC2V 7QP
Joint Broker
Peel Hunt LLP
7th Floor
100 Liverpool Street
London
England
EC2M 2AT
124
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
www.boku.com
Stock code: BOKU
Boku Inc Annual Report and Accounts for the year ended 31 December 2023
125
Boku, Inc.Stock Code: BOKU