8-K
LESAKA TECHNOLOGIES INC (LSAK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 ___________________________
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 5, 2025
LESAKA TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)
| Florida | 000-31203 | 98-0171860 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
President Place, 4th Floor, Cnr.
Jan Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
\(Address of principal executive offices\) \(ZIP Code\)
Registrant’s telephone number, including area code: 011-27-11-343-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbols | Name of each exchange on which registered |
|---|---|---|
| Common Shares | LSAK | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition".
On February 5, 2025, Lesaka Technologies, Inc., a Florida corporation (the "Company"), issued a press release setting forth its financial results for the second quarter ended December 31, 2024.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibits | Description |
|---|---|
| 99.1 | Press Release, dated February 5, 2025, issued by Lesaka Technologies, Inc. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LESAKA TECHNOLOGIES, INC. | ||
|---|---|---|
| Date: February 5, 2025 | By: | /s/ Dan L. Smith |
| Name: | Dan L. Smith | |
| Title: | Group Chief Financial Officer |
Lesaka Technologies, Inc.: Exhibit 99.1 - Filed by newsfilecorp.com
Exhibit 99.1
Q2 2025 Results: Lesaka beats profitability guidance for Q2 2025, reaffirms FY2025 guidance and sets FY2026 profitability guidance
JOHANNESBURG, February 5, 2025 - Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released results for the second quarter of fiscal 2025 ("Q2 2025").
Q2 2025 performance:
- Revenue of $146.8 million (ZAR 2.6 billion) was at the upper end of our Revenue guidance and compares to $143.9 million (ZAR 2.7 billion) in Q2 2024.
- Net Revenue (a non-GAAP measure) of $77.1 million (ZAR 1.4 billion) was at the upper end of our Net Revenue guidance increasing 42% in ZAR, from $51.7 million (ZAR 968.7 million) in Q2 2024.
- Operating income of $0.8 million (ZAR 14.2 million) was lower than operating income of $2.3 million (ZAR 42.5 million) in Q2 2024.
- Net loss, including a tax adjusted $26.6 million (ZAR 485.6 million) non-operating, non-cash, change in fair value of Mobikwik (a non-core asset), increased to $32.1 million (ZAR 583.7 million) compared to a net loss of $2.7 million (ZAR 50.8 million) in Q2 2024.
- GAAP loss per share increased to $0.40 (ZAR 7.32) from $0.04 (ZAR 0.79) in Q2 2024.
- Group Adjusted EBITDA (a non-GAAP measure) of $11.8 million (ZAR 211.8 million) improved 26% in ZAR from $9.0 million (ZAR 167.8 million) in Q2 2024, exceeding guidance provided
- Fundamental earnings per share (a non-GAAP measure) of $0.01 (ZAR 0.29) improved by 12% in ZAR, from $0.01 (ZAR 0.26) in Q2 2024.
- Merchant Division Revenue decreased 5% in ZAR to $115.8 million (ZAR 2.1 billion), Net Revenue increased 68% in ZAR to $47.7 million (ZAR 854.5 million) and Segment Adjusted EBITDA increased by 32% in ZAR, to $10.3 million (ZAR 185.1 million).
- Consumer Division Revenue and Net Revenue increased 31% in ZAR to $22.9 million (ZAR 410.7 million) and Segment Adjusted EBITDA increased 61% in ZAR, to $4.3 million (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 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 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
Lesaka Technologies, Inc.
Attachment A
Reconciliation of GAAP loss attributable to Lesaka to Group Adjusted EBITDA loss:
Three and six months ended December 31, 2024 and 2023, and three months ended September 30, 2024
| **** | **** | **** | **** | **** | **** | **** | Three months ended | Six months ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | **** | **** | **** | **** | **** | **** | December 31, | Sept 30, | December 31, | ||||||||||||
| **** | **** | **** | **** | **** | **** | **** | 2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||
| Loss attributable to Lesaka - GAAP | $ | (32,134 | ) | $ | (2,707 | ) | $ | (4,542 | ) | $ | (36,676 | ) | $ | (8,358 | ) | ||||||
| Less net income attributable to noncontrolling interest | (28 | ) | - | - | (28 | ) | - | ||||||||||||||
| **** | Net loss | (32,106 | ) | (2,707 | ) | (4,542 | ) | (36,648 | ) | (8,358 | ) | ||||||||||
| Loss from equity accounted investments | (50 | ) | (43 | ) | (27 | ) | (77 | ) | 1,362 | ||||||||||||
| Net loss before (earnings) loss from equity-accounted investments | (32,156 | ) | (2,750 | ) | (4,569 | ) | (36,725 | ) | (6,996 | ) | |||||||||||
| Income tax (benefit) expense | (6,412 | ) | 686 | 78 | (6,334 | ) | 950 | ||||||||||||||
| Loss before income tax expense | (38,568 | ) | (2,064 | ) | (4,491 | ) | (43,059 | ) | (6,046 | ) | |||||||||||
| Reversal of allowance for doubtful EMI loans receivable | - | - | - | - | (250 | ) | |||||||||||||||
| Change in fair value in equity securities | 33,731 | - | - | 33,731 | - | ||||||||||||||||
| Net (gain) loss on disposal of equity-accounted investment | 161 | - | - | 161 | - | ||||||||||||||||
| Unrealized (gain) loss FV for currency adjustments | 435 | (122 | ) | (219 | ) | 216 | (20 | ) | |||||||||||||
| Operating income/(loss) after PPA amortization and net interest (non-GAAP) | (4,241 | ) | (2,186 | ) | (4,710 | ) | (8,951 | ) | (6,316 | ) | |||||||||||
| PPA amortization (amortization of acquired intangible assets) | 4,867 | 3,592 | 3,747 | 8,614 | 7,200 | ||||||||||||||||
| Operating income/(loss) before PPA amortization after net interest (non-GAAP) | 626 | 1,406 | (963 | ) | (337 | ) | 884 | ||||||||||||||
| Interest expense | 6,174 | 4,822 | 5,032 | 11,206 | 9,731 | ||||||||||||||||
| Interest income | **** | (721 | ) | (485 | ) | (586 | ) | (1,307 | ) | (934 | ) | ||||||||||
| Operating income/(loss) before PPA amortization and net interest (non-GAAP) | 6,079 | 5,743 | 3,483 | 9,562 | 9,681 | ||||||||||||||||
| Depreciation (excluding amortization of intangibles) | 3,356 | 2,221 | 2,529 | 5,885 | 4,469 | ||||||||||||||||
| Interest adjustment | (757 | ) | - | (831 | ) | (1,588 | ) | - | |||||||||||||
| Stock-based compensation charges | 2,644 | 1,804 | 2,377 | 5,021 | 3,563 | ||||||||||||||||
| Once-off items (refer below) | 488 | (816 | ) | 1,805 | 2,293 | (738 | ) | ||||||||||||||
| Group Adjusted EBITDA - Non-GAAP | $ | 11,810 | $ | 8,952 | $ | 9,363 | $ | 21,173 | $ | 16,975 | |||||||||||
| **** | **** | **** | **** | **** | **** | Three months ended | Six months ended | ||||||||||||||
| **** | **** | **** | **** | **** | **** | December 31, | Sep 30, | December 31, | |||||||||||||
| **** | **** | **** | **** | **** | **** | 2024 | 2023 | 2024 | 2024 | 2023 | |||||||||||
| Once-off items comprises: | |||||||||||||||||||||
| Transaction costs | $ | 684 | $ | 102 | $ | 103 | $ | 787 | $ | 180 | |||||||||||
| Transaction costs related to Adumo acquisition | - | 34 | 1,702 | 1,702 | 34 | ||||||||||||||||
| Indirect taxes provision | (196 | ) | - | - | (196 | ) | - | ||||||||||||||
| Income recognized incurred related to closure of legacy businesses | - | (952 | ) | - | - | (952 | ) | ||||||||||||||
| $ | 488 | $ | (816 | ) | $ | 1,805 | $ | 2,293 | $ | (738 | ) |
Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transaction costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span multiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo over a number of quarters, and the transactions are generally non-recurring.
Indirect tax provision release relates to the reversal of a non-recurring indirect tax provision created in fiscal 2023 which was resolved in fiscal 2025 following settlement of the matter with the tax authority. Income recognized related to closure of legacy businesses represents (i) gains recognized related to the release of the foreign currency translation reserve on deconsolidation of a subsidiaries and (ii) costs incurred related to subsidiaries which we are in the process of deregistering/ liquidation and therefore we consider these costs non-operational and ad hoc in nature.
Year ended June 30, 2024 and 2023
| **** | **** | **** | **** | **** | Year ended | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | **** | **** | **** | **** | **** | June 30, | |||||
| **** | **** | **** | **** | **** | **** | 2024 | 2023 | ||||
| Loss attributable to Lesaka - GAAP | $ | (17,440 | ) | $ | (35,074 | ) | |||||
| Loss from equity accounted investments | 1,279 | 5,117 | |||||||||
| Net loss before (earnings) loss from equity-accounted investments | (16,161 | ) | (29,957 | ) | |||||||
| Income tax (benefit) expense | 3,363 | (2,309 | ) | ||||||||
| Loss before income tax expense | (12,798 | ) | (32,266 | ) | |||||||
| Reversal of allowance for doubtful EMI loans receivable | (250 | ) | - | ||||||||
| Net (gain) loss on disposal of equity-accounted investment | - | 205 | |||||||||
| Impairment loss | - | 7,039 | |||||||||
| Unrealized (gain) loss FV for currency adjustments | (83 | ) | 222 | ||||||||
| Operating income (loss) after PPA amortization and net interest (non-GAAP) | (13,131 | ) | (24,800 | ) | |||||||
| PPA amortization (amortization of acquired intangible assets) | 14,419 | 15,149 | |||||||||
| Operating income (loss) before PPA amortization after net interest (non-GAAP) | 1,288 | (9,651 | ) | ||||||||
| Interest expense | 18,932 | 18,567 | |||||||||
| Interest income | (2,294 | ) | (1,853 | ) | |||||||
| Operating income (loss) before PPA amortization and net interest (non-GAAP) | 17,926 | 7,063 | |||||||||
| Depreciation (excluding amortization of intangibles) | 9,246 | 8,536 | |||||||||
| Stock-based compensation charges | 7,911 | 7,309 | |||||||||
| Once-off items (refer below) | 1,853 | 1,922 | |||||||||
| Group Adjusted EBITDA - Non-GAAP | $ | 36,936 | $ | 24,830 | |||||||
| **** | **** | **** | **** | **** | **** | Year ended | |||||
| **** | **** | **** | **** | **** | **** | June 30, | |||||
| **** | **** | **** | **** | **** | **** | 2024 | **** | 2023 | |||
| Once-off items comprises: | |||||||||||
| Transaction costs | $ | 512 | $ | 850 | |||||||
| Transaction costs related to Adumo acquisition | 2,293 | - | |||||||||
| (Income recognized) Expenses incurred related to closure of legacy businesses | (952 | ) | 639 | ||||||||
| Non-recurring revenue not allocated to segments | - | (1,469 | ) | ||||||||
| Employee misappropriation of company funds | - | 1,202 | |||||||||
| Separation of employee expense | - | 262 | |||||||||
| Indirect taxes provision | - | 438 | |||||||||
| $ | 1,853 | **** | $ | 1,922 |
Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transaction costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span multiple quarters, for instance in fiscal 2024 we incurred significant transaction costs related to the acquisition of adumo over a number of quarters, and the transactions are generally non-recurring.
(Income recognized) Expenses incurred related to closure of legacy businesses represents (i) gains recognized related to the release of the foreign currency translation reserve on deconsolidation of a subsidiaries and (ii) costs incurred related to subsidiaries which we are in the process of deregistering/ liquidation and therefore we consider these costs non-operational and ad hoc in nature. Non-recurring revenue not allocated to segments includes once off revenue recognized that we believe does not relate to either our Merchant or Consumer divisions. Employee misappropriation of company funds represents a once-off loss incurred. Indirect tax provision includes non-recurring indirect taxes which have been provided related to prior periods following an on-going investigation from a tax authority. We incurred separation costs related to the termination of certain senior-level employees, including an executive officer and senior managers, during the fiscal year and we consider these specific terminations to be of a non-recurring nature. The legacy processing adjustments represents amounts we identified during fiscal 2022 related to prior periods that are payable to third parties.
Reconciliation of revenue under GAAP to Net Revenue:
Three and six months ended December 31, 2024 and 2023, and three months ended September 30, 2024
| **** | **** | **** | **** | Three months ended | Six months ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | **** | **** | **** | December 31, | Sep 30, | December 31, | ||||||||||||
| **** | **** | **** | **** | 2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||
| Revenue - GAAP | $ | 146,818 | $ | 143,893 | $ | 145,546 | $ | 292,364 | $ | 279,982 | ||||||||
| Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency-based products | (69,758 | ) | (92,163 | ) | (86,737 | ) | (156,495 | ) | (179,489 | ) | ||||||||
| Net Revenue (non-GAAP) | $ | 77,060 | $ | 51,730 | $ | 58,809 | $ | 135,869 | $ | 100,493 | ||||||||
| Net Revenue / revenue | 52% | 36% | 40% | 46% | 36% | |||||||||||||
| Merchant revenue - GAAP | $ | 115,811 | $ | 117,182 | $ | 115,630 | $ | 231,441 | $ | 229,243 | ||||||||
| Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency-based products | (68,097 | ) | (89,968 | ) | (85,173 | ) | (153,270 | ) | (175,281 | ) | ||||||||
| Merchant Net Revenue (non-GAAP) | $ | 47,714 | $ | 27,214 | $ | 30,457 | $ | 78,171 | $ | 53,962 |
Reconciliation of GAAP net loss and loss per share, basic, to fundamental net earnings (loss) and earnings (loss) per share, basic:
Three months ended December 31, 2024 and 2023
| **** | Net (loss) income( '000) | (L)PS, basic () | Net (loss) income<br>(ZAR '000) | (L)PS, basic <br>(ZAR) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| GAAP | (32,134 | (2,707 | ) | (0.40 | (0.04 | ) | (583,694 | ) | (50,819 | ) | (7.32 | ) | (0.79 | ) |
| Change in fair value of equity securities, net | 26,647 | - | **** | 485,621 | - | **** | ||||||||
| Intangible asset amortization, net | 3,553 | 2,624 | **** | 63,495 | 49,104 | **** | **** | |||||||
| Stock-based compensation charge | 2,644 | 1,804 | **** | 47,400 | 33,810 | **** | **** | |||||||
| Transaction costs | 684 | 136 | **** | 12,330 | 2,556 | **** | **** | |||||||
| Indirect taxes provision release | (196 | - | **** | (3,508 | ) | - | **** | **** | ||||||
| Net loss on disposal of equity-accounted investments | (161 | - | **** | 2,886 | - | **** | **** | |||||||
| Amortization, net related to non-controlling interest | (84 | - | **** | (1,503 | ) | - | **** | **** | ||||||
| Non core international - unrealized currency loss | - | (952 | ) | **** | - | (17,648 | ) | **** | ||||||
| Fundamental | 953 | 905 | 0.01 | 0.01 | 23,027 | 17,003 | 0.29 | 0.26 |
All values are in US Dollars.
Six months ended December 31, 2024 and 2023
| **** | Net (loss) income ( '000) | (L) EPS, basic () | Net (loss) income <br>(ZAR '000) | (L)EPS, basic <br>(ZAR) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| GAAP | (36,676 | (8,358 | ) | (0.46 | (0.13 | ) | (664,717 | ) | (156,454 | ) | (8.29 | ) | (2.43 | ) |
| Change in fair value of equity securities, net | 26,647 | - | **** | 485,621 | - | **** | **** | |||||||
| Stock-based compensation charge | 5,021 | 3,563 | **** | 90,091 | 66,607 | **** | **** | |||||||
| Intangible asset amortization, net | 6,288 | 5,249 | **** | 112,668 | 98,208 | **** | **** | |||||||
| Transaction costs | 2,489 | 214 | **** | 44,158 | 4,021 | **** | **** | |||||||
| Indirect taxes provision release | (196 | - | **** | (3,508 | ) | - | **** | **** | ||||||
| Net loss on disposal of equity-<br>accounted investments | 161 | - | **** | 2,886 | - | **** | **** | |||||||
| Intangible asset amortization, net <br>related to non-controlling interest | (84 | - | **** | (1,503 | ) | - | **** | **** | ||||||
| Impairment of equity method investments | - | 1,167 | **** | - | 22,084 | **** | **** | |||||||
| Non core international - unrealized <br>currency (gain) loss | - | (952 | ) | **** | - | (17,648 | ) | **** | ||||||
| Allowance for doubtful EMI loans <br>receivable | - | (250 | ) | **** | - | (4,741 | ) | **** | **** | |||||
| Fundamental | 3,650 | 633 | 0.05 | 0.01 | 65,696 | 12,077 | 0.82 | 0.19 |
All values are in US Dollars.
Attachment B
Unaudited Condensed Consolidated Financial Statements
LESAKA TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations
| **** | **** | Unaudited | Unaudited | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended | Six months ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| (In thousands) | (In thousands) | ||||||||||||
| REVENUE | $ | 146,818 | $ | 143,893 | $ | 292,364 | $ | 279,982 | |||||
| EXPENSE | |||||||||||||
| Cost of goods sold, IT processing, servicing and support | 101,298 | 114,266 | 212,185 | 221,756 | |||||||||
| Selling, general and administration | 36,520 | 21,507 | 63,246 | 44,022 | |||||||||
| Depreciation and amortization | 8,223 | 5,813 | 14,499 | 11,669 | |||||||||
| Transaction costs related to Adumo acquisition | - | 34 | 1,702 | 34 | |||||||||
| OPERATING (LOSS) INCOME | **** | 777 | **** | 2,273 | **** | 732 | **** | 2,501 | |||||
| CHANGE IN FAIR VALUE OF EQUITY SECURITIES | (33,731 | ) | - | (33,731 | ) | - | |||||||
| REVERSAL OF ALLOWANCE FOR DOUBTFUL EMI LOAN RECEIVABLE | - | - | - | 250 | |||||||||
| LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT | 161 | - | 161 | - | |||||||||
| INTEREST INCOME | 721 | 485 | 1,307 | 934 | |||||||||
| INTEREST EXPENSE | 6,174 | 4,822 | 11,206 | 9,731 | |||||||||
| LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE | **** | (38,568 | ) | **** | (2,064 | ) | **** | (43,059 | ) | **** | (6,046 | ) | |
| INCOME TAX (BENEFIT) EXPENSE | (6,412 | ) | 686 | (6,334 | ) | 950 | |||||||
| NET LOSS BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS | **** | (32,156 | ) | **** | (2,750 | ) | **** | (36,725 | ) | **** | (6,996 | ) | |
| EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS | 50 | 43 | 77 | (1,362 | ) | ||||||||
| NET LOSS | **** | (32,106 | ) | **** | (2,707 | ) | **** | (36,648 | ) | **** | (8,358 | ) | |
| (ADD) LESS NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 28 | - | 28 | - | |||||||||
| NET LOSS ATTRIBUTABLE TO LESAKA | $ | (32,134 | ) | $ | (2,707 | ) | $ | (36,676 | ) | $ | (8,358 | ) | |
| Net loss per share, in United States dollars: | |||||||||||||
| Basic loss attributable to Lesaka shareholders | $ | (0.40 | ) | $ | (0.04 | ) | $ | (0.51 | ) | $ | (0.13 | ) | |
| Diluted loss attributable to Lesaka shareholders | $ | (0.40 | ) | $ | (0.04 | ) | $ | (0.51 | ) | $ | (0.13 | ) |
LESAKA TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
| **** | **** | **** | Unaudited | Unaudited | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended | Six months ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| (In thousands) | (In thousands) | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | $ | (32,106 | ) | $ | (2,707 | ) | $ | (36,648 | ) | $ | (8,358 | ) | ||
| Depreciation and amortization | 8,223 | 5,813 | 14,499 | 11,669 | ||||||||||
| Movement in allowance for doubtful accounts receivable and finance loans receivable | 2,521 | 1,164 | 4,020 | 2,689 | ||||||||||
| Movement in interest payable | 1,864 | (1,573 | ) | 3,557 | 191 | |||||||||
| Fair value adjustment related to financial liabilities | (454 | ) | (836 | ) | (264 | ) | (870 | ) | ||||||
| Loss on disposal of equity-accounted investments | 161 | - | 161 | - | ||||||||||
| (Gain) Loss from equity-accounted investments | (50 | ) | (43 | ) | (77 | ) | 1,362 | |||||||
| Reversal of allowance for doubtful loans receivable | - | - | - | (250 | ) | |||||||||
| Change in fair value of equity securities | 33,731 | - | 33,731 | - | ||||||||||
| Profit on disposal of property, plant and equipment | (14 | ) | (163 | ) | (41 | ) | (199 | ) | ||||||
| Facility fee amortized | 68 | 89 | 137 | 316 | ||||||||||
| Stock-based compensation charge | 2,644 | 1,804 | 5,021 | 3,563 | ||||||||||
| Dividends received from equity accounted investments | 65 | 54 | 65 | 54 | ||||||||||
| Increase in accounts receivable and other receivables | (11,988 | ) | (13,157 | ) | (4,295 | ) | (15,502 | ) | ||||||
| Increase in finance loans receivable | (8,325 | ) | (2,889 | ) | (9,915 | ) | (3,377 | ) | ||||||
| (Increase) Decrease in inventory | (4,560 | ) | 985 | (5,449 | ) | 506 | ||||||||
| Increase (Decrease) in accounts payable and other payables | 8,135 | 13,728 | (9,042 | ) | 14,103 | |||||||||
| (Decrease) Increase in taxes payable | (153 | ) | (654 | ) | 612 | (346 | ) | |||||||
| Decrease in deferred taxes | (8,928 | ) | (1,032 | ) | (9,374 | ) | (1,594 | ) | ||||||
| Net cash provided by (used in) operating activities | (9,166 | ) | 583 | (13,302 | ) | 3,957 | ||||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditures | (6,318 | ) | (2,198 | ) | (10,283 | ) | (5,007 | ) | ||||||
| Proceeds from disposal of property, plant and equipment | 475 | 436 | 1,325 | 720 | ||||||||||
| Acquisition of intangible assets | (428 | ) | (47 | ) | (601 | ) | (182 | ) | ||||||
| Acquisitions, net of cash acquired | (3,957 | ) | - | (3,957 | ) | - | ||||||||
| Proceeds from disposal of equity-accounted investment | - | 3,508 | - | 3,508 | ||||||||||
| Repayment of loans by equity-accounted investments | - | 250 | - | 250 | ||||||||||
| Net change in settlement assets | (1,266 | ) | (43 | ) | 2,304 | (11,280 | ) | |||||||
| **** | Net cash (used in) provided by investing activities | (11,494 | ) | 1,906 | (11,212 | ) | (11,991 | ) | ||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from bank overdraft | 48,855 | 69,012 | 72,748 | 128,586 | ||||||||||
| Repayment of bank overdraft | (4,512 | ) | (66,048 | ) | (35,540 | ) | (128,841 | ) | ||||||
| Long-term borrowings utilized | 12,903 | 8,557 | 13,677 | 11,028 | ||||||||||
| Repayment of long-term borrowings | (8,322 | ) | (3,184 | ) | (13,794 | ) | (5,813 | ) | ||||||
| Acquisition of treasury stock | (12,586 | ) | (198 | ) | (12,586 | ) | (198 | ) | ||||||
| Proceeds from issue of shares | 51 | 2 | 51 | 23 | ||||||||||
| Guarantee fee | (431 | ) | - | (431 | ) | - | ||||||||
| Dividends paid to non-controlling interest | (301 | ) | - | (301 | ) | - | ||||||||
| Net change in settlement obligations | 1,209 | 197 | (2,439 | ) | 10,893 | |||||||||
| **** | Net cash provided by financing activities | 36,866 | 8,338 | 21,385 | 15,678 | |||||||||
| Effect of exchange rate changes on cash | (5,278 | ) | 2,005 | (2,052 | ) | 1,562 | ||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 10,928 | 12,832 | (5,181 | ) | 9,206 | |||||||||
| Cash, cash equivalents and restricted cash - beginning of period | 49,809 | 55,006 | 65,918 | 58,632 | ||||||||||
| Cash, cash equivalents and restricted cash - end of period | $ | 60,737 | $ | 67,838 | $ | 60,737 | $ | 67,838 |
LESAKA TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Balance Sheets
| Unaudited | (A) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| December 31, | June 30, | ||||||||
| 2024 | 2024 | ||||||||
| (In thousands, except share data) | |||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| $ | 60,625 | $ | 59,065 | ||||||
| 112 | 6,853 | ||||||||
| 46,203 | 36,667 | ||||||||
| 49,529 | 44,058 | ||||||||
| 27,346 | 18,226 | ||||||||
| 183,815 | 164,869 | ||||||||
| Settlement assets | 27,550 | 22,827 | |||||||
| Total current assets | 211,365 | **** | 187,696 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - December: 48,124; June: 49,762 | 42,295 | 31,936 | |||||||
| OPERATING LEASE RIGHT-OF-USE | 7,649 | 7,280 | |||||||
| EQUITY-ACCOUNTED INVESTMENTS | 181 | 206 | |||||||
| GOODWILL | 200,760 | 138,551 | |||||||
| INTANGIBLE ASSETS, net of accumulated amortization of - December: 52,897; June: 46,200 | 125,964 | 111,353 | |||||||
| DEFERRED INCOME TAXES | 6,278 | 3,446 | |||||||
| OTHER LONG-TERM ASSETS, including equity securities | 46,082 | 77,982 | |||||||
| TOTAL ASSETS | 640,574 | **** | 558,450 | ||||||
| LIABILITIES | |||||||||
| CURRENT LIABILITIES | |||||||||
| - | 6,737 | ||||||||
| 51,152 | 9,351 | ||||||||
| 16,704 | 16,674 | ||||||||
| 59,416 | 56,051 | ||||||||
| 3,257 | 2,343 | ||||||||
| 68,300 | 3,878 | ||||||||
| 1,385 | 654 | ||||||||
| 200,214 | 95,688 | ||||||||
| Settlement obligations | 26,882 | 22,358 | |||||||
| Total current liabilities | 227,096 | **** | 118,046 | ||||||
| DEFERRED INCOME TAXES | 36,260 | 38,128 | |||||||
| OPERATING LEASE LIABILITY - LONG TERM | 4,819 | 5,087 | |||||||
| LONG-TERM BORROWINGS | 80,357 | 139,308 | |||||||
| OTHER LONG-TERM LIABILITIES, including insurance policy liabilities | 3,048 | 2,595 | |||||||
| TOTAL LIABILITIES | 351,580 | 303,164 | |||||||
| REDEEMABLE COMMON STOCK | 88,957 | 79,429 | |||||||
| EQUITY | |||||||||
| LESAKA EQUITY: | |||||||||
| COMMON STOCK | |||||||||
| ****** | 101 | 83 | |||||||
| PREFERRED STOCK | |||||||||
| - | - | ||||||||
| ADDITIONAL PAID-IN-CAPITAL | 421,950 | 343,639 | |||||||
| TREASURY SHARES, AT COST: December: 28,297,365; June: 25,563,808 | (302,319 | ) | (289,733 | ) | |||||
| ACCUMULATED OTHER COMPREHENSIVE LOSS | (199,969 | ) | (188,355 | ) | |||||
| RETAINED EARNINGS | 273,547 | 310,223 | |||||||
| TOTAL LESAKA EQUITY | **** | 193,310 | **** | 175,857 | |||||
| NON-CONTROLLING INTEREST | 6,727 | - | |||||||
| TOTAL EQUITY | 200,037 | **** | 175,857 | ||||||
| TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY | $ | 640,574 | $ | 558,450 |
All values are in US Dollars.
(A) Derived from audited consolidated financial statements.
Lesaka Technologies, Inc.
Attachment C
Reconciliation of net loss used to calculate loss per share basic and diluted and headline loss per share basic and diluted:
Three months ended December 31, 2024 and 2024
| 2024 | 2023 | |||
|---|---|---|---|---|
| Net loss ('000) | (32,134 | ) | (5,651 | ) |
| Adjustments: | ||||
| 161 | - | |||
| (14 | ) | (163 | ) | |
| 4 | 44 | |||
| Net loss used to calculate headline loss ('000) | (31,983 | ) | (5,770 | ) |
| Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss ('000) | 79,753 | 63,805 | ||
| Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss ('000) | 79,753 | 63,805 | ||
| Headline loss per share: | ||||
| (0.40 | ) | (0.09 | ) | |
| (0.40 | ) | (0.09 | ) |
All values are in US Dollars.
Six months ended December 31, 2024 and 2024
| 2024 | 2023 | |||
|---|---|---|---|---|
| Net loss ('000) | (36,676 | ) | (8,358 | ) |
| Adjustments: | ||||
| - | 1,167 | |||
| 161 | - | |||
| (41 | ) | (199 | ) | |
| 11 | 54 | |||
| Net loss used to calculate headline loss ('000) | (36,545 | ) | (7,336 | ) |
| Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss ('000) | 72,037 | 63,134 | ||
| Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss ('000) | 72,037 | 63,134 | ||
| Headline loss per share: | ||||
| (0.51 | ) | (0.12 | ) | |
| (0.51 | ) | (0.12 | ) |
All values are in US Dollars.
Calculation of the denominator for headline diluted loss per share
| Three months ended<br><br> <br>December 31, | Six months ended December 31, | ||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||
| Basic weighted-average common shares outstanding and unvested restricted <br>shares expected to vest under GAAP | 79,753 | 63,805 | 72,037 | 63,134 | |
| Denominator for headline diluted loss per share | 79,753 | 63,805 | 72,037 | 63,134 |
Weighted average number of shares used to calculate headline diluted loss per share represents the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully diluted shares outstanding to calculate headline diluted loss per share because we do not use the two-class method to calculate headline diluted loss per share.