Boku, Inc. · LSE:BOKU

Boku — Investor Day (February 2023)

75 slides from Boku's investor day presentation, Feb 22, 2023

1. Slide 1: Capital Markets Day

   Capital Markets Day 22nd February 2023

2. Slide 2: Your Speakers

   Your Speakers Jon Prideaux Adam Lee Mark Stannard Lex Ledger CEO Chief Product Officer Chief Business Officer Director Global Payments, Spotify Chris Newton-Smith Keegan Flanigan Keith Butcher Kristen Morrow-Greven Chief Operating Officer Chief Technical Officer Chief Financial Officer Global Head C

3. Slide 3: Agenda

   Agenda Introduction Jon Prideaux, Chief Executive Officer, Boku Why Local Payments? Adam Lee, Chief Product Officer, Boku Spotify Payments Lex Ledger, Director Global Payments Partnerships and Optimisation, Spotify Why Boku? Mark Stannard, Chief Business Officer, Boku How Boku Delivers Chris Newton-

4. Slide 4: Local Payment Methods = More Users

   Local Payment Methods = More Users 2021 eCommerce Payments Share The number of new Payment Method Usage (selected countries) members signing up last year using 100% alternative payment Cards LPM 90% methods more than 80% tripled. 70% Source:https://www.bloomberg.com/news/article s/2022-06-27 /netfli

5. Slide 5: Boku Network

   Boku Network TH-PromptPay- RU-Megafon-DCB JP-KDDI-DCB ID-Indosat-DCB BR-Claro-DCB A2A ID-XL-DCB BR-TIM-DCB BD-Grameenphone- DCB JP-LINEPay- EG-Vodafone- ZA-Vodacom- ID-GoPay- VN-Viettel- DE-O2-DCB Wallet TH-AIS-DCB PK-Zong-DCB DCB DCB Wallet DCB BD-Robi-DCB ID-Telkomsel-DCB DE- TH- VN- 7.7 billion a

6. Slide 6: Customised Connections Work Better

   Customised Connections Work Better >400 custom integrations to Issuers Custom integrations to merchant specs Continuous Continuous optimisation optimisation Drive Growth Create Efficiencies Enhance Customer Experience DCB = Direct Carrier Billing A2A = Account to Account © 2023 Boku Inc. All rights

7. Slide 7: Hard to Replicate

   Hard to Replicate Platform Settlement Culture >400 custom Regulated payments Optimised for working connections to issuers capability in 54 markets with global giants Payment integrations to 150 Bank accounts People in 24 countries world’s leading merchants 34 Boku entities Used to working with c. $1

8. Slide 8: Wallets and Account to Account Drive Revenue Growth

   Wallets and Account to Account Drive Revenue Growth LPMs – Account to Account (A2A/RTP) Expect to overtake eWallet revenues. (higher take rate than DCB) LPMs – Wallets Revenue Primary driver of near-term growth (higher take rate than DCB) Carrier Commerce (DCB+Bundling) Continued growth. Merchants h

9. Slide 9: Why Local Payments?

   Why Local Payments? Adam Lee, Chief Product Officer

10. Slide 10: When digital entertainment first moved online

    When digital entertainment first moved online, a credit card was required for any downloads, in-app purchases, and subscriptions © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 10

11. Slide 11: Prepaid gift cards offered the only alternative

    Prepaid gift cards offered the only alternative to the credit card © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 11

12. Slide 12: DCB provided a solution that was more accessible

    DCB provided a solution that was more accessible, more convenient, more effective. © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 12

13. Slide 13: After its adoption, Google Play & Apple App Store saw 15% of revenue from DCB

    After its adoption, Google Play & Apple App Store 1Ovum Carrier Billing Forecast Report: 2018-2023 saw 15% of their worldwide revenue come from DCB © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 13

14. Slide 14: Digital Entertainment $300 Billion

    Source: Insights on the Online Entertainment Global Market to 2027 - Continual Technological Advancements in Smart Devices Drives Growth (yahoo.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc.

15. Slide 15: B2C $13 Trillion

    B2C $13 Trillion Source: Global E-Commerce Market Reached US$ 13 Trillion in 2021 (prnewswire.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 15

16. Slide 16: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 16

17. Slide 17: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 17

18. Slide 18: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 18

19. Slide 19: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 19

20. Slide 20: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 20

21. Slide 21: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 21

22. Slide 22: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 22

23. Slide 23: Digital Entertainment $300 Billion

    Source: Insights on the Online Entertainment Global Market to 2027 - Continual Technological Advancements in Smart Devices Drives Growth (yahoo.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc.

24. Slide 24: B2C $13 Trillion

    B2C $13 Trillion Source: Global E-Commerce Market Reached US$ 13 Trillion in 2021 (prnewswire.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 24

25. Slide 25: Mobile Wallets

    Mobile Wallets LEGEND LIVE ROADMAP Current as of: 21 Jan. 2023 © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 25

26. Slide 26: Account-to-Account / Real Time Payments (A2A/RTP)

    Account-to-Account / Real Time Payments (A2A/RTP) © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 26

27. Slide 27: Real Time Payments via QR

    Real Time Payments via QR © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 27

28. Slide 28: © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is

    © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 28

29. Slide 29: Account to Account / Real Time Payments

    Account to Account / Real Time Payments LEGEND LIVE ROADMAP Current as of: SEPA ICT 21 Jan. 2023 Korea RTP © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 29

30. Slide 30: Digital Entertainment $300 Billion

    Source: Insights on the Online Entertainment Global Market to 2027 - Continual Technological Advancements in Smart Devices Drives Growth (yahoo.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc.

31. Slide 31: B2C $13 Trillion

    B2C $13 Trillion Source: Global E-Commerce Market Reached US$ 13 Trillion in 2021 (prnewswire.com) Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 31

32. Slide 32: B2B $49 Trillion

    B2B $49 Trillion B2B Payment Transaction Market Size Will Attain USD 81,840 (globenewswire.com) B2C $13 Trillion Digital Entertainment $300 Billion © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 32

33. Slide 33: Why Boku?

    Why Boku? Mark Stannard, Chief Business Officer

34. Slide 34: Visa and MasterCard – The De Facto Payment Standard for the Internet?

    Visa and MasterCard – The De Facto Payment Standard for the Internet? Total Payment Volume ($USD Tn) © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 34

35. Slide 35: Absolute Growth of Cards Masks Relative Decline Against Local Payments

    Absolute Growth of Cards Masks Relative Decline Against Local Payments Local Payment Methods Source: Worldpay reports 2012-2021 Cards © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 35

36. Slide 36: Absolute Growth of Cards Masks Relative Decline Against Local Payments

    Absolute Growth of Cards Masks Relative Decline Against Local Payments Local Payment Methods Source: Worldpay reports 2012-2021 Cards © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 36

37. Slide 37: Card Acceptance is Easy

    Card Acceptance is Easy • Standard Technical Specifications • Standard Functionality • Standard Settlement • Standard Reporting © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 37

38. Slide 38: LPM Acceptance is Difficult

    LPM Acceptance is Difficult • No Technical Standards • No Functionality Standards • No Settlement Standards • No Reporting Standards © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 38

39. Slide 39: Boku Makes LPM Acceptance Easy

    Boku Makes LPM Acceptance Easy • Boku Technical Standards • Boku Functionality Standards • Boku Settlement Standards • Boku Operational Standards © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 39

40. Slide 40: LPMs Require a Very Different Beast to Get You to Your Destination

    LPMs Require a Very Different Beast to Get You to Your Destination Card Processors Boku • Visa & Mastercard create & maintain standards • Boku creates & maintains standards • Card Processors rely on Visa / MasterCard to collect money • Boku has set up entities & licenses to move money • Card Process

41. Slide 41: Different Success Factors for Cards & LPMs

    Different Success Factors for Cards & LPMs Card Processors Boku Standardisation Customisation Scale Complexity Specialisation is our friend Commodity Value Win on Price Win on Quality © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc.

42. Slide 42: Different Success Factors for Cards & LPMs

    Different Success Factors for Cards & LPMs Card Processors Boku Standardisation Customisation Scale Complexity Specialisation Simplicity to is our friend our Merchants Commodity Value Win on Price Win on Quality © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a regist

43. Slide 43: Boku Engagement Model

    Boku Engagement Model Advise on what to use Build bespoke tools & where to go. Market to create efficiencies developments to meet & reduce costs merchant objectives Redesign LPMs to meet merchant Understand merchant requirements - requirements, e.g., tokenization, build LPMs to order, subscriptions,

44. Slide 44: A Specialised Focus Delivers Better Results

    A Specialised Focus Delivers Better Results TPV TPV +35% +20% +$40M +$7M Merchant switched a Merchant switched a major LPM major LPM connection from a connection from a major card major card processor to Boku processor to Boku and saw a +35% and saw a +20% revenue uplift on revenue uplift on the con

45. Slide 45: Why Amazon Chose Boku

    Growth by Adding More Merchants Why Amazon Chose Boku Referral Functionality Existing Major Boku Only Boku could merchant referred deliver required Amazon to Boku functionality due to tech stack capabilities Reach Adaptability Boku had the reach Boku built bespoke to launch Amazon functionality to m

46. Slide 46: Growth by going wider

    Growth by going wider Connected with Boku Boku payment connection © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 46

47. Slide 47: Growth by going deeper

    Growth by going deeper Live with Boku New Opportunity © 2023 Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL • ‘Boku’ is a registered trademark of Boku, Inc. 47

48. Slide 48: How Boku Delivers

    How Boku Delivers Chris Newton-Smith, Chief Operating Officer Keegan Flanigan, Chief Technical Officer

49. Slide 49: How Boku Delivers for Large Merchants

    How Boku Network • >400 custom connections to issuers Delivers for • Regulated payments capability in 54 markets Large Merchants • 150 Bank accounts • 34 Boku entities Services • Optimised for working with global giants • Multi-year delivery roadmaps for merchants • People in 24 countries Platform •

50. Slide 50: Boku is Building a New Network

    Boku is Building a New Network There are no defined schemes for LPMs (unlike credit cards) ★ Boku sets the network standard ★ High quality integration signed off by Boku expert Card Processors • Standards provided ★ Best practices from 400+ connections by card schemes • Simple integration based on t

51. Slide 51: Unique Network of Payment Licenses

    Unique Network of Payment Licenses European Economic Area Hong Kong India Authorised Payment Institution Money Service Operator In-principle Payment Aggregator Central Bank Ireland HKCED Reserve Bank of India LPM payment services are locally regulated Boku’s regulated payments cover 54 markets Phili

52. Slide 52: Unique Network of Regulated Payment Methods

    Unique Network of Regulated Payment Methods Regulated Payments (54 markets) Transaction capability (additional 29 markets) Settlement capability suspended Regulated Payments: Countries No capability where Boku is authorised to provide regulated payment services for international merchants and, where

53. Slide 53: Creating LPM Settlement Operations

    Creating LPM Settlement Operations • Boku has created settlement operations for LPMs (provided by scheme in cards) • Unifies complex, local settlement for global merchants • 150 bank accounts, 34 entities, 33 local currencies Accounting Settlement Treasury & Reporting • Receive and • Funds available

54. Slide 54: Accelerating Launches for Large Merchants

    Accelerating Launches for Large Merchants Faster Time To Market & Lower Cost • Reverse integrations Card Processors • Customisation to close gaps • Standardization – merchants need • Program adapted to merchant to adapt to PSP • Scale – no Large Scale customisation in product or program • Commoditiz

55. Slide 55: Boku Platform: Extensible

    Boku Platform: Extensible Issuers Merchants Built for World Class Merchant Needs Core platform provides building blocks to create solutions customized to merchant needs. Simplifies complexity of connecting to over 400 distinct issuer APIs into single integration. Reduces work for merchants and creat

56. Slide 56: Boku Platform: Reliable

    Boku Platform: Reliable Redundancy across software, virtual hardware & geography • Fully cloud based platform hosted in AWS • Two independent AWS regions running in active/active with ~1 second failover • 800+ highly available services running across multiple Kubernetes clusters • 99.99% success rat

57. Slide 57: Boku Platform: Scalable

    Boku Platform: Scalable Successful Transactions Capacity to expand 1,200 • Peak transactional 1,000 throughput of over 400 transactions per second 800 (TPS); capacity of over 1000 TPS Millions 600 • Supporting over 1.2b transactions per year 400 • Each AWS region capable of handling 200 100% of max

58. Slide 58: Boku Platform: Secure

    Boku Platform: Secure • No data leaks, no intrusions • ISO 27001 certified — international standard for information security • Accelerated security investments in 2021–2022 to deliver requirements of strategic merchants and regulators • More than 50 external security assessment completed in 2022 — o

59. Slide 59: 2022 Financials

    2022 Financials Keith Butcher, Chief Financial Officer

60. Slide 60: 2022 Full Year Trading Update – strong growth

    2022 Full Year Trading Update – strong growth Revenue ($m) +2.0% +14% • Revenues $63.3m. +14% in constant currency 70.0 Constant Currency (2021: $62.1m). 60.0 62.1 63.3 • H2: 19% growth over H2 2021 50.0 51.2 • Payments adj. EBITDA at least $20m 40.0 • FX headwinds 43.5 • continued investment in mob

61. Slide 61: 2022 Trading Update – Operational KPIs

    2022 Trading Update – Operational KPIs Total Payment Volume (TPV) Strong Underlying Payment metrics 10.0 +20% • Monthly Active Users up 28% (11.3m) to 52.3m Constant 9.0 +8% Currency in December 2022: (December 2021: 41.0m) 8.0 • 56.7m new users made their first payment or 8.9 7.0 bundling transacti

62. Slide 62: 2022 Trading Update – Strong Growth in New Payment Types

    2022 Trading Update – Strong Growth in New Payment Types Monthly Active Users - New LPMs (millions) 4,000 8X Strong growth in new payment types 3,500 • eWallets 3,000 • account to account/real-time payments 2,500 • 8x increase in volumes in 2022 2,000 processed from eWallets and account to account/r

63. Slide 63: Significant Operating Leverage in Payments Model

    Significant Operating Leverage in Payments Model 2016 to 2020: 80%+ drop through of revenues to EBITDA (DCB) 25.0 Powerful Operating leverage DCB 20.0 • 97% gross margins 15.0 • No real cost of incremental transactions 10.0 • Opex – heavily fixed 5.0 • EBITDA drop through high 80% - 2016 2017 2018 2

64. Slide 64: Significant Operating Leverage in Payments Model

    Significant Operating Leverage in Payments Model 2021 and 2022: years of investment to deliver LPMs Powerful Operating leverage DCB 25.0 • 97% gross margins 20.0 • No real cost of incremental transactions • Opex – heavily fixed 15.0 • EBITDA drop through high 80% 10.0 5.0 LPM investment phase since

65. Slide 65: Mid Term Financial Outlook

    Mid Term Financial Outlook

66. Slide 66: Mid Term Outlook – Revenue Expected to Double

    Mid Term Outlook – Revenue Expected to Double Local Payment Methods will drive revenue growth LPMs – Account to Account (A2A/RTP) Expect to overtake eWallet revenues. (higher take rate than DCB) Revenue LPMs – Wallets Primary driver of near-term growth (higher take rate than DCB) Carrier Commerce (D

67. Slide 67: Mid Term Outlook – Regional Mix Will Change

    Mid Term Outlook – Regional Mix Will Change Asia remains strong but other Revenue by region - evolution regions growing strongly Americas APAC EMEA UK/Ireland EMEA/UK growth strong. Growth in Europe and Africa mainly from Wallets/A2A. Revenue APAC will grow strongly and continue to be main source of

68. Slide 68: Mid Term Outlook – Merchant Mix Will Change

    Mid Term Outlook – Merchant Mix Will Change Revenue by merchant Most growth from existing major merchants Focus on existing large global digital giants • Majority existing merchants (inc. Amazon) Revenue • Limited need to find new merchants • Declining revenue concentration Existing Merchants New Me

69. Slide 69: Take Rate Will Increase, Opex Will Flatten

    Take Rate Will Increase, Opex Will Flatten Take rates expected to increase LPM investment phase ending • Take rate currently 0.73% (73 bps) • Fixed costs/opex - will scale • Fees are from the merchants • Headcount growth to slow • Fees are % of TPV • Platform costs fixed • All volume related, no one

70. Slide 70: Mid Term Outlook – EBITDA Margins to Grow

    Mid Term Outlook – EBITDA Margins to Grow EBITDA margins to increase to over 50% Summary • Revenues expected to double over a 60 reasonable period of time 50 • Most of the growth will be LPMs – wallets and then A2As on solid base of DCB • Most of growth from existing merchants 40 ~50% • Merchants ar

71. Slide 71: Conclusion

    Conclusion

72. Slide 72: Summary

    Boku Capital Markets Day Summary The “Big Pond” is a huge and growing market. Boku high quality, customised which is and is starting to connections to large appreciated by deliver material merchants & local merchants and revenue and payment issuers is a hard to replicate… profit growth. winning prop

73. Slide 73: Q&A

    Q&A

74. Slide 74: Our Values

    We're committed to the long-term growth of our customers, even if it costs us more in the short run. 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 s

75. Slide 75: Slide 75

Boku — Investor Day (February 2023) on 6ix