LESAKA TECHNOLOGIES INC
For the period ended Mar 31, 2024. Filed May 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 8, 2024
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-06.
0001562762-24-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001562762-24-000130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 2753 previous paragraphs and 2891 current paragraphs.
1462 unchanged; 72 reworded; 1340 added; 1200 removed; 19 previous and 17 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1340)
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terms and other
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and thereto
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and which we
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have filed with
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the United States
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Securities and
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Exchange Commission
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(“SEC”) completely
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and with
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As of the date hereof, we have been successfully executing on our strategic objectives in building a leading fintech platform and
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consolidating Southern
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African fintech. We
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experienced continued improvement
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in our financial
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performance in the
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third quarter of
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fiscal 2024 with year-on-year revenue and profitability
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improvements in both Merchant and Consumer divisions.
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Operating income of $0.8 million (ZAR 15.0 million) improved
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(ZAR 33.2 million) during the third quarter of fiscal 2023.
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EBITDA, a
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of $9.7
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(ZAR 183.3
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million) this
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a 47%
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compared to $7.0 million (ZAR 124.6 million) in the third
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quarter of fiscal 2023. The continued resilience of our business model
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in a
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Kazang,
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our VAS
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and supplier payments
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business, continues to see
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adoption by micro-merchants,
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with a 12% year-on-year
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had approximately 80,250
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devices deployed as of
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to approximately 71,800 devices
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one year ago, and approximately
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79,000 devices at the
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end of the second quarter
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10-K for
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and other
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thereto
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filed
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United
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States
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Securities
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Commission
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completely
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experienced
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improvement
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profitability improving in both Consumer and Merchant divisions.
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Revenue of $143.9 million (ZAR 2.7 billion) was within our revenue guidance of ZAR 2.7 billion to ZAR 2.8 billion for second
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quarter of fiscal 2024, despite prevailing negative macroeconomic
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and socio-political conditions in South Africa.
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Operating income of $2.3 million (ZAR 42.5 million) improved
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(ZAR 38.4 million) during the second quarter of fiscal 2023.
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We exceeded the upper end of guidance of ZAR 170.0 million to
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ZAR 180.0 million for second quarter of
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fiscal 2024, delivering
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Group Adjusted EBITDA, a non-GAAP measure, of $9.6 million (ZAR180.5 million) this quarter, a 38% increase in ZAR, compared
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second
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resilience
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model
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Kazang, our VAS
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and supplier payments business,
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continues to see adoption
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by MSMEs in the informal
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sector, with a
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year-on-year and 3% quarter-on-quarter growth
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had
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deployed
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devices one year ago, and approximately 77,000 devices at the end
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of the first quarter. Core to our device placement
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strategy is the decision to focus on quality business and optimizing our existing fleet, which is reflected in a healthy
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throughput increased
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21% year-on-year
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and 17% quarter-on-quarter.
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The second quarter
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of our fiscal
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Reworded paragraphs (72)
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“plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms
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“plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such
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211% in ZAR, compared with an operating loss of
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145% in ZAR, compared with an operating loss of $1.9 million
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the value they place on our services.
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the value our customers place on our services.
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enterprises (“MSMEs”), especially in the informal
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enterprises (“MSMEs”), especially in the micro-
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markets of South Africa, where we have a leading market position.
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merchant sector of South Africa, where we have a leading market position.
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in the number of devices deployed.
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growth in the number of devices deployed.
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throughput and margin per device.
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in a healthy throughput and margin per device.
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traditionally our strongest quarter due to higher activity over the year-end
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strongest quarter due to higher activity over the year-end festive
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Card-enabled POS devices
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Connect. Card-enabled POS devices increased to
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31, 2023, a year-on-year
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2024, a year-on-year growth of 21%.
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quarter, compared to approximately ZAR 205 million in the comparable period last year, representing a 17% decrease. In the
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in the comparable period last year, representing a 13% increase.
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informal licensed tavern market. Touchsides has an installed base of over 10,000 active POS terminals across South Africa’s informal
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has an installed base of over 10,000
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of stock levels and informing commercial decisions, such as pricing
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time, management of stock levels and informing commercial decisions,
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The progress on our three key initiatives is as follows:
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The progress on our key initiatives is as follows:
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during the COVID pandemic and
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introduced during the COVID pandemic and
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remained at approximately 6% on an annualized basis, in line with the first quarter
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remained at approximately 6% on an annualized basis, in line with the first and
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condition, results of operations and cash flows.
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results of operations and cash flows.
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information presented to our chief operating
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presented to our chief
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are supplementally presented in ZAR, and our internal management
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supplementally presented in ZAR, and our internal management information,
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information, which is also presented in ZAR.
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which is also presented in ZAR.
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impairment of goodwill or
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depreciation and amortization, impairment of goodwill or other
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are therefore reported as reconciling items to reconcile the
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reconciling items to reconcile the reportable segments’ Segment Adjusted
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reportable segments’ Segment Adjusted EBITDA to our loss before income
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EBITDA to our loss before income tax expense.
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Operations—Use of Non-GAAP Measures” below.
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“Results of Operations—Use of Non-GAAP Measures” below.
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low margin prepaid airtime sales and
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airtime sales and
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70.0 million) primarily due to higher interest rates; and
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81.0 million) primarily due to higher interest rates; and
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Selling, general and administration expenses decreased by $2.0
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Selling, general and administration expenses decreased
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African tax payments of $0.2 million (ZAR 3.4 million) related to our 2022 tax
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by $1.4 million (ZAR 3.4 million),
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We did not record any changes in the fair value of equity interests in MobiKwik and Cell C during the first half of fiscal 2024 or
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We did not record any changes in the fair
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2024 or 2023, respectively. We continue to carry our investment in Cell C
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continue to carry our investment in Cell
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at $0 (zero). Refer to
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C at $0 (zero). Refer to Note
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Note 4 for the methodology and
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4 for the methodology and inputs used
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used in the fair value calculation for Cell C.
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in the fair value calculation for Cell C.
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of our South African businesses
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of our South African businesses and
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net operating losses incurred by these entities.
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assets recognized regarding net operating losses incurred by these entities.
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by the tax expense recorded by our profitable South
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28% to 27% from January 2023 (but backdated to July 1, 2022), the tax expense recorded by our profitable South African operations,
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2.8%. In ZAR, the increase was
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international money transfers). In ZAR, the increase in Segment Adjusted EBITDA is
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primarily due to the higher sales activity,
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primarily due to the higher sales activity, which
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Adjusted EBITDA margins shown by the business.
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shown by the business.
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team and the year-over-year impact of inflationary increases
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the year-over-year impact of inflationary increases on certain expenses.
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Rearranged current paragraphs (17)
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36,000 in the comparable period in
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decreased by $0.2 million, or 3.1%
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Our operating income (loss) margin for
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value of equity interests in MobiKwik and
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quarter of fiscal 2024 compared with comparable period in the prior quarter.
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This increase in revenue has translated
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other value-added services, as well
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as higher transaction, insurance and lending revenues,
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which was partially offset by lower
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211.3 million) primarily due to higher interest
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due to the increase in the number of
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is primarily due to the higher sales activity, which
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was partially offset by lower hardware sales
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Our Segment Adjusted EBITDA margin for the year
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Our Segment Adjusted EBITDA margin for the year
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payments related to prior years of $0.6
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received $0.4 million from the exercise of stock options. We
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ZAR, primarily due to an increase in
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various cost reduction initiatives in Consumer implemented in prior periods as well as the
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offset by lower hardware sales revenue in our POS hardware distribution
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Cost of goods sold, IT processing, servicing and support increased by $5.4 million
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other value added services, as well as
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131.5 million) primarily due to higher interest rates; and
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Net gain on disposal of equity-accounted investments
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Net gain on disposal of equity-accounted investments
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offset by lower hardware sales revenue in our POS hardware distribution
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to negotiate lower rates of interest during the latter half of fiscal 2023.
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Fiscal 2024 tax expense was $(1.0) million
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by the tax expense recorded by our profitable South
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net operating losses incurred by these entities.
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which was partially offset by lower hardware sales.
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and lower provision for executive bonuses, which was partially offset
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acquisitions and transactions consummated or ultimately not pursued.
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African overdraft facilities to fund our ATMs
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vesting of shares of restricted stock.
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due related to the vesting of shares of restricted stock.