Boku: Boku Inc (FRA:B04) (Q4 2024) Earnings Call Highlights: Strong Revenue Growth Amid Strategic ...

In This Article: Release Date: March 18, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Boku Inc ( FRA:B04 ) reported strong organic revenue growth of 24% on a constant exchange rate basis. The company achieved a higher adjusted EBITDA margin, maintaining above 30%, which supports strategic investments for future growth. Monthly active users (MAUs) increased by 29%, and new users on the Boku platform grew by 26% year on year. Boku Inc expanded its network by adding over 100 new connections and launched its first e-commerce in Japan. The company remains debt-free with robust cash generation, reflecting financial stability and confidence in strategic investments. Negative Points Operating profit decreased to 6.2 million due to increased share-based payment expenses and FX losses, primarily related to JPY. The company faces challenges in maintaining high take rates as it expands into high-value e-commerce transactions with lower margins. There is a need for significant investment in automation and compliance to handle increased transaction volumes efficiently. Boku Inc's bundling growth is dependent on merchant demand, which can be unpredictable and lumpy. The competitive landscape varies dramatically by market, with traditional players still present in major markets like Brazil and India. Q & A Highlights Warning! GuruFocus has detected 2 Warning Signs with FRA:B04. Q : Could you talk about the bundling outlook in the medium term and what drives that growth? A : Unidentified_3 (CFO): We expect the combined payment and bundling DCB piece to grow at a consistent rate with 2024, around 11%. Unidentified_2 (CEO): Bundling demand is driven by customer needs to distribute their products, and while it can be lumpy, we continue to invest in it. Q : Can you discuss the FX opportunity and insourcing FXs around account-to-account transactions? A : Unidentified_2 (CEO): A to A schemes are set up for domestic needs, but international merchants can benefit from cross-border transactions, which presents FX opportunities. For example, Amazon in the Philippines will use local payment methods for cross-border transactions. Q : What is the go-to-market strategy for the next 100 large merchants? A : Unidentified_2 (CEO): We are working on creating a standardized version of our product to attract multinational customers. This involves developing a standard set of SLAs and pricing, which will allow us to mobilize the sales team and start closing deals by early 2026. Q : How are you strengthening your USP relative to competitors, and what is your medium-term growth outlook? A : Unidentified_2 (CEO): We have the broadest network and our tech is hardened by demanding customers, which gives us an edge. Unidentified_3 (CFO): We have a variety of revenue sources, both existing and new, and expect continued growth from network connections and new customers. Q : Can you elaborate on the mid-term growth outlook for LPMs, DCB, and the treasury opportunity? A : Unidentified_3 (CFO): We expect DCB payments to grow mid to high single digits, LPMs to continue meaningful growth, and treasury activities to increasingly contribute to revenue as we expand FX conversion and money movement capabilities. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus .