Q2 2025 Results: Lesaka beats profitability guidance for Q2 2025, reaffirms FY2025 guidance and sets FY2026 profitability guidance

JOHANNESBURG, February 6, 2025 – Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) released results for the second quarter of fiscal 2025 (“Q2 2025”).

Q2 2025 performance:

• Revenue of ZAR 2.6 billion was at the upper end of our revenue guidance and compares to ZAR 2.7 billion in Q2 2024.

• Net Revenue (a non-GAAP measure) of ZAR 1.4 billion was at the upper end of our Net Revenue guidance increasing 42% in ZAR, from ZAR 968.7 million in Q2 2024.

• Operating income of ZAR 14.2 million was lower than operating income of ZAR 42.5 million in Q2 2024.

• Net loss, including a tax adjusted ZAR 485.6 million non-operating, non-cash, change in fair value of Mobikwik (a non-core asset), increased to ZAR 583 million compared to a net loss of ZAR 50.8 million in Q2 2024.

• GAAP loss per share increased to ZAR 7.32 from ZAR 0.79 in Q2 2024.

• Group Adjusted EBITDA (a non-GAAP measure) of ZAR 211.8 million improved 26% in ZAR from ZAR 167.8 million in Q2 2024, exceeding guidance provided

• Fundamental earnings per share (a non-GAAP measure) of ZAR 0.29 improved by 12% in ZAR, from ZAR 0.26 in Q2 2024.

• Merchant Division revenue decreased 5% in ZAR to ZAR 2.1 billion, Net Revenue increased 68% in ZAR to ZAR 854.4 million and Segment Adjusted EBITDA increased by 32% in ZAR, to ZAR 185.11 million.

• Consumer Division revenue increased 31% in ZAR to ZAR 410.7 million and Segment Adjusted EBITDA increased 61% in ZAR, to ZAR 77.5 million.

(1)   Average exchange rates applicable for the quarter: ZAR 17.85 to $1 for Q2 2025, ZAR 18.71 to $1 for Q2 2024. The ZAR strengthened 4.6% against the U.S. dollar during Q2 2025 when compared to Q2 2024.

Commenting on the results, Lesaka Chairman Ali Mazanderani said, “I am pleased that we exceeded our Group Adjusted EBITDA guidance for the quarter and can re-affirm our FY2025 guidance. We have now delivered on our profitability guidance for ten successive quarters.  Our Group Adjusted EBITDA guidance of ZAR 1.25 billion to ZAR 1.45 billion for FY2026 demonstrates our continued confidence in the Lesaka platform’s scalability.”

Outlook: Third Quarter 2025 (“Q3 2025”), reaffirming Full Fiscal Year 2025 (“FY 2025”) and Group Adjusted EBITDA guidance for Full Fiscal Year 2026 (“FY 2026”)

While we report our financial results in USD, we measure our operating performance in ZAR, and as such we provide our guidance accordingly.

For Q3 2025, the quarter ending March 31, 2025 we expect:

• Revenue between ZAR 2.4 billion and ZAR 2.6 billion.

• Net Revenue between ZAR 1.3 billion and ZAR 1.5 billion.

• Group Adjusted EBITDA between ZAR 230 million and ZAR 260 million.

 For FY2025, the year ending June 30, 2025, we expect:

• Revenue between ZAR 10.0 billion and ZAR 11.0 billion.

• Net Revenue between ZAR 5.2 billion and ZAR 5.6 billion.

• Group Adjusted EBITDA between ZAR 900 million and ZAR 1 billion

Our FY2025 outlook provided:

• Includes the impact of the acquisition of Adumo, which closed in October 2024 (in Q2 2025).

• Includes the impact of the acquisition of Recharger, which we expect to close in March 2025 (Q3 2025).

• Excludes the impact of unannounced mergers and acquisitions that we may conclude.

For FY2026, the year ending June 30, 2026, we expect:

For the financial year ending June 30, 2026, we expect Group Adjusted EBITDA between ZAR 1.25 billion and ZAR 1.45 billion. This includes the impact of Recharger for 12 months in FY2026 and excludes the impact of unannounced mergers and acquisitions that we may conclude. 

Management has provided its outlook regarding Net Revenue and Group Adjusted EBITDA, which are non-GAAP financial measures and excludes certain revenue and charges. Management has not reconciled these non-GAAP financial measures to the corresponding GAAP financial measures because guidance for the various reconciling items is not provided. Management is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the company's control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Earnings Presentation for Q2 2025 Results

Our earnings presentation will be posted to the Investor Relations page of our website prior to our earnings call.

Webcast and Conference Call

Lesaka will host a webcast and conference call to review results on February 6, 2025, at 8:00 a.m. Eastern Time which is 3:00 p.m. South Africa Standard Time (“SAST”). A replay of the results presentation webcast will be available on the Lesaka investor relations website following the conclusion of the live event.

Presentation webcast via Zoom:

Link to access the results webcast: https://bit.ly/3VzfPjT 

Participants using the webcast will be able to ask questions by raising their hand and then asking the question “live.”

Conference call dial-in:

• US Toll-Free:  +1 564 217 2000 or +1 646 931 3860

• South Africa Toll-Free: +27 21 426 8190 or +27 87 551 7702 or +27 87 550 3946

Participants using the conference call dial-in will be unable to ask questions.

A replay of the results presentation webcast will be available on the Lesaka investor relations website following the conclusion of the live event.

Our Form 10-Q for the quarter ended December 31, 2024, as filed with the SEC, is available on our company website at www.lesakatech.com.

Use of Non-GAAP Measures

U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA, Group Adjusted EBITDA margin, Net Revenue, fundamental net (loss) income, fundamental (loss) earnings per share, and headline (loss) earnings per share are non-GAAP measures. Refer to Attachment A for a reconciliation of these non-GAAP measures.

Non-GAAP Measures

Group adjusted EBITDA

Group Adjusted EBITDA is net loss before interest, taxes, depreciation and amortization, adjusted for non-operational transactions (including loss on disposal of equity-accounted investments), loss from equity-accounted investments, stock-based compensation charges and once-off items. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. Group Adjusted EBITDA margin is Group Adjusted EBITDA divided by revenue.

Net Revenue

We generate revenue from the provision of transaction-processing services through our various platforms and service offerings. We use these platforms to (a) sell prepaid airtime vouchers (“Pinned Airtime”) which was held as inventory, and (b) distribute pre-paid solutions including prepaid airtime vouchers (which we do not hold as inventory) (“Pinless Airtime”), prepaid electricity, gaming vouchers, and other products, to users of our platforms. We act as a principal when we sell Pinned Airtime that were held as inventory and record revenue and cost of sales on a gross basis when sold. We act as an agent in a transaction when we provide pre-paid solutions through our various platforms and services offerings because we do not control the good or service to be provided and we recognize revenue based on the amount that we are contractually entitled to receive for performing the distribution service on behalf of our customers using our platform. Our revenue under GAAP can fluctuate materially due to changes in the revenue mix between these revenue categories. Net Revenue is a non-GAAP measure and is calculated as revenue presented under GAAP less (i) the cost of Pinned Airtime sold by us, and (ii) commissions paid to third parties selling all other agency-based pre-paid solutions (including Pinless Airtime, electricity and other products) provided through our distribution channels. We believe that the use of Net Revenue is meaningful to users of financial information because it seeks to eliminate the impact of the change in the revenue mix from the revenue categories over the periods presented.

Fundamental net earnings (loss) and fundamental earnings (loss) per share

Fundamental net earnings (loss) and earnings (loss) per share is GAAP net loss and loss per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), stock-based compensation charges, and unusual non-recurring items, including costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net loss and loss per share for fiscal 2025 also includes adjustments related to changes in the fair value of equity securities (net of deferred tax), loss on disposal of equity-accounted investments and intangible asset amortization, net related to non-controlling interests.

Fundamental net earnings (loss) and earnings (loss) per share for fiscal 2024 also includes an impairment loss related to an equity-accounted investment, and a reversal of allowance for doubtful loan receivable.

Management believes that the Group Adjusted EBITDA, fundamental net earnings (loss) and fundamental earnings (loss) per share metrics enhance its own evaluation, as well as an investor’s understanding, of our financial performance. Attachment A presents the reconciliation between GAAP net loss attributable to Lesaka and these non-GAAP measures.

Headline (loss) earnings per share (“H(L)EPS”)

The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.

H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment losses related to our equity-accounted investments and (profit) loss on sale of property, plant and equipment. Attachment C presents the reconciliation between our net (loss) income used to calculate (loss) earnings per share basic and diluted and H(L)EPS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.

About Lesaka (www.lesakatech.com)

Lesaka Technologies, (Lesaka™) is a South African Fintech company driven by a purpose to provide financial services and software to Southern Africa’s underserviced consumers (B2C) and merchants (B2B), improving people’s lives and increasing financial inclusion in the markets in which we operate. We offer a wide range of integrated payment solutions including transactional accounts (banking), lending, insurance, payouts, cash management solutions, card acceptance, supplier payments, software services and bill payments. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.

Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.lesakatech.com for additional information about Lesaka Technologies (Lesaka ™).

Forward-Looking Statements

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “expects,” “estimates,” “projects,” “believes,” “anticipates,” “plans,” “could,” “would,” “may,” “will,” “intends,” “outlook,” “focus,” “seek,” “potential,” “mission,” “continue,” “goal,” “target,” “objective,” derivations thereof, and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating to future financial results and future financing and business opportunities are forward-looking statements. Additional information concerning factors that could cause actual events or results to differ materially from those in any forward-looking statement is contained in our Form 10-K for the fiscal year ended June 30, 2024, and our Form 10-Q for the quarterly period ended December 31, 2024, as filed with the SEC, as well as other documents we have filed or will file with the SEC. With respect to our proposed acquisition of Recharger, additional factors that could cause actual results to differ materially from those indicated or implied by the forward-looking statements include, among others: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the share purchase agreement relating to the proposed acquisition; (2) the ability to satisfy all conditions to completion of the proposed acquisition, including obtaining regulatory approvals; (3) unexpected costs, charges or expenses resulting from the transaction; (4) the disruption of management’s attention from our ongoing business operations due to the proposed acquisition; (5) changes in the financial condition of the markets that Recharger serves; (6) risks associated with Recharger’s product and service offerings or its results of operation; (7) the challenges, risks and costs involved with integrating the operations of Recharger with ours; and (8) our ability to realize the anticipated benefits of the proposed acquisition. We assume no obligation to update the information in this press release, to revise any forward-looking statements or to update the reasons actual results could differ materially from those anticipated in forward-looking statements.

Investor Relations and Media Relations Contacts:

Phillipe Welthagen

Email: phillipe.welthagen@lesakatech.com

Mobile: +27 84 512 5393

Media Relations Contact:

Ian Harrison

Email: Ian@thenielsennetwork.com