8-K: Lesaka Technologies Delivers on Guidance, Projects Positive Net Income for FY2026

Lesaka Technologies reaffirms its FY2025 outlook and projects positive net income in FY2026, driven by growth in Net Revenue and Adjusted EBITDA.

Summary

• Lesaka Technologies released its Q3 2025 financial results, showing revenue of $135.7 million.
• Net Revenue increased 43% in ZAR to $73.4 million.
• Operating income was $0.6 million, impacted by $2.3 million in one-off transaction costs.
• The net loss was $22.1 million, including a $17.0 million non-cash charge related to Mobikwik.
• Group Adjusted EBITDA improved 29% in ZAR to $12.8 million.
• The company reaffirms its FY2025 guidance and projects positive net income for FY2026.
• For FY2025, Lesaka expects revenue between ZAR 10.0 billion and ZAR 11.0 billion, Net Revenue between ZAR 5.2 billion and ZAR 5.6 billion, and Group Adjusted EBITDA between ZAR 900 million and ZAR 1 billion.
• For FY2026, Lesaka expects revenue between ZAR 11.4 billion and ZAR 12.2 billion, Net Revenue between ZAR 6.4 billion and ZAR 6.9 billion, and Group Adjusted EBITDA between ZAR 1.25 billion and ZAR 1.45 billion, with positive net income attributable to Lesaka.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While the company reported a net loss for the quarter, it delivered on guidance, showed strong growth in Net Revenue and Adjusted EBITDA, and projects positive net income for the next fiscal year. The reaffirmation of FY2025 guidance and the positive outlook for FY2026 contribute to the positive sentiment.

Positives

• Net Revenue saw a significant increase of 43% in ZAR.
• Group Adjusted EBITDA improved by 29% in ZAR.
• The company is projecting positive net income for FY2026.
• Merchant Division Net Revenue increased 58% in ZAR.
• Consumer Division Revenue and Net Revenue increased 32% in ZAR.
• Fundamental earnings increased by 98% in ZAR.

Negatives

• Operating income was lower due to $2.3 million in one-off transaction costs.
• The company experienced a net loss of $22.1 million, impacted by a $17.0 million non-cash charge related to Mobikwik.
• GAAP loss per share increased to $0.27 from $0.06 in Q3 2024.

Risks

• The company's future financial results could be affected by factors that are difficult to predict or quantify.
• The company's outlook excludes the impact of unannounced mergers and acquisitions.
• Fluctuations in the ZAR/USD exchange rate can impact reported results.

Future Outlook

Lesaka expects revenue between ZAR 10.0 billion and ZAR 11.0 billion, Net Revenue between ZAR 5.2 billion and ZAR 5.6 billion, and Group Adjusted EBITDA between ZAR 900 million and ZAR 1 billion for FY2025. For FY2026, Lesaka expects revenue between ZAR 11.4 billion and ZAR 12.2 billion, Net Revenue between ZAR 6.4 billion and ZAR 6.9 billion, and Group Adjusted EBITDA between ZAR 1.25 billion and ZAR 1.45 billion, with positive net income attributable to Lesaka.

Management Comments

• Lesaka Chairman Ali Mazanderani stated, 'I am pleased that we have delivered on our guidance for the quarter and can reaffirm FY2025 full year guidance.'
• Management is providing Revenue and Net Revenue guidance, and projecting positive net income, for FY2026.
• At the midpoint of these measures, this implies a 23% growth in Net Revenue and a 42% growth in Group Adjusted EBITDA year-on year.

Industry Context

Lesaka's focus on providing financial services and software to underserved consumers and merchants in Southern Africa aligns with the broader fintech trend of increasing financial inclusion through digital solutions. The company's integrated platform and focus on Alternative Digital Payments (ADP) position it to capitalize on the growing demand for digital financial services in the region.

Comparison to Industry Standards

• Comparing Lesaka to companies like Adyen (ADYEN:AMS) and Block (SQ), which also operate in the payments and financial services space, Lesaka's growth in Net Revenue and Adjusted EBITDA, particularly in ZAR terms, indicates a strong performance in its target market.
• While Adyen and Block have a global presence, Lesaka's focus on Southern Africa allows it to tailor its services to the specific needs of the region, potentially leading to higher growth rates in that market.
• Lesaka's projection of positive net income for FY2026 is a positive sign, as many high-growth fintech companies often prioritize revenue growth over profitability in their early stages.

Stakeholder Impact

• Shareholders can expect potential value appreciation if the company achieves its FY2026 targets.
• Employees may benefit from the company's growth and profitability.
• Customers in Southern Africa will continue to have access to financial services and software.
• Suppliers and creditors can expect continued business relationships with a growing company.

Next Steps

• Lesaka will host a webcast to review results on May 8, 2025.
• The company's Form 10-Q for the quarter ended March 31, 2025, is available on the company website.

Key Dates

Keywords

Lesaka Technologies, Financial Results, Q3 2025, Net Revenue, Adjusted EBITDA, Fintech, Guidance, Earnings, LSAK, LSK