Boku, Inc. · LSE:BOKU
Boku — Investor Day (May 2019)
77 slides from Boku's investor day presentation, May 22, 2019
Slide 1: Boku Investor Day
Boku Investor Day 22 May 2019 © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc.
Slide 2: Agenda
Agenda Vision & Strategy Jon Prideaux,CEO Platform & Network Mike Cahill, COO Boku Payments Mark Stannard, CBO, Payments Merchant Perspective Ben King, SVP Global Distribution and Business Development, DAZN Boku Identity Paul McGuire, Head of Boku Labs Finance Stuart Neal, CFO Trading Update Jon Pri
Slide 3: Vision & Strategy - Jon Prideaux, CEO
Vision & Strategy - Jon Prideaux, CEO © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 3
Slide 4: Mobile: Distribution maturing, usage has hardly started
Mobile: Distribution maturing, usage has hardly started © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 4
Slide 5: Mobile: A New Computing Paradigm
Mobile: A New Computing Paradigm © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 5
Slide 6: © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a
© 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 6
Slide 7: Mobile: Carriers have the key, but are fragmented
Mobile: Carriers have the key, but are fragmented Need for an intermediary to remove the complexity for Merchants © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 7
Slide 8: Boku Platform: Mobile Transactions Made Simple
Boku Platform: Mobile Transactions Made Simple Illustrative list of carriers. No claim made about specific networks Note: MSISDN: Mobile Station International Subscriber Directory Number or the mobile number © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered
Slide 9: The Master Plan
The Master Plan Note: MSISDN: Mobile Station International Subscriber Directory Number or the mobile number © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 9
Slide 10: Sources of Competitive Advantage
Sources of Competitive Advantage Scale Carrier Network Global Merchants Scale acquired on Building Carrier network Proven ability to contract one application has taken >$100m with and rollout transferable to another and 10 years global merchants © 2019, Boku Inc. All rights reserved • PROPRIETARY AN
Slide 11: We've Only Just Begun
We’ve Only Just Begun Mobile Transactions Made Simple • Removing Friction, whilst maintaining security • Simplifying any mobile transaction from any sector at any stage of the user journey © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku,
Slide 12: Key messages
Key messages Mobile disruption brings huge opportunities Boku Platform can be configured to address multiple opportunities Our existing network’s scale brings significant competitive advantage We have only just begun © 2019 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a re
Slide 13: Platform & Network – Mike Cahill, COO
Platform & Network – Mike Cahill, COO © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 13
Slide 14: Boku Platform: Reliable
Boku Platform: Reliable Multi-substrate - services deployed in 2 data centers and in Google Cloud Platform and Amazon Web Services Redundant at all levels: • Software - 400+ services deployed High Availability in 600+ Virtual Machines • Hardware – everything from power supplies to network interfaces
Slide 15: Boku Platform: Scalable
Boku Platform: Scalable Major capital investment complete - platform can handle 3 times current peak load © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 15
Slide 16: Boku Platform: Secure
Boku Platform: Secure • 5 DDoS attacks, 78 Injection-based attacks and 208 vulnerability scans in 2018. None successful. • Averaged 1 external security assessment per week in 2018 – library of answers to 675 unique questions (so far) • SOC 2 compliant for identity Personally Identifiable Information
Slide 17: Boku Platform: Connected
Boku Platform: Connected © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 17
Slide 18: Boku Platform: Simple To Connect
Boku Platform: Simple To Connect • Insulate merchants from the complexities of connecting to myriad carriers and dealing with local regulatory requirements • Customer support provided in 15 languages in local time zones. • User-interface available in 31 languages • Boku transacts in 41 currencies, s
Slide 19: Round-the-clock Monitoring
Round-the-clock Monitoring • 24 x 7 x 365 Network Operations Center • Sophisticated monitoring with 25k metrics checked per second © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 19
Slide 20: Boku Platform: Flexible
Boku Platform: Flexible Illustrative list of carriers. No claim made about specific networks • Only Boku has access to advanced carrier functionality. • With service oriented architecture, can assemble new APIs from existing capabilities. • Easy to integrate Danal services into the Boku platform. No
Slide 21: Boku Platform: Performing at Scale
Boku Platform: Performing at Scale • Service Level Agreement (SLA): 500 milliseconds • Achievement • 99th percentile: <200 milliseconds • Average: <100 milliseconds • Cumulatively ~$9bn in TPV processed. Over 1bn transaction records stored • 47bn+ Database operations since April 2019 © 2019, Boku In
Slide 22: Boku Platform: Summarised
Boku Platform: Summarised • Zero unscheduled downtime in 2018 • Major capital investment is complete • Zero security issues • Transactions in 41 Currencies • Customer Service in 15 languages • 25k metrics checked per second • Myriad capabilities can be assembled into new APIs • 220 Transactions Per
Slide 23: Boku Network: Summarised
Boku Network: Summarised • Leading Global Coverage – 58 Countries • Leading Integration Coverage – 183 carriers • Leading Identity Coverage – Technical capability in 42 countries, enabled across 91 Carriers © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered
Slide 24: Key messages
Key messages Leading Global Network Flexible Platform Leading Reliability Most Efficient Rollout © 2019 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 24
Slide 25: Boku Payments – Mark Stannard, CBO, Payments
Boku Payments – Mark Stannard, CBO, Payments © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 25
Slide 26: Boku Payment: Strategic Relationships
Boku Payment: Strategic Relationships DCB Provider #2 App Store © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 26
Slide 27: Boku's Payment and Acquisition Products
Boku’s Payment and Acquisition Products © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 27
Slide 28: Why do our Merchants use Boku?
Why do our Merchants use Boku? New Users We act like a payment company, but are hired to acquire and retain users Merchants need Lower CAC: Netflix spends $45 to recruit a new International subscriber • One Tap to Enrol improves conversion rates Lower Churn / Longer LTV • Phone numbers don’t expire
Slide 29: More Premium Users for Spotify
More Premium Users for Spotify Boku Account’s 1-tap Activation significantly out-performs credit card & PayPal. © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 29
Slide 30: Competitive Advantage - Scale
Competitive Advantage - Scale Better Service • More resources to service global merchants Higher Quality • More data to optimise Better Economics • Lower Unit costs than competitors © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 3
Slide 31: Growth in Underlying Market and Broader Distribution…
Growth in Underlying Market and Broader Distribution… Source: Ovum 2018 © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 31
Slide 32: Growth: More Connections for Existing Merchants
Growth: More Connections for Existing Merchants Source: Ovum 2018 *Carriers with transactions LTM © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 32
Slide 33: Boku Partners with GrabPay
Boku Partners with GrabPay Who are Grab? • $14B valuation • Live: MY, SG, TH, VN, ID, CM, MM, PH • $1B annualised revenue run rate • 139 Million Downloads *DMR Business Statistics Why partner with Boku? Same challenges as carriers: • Fragmented • Limited territories • Non-standard settlement and rec
Slide 34: … drive predictable growth in users on the Boku platform
… drive predictable growth in users on the Boku platform Monthly Active Users on Boku Platform © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 34
Slide 35: …and increasing levels of TPV
…and increasing levels of TPV © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 35
Slide 36: Key messages
Key messages Strong Merchant Base Predictable growth from past implementations Strong pipeline of future potential New products to drive growth faster © 2019 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 36
Slide 37: Ben King, SVP Global Distribution and Business Development, DAZN
Ben King, SVP Global Distribution and Business Development, DAZN © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 37
Slide 38: Ben King – SVP Global Distribution and Business Development
BEN KING – SVP GLOBAL DISTRIBUTION AND BUSINESS DEVELOPMENT
Slide 39: Welcome to DAZN
WELCOME TO DAZN DAZN is redefining the linear world of sports entertainment through the creation of the world’s first, pure OTT, sports broadcast platform LETS CHANGE THE GAME 39
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Slide 41: Key Milestones
KEY MILESTONES Mayweather v McGregor Live in 5 Live in 7 Launched in Global Japan Launch Italy Launch USA Launch in Japan & DACH Markets Markets Spain Expansion Featured in App DACH, Japan & Launching in DACH Launch Store’s Canada Launch Canada UCL & Brazil ”Best of 2017” UEL Start 41
Slide 42: DAZN's Unique Proposition
DAZN’S UNIQUE PROPOSITION Having seen the opportunity early, and moved aggressively, DAZN is ready to win in the sports OTT market. This is how we succeed… WW RIGHTS EXPERTISE FAN FIRST PHILOSOPHY 1. 2. Know the true market value of every sport in A simple, flexible and affordable product every mark
Slide 43: Own Market Leading Rights in All Territories
OWN MARKET LEADING RIGHTS IN ALL TERRITORIES 43
Slide 44: World Class Product & Team
WORLD CLASS PRODUCT & TEAM • World class product available on all major devices • 20,000+ live sporting events per year • User engagement driven by dynamic and intuitive product Available on 96% of devices 44
Slide 45: Unlocking the Power of OTT…
UNLOCKING THE POWER OF OTT… CONSUMER LED INNOVATION NO CHANNEL RESTRICTIONS - Downloads - Zero rated data - Live looking 2000+ LIVE EVENTS UNIQUE CONTENT Creating engaging and ground breaking per month original programming UNBOUNDING OF PREMIUM SPORT Creating engaging and ground breaking 3600+ LIVE
Slide 46: Why are Carriers / Operators Important?
WHY ARE CARRIERS / OPERATORS IMPORTANT? 46
Slide 47: DAZN for Operators
DAZN FOR OPERATORS Working in partnership with mobile, broadband and Pay TV partners REACH • Circa 10bn billing relationships with nearly every adult human being on earth • Substantial sales and marketing channels to reach customers BILLING • Widens access to customers unable or unwilling to use cre
Slide 48: Why Boku?
WHY BOKU? 48
Slide 49: Boku Unlocks Broad Distribution Opportunities
BOKU UNLOCKS BROAD DISTRIBUTION OPPORTUNITIES Billing Reselling Bundling 49
Slide 50: Boku for DAZN
BOKU FOR DAZN Why choose Boku? SPEED & EFFICIENCY • Plug and play connectivity to 80+ operators • Technical expertise and experience to build new connections to suit DAZN’s needs RELIABILITY • Successfully deliver against needs of world’s biggest blue-chip organisations • Can demonstrate ability for
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Slide 52: Boku Identity – Paul McGuire, Head of Boku Labs
Boku Identity – Paul McGuire, Head of Boku Labs © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 52
Slide 53: Boku Identity – Driving new Growth
Boku Identity – Driving new Growth Transforms our Market opportunity • No longer limited to digital goods – any type of payment • No longer limited to payments – any type of mobile transaction Builds on our existing Platform / Network capabilities • Example of our Platform strategy in action We are
Slide 54: Leveraging our Platform to enter a new Market
Leveraging our Platform to enter a new Market • Our Payments business is based on Authentication + Charge • Unbundling this proven, international Authentication capability • Coupled with Danal assets creates a leading IDENTITY business © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDEN
Slide 55: A Large Market
A Large Market 1. Breakdown only based on Account Opening and Account Management use cases (excl. transaction verification) 2. includes Health & Education Source: McKinsey https://fuelbymckinsey.com/article/the-next-20-billion-digital-market-id-verification-as-a-service © 2019, Boku Inc. All rights
Slide 56: Big Problems on Mobile
Big Problems on Mobile • Email is not a strong primary identity on Mobile • Data from Apps is unverified & not secure • Mobile Number is not enough (SIM Swap fraud / Recycling) • Fraud is migrating to mobile Merchants need a solution… © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENT
Slide 57: Boku has the Answer
Boku has the Answer Silent device Authentication • Applying the magic of DCB to Identity • No User Involvement Reduces fraud and improves conversion Previously an impossible combination Can be applied to any transaction on Mobile © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL.
Slide 58: Solves Multiple Use Cases
Solves Multiple Use Cases Reduce Fraud & Streamline the Strong Customer Reduce the Risk from Account Improve Conversion Authentication process Take Over Fraud Streamline User Registration, Avoid blocking high-value Verify Name & Address data Users who are travelling © 2019, Boku Inc. All rights rese
Slide 59: Legacy SMS One-Time Password vs Boku
Legacy Boku SMS One-Time Password Silent Authentication © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 59
Slide 60: Current Merchants and Channel Partners
Current Merchants and Channel Partners Mainly US Companies, most operating globally => Need for Internationalisation Able to leverage Boku Global Network © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 60
Slide 61: Boku Identity: Two Business Models
Boku Identity: Two Business Models Recurring: Per Transaction: Identities under Management Charge per check • Phone verification • Valid Mobile-ID Token • Match Name & Address • Active / inactive • Match User profile data • Number change • Confidence / Risk Score © 2019, Boku Inc. All rights reserve
Slide 62: Identity Non Financial KPIs
Identity Non Financial KPIs © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 62
Slide 63: Growth Strategy
Growth Strategy • Triple Sales Force • Enable Identity in new • Tokenised Identity markets + Confidence Score • Direct + Channels • Extend rollout across entire • Moving from data broker • USA, Europe, Asia Boku Network to Identity solutions • Sector-specific focus • Continue to add additional • Sin
Slide 64: Key Messages - Identity
Key Messages - Identity Significant Growth Opportunities in a Large Market New, Game-changing Identity solution Leading International Coverage Strong Traction already in Financial Services Rolling out to new Sectors and Markets © 2019 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Bo
Slide 65: Finance – Stuart Neal, CFO
Finance – Stuart Neal, CFO © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 65
Slide 66: TPV Growth Feeding into Revenue
TPV Growth Feeding into Revenue © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 66
Slide 67: Blended Take Rates
Blended Take Rates Blended take rates are slowly attenuating due to rapid growth in Transaction model business changing the overall revenue mix. Contracts include volume bandings where marginal take rates are lower at significant volumes (as is typical in payments contracts) Transaction Model c. 90%
Slide 68: Expenses Under Control
Expenses Under Control Gross Margin: improved from 91% to 93% *Adjusted Operating Expenditure=Administrative expenses adjusted to exclude depreciation and amortization, share option expenses, foreign exchange gains and losses and exceptional items (which include IPO costs). © 2019, Boku Inc. All rig
Slide 69: Adjusted EBITDA a positive $6.3m
Adjusted EBITDA a positive $6.3m *Adjusted Operating Expenditure=Administrative expenses adjusted to exclude depreciation and amortization, share option expenses, foreign exchange gains and losses and exceptional items (which include IPO costs). © 2019, Boku Inc. All rights reserved • PROPRIETARY AN
Slide 70: Gearing In Action
Gearing In Action • 2018 the company generated its maiden FY positive Adjusted EBITDA • In 2018, 80% of Boku Payments Revenue Growth turned into Adj EBITDA • EBITDA growth % was significantly higher than revenue growth for the Payments business • Boku Identity will impact the gearing due to the need
Slide 71: Cashflow
Cashflow 13.7 • The company is now generating cash - Through P&L growth - Through positive working capital • Closing balances are strong at $31.1m (excl. $1.3m of restricted cash) • Average cash balances, which smooth out the effect of intra- month settlement flows, grew from $19.2m in Dec 17 to $24
Slide 72: Boku will grow Revenues and reduce Concentration Risk in 2019
Boku will grow Revenues and reduce Concentration Risk in 2019 In 2019, Boku will operate as a multi-product business with a broader set of merchants: • Group Revenue to be at least $52m • 15-20% of revenue to come from Identity • Strong Gross Margins • Payments to remain at 93% • Identity to improve
Slide 73: Trading Update – Jon Prideaux, CEO
Trading Update – Jon Prideaux, CEO © 2019, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a registered trademark of Boku, Inc. 73
Slide 74: Trading Update
Trading Update Encouraging 4M Trading: Payments • TPV: 4M-2019: $1.6bn +64% (4M-2018 $989m) • MAU: 4M-2019: 14.6m +56% (4M-2018: 9.4m) Identity • Monitored Numbers 4M-2019: 69.8m +458% (4M-2018: 12.5m) • Billable Transactions 4M-2019: 102m +106% (4M-2018: 49.7m) © 2019, Boku Inc. All rights reserved
Slide 75: Key messages
Key messages Mobile disruption brings huge opportunities Boku Platform can be configured to address multiple opportunities Our existing network’s scale brings significant competitive advantage We have only just begun © 2019 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku’ is a re
Slide 76: Our Values
Our Values Things might not happen as planned. Stay calm, alter course and move on. Trust and respect each other. Encourage others to do the same. Welcome others’ opinions and ideas. We’re all on the same team. We are building a great big global payment network. Aim for (modest) world domination. ©
Slide 77: Mobile Transactions Made Simple
eooku Mobile Transactions Made Simple