8-K: Lesaka Delivers on FY2025 Profitability Guidance, Eyes Strong FY2026 Growth

Lesaka Technologies, Inc. reported strong FY2025 operational performance, meeting profitability guidance and projecting over 100% adjusted earnings per share growth for FY2026.

Summary

• For the full fiscal year 2025 (FY2025), revenue increased by 14% in ZAR to $659.7 million (ZAR 12.0 billion) compared to FY2024.
• Net Revenue (non-GAAP) for FY2025 grew by 38% in ZAR to $328.7 million (ZAR 5.3 billion).
• The company reported a Net Loss of $87.5 million (ZAR 1.6 billion) for FY2025, a 386% increase in ZAR, primarily due to a $49.3 million (ZAR 897.6 million) non-operating, non-cash charge from the change in fair value and sale of MobiKwik, $18.4 million (ZAR 326.2 million) in impairment losses, and $17.8 million (ZAR 321.9 million) in once-off transaction costs.
• Group Adjusted EBITDA (non-GAAP) for FY2025 reached $50.7 million (ZAR 922.2 million), up 33% in ZAR, successfully achieving the guidance provided.
• Adjusted earnings per share (non-GAAP) for FY2025 increased by 187% in ZAR to $0.13 (ZAR 2.29).
• The Merchant Division's Net Revenue grew by 46% in ZAR to $202.3 million (ZAR 3.0 billion) for FY2025, with Segment Adjusted EBITDA up 20% in ZAR to $36.2 million (ZAR 657 million).
• The Consumer Segment's Net Revenue increased by 35% in ZAR to $96.0 million (ZAR 1.7 billion) for FY2025, and Segment Adjusted EBITDA surged by 83% in ZAR to $23.9 million (ZAR 435 million).

Sentiment

Score: 7

Explanation: The sentiment is positive due to meeting profitability guidance, strong growth in key non-GAAP metrics (Net Revenue, Adjusted EBITDA, Adjusted EPS), and a very optimistic outlook for FY2026, despite significant GAAP net losses attributed to specific non-cash and once-off items.

Positives

• Achieved FY2025 profitability guidance with Group Adjusted EBITDA of $50.7 million (ZAR 922.2 million), up 33% year-on-year in ZAR.
• Strong growth in Net Revenue for FY2025, increasing 38% in ZAR to $328.7 million.
• Adjusted earnings per share for FY2025 grew significantly by 187% in ZAR to $0.13 (ZAR 2.29).
• Provided robust FY2026 guidance, expecting Group Adjusted EBITDA growth of at least 35% and Adjusted earnings per share to more than double to at least ZAR 4.60.
• Consumer Segment Adjusted EBITDA showed exceptional growth of 83% in ZAR, driven by an increased active consumer base and successful cross-selling of lending and insurance products.

Negatives

• Reported a significant Net Loss of $87.5 million (ZAR 1.6 billion) for FY2025, a 386% increase in ZAR.
• The Net Loss was largely impacted by non-operating, non-cash charges including $49.3 million (ZAR 897.6 million) related to MobiKwik, $18.4 million (ZAR 326.2 million) in impairment losses, and $17.8 million (ZAR 321.9 million) in once-off transaction costs.

Risks

• Forward-looking statements 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.
• The FY2026 guidance excludes the impact of the Bank Zero acquisition, which is subject to regulatory approval by the Prudential Authority and the South African Reserve Bank and other customary closing conditions, introducing uncertainty regarding its contribution.

Future Outlook

For Q1 FY2026, Net Revenue is expected to be between ZAR 1.50 billion and ZAR 1.65 billion, with Group Adjusted EBITDA between ZAR 260 million and ZAR 300 million. For the full FY2026, Net Revenue is projected between ZAR 6.4 billion and ZAR 6.9 billion, and Group Adjusted EBITDA between ZAR 1.25 billion and ZAR 1.45 billion, implying at least 35% year-on-year growth. The company also expects Net Income Attributable to Lesaka to be positive and Adjusted earnings per share to reach at least ZAR 4.60, representing over 100% year-on-year growth. This guidance excludes the impact of the Bank Zero acquisition and any unannounced mergers and acquisitions.

Management Comments

• "FY2025 was a strong year for the Group, delivering on our profitability guidance and advancing key strategic priorities."
• "We expect to maintain this momentum into FY2026, and are guiding for adjusted EBITDA growth of at least 35%."
• "We have also introduced adjusted earnings per share guidance, expecting this to more than double in FY2026 to at least ZAR 4.60, from ZAR 2.29 per share this year."

Industry Context

Lesaka Technologies operates as a South African fintech company focused on providing financial services, software, and business services to underserviced consumers and merchants in Southern Africa. The reported growth in Net Revenue and Adjusted EBITDA, particularly in its Merchant and Consumer segments, reflects a positive trend in the digitization of commerce and increasing adoption of integrated fintech platforms in its target markets. The expansion of its active consumer base and cross-selling of lending and insurance products align with broader industry efforts to deepen financial inclusion and monetize digital payment ecosystems in emerging markets.

Stakeholder Impact

• Shareholders: Positive impact from meeting profitability guidance and strong FY2026 outlook, indicating potential for future value creation despite current GAAP losses.
• Customers and Merchants: Continued expansion of services and active user base suggests ongoing value proposition and market penetration in Southern Africa.
• Employees: Continued growth and strategic advancements may lead to stability and opportunities within the company.
• Regulatory Bodies: The Bank Zero acquisition is subject to regulatory approval, indicating ongoing engagement with authorities.

Next Steps

• Obtain regulatory approval for the Bank Zero acquisition from the Prudential Authority and the South African Reserve Bank.
• Continue to execute on strategic priorities to maintain momentum into FY2026.
• Work towards achieving the FY2026 guidance targets, including positive Net Income Attributable to Lesaka and at least ZAR 4.60 Adjusted earnings per share.

Key Dates

Recommendation

The company delivered on its profitability guidance for FY2025 and provided a strong, positive outlook for FY2026, projecting over 100% growth in adjusted earnings per share and at least 35% growth in Adjusted EBITDA. While GAAP net losses are significant, they are largely attributed to non-cash and one-off items, which a seasoned investor would likely discount in favor of the robust operational performance and future guidance. The underlying business segments (Merchant and Consumer) show healthy growth, indicating strong market traction and effective strategy execution in a high-growth fintech sector in Southern Africa. This suggests a strong operational trajectory and potential for significant future returns.

Keywords

Fintech, Financial Results, Earnings, EBITDA, Net Revenue, South Africa, Merchant Services, Consumer Payments, Lesaka Technologies, LSAK, LSK