LESAKA TECHNOLOGIES INC
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
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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.
Sep 30, 2025 · Filed Nov 5, 2025
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Notes to Unaudited Condensed Consolidated Financial Statements
Notes to the Unaudited Condensed Consolidated Financial Statements
for the three months ended September 30, 2025 and 2024
(All amounts in tables stated in thousands or thousands of U.S. dollars, unless otherwise stated)
Basis of Presentation and Summary of Significant Accounting
Policies
Unaudited Interim Financial Information
The accompanying
statements include
all majority-owned
subsidiaries over
which
the
Company
exercises
control
and
have
been
prepared
in
accordance
with
U.S.
accepted
principles
(“U.S.
GAAP”) and
the rules and regulations
of the United States Securities
and Exchange Commission for
Quarterly Reports on Form
10-
Q and
include all
of the
information and
disclosures required
for interim
financial reporting.
The results
of operations
for the
three
months ended September 30, 2025 and 2024, are not necessarily indicative of
the results for the full year. The Company believes that
the disclosures are adequate to make the information presented not misleading.
These
should
be
read
in
conjunction
with
the
statements,
accounting policies and financial notes thereto included in the
Company’s Annual Report on Form 10-K for the fiscal year ended June
30,
In
the
opinion
of
management,
the
accompanying
reflect
all
adjustments (consisting only of normal recurring adjustments), which are necessary for a fair
representation of financial results for the
interim periods presented.
References to “Lesaka” are references
solely to Lesaka Technologies,
Inc. References to the “Company” refer
to Lesaka and its
consolidated subsidiaries, collectively,
unless the context otherwise requires.
Revision of Previously Issued Financial Statements
In October 2025, the Company identified that it
had understated its June 30, 2025,
amounts of cost and accumulated depreciation
for
computer
equipment
as
well
as
the
totals
for
cost
and
accumulated
by
$
6.5
million
in
the
notes
to
the
audited
for
the
years
ended
June
30,
2025,
and
The
value
of
property,
plant
and
equipment reported as of June 30, 2025, was not impacted by the misstatement.
The Company has recast its accumulated depreciation
presented on the condensed consolidated balance sheet as of June 30, 2025,
to increase the amount from $
48,636
to $
55,086
.
Recent accounting pronouncements adopted
In December 2023, the Financial Accounting
Standards Board (“FASB”)
issued guidance regarding
Income Taxes
(Topic
to improve income tax
disclosure requirements. The guidance
requires entities, on an
annual basis, to (1) disclose
specific categories
in the income tax rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if
the effect of those reconciling items is equal to or greater than five percent of
the amount computed by multiplying pre-tax income or
loss by
the applicable
statutory income
tax rate).
This guidance
was effective
for the
Company beginning
July 1,
for its
year
ended June 30, 2026.
as of September 30, 2025
In
November
2024,
the
FASB
issued
Income
Statement—Reporting
Comprehensive
Income—Expense
Disaggregation
Disclosures
(Subtopic
220-40)
which
disclosure
of
income
statement
for
public
business entities. The guidance does not change the expense captions an
entity presents on the face of the income statement; rather,
it
disaggregation
of
certain
expense
captions
into
specified
categories
in
disclosures
within
the
footnotes
to
the
statements. This guidance is effective for the
Company beginning July 1, 2027. Early
adoption is permitted. The Company is
currently
assessing the impact of this guidance on its financial statements and related disclosures.
In
July
2025,
the
FASB
issued
Financial
Instruments-Credit
Losses
(Topic
Measurement
of
Credit
Losses for Accounts Receivable and Contract Assets
which amends current guidance to provide a practical
expedient (for all entities)
and an accounting
policy election (for
all entities, other than
public business entities,
that elect the practical
expedient) related to
the
estimation of expected credit
losses for current accounts receivable
and current contract assets that
arise from transactions accounted
for under
Revenue From Contracts With
Customers (Topic
606).
This guidance is effective for
the Company beginning July 1, 2026,
and interim
reporting periods during
that fiscal year.
Early adoption
is permitted. The
Company is currently
assessing the impact
of
this guidance on its financial statements and related disclosures.
Basis of Presentation and Summary of Significant Accounting
Policies (continued)
as of September 30, 2025 (continued)
On
18,
2025,
the
FASB
issued
Intangibles—Goodwill
and
Other—
Internal-Use
Software
(Subtopic 350-40)
which amends certain
aspects of the
accounting for and
disclosure of software
costs under ASC
350-40. The new
makes
targeted
improvements
to
but
does
not
fully
align
the
framework
for
for
developed software
costs that
are subject
to ASC
350-40 with
the framework
applied to
software to
be sold
or marketed
externally
that is
subject to
guidance regarding
Costs of
Software to
Be Sold,
Leased, or
Marketed
(Subtopic ASC
985-20)
. The
new guidance
also does not amend the guidance
on costs of software licenses that
are within the scope of ASC 985
-20. The amendments supersede
the guidance
on website
development costs
in guidance
Website
Development Costs
(Subtopic ASC
350-50)
and relocate
that guidance,
along with the
recognition requirements
for development costs
specific to websites,
to ASC 350
-40. This guidance
is
effective for
the Company beginning
July 1, 2028,
and interim reporting
periods during that
fiscal year.
Early adoption is permitted.
Entities
may
apply
the
prospectively,
retrospectively,
or
via
a
modified
prospective
method.
The
modified
prospective
approach
would
allow
entities
to
account
for
an
in-process
project
that,
before
the
date,
met
the
capitalization requirements but would no longer meet
the requirements for capitalization under the
new guidance by derecognizing the
capitalized costs for
that in-process project
through a
cumulative-effect adjustment
to the opening
balance of retained
earnings. The
Company is currently assessing the impact of this guidance on its financial
statements and related disclosures.
Acquisitions
Refer to Note 3 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the
2025, for
additional information
regarding the
Recharger Proprietary
Limited (“Recharger”)
and
the proposed
Bank Zero
Mutual Bank
(“Bank Zero”)
(which transaction
remains conditional).
did not
close any acquisitions during the three months ended September 30, 2025.
2026 Proposed acquisitions of Bank Zero
On
June
26,
2025,
Lesaka
Technologies
Proprietary
Limited
(“Lesaka
SA”)
entered
into
a
Transaction
Implementation
Agreement (the
“Transaction
Implementation Agreement”)
with Zero
Research Proprietary
Limited (“Zero
Research”), Bank
Zero,
and other parties identified in Annexure
A to the Transaction Implementation
Agreement (being all of the shareholders of Bank
Zero
save
for
Zero
Research
and
Naught
Holdings
Ltd,
the
“Bank
Zero
Sellers”),
the
parties
listed
in
Annexure
B
to
the
Transaction
Implementation Agreement (being all
of the shareholders
of Zero Research
save for Naught
Holdings Ltd, the
“Zero Research Sellers”)
and Naught Holdings Ltd.
The
Company
incurred
of $
0.1
million
during
the
three
months
ended
30,
2025,
related to the
proposed acquisition of
Bank Zero. The
accruals presented in
Note 10 of
as September 30,
2025, includes
an accrual of
transaction related expenditures
of $
0.3
million and the
Company expects to
incur further transaction
costs of $
0.3
million
during the 2026 fiscal year.
2025 Acquisitions
On November 19,
2024, the Company,
through Lesaka SA,
entered into a
Sale of Shares Agreement
(the “Recharger Purchase
Agreement”) with
Imtiaz Dhooma
(Recharger’s
former chief
executive officer)
and Ninety
Nine Proprietary
Limited (“the
Seller”).
Pursuant to
the Recharger
Purchase Agreement
and subject to
its terms and
conditions, Lesaka
SA agreed to
acquire, and
the Seller
agreed to sell, all of the outstanding equity interests in Recharger.
The transaction closed on March 3, 2025.
Acquisitions (continued)
2025 Acquisitions (continued)
The
Company
completed
the
price
allocation
related
to
the
acquisition
during
the
three
months
ended
September 30, 2025. There were no changes to the preliminary purchase price allocation as of June 30, 2025. The final purchase
price
allocation of
the Recharger
acquisition, translated
at the
foreign exchange
rates applicable
on the
date of
acquisition, is
provided in
the table below:
Final purchase price allocation
$
1,720
Accounts receivable
Inventory
Property, plant and equipment
Operating lease right of use asset
Goodwill
3,614
Intangible assets
16,171
Deferred income taxes assets
Accounts payable
(149)
Other payables
(1,439)
Operating lease liability - current
(185)
Income taxes payable
(4)
Deferred income taxes liabilities
(4,366)
Operating lease liability - long-term
(269)
Fair value of assets and liabilities on acquisition
$
15,825
Transaction costs and certain compensation
costs
The Company did
no
t incur any transaction costs related to the Bank Zero acquisition during the three months ended September
30, 2024.
The table below
presents transaction costs
incurred related
to the acquisitions
of Adumo and
and the proposed
acquisition of Bank Zero during the three months ended September
30, 2025 and 2024:
Bank Zero transaction costs
$
$
Adumo transaction costs
1,702
Recharger transaction costs
(1)
Total
$
$
1,730
(1)
costs for
the
three
months
ended
30,
2024,
of
$
0.03
million
have
been
allocated
from
Selling, general
and administration
to Transaction
to Adumo,
and Bank
Zero acquisitions
in the
c
ondensed consolidated statement of operations for the three months
ended September 30, 2024.
finance loans receivable, net
Accounts receivable, net and other receivables
The Company’s accounts receivable, net, and other receivables as of September 30, 2025, and June 30, 2025, are presented in
the table below:
Accounts receivable, trade, net
$
22,145
$
16,433
Accounts receivable, trade, gross
23,961
18,186
Less: Allowance for doubtful accounts receivable, end of period
1,816
1,753
1,753
1,241
(150)
(521)
1,856
(67)
(847)
Current portion of amount outstanding related to sale of interest in Carbon,
net of
allowance: September 2025: $
; June 2025: $
Current portion of total held to maturity investments
Other receivables
22,645
26,092
Total accounts receivable,
net and other receivables
$
44,790
$
42,525
Trade receivables include amounts
due from customers
which generally have
a very short-term
life from
date of invoice
or service
provided to settlement. The duration
is less than a year in all cases and
generally less than 30 days in many
instances. The short-term
nature
of
these
exposures
often
results
in
balances
at
month-end
that
are
disproportionately
small
compared
to
the
total
invoiced
amounts.
The
month-end
balance
are
more
volatile
than
the
monthly
invoice
amounts
because
they
are
affected
by
operational timing issues and
the fact that a balance
is outstanding at month-end
is not necessarily an indication
of increased risk but
rather a matter of operational timing.
Credit risk in respect of trade receivables are generally not
significant and the Company has not developed a sophisticated model
for these basic
credit exposures. The
Company determined to
use a lifetime
loss rate by
expressing write-off experience as
a percentage
of corresponding
invoice amounts
(as opposed
to outstanding
balances). The
allowance for credit
losses related to
these receivables
has
been
calculated
by
multiplying
the
lifetime
loss
rate
with
recent
invoice/origination
amounts.
Management
actively
monitors
performance of these receivables over
short periods of time. Different
balances have different rules to
identify an account in distress.
Once balances
in distress are
identified, specific
allowances are immediately
created. Subsequent
recovery from distressed
accounts
is not significant.
O
ther receivables include prepayments, deposits, income taxes receivable and
other receivables.
finance loans receivable, net (continued)
Finance loans receivable, net
The Company’s finance
loans receivable, net, as of September 30, 2025, and June 30, 2025, is presented
in the table below:
Microlending finance loans receivable, net
$
60,329
$
52,492
Microlending finance loans receivable, gross
64,600
56,140
Less: Allowance for doubtful finance loans receivable, end of period
4,271
3,648
3,648
1,947
(161)
2,223
4,301
(1,714)
(2,499)
Merchant finance loans receivable, net
20,531
21,618
Merchant finance loans receivable, gross
22,374
23,214
Less: Allowance for doubtful finance loans receivable, end of period
1,843
1,596
1,596
2,697
(19)
(22)
2,576
(107)
(3,709)
Total finance
loans receivable, net
$
80,860
$
74,110
Total
finance
loans
receivable,
net,
comprises
microlending
finance
loans
receivable
related
to
the
microlending
Africa as
well as
its merchant
finance loans
receivable related
to Connect’s
lending activities
Africa.
Certain merchant finance loans receivable with an aggregate balance of $
19.7
million as of September 30, 2025 have been pledged as
security for the Company’s
revolving credit facility (refer to Note 9).
Allowance for credit losses
Microlending finance loans receivable
Microlending finance loans receivable is related to the Company’s
microlending operations in South Africa whereby it provides
unsecured short-term loans to qualifying customers. Loans to customers
have a tenor of up to nine months, with the majority of loans
originated having
a tenor of
six months.
analyses this lending
book as a
single portfolio
because the
loans within the
portfolio have similar characteristics and management uses similar processes to monitor and assess
the credit risk of the lending book.
Refer to Note 5 related to the Company risk management process related to
these receivables.
The Company has operated this lending book for more than
five years
and uses historical default experience over the lifetime of
loans in order
to calculate a
lifetime loss rate
for the lending
book. The allowance
for credit losses
related to these
microlending finance
loans receivables
is calculated
by multiplying
the lifetime
loss rate
month end
outstanding lending
book. The
lifetime loss
rate as of each of June 30, 2025 and September 30, 2025,
was
6.50
%. The performing component (that is, outstanding loan payments
not in arrears)
of the book
exceeds more than
%, of the
outstanding lending
book as of
each of
2025 and
Merchant finance loans receivable
Merchant finance loans
receivable is related
Merchant lending activities
in South Africa
whereby it provides
unsecured
short-term loans
to qualifying
customers. Loans
to customers
have a
tenor of
up to
twelve months,
majority of
loans originated having a tenor of approximately eight months. The Company analyses this lending book as a single portfolio because
the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk
o
f the lending book. Refer to Note 5 related to the Company risk management
process related to these receivables.
finance loans receivable, net (continued)
Finance loans receivable, net (continued)
Allowance for credit losses (continued)
Merchant finance loans receivable (continued)
The Company uses historical default
experience over the lifetime of loans generated
thus far in order to calculate a lifetime
loss
rate for the lending
book. The allowance
for credit losses related
to these merchant
finance loans receivables
is calculated by adding
together actual receivables in default plus
multiplying the lifetime loss rate
with the month-end outstanding lending book.
The lifetime
loss
rate
as
of
each
of
June
30,
and
30,
2025,
was
1.14
%.
The
performing
(that
is,
outstanding loan
payments not
in arrears),
under-performing
component (that
is, outstanding
loan payments
that are
in arrears)
and
non-performing
(that
is,
loans
for
which
appeared
to
have
ceased)
of
the
book
approximately 95%, 4% and
1%, respectively, of the outstanding
lending book as
of June 30,
- The performing component,
under-
performing component
and non-performing
component of
the book represents
%,
% and
%, respectively,
of the
outstanding lending book as of September 30, 2025.
Inventory
The Company’s inventory
comprised the following categories as of September 30, 2025, and June 30, 2025:
Raw materials
$
2,424
$
2,963
Work-in-progress
Finished goods
16,158
20,295
$
18,957
$
23,551
Fair value of financial instruments
Initial recognition and measurement
Financial instruments
are recognized
when the
Company becomes
a party
to the
transaction. Initial
measurements are
at cost,
which includes transaction costs.
Risk management
The Company manages its exposure
to currency exchange, translation, interest rate,
credit, microlending credit and equity price
and liquidity risks as discussed below.
Currency exchange risk
The Company is subject to currency exchange risk because it purchases components
for its vaults, that the Company assembles,
and inventories
that it is
required to
settle in other
currencies, primarily
the euro, renminbi,
and U.S. dollar.
has used
forward contracts in order to limit its
exposure in these transactions to fluctuations
in exchange rates between the South African
rand
(“ZAR”), on the one hand, and the U.S. dollar and the euro, on the other hand.
Translation risk
Translation risk relates to
the risk that
the Company’s results of operations
will vary significantly
as the U.S.
dollar is its
currency,
but it earns a
significant amount of its
revenues and incurs a
significant amount of its
expenses in ZAR. The
U.S. dollar to
the ZAR
exchange rate
has fluctuated
significantly over
the past
three years.
As exchange
rates are
outside the
control,
there can be no
assurance that future fluctuations will
not adversely affect the Company’s results of operations and
financial condition.
Risk management (continued)
Interest rate risk
As a result of its
normal borrowing activities, the Company’s operating results are exposed to fluctuations in
interest rates, which
it
manages
through
regular
financing
activities.
rates
in
South
Africa
have
been
trending
downwards
in
recent
quarters and as of the date of this Quarterly Report, are expected to decline
by a further 25 basis points in the first quarter of calendar
2026 and stabilize
at that level
for the remainder of
that year. Therefore, ignoring the
impact of changes
to the margin on
its borrowings
(refer
to
Note
and
value
of
outstanding,
the
Company
expects
its
cost
of
to
decline
moderately
in
the
foreseeable future, however, the Company would expect a higher cost of borrowing if interest rates were to increase in the future. The
Company
periodically
the
cost
and
effectiveness
of
rate
hedging
strategies
to
manage
this
risk.
The
Company
maintains surplus
cash in
cash equivalents
and held
to maturity
investments and
has occasionally
invested in
marketable
securities.
Credit risk
Credit
risk
relates
to
the
risk
of
loss
that
the
Company
would
incur
as
a
result
of
non-performance
by
counterparties.
The
Company
maintains
credit
risk
policies
in
respect
of
its
counterparties
to
minimize
overall
credit
risk.
These
policies
include
an
evaluation
of
a
potential
counterparty’s
condition,
credit
rating,
and
other
credit
criteria
and
risk
mitigation
tools
as
the
management deems
appropriate.
With
respect to
credit risk
on certain
financial instruments,
maintains
a
policy of entering
into such transactions only
with South African
and European financial
institutions that have
a credit rating
of “B”
(or its equivalent) or better, as determined by
credit rating agencies such as Standard & Poor’s, Moody’s
and Fitch Ratings.
Consumer microlending credit
risk
is exposed
to credit
risk in
its Consumer
microlending activities,
which provides
unsecured short-term
loans to
qualifying customers.
Credit bureau
checks as
well as
an affordability
test are
conducted as
part of
the origination
process, both
of
which are in line with local regulations. The Company considers this
policy to be appropriate because the affordability test it
performs
takes into account
a variety of
factors such
as other debts
and total expenditures
on normal household
and lifestyle expenses.
allowances
may
be required
should the
ability of
its customers
to make
payments when
due
deteriorate
in the
future. Judgment
is
required to assess
the ultimate recoverability
of these finance
loan receivables, including
ongoing evaluation
of the creditworthiness
of each customer.
Merchant lending
The Company maintains an allowance for
doubtful finance loans receivable related to
its Merchant services segment with
respect
to short-term loans to qualifying merchant customers. The
Company’s risk management procedures include adhering to its proprietary
lending criteria which uses
an online-system loan application
process, obtaining necessary customer transaction-history
data and credit
bureau checks.
The Company considers
these procedures
to be appropriate
because it takes
into account
a variety of
factors such
as
the customer’s credit capacity and customer-specific
risk factors when originating a loan.
Equity price and liquidity risk
Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded price
of equity
securities that
it holds.
The market
price of
these securities
may fluctuate
for a
variety of
reasons and,
consequently,
the
amount that the Company may obtain in a subsequent sale of these securities may significantly differ
from the reported market value.
Equity liquidity risk
relates to the risk
of loss that the
Company would incur as
a result of the lack
of liquidity on the
on
which
those
are
listed.
The
Company
may
not be
able
to
sell some
or
all
of
these
at
one
time,
or
over
an
extended period of time without influencing the exchange-traded price,
or at all.
Financial instruments
The following
section describes
the valuation
methodologies the
Company uses
to measure
its significant
financial assets
and
liabilities at fair value.
In general, and where applicable, the Company uses quoted prices in
active markets for identical assets or liabilities
to determine
fair value.
This pricing
methodology would
apply to
Level 1
investments. If quoted
prices in
active markets
for identical
assets or
liabilities are
not available
to determine
fair value,
then the
Company uses
quoted
prices for
similar assets
and
liabilities or
inputs
other
than
the
quoted
prices
that
are
observable
either
or
indirectly. These
would
be included
in
Level
investments. In
circumstances
in
which
inputs
are
unobservable,
values
typically
reflect
management’s
of
assumptions that market participants would use in pricing the asset or liability.
The fair values are therefore determined using model-
based techniques that include
option pricing models, discounted
cash flow models, and
similar techniques. Investments
valued using
such techniques are included in Level 3 investments.
Asset measured at fair value using significant unobservable inputs – investment
in Cell C
The Company’s Level 3 asset represents an investment of
75,000,000
class “A” shares in Cell
C Limited (“Cell C”), a significant
mobile telecoms provider in South Africa.
The Company used a discounted cash flow model developed by the Company to determine
the fair value
of its investment in
Cell C as of
and June 30, 2025,
and valued Cell
C at $
0.0
(zero)
and $
0.0
(zero) as of
2025, and
2025, respectively.
assumes that
Cell C’s
deferred tax
assets
would
be
utilized
over
the
forecast
period.
The
Company
has
assumed
a
marketability
discount
of
%
(June
2025:
15%)
and
a
minority discount
of
% (June 2025:
17%). The Company
utilized the latest
business plan provided
by Cell C
management for
the
period ended May 31, 2030, for the September 30, 2025, and
June 30, 2025, valuations.
The following key valuation inputs were used as of September 30, 2025,
and June 30, 2025:
Weighted Average
Cost of Capital ("WACC"):
% (
Long term growth rate:
4.5
% (
4.5
Marketability discount:
% (
Minority discount:
% (
Net adjusted external debt - September 30, 2025:
(1)
ZAR
8.8
billion ($
0.5
billion), no lease liabilities included
Net adjusted external debt - June 30, 2025:
(2)
ZAR
8.3
billion ($
0.5
billion), no lease liabilities included
(1) translated from ZAR to U.S. dollars at exchange rates applicable as of
(2) translated from ZAR to U.S. dollars at exchange rates applicable as of
The fair value of
Cell C as
of September 30, 2025, utilizing
the discounted cash flow
valuation model developed by the
Company
is sensitive to
the following
inputs: (i) the
ability of Cell
C to achieve
the forecasts in
their business case;
(ii) the
WAC
C
rate used;
and
(iii)
the
minority
and
marketability
discount
used.
Utilization
of
inputs,
or
changes
to
these
inputs,
may
result
in
a
significantly higher or lower fair value measurement.
The following table presents the impact on the carrying value of the Company’s
Cell C investment of a
2.5
% decrease and
2.5
%
increase in the
WACC
rate and
the EBITDA margins
respectively used
in the Cell
C valuation
on September
30, 2025, all
amounts
translated at exchange rates applicable as of September 30, 2025:
Sensitivity for fair value of Cell C investment
2.5% increase
2.5% decrease
WACC
rate
$
$
EBITDA margin
$
1,720
$
The
aggregate
fair
value
of
the
Cell
C’s
shares
as
of
30,
2025,
represented
0.0
%
of
the
total
assets,
including these
shares. The
Company expects
that there
will be
short-term equity
price volatility
with respect
to these
shares given
t
hat Cell C remains in a turnaround process.
The
table
the
assets
measured
at
fair
value
on
a
recurring
basis
as
of
30,
2025,
according to the fair value hierarchy:
Quoted Price in
Active Markets
for Identical
Assets
(Level 1)
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Total
Assets
Investment in Cell C
$
$
$
$
Related to insurance
business:
Cash, cash equivalents and
restricted cash (included
in other long-term assets)
Fixed maturity
investments (included in
cash and cash equivalents)
2,633
2,633
Total assets at fair value
$
2,763
$
$
$
2,763
The following table presents the
Company’s assets measured
at fair value on a recurring basis as of
June 30, 2025, according to
the fair value hierarchy:
Quoted Price in
Active Markets
for Identical
Assets
(Level 1)
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Total
Assets
Investment in Cell C
$
$
$
$
Related to insurance business
(included in other long-term
assets)
Fixed maturity investments
(included in cash and cash
equivalents)
4,739
4,739
Total assets at fair value
$
4,864
$
$
$
4,864
There have been
no
transfers in or out of Level 3 during the three months ended September 30, 2025 and 2024,
respectively.
There was
no
movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level
3, during the three months ended September 30, 2025 and 2024.
Summarized below is the movement in the carrying value of
assets and liabilities measured at fair value on a recurring
basis, and
categorized within Level 3, during the three months ended September
Carrying value
Assets
$
(1)
$
(1) The foreign currency adjustment represents the effects of the fluctuations of the
South African rand against the U.S. dollar on
the carrying value.
Summarized below is the movement in the carrying value
of assets and liabilities measured at fair value on
a recurring basis, and
categorized within Level 3, during the three months ended September
30, 2024:
Carrying value
Assets
Balance as of June 30, 2024
$
(1)
Balance as of September 30, 2024
$
(1) The
foreign currency
adjustment represents the
effects of
the fluctuations
of the South
African rand
against the U.S.
dollar
on the carrying value.
Assets measured at fair value on a nonrecurring basis
measures equity
investments without
readily determinable
fair values
at fair value
on a
nonrecurring basis.
The
fair values of
these investments
are determined
valuation techniques
using the best
information available
and may include
quoted market prices, market comparables, and discounted cash flow
projections. An impairment charge is recorded when the cost
of
the
asset
exceeds
its
fair
value
and
the
excess
is
to
be
other-than-temporary.
The
Company
has
no
liabilities
that
are
measured at fair value on a nonrecurring basis.
Equity-accounted investments and other long-term assets
Refer to Note 9 to the Company’s audited consolidated
financial statements included in its Annual Report on Form 10-K for the
year ended June 30, 2025, for additional information regarding its equity
-accounted investments and other long-term assets.
Equity-accounted investments
The Company’s ownership
percentage in its equity-accounted investments as of September 30, 2025,
and June 30, 2025, was as
follows:
Sandulela Technology
(Pty) Ltd (“Sandulela”)
49.0
%
49.0
%
SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”)
50.0
%
50.0
%
SmartSwitch Namibia
The
Company
recorded
a
loss on
of
investment
of $
0.6
million
during
months
ended
September 30, 2025, which primarily includes the release of accumulated
other comprehensive loss (refer to Note 12).
Other long-term assets
Summarized below is the breakdown of other long-term assets as of September
30, 2025, and June 30, 2025:
Investment in
% of Cell C (June 30, 2025:
%) at fair value (Note 5)
Investment in
87.5
% of CPS (June 30, 2025:
87.5
%) at fair value
(1)(2)
Policy holder assets under investment contracts (Note 8)
Reinsurance assets under insurance contracts (Note 8)
2,055
1,837
Other long-term assets
1,835
1,847
Total other long-term
assets
$
4,020
$
3,809
(1)
The
Company
that
CPS
does
not
have
a
readily
determinable
fair
value
and
therefore
elected
to
record
its
investment at
cost minus
impairment, if
any,
plus or
minus changes
resulting from
observable price
orderly transactions
for the identical or a similar investment of the same issuer.
(2) On October 16, 2020,
the High Court of
South Africa, Gauteng Division, Pretoria
ordered that CPS be
placed into liquidation.
Equity-accounted investments and other long-term assets (continued)
Other long-term assets (continued)
Summarized below
are the components
of the Company’s
equity securities without
readily determinable
fair value and
held to
maturity investments as of September 30, 2025:
Cost basis
holding
holding
gains
losses
value
Equity securities:
Investment in CPS
$
$
$
$
Total
$
$
$
$
Summarized below are the components of the Company’s
equity securities without readily determinable fair value and held to
maturity investments as of June 30, 2025:
Cost basis
holding
holding
gains
losses
value
Equity securities:
Investment in CPS
$
$
$
$
Held to maturity:
Investment in Cedar Cellular notes
Goodwill and intangible assets, net
Goodwill
Summarized below is the movement in the carrying value of goodwill
for the three months ended September 30, 2025:
Gross value
value
$
236,109
$
(36,714)
$
199,395
(1)
6,453
(869)
5,584
$
242,562
$
(37,583)
$
204,979
(1) – The foreign currency adjustment represents the effects of the fluctuations
of the South African rand against the U.S. dollar
on the carrying value.
Goodwill has been allocated to the Company’s
reportable segments as follows:
value
$
179,634
$
6,027
$
13,734
$
199,395
(1)
5,027
5,584
$
184,661
$
6,197
$
14,121
$
204,979
(1) The foreign
currency adjustment represents
the effects
of the fluctuations
of the South
African rand
against the U.S.
dollar
o
n the carrying value.
Goodwill and intangible assets, net (continued)
Intangible assets, net
Carrying value and amortization of intangible assets
Summarized below is
the carrying value and
accumulated amortization of
intangible assets as of
September 30, 2025, and
June
As of September 30, 2025
As of June 30, 2025
Gross
value
Net
value
Gross
value
Net
value
Finite-lived intangible assets:
Software, integrated
platform and unpatented
technology
$
142,015
$
(47,034)
$
94,981
$
137,099
$
(41,925)
$
95,174
Customer relationships
54,970
(20,509)
34,461
53,369
(18,568)
34,801
Brands and trademarks
(1)
18,746
(13,524)
5,222
18,233
(8,993)
9,240
FTS patent
2,219
(2,219)
2,158
(2,158)
Total finite-lived
intangible
assets
$
217,950
$
(83,286)
$
134,664
$
210,859
$
(71,644)
$
139,215
(1)
During
early
calendar
2025,
the
executive
considered
the
unification
of
the
segments
and
the
realignment
of
the
brands
under
the
master
brand
“Lesaka”.
The
Board
of
Directors
approved the realignment of certain of the Company’s brands to the master brand in May 2025. The Company has identified the steps
and
timing
to realign
the affected
brands
under the
master brand
and expects
to have
complete alignment
by February
2027,
with
certain brands expected to
be aligned by December 2025.
The change in brands has
resulted in a change in
the useful lives of certain
of the Company’s brand and trademark
intangible assets which has
resulted in an increase
(excluding the impact on
Adumo and GAAP
brands) in amortization
expense of $
3.1
million during the three
30, 2025 compared
with the three months
ended September 30, 2024.
The change in
the useful lives
resulted in a
$
2.3
million increase in
the Company’s net loss from
continuing
operations for
months ended
2025, and
did not
have a
significant impact
on loss
per share.
The change
did
not impact prior periods.
Aggregate amortization
expense on the
finite-lived intangible assets
for the three
30, 2025 and
2024,
was
$
9.2
million
and
$
3.8
respectively.
Future
estimated
annual
expense
for
the
next
five
fiscal
years
and
thereafter, assuming exchange rates that
prevailed on September 30,
2025,
is presented in
the table below. Actual amortization expense
in future periods could differ from
this estimate as a
result of acquisitions, changes in useful
lives, exchange rate fluctuations and other
relevant factors.
Fiscal 2026 (excluding three months ended September 30, 2025)
$
21,615
Fiscal 2027
21,507
Fiscal 2028
20,994
Fiscal 2029
20,034
Fiscal 2030
18,662
Thereafter
31,852
Total future
estimated annual amortization expense
$
134,664
Assets and policyholder liabilities under insurance and investment
Reinsurance assets and policyholder liabilities under insurance contracts
Summarized below is the movement in reinsurance
assets and policyholder liabilities under insurance contracts
during the three
months ended September 30, 2025:
Reinsurance
Assets
(1)
Insurance
(2)
$
1,837
$
(2,644)
Increase in policyholder benefits under insurance contracts
(3,062)
Claims and decrease in policyholders’ benefits under insurance contracts
2,882
(3)
(78)
$
2,055
$
(2,902)
(1) Included in other long-term assets (refer to Note 6);
(2) Included in other long-term liabilities;
(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.
The Company has agreements with reinsurance companies in order to limit its losses from various insurance contracts, however,
if the reinsurer is unable
to meet its obligations, the
Company retains the liability.
The value of insurance
contract liabilities is based
on the best estimate assumptions of future experience plus prescribed
margins, as required in the markets in which these
products are
offered,
namely South
Africa. The
process of
deriving the
best estimate
assumptions plus
prescribed margins
includes assumptions
related to claim reporting delays (based on average industry experience).
Assets and policyholder liabilities under investment contracts
Summarized
below is
the movement
in assets
and policyholder
liabilities under
investment contracts
ended September 30, 2025:
Assets
(1)
Investment
(2)
$
$
(125)
Increase in policy holder benefits under investment contracts
(1)
(3)
(4)
(4)
$
$
(130)
(1) Included in other long-term assets (refer to Note 6);
(2) Included in other long-term liabilities;
(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.
The Company does not offer any investment products with guarantees
related to capital or returns.
Borrowings
Refer to
Note 12
to the
audited consolidated
financial statements
its Annual
Form 10-K
for
the year ended June 30, 2025, for additional information regarding
its borrowings.
Reference rate reform
After the
away from
certain
interbank
offered
rates in
foreign
jurisdictions
(“IBOR reform”),
the reforms
to South
Africa’s
reference interest
rate are now
accelerating rapidly.
The Johannesburg
Interbank Average
Rate (“JIBAR”)
will be replaced
by the new South African Overnight Index Average (“ZARONIA”). Certain of the Company’s
borrowings reference JIBAR as a base
interest rate. ZARONIA
reflects the
interest rate at
which rand-denominated
overnight wholesale
funds are
obtained by commercial
banks. There
is uncertainty
surrounding the
timing and
manner in
which the
transition would
occur and
how this
would affect
our
borrowings. The
Company is in
regular contact
with its lenders
and will update
existing borrowing
agreements to the
new base
rate
when ZARONIA is adopted by the financial industry and lenders as the new
reference rate.
The JIBAR,
an average
of 3
month negotiable
certificates of
deposit (“NCD”)
rates, on
2025, was
7.00
%. The
prime rate, the benchmark rate at which private sector banks lend to the public
in South Africa, on September 30, 2025, was
10.50
%.
Movement in short-term credit facilities
Summarized below are the
Company’s short-term facilities as of
September 30, 2025, and
the movement in
the Company’s short-
term facilities from as of June 30, 2025 to as of September 30, 2025:
RMB
RMB
Nedbank
GBF
Other
Facilities
Total
Short-term facilities available as of September 30, 2025
$
40,584
$
5,831
$
9,065
$
55,480
Overdraft
40,584
40,584
5,831
9,065
14,896
Movement in utilized overdraft facilities:
No restrictions as to use
24,469
24,469
24,469
24,469
Utilized
27,974
27,974
Repaid
(1)
12,488
12,488
No restrictions as to use
$
12,488
$
$
$
12,488
Interest rate as of September 30, 2025 (%)
(2)
10.00
N/A
N/A
Interest rate as of June 30, 2025 (%)
(2)
10.25
N/A
N/A
Movement in utilized indirect and derivative facilities:
$
$
1,864
$
$
1,983
(1)
$
$
1,917
$
$
2,039
(1) Represents the effects of the fluctuations between the
ZAR and the U.S. dollar.
(2) RMB GBF interest is set at prime less
0.50
%.
Interest expense incurred under
the Company’s South African short-term borrowings
and included in
the caption interest
expense
on the condensed consolidated statement of operations during the three months ended September 30, 2025 and
2024, was $
0.8
million
and $
0.6
Borrowings (continued)
Movement in long-term borrowings
Summarized below
is the
movement in
long-term borrowing
from as
of June
to as
of September
30,
2025:
Facilities
Lesaka A
Lesaka B
Asset
backed
CCC
Total
Included in current
$
$
8,448
$
3,508
$
$
11,956
Included in long-term
120,375
47,873
3,671
16,894
188,813
Opening balance as of June 30, 2025
120,375
56,321
7,179
16,894
200,769
Facilities utilized
1,791
2,763
Facilities repaid
(1,148)
(1,148)
Non-refundable fees paid
(33)
(33)
Non-refundable fees amortized
(1)
3,384
1,582
5,666
Closing balance as of September 30, 2025
123,834
57,903
8,042
18,318
208,097
Included in current
8,685
3,896
12,581
Included in long-term
123,834
49,218
4,146
18,318
195,516
Unamortized fees
(990)
(31)
(1,021)
Due within 2 years
11,581
2,521
14,102
Due within 3 years
17,371
1,313
18,684
Due within 4 years
124,824
20,266
18,349
163,751
Due within 5 years
$
$
$
$
$
Interest rates as of September 30, 2025 (%):
10.25
10.15
11.25
11.45
Base rate (%)
7.00
7.00
10.50
10.50
Margin (%)
3.25
3.15
0.75
0.95
(2)
(3)
(4)
(5)
Interest rates as of June 30, 2025 (%):
10.54
10.44
11.50
11.70
Base rate (%)
7.29
7.29
10.75
10.75
Margin (%)
3.25
3.15
0.75
0.95
Footnote number
(2)
(3)
(4)
(5)
(1) Represents the effects of the fluctuations between the ZAR and the
U.S. dollar.
(2) Interest
on Facility
A and Facility
B is based
on the JIBAR
in effect
from time
to time
plus an
initial margin
of
3.25
% per
annum until
- From
July 1,
2025, the
margin on
Facility A
is determined
with reference
to the
Net Debt
to EBITDA
Ratio, and the
margin will be either
(i)
3.25
%, if the Net
Debt to EBITDA Ratio
is greater than or
equal to 2.5 times;
or (ii)
2.5
%, if
the Net Debt to EBITDA Ratio is less than 2.5 times.
(3) Interest on
Facility B is calculated
based on JIBAR from
time to time plus
an initial margin
of
3.15
% per annum
until June
30, 2025. From July 1, 2025, the margin on Facility B is determined with reference to the Net Debt to EBITDA Ratio, and the margin
will be either (i)
3.15
%, if the Net
Debt to EBITDA Ratio is greater than
or equal to 2.5 times;
or (ii)
2.4
%, if the Net Debt
to EBITDA
Ratio is less than 2.5 times.
(4) Interest is charged at prime plus
0.75
% per annum on the utilized balance.
(5) Interest is charged at prime plus
0.95
% per annum on the utilized balance.
Interest expense incurred under the Company’s South African long-term borrowings and included in the
caption interest expense
on the condensed consolidated statement of operations during the three months ended September 30, 2025 and
2024, was $
3.8
million
and $
4.2
Prepaid facility fees amortized
included in interest expense
during the three months
30, 2025 and 2024, respectively,
were $
0.1
0.1
Interest expense incurred under the Company’s
South African long-term borrowings to fund its Consumer lending book (for the
three months ended September
30, 2025) and interest incurred
under the Company’s
CCC and K2020 facilities relates to
utilized to fund a portion of the Company’s merchant finance loans receivable were $
1.6
0.4
million, respectively, and is
included in the caption cost of
goods sold, IT processing, servicing and support
on the condensed consolidated statement of operations
f
or the three months ended September 30, 2025 and 2024.
Other payables
Summarized below is the breakdown of other payables as of September
30, 2025, and June 30, 2025:
Vendor
wallet balances
$
20,136
$
19,529
Accruals
9,062
8,469
Provisions
5,402
8,497
Clearing accounts
8,433
6,766
Value
-added tax payable
3,042
2,391
Deferred consideration due to seller of Recharger
14,225
13,837
Payroll-related payables
3,931
1,931
Other
10,795
10,659
$
75,026
$
72,079
Other includes deferred income, client deposits and other payables.
Capital structure
The following table presents a
reconciliation between the number of
shares, net of treasury, presented in the
consolidated statement of changes in equity as of September 30, 2025
and 2024, respectively:
Number of shares, net of treasury:
Statement of changes in equity
64,301,943
Non-vested equity shares that have not vested as of end of period
2,357,269
2,035,845
Number of shares, net of treasury,
excluding non-vested equity shares that have not
vested
79,106,630
62,266,098
Accumulated other comprehensive loss
The table
below presents
the change
in accumulated
other comprehensive
loss per
ended
foreign
reserve
Total
Balance as of July 1, 2025
$
$
Release of foreign currency translation reserve related to liquidation of equity
-accounted
investment
6,652
6,652
$
$
Accumulated other comprehensive loss (continued)
The table
below presents
the change
in accumulated
other comprehensive
loss per
component during
months ended
September 30, 2024:
September 30, 2024
foreign
reserve
Total
Balance as of July 1, 2024
$
$
10,525
10,525
Balance as of September 30, 2024
$
$
reclassified losses
of $
0.6
accumulated other
loss
(accumulated
foreign
reserve)
to
net
loss
related
to
the
on
liquidation
of
an
equity-accounted investment. There were
no
reclassifications from accumulated other comprehensive loss to net (loss) income during
the three months ended September 30, 2024.
Stock-based compensation
The Company’s
Amended and Restated
2022 Stock
Incentive Plan (“20
22 Plan”)
and the vesting
terms of certain
stock-based
awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on
Form 10-K for the year ended June 30, 2025.
Stock option and restricted stock activity
Options
The following table summarizes stock option activity for the three months
ended September 30, 2025 and 2024:
shares
average
price
($)
average
term
value
($'000)
average
grant date
fair value
($)
Outstanding - June 30, 2025
8.71
3.55
1.20
Outstanding - September 30, 2025
8.71
3.29
1.20
Outstanding - June 30, 2024
4,918,248
8.70
4.51
1.77
Forfeited
(13,333)
11.23
8.83
Outstanding - September 30, 2024
4,904,915
8.67
4.33
1,117
1.76
No
stock options were awarded
during the three months
ended September 30, 2025
No
stock options were exercised
Employees forfeited
an aggregate
of
13,333
stock options
three months ended September 30, 2024.
The following table presents stock options vested and expected to vest as of
shares
average
price
($)
average
term
value
Vested
and expecting to vest - September 30, 2025
8.71
3.29
These options have an exercise price range of $
3.01
to $
14.00
.
Stock-based compensation (continued)
Stock option and restricted stock activity
Options (continued)
The following table presents stock options that are exercisable as of September
shares
average
price
($)
average
term
value
Exercisable - September 30, 2025
869,570
3.98
3.71
No
stock options became exercisable during
each of the three months ended
three months ended September 30, 2025
The Company issues new shares to satisfy stock option exercises.
Restricted stock
The following table summarizes restricted stock activity for the three
months ended September 30, 2025 and 2024:
restricted stock
average grant
date fair value
Non-vested – June 30, 2025
2,169,900
7,833
Total granted
209,095
Granted – July 2025
3,772
Granted – August 2025
5,323
Granted – September 2025
200,000
Total vested
(10,933)
Vested
– August 2025
(10,933)
Non-vested – September 30, 2025
2,357,269
8,651
Non-vested – June 30, 2024
2,084,946
8,736
Total Granted
32,800
Granted – August 2024
32,800
Total vested
(78,801)
Vested
– July 2024
(78,801)
(3,100)
Non-vested – September 30, 2024
2,035,845
8,449
Grants
In July,
August and September
2025, respectively,
the Company granted
3,772
,
5,323
and
200,000
shares of restricted
stock to
which
have
time-based
vesting
conditions
and
which
are
subject
to
the
employees’
continued
employment
with
the
Company through the applicable vesting dates.
In August 2024, the Company granted
32,800
shares of restricted stock to employees which have time-based vesting conditions.
The Company has agreed
to grant an advisor
5,500
shares per month in
lieu of cash for services
provided to the Company.
The
Company and
the advisor have
agreed that the
Company will issue
the shares to
the advisor,
in arrears, on
a quarterly basis.
During
the three months ended September 30,
2025, the Company recorded a stock-based
compensation charge of $
0.1
million and included
the issuance of
16,500
shares of common stock in its issued and outstanding share count.
Stock-based compensation (continued)
Restricted stock (continued)
Vesting
In August
and September
2025, an
aggregate of
10,933
stock granted
vested. In
July 2024,
78,801
shares of restricted stock granted to our former Group CEO vested.
During
the
three
months
ended
30,
and
2024,
forfeited
10,793
and
3,100
restricted stock following termination of their employment with the Company.
Stock-based compensation charge and unrecognized compensation
cost
The Company recorded a
stock-based compensation charge, net,
excluding charges related to
the post-combination compensation
charges
discussed
in
Note
2,
during
the
three
months
ended
30,
and
2024,
of
$
1.9
million
and
$
2.4
respectively, which
comprised:
Total
charge
Allocated to cost
of goods sold, IT
processing,
servicing and
support
Allocated to
selling, general
and
Three months ended September 30, 2025
$
1,712
$
$
1,712
Reversal of stock compensation charge related to ESOP
Reversal of stock compensation charge related to restricted
stock forfeited
(12)
(12)
Total - three months
ended September 30, 2025
$
1,861
$
$
1,861
Three months ended September 30, 2024
$
2,377
$
$
2,377
Total - three months
ended September 30, 2024
$
2,377
$
$
2,377
The stock-based compensation charges
have been allocated to selling,
general and administration based
on the allocation of the
cash compensation paid to the relevant employees.
As
of
30,
2025,
the
total
unrecognized
compensation
cost
related
to
stock
options
was
$
4.3
which
the
Company
expects
to
recognize
over
three years
.
As
of
30,
2025,
the
total
unrecognized
compensation
cost
related
to
restricted stock awards was $
5.6
million, which the Company expects to recognize over
two years
.
During the three months ended
September 30, 2025 and 2024,
the Company recorded a deferred
tax benefit of $
0.2
million and
$
0.3
million, respectively,
the stock-based
compensation charge
recognized related
of Lesaka.
During these
periods the Company recorded a valuation allowance related
to the full deferred tax benefit
recognized because it does not believe that
the stock-based compensation deduction would be utilized as it does not anticipate
generating sufficient taxable income in the United
States. The Company deducts the difference between the market value on the date of exercise by the option recipient
and the exercise
price from income subject to taxation in the United States.
(Loss) Earnings per share
has issued redeemable
which is redeemable
at an amount
other than
fair value.
Redemption of
a
class of
at other
than fair
value increases
or decreases
the carrying
amount of
the redeemable
and is
reflected in basic earnings
per share using the two-class
method. There were
no
redemptions of common stock, or
adjustments to the
carrying value of the redeemable common stock during
the three months ended September 30, 2025 and 2024. Accordingly,
the two-
class method presented below does not include the impact of
any redemption. The Company’s redeemable common stock is described
in Note 14 to the Company’s audited consolidated financial statements included in
its Annual Report on Form 10-K for
the year ended
(Loss) Earnings per share (continued)
Basic (loss) earnings per share
includes shares of restricted stock that
meet the definition of a
participating security because these
shares are eligible
to receive non
-forfeitable dividend
equivalents at the
same rate as
common stock.
Basic (loss) earnings
has been calculated using the two-class
method and basic (loss) earnings per share
for the three months ended September
30, 2025 and
2024,
reflects only undistributed earnings. The computation below of basic (loss) earnings per
share excludes the net loss attributable
to shares of unvested
restricted stock (participating
non-vested restricted stock)
from the numerator
and excludes the dilutive
impact
of these unvested shares of restricted stock from the denominator.
Diluted (loss)
has been
calculated
to give
effect
to the
number
of shares
of additional
common
stock that
would have
been outstanding
if the
potential dilutive
instruments had
been issued
in each
period. Stock
options are
the
calculation of diluted (loss) earnings per share utilizing the treasury
stock method and are not considered to be
participating securities,
as the
stock options
do not
contain non-forfeitable
dividend rights.
has excluded
employee stock
options to
158,479
and
65,173
shares of common stock
from the calculation of
diluted loss per share during
the three months ended
30, 2025 and 2024 because the effect would be antidilutive.
The
calculation
of diluted
(loss) earnings
per
share
includes the
dilutive
effect
of
a portion
of the
stock granted
to
as
these
shares
of
stock
are
considered
contingently
returnable
shares
for
the
purposes
of
the
diluted
(loss)
earnings per share calculation and the vesting conditions in respect of
a portion of the restricted stock had been satisfied.
The vesting conditions for all awards made are discussed in Note 17 to the Company’s audited consolidated financial statements
included in its Annual Report on Form 10-K for the year ended June
The
table
net
loss
attributable
to
Lesaka
and
the
share
data
used
in
the
basic
and
diluted
loss
per
share
computations using the two-class method:
(in thousands except
percent and
per share data)
Numerator:
Net loss attributable to Lesaka
$
(4,297)
$
(4,542)
Undistributed (loss) earnings
$
(4,297)
$
(4,542)
Percent allocated to common shareholders (Calculation 1)
Numerator for (loss) earnings per share: basic and diluted
(4,179)
(4,399)
Continuing
(4,179)
(4,399)
Denominator
Denominator for basic (loss) earnings per share:
Weighted-average
common shares outstanding
79,094
62,265
Denominator for diluted (loss) earnings per share: adjusted weighted
average
common shares outstanding and assuming conversion
79,094
62,265
(Loss) Earnings per share:
Basic
$
(0.05)
$
(0.07)
Diluted
$
(0.05)
$
(0.07)
(Calculation 1)
Basic weighted-average common shares outstanding (A)
79,094
62,265
Basic weighted-average common shares outstanding and unvested restricted
shares
expected to vest (B)
81,327
64,293
Percent allocated to common shareholders
(A) / (B)
Options to
6,493,683
at prices
ranging from
$
4.87
to $
14.00
were
outstanding during
30, 2025, but
were not included
in the computation
of diluted
(loss) earnings
per share because the
options’ exercise price was greater
than the average market
price of the Company’s
common stock. Options to
4,224,210
shares of the Company’s common stock at prices ranging from
$
4.87
to $
14.00
per share were outstanding during
the three months ended September 30, 2024, but were not included in the computation of diluted (loss) earnings per share because the
options’
price
was greater
than
the
average
market
price
of
the
common
stock.
The options,
which
expire
at
v
arious dates through February 3, 2032, were still outstanding as of September
Supplemental cash flow information
The following table presents supplemental cash flow disclosures for
the three months ended September 30, 2025 and 2024:
Cash received from interest
$
$
Cash paid for interest
$
6,001
$
3,271
Cash paid (refund) for income taxes
$
$
(45)
Disaggregation of cash, cash equivalents and restricted
cash
Cash, cash equivalents and restricted
cash included on the Company’s unaudited condensed consolidated statement of
cash flows
includes restricted
cash related
to cash
withdrawn from
debt facilities
to fund
ATMs.
This facility
was cancelled
in
November 2024.
was only permitted
to use this
cash to
fund ATMs
and this cash
was considered
restricted as
to use
and therefore was classified
as restricted cash.
Cash, cash equivalents
and restricted cash also
includes cash in certain
bank accounts
that has been
ceded to Nedbank.
As this cash has
been pledged and
ceded it may
not be drawn
and is considered
restricted as to
use
and
therefore is
classified as
cash as
well. The
table presents
the disaggregation
of cash,
cash equivalents
and
restricted cash as of September 30, 2025 and 2024, and June 30, 2025:
June 30, 2025
$
72,162
$
49,687
$
76,520
Restricted cash
Cash, cash equivalents and restricted cash
$
72,284
$
49,809
$
76,639
Leases
The following table presents supplemental cash flow disclosure related to leases for the three months ended September 30, 2025
and 2024:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$
1,362
$
1,004
Right-of-use assets obtained in exchange for lease obligations
Operating leases
$
1,036
$
Revenue recognition
Disaggregation of revenue
The
table
the
revenue
by
major
revenue
streams,
a
reconciliation
to
reportable segments for the three months ended September 30, 2025:
Total
Processing fees
$
34,463
$
9,416
$
11,631
$
55,510
32,614
9,416
11,631
53,661
1,849
1,849
Technology
products
6,521
7,575
6,460
7,514
Prepaid airtime sold
82,053
1,679
83,769
74,337
1,679
76,053
7,716
7,716
Lending revenue
6,854
6,854
Interest from customers
2,287
4,914
7,201
Insurance revenue
6,872
6,872
Account holder fees
2,148
2,148
Other
1,519
1,374
Total revenue, derived
from the following geographic
126,313
30,576
14,559
171,448
116,542
30,576
14,559
161,677
$
9,771
$
$
$
9,771
Revenue recognition (continued)
Disaggregation of revenue (continued)
The
table
the
revenue
by
major
revenue
streams,
a
reconciliation
to
segments
for
the
three
months
ended
30,
(previously
for
the
ended
September 30, 2024, has been recast for the change
to the Company’s internal
reporting structure in the second quarter of fiscal 2025
as described in Note 21
audited consolidated financial
statements included in its Annual
Report on Form 10-K
for
the year ended June 30, 2025):
Total
Processing fees
$
24,370
$
7,530
$
6,513
$
38,413
22,568
7,530
6,513
36,611
1,802
1,802
Technology
products
1,845
1,291
3,138
1,772
1,291
3,065
Prepaid airtime sold
93,875
1,578
95,470
87,995
1,578
89,590
5,880
5,880
Lending revenue
6,956
6,956
Interest from customers
1,676
1,676
Insurance revenue
4,340
4,340
Account holder fees
1,699
1,699
Other
1,297
1,876
1,240
1,819
Total revenue, derived
from the following geographic
123,063
21,072
9,433
153,568
115,251
21,072
9,433
145,756
$
7,812
$
$
$
7,812
Leases
The
Company
has
entered
into leasing
arrangements
classified
as operating
leases under
guidance.
These leasing
arrangements
relate
to
the
lease
of
its
corporate
head
office
and
sales
and
offices
of
its
Merchant,
and
Enterprise businesses. The Company’s operating leases have remaining lease terms of between
one
and
five years
. The Company also
operates parts
of its
consumer business
from locations
which it
leases for
a period
of less
than
one year
. The
lease expense during the three months ended September 30, 2025 and 2024
was $
1.4
1.0
The
Company
has
also
entered
into
short-term
leasing
arrangements,
for
the
lease
of
branch
and
other
locations,
to operate its consumer
business in South Africa.
The Company’s
short-term lease expense during
the three months ended
September 30, 2025 and 2024, was $
0.4
1.0
The following table presents supplemental balance
sheet disclosure related to the
Company’s right-of-use assets and its operating
lease liabilities as of September 30, 2025 and June 30, 2025:
Right of use assets obtained in exchange for lease obligations:
Weighted average
remaining lease term (years)
2.9
2.8
Weighted average
discount rate (percent)
9.8
9.8
The maturities of the Company’s
operating lease liabilities as of September 30, 2025, are presented below:
Maturities of operating lease liabilities
Year
ended June 30,
2026 (excluding three months to September 30, 2025)
$
4,421
3,813
2,387
1,164
Thereafter
Total undiscounted
operating lease liabilities
12,247
Less imputed interest
1,948
Total operating lease liabilities,
10,299
Operating lease liability - current
4,258
Operating lease liability - long-term
$
6,041
The Company discloses segment information as reflected in the management
information systems reports that its chief operating
decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in
which the entity holds material assets or reports material revenues. A description of the Company’s operating segments is contained in
Note 21
audited consolidated
financial statements
its Annual Report
on Form 10-K
for the year
ended
June 30, 2025. Previously
reported information for the
three months ended September
30, 2024, has been recast
for the change to
the
structure
in
the
second
quarter
of
fiscal
as
in
Note
to
the
audited
consolidated financial statements included in its Annual Report on
Form 10-K for the year ended June 30, 2025.
The Company’s chief operating decision maker is the Company’s
Executive Chairman. During the second quarter of fiscal 2025,
he changed the Company’s operating
and internal reporting structures to present a new segment, Enterprise, separately.
The
Company
currently
has
three
segments:
Merchant,
and Enterprise.
The
chief
decision
maker
(“CODM”)
is
the
Executive
Chairman.
The
CODM
analyzes
the
primarily based on these three operational lines, namely,
(i) Merchant, which focuses
on both formal
and informal sector
merchants. Formal sector merchants
are generally in
urban areas,
have higher revenues
and have access to
multiple service providers.
Informal sector merchants,
which are often
sole proprietors and
usually have
lower revenues
compared with
formal section
merchants, operate
in rural
areas or
in informal
urban areas
and do
not
always have access to a full-suite of traditional banking products;
(ii) Consumer,
which primarily
focuses on
individuals who
have historically
been excluded
from traditional
financial services
and to whom we offer transactional accounts (banking), insurance, lending (short-term
loans), payments solutions (digital wallet) and
various value-added services; and
(iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobile
network operators (“MNOs”) and municipalities, and, through Recharger, landlords utilizing Recharger’s
prepaid electricity metering
s
olution.
Types of products
and services from which each segment derives its revenues
The
segment
revenue
from
the
sale
of
Alternative
Digital
Products
(“ADP”)
(select
prepaid
solutions,
supplier-enabled
payments,
international
money
transfer
and
other)
and
card-acquiring
services
to
informal
sector
merchants. It
also includes
activities related
to the
provision of
goods and
services provided
to corporate
juristic entities.
The
Company
earns
fees
from
processing
performed
card
acquiring
and
the
provision
of
a
payment
gateway
services)
for
its customers,
and rental
and
license
fees from
the provision
of point
of sales
(“POS”)
and
to
the
hospitality
industry.
also provides
cash management
and payment
services to
customers
through
a digital
vault
which
is located
at
the customer’s
premises and
through
which
is able
to provide
the services
which
generate
processing fee revenue. The Merchant segment includes interest earned from the provision of loans
to its customers, refer to Note 16.
The Consumer segment
includes activities related
to the provision of
financial services to customers,
including a bank account,
loans and insurance
products. The Company
charges monthly
administration fees
for all bank
accounts. Customers that
have a bank
account managed by the Company are issued cards that
can be utilized to withdraw funds at
an ATM or to transact at a merchant POS.
earns processing
fees from
transactions processed
for these
customers. The
Company also
earns fees
on transactions
performed
by other
banks’ customers
utilizing
its ATM
(until
or POS.
provides short
-term loans
to
customers in South Africa for which it earns initiation and monthly service fees, and interest
revenue from the second quarter of fiscal
2025,
refer to
Note 16.
writes life
insurance contracts,
primarily funeral-benefit
policies, and
policy holders
pay the
Company a monthly insurance
premium. The Company
also earns fees from the
provision of physical and
digital prepaid and secure
payout solutions for South African businesses.
The Enterprise segment provides
its business and
government-related customers with transaction processing services
that involve
the
collection,
transmittal
and
retrieval
of
transaction
data.
Through
offers
landlords
access
to
Recharger’s
prepaid
electricity metering
solution through
which Enterprise
earns commission
revenue from
prepaid electricity
voucher sales
to
tenants recharging prepaid meters. This segment also includes
sales of hardware and licenses to
customers. Hardware includes the sale
of
POS
devices,
SIM
cards
and
other
consumables
which
can
occur
on
an
ad
hoc
basis.
Licenses
include
the
right
to
use
certain
technology developed by the Company.
Segment measure of profit or loss
The
Company
segment
based
on
segment
before
tax,
and
adjusted
for
items
mentioned
in
the
sentences
below
(“Segment
EBITDA”),
the
segments’ measure of profit or loss.
The
Company
obtained
a
general
lending
in
February
2025,
which
has
been
used
to
fund
a
portion
of
its
Consumer lending during the three months ended September 30, 2025, and interest related to these borrowings have been allocated to
Consumer.
The Company also
included an
intercompany interest expense
in its Consumer
EBITDA for the
three
months ended September 30, 2024.
does not
allocate once-off
items, stock-based
compensation charges,
depreciation and
amortization, impairment
of
goodwill
or other
intangible assets,
other
items
gains or
losses on
disposal of
fair
value
to
equity
securities),
income,
certain
expense,
income
tax
expense
or
loss
from
to
its
reportable segments. Group costs generally include: employee related costs in relation to employees specifically hired for group roles
and related directly to
managing the US-listed entity;
expenditures related to compliance
with the Sarbanes-Oxley Act
of 2002; non-
employee directors’ fees; legal fees; group and US-listed related audit
fees; and directors and officer’s insurance premiums. Once-off
items represent
non-recurring expense
items, including
costs related to
acquisitions and
transactions consummated
or ultimately not
pursued.
(loss)
gain
for
foreign
mark-to-market
on
certain
intercompany accounts. Interest adjustment represents the
intercompany interest expense included in the Consumer
EBITDA during fiscal 2025. The Stock-based compensation adjustments
reflect stock-based compensation expense and are excluded
from
the
calculation
of
Segment
EBITDA
and
are
therefore
as
reconciling
items
to
reconcile
the
segments’ Segment Adjusted EBITDA to the Company’s
loss before income tax expense.
Our
CODM
does
not
review
the
components
of
segment
selling,
general
and
and
is
with
reports which include revenue, net revenue (a non-GAAP measure)
and Segment Adjusted EBITDA.
The table below presents
the reconciliation of revenue
from external customers to the
reportable segment’s
revenue, significant
expenditures,
the
segment’s
measure
of
profit
or
loss,
and
certain
other
segment
for
the
three
months ended September 30, 2025 and 2024, respectively,
is as follows:
Three months ended September 30, 2025
No allocated
Total
Revenue from external customers
$
126,313
$
30,576
$
14,559
$
$
171,448
Intersegment revenues
126,950
30,576
14,853
172,379
Less segment-related expenses:
Cost of goods sold, IT processing,
servicing and support
98,413
10,437
10,521
119,371
Selling, general and
(1)(2)
19,347
11,646
3,063
34,056
Segment adjusted EBITDA
$
9,190
$
8,493
$
1,269
$
$
18,952
Total
$
3,365
$
$
$
9,134
$
12,894
Expenditures for long-lived assets
$
4,325
$
$
$
$
5,119
Three months ended September 30, 2024
No allocated
Total
Revenue from external customers
$
123,063
$
21,072
$
9,433
$
$
153,568
Intersegment revenues
2,450
3,038
123,651
21,072
11,883
156,606
Less segment-related expenses:
Cost of goods sold, IT processing,
servicing and support
104,703
8,373
9,702
122,778
Selling, general and
(1)(3)
11,394
8,303
1,819
21,516
Segment adjusted EBITDA
$
7,554
$
4,396
$
$
$
12,312
Total
$
2,227
$
$
$
3,747
$
6,276
Expenditures for long-lived assets
$
3,886
$
$
$
$
4,138
Operating segments (continued)
(1)
Selling,
general
and
human
capital-related
base
salary
and
bonus),
IT-related
licenses,
maintenance,
hosting,
and
communication
expenses),
professional
fees
audit, legal,
consulting and
other fees),
lease and
utilities expenses,
the allowance
for credit
losses and
other operating
and support
expenses.
(2) Segment Adjusted
EBITDA for the
three months ended
September 30, 2025,
includes retrenchment
costs for Merchant
of $
0.2
3.8
million) and Consumer of $
0.1
2.6
million).
(3) Segment
Adjusted EBITDA for
30, 2024, includes
retrenchments costs
for Consumer
of
$
0.06
1.1
million) and for Merchant, costs of $
0.01
0.2
million).
The reconciliation of
the reportable segments’
measures of profit or
loss to loss before
income tax expense for
ended September 30, 2025 and 2024, is as follows:
Reportable segments measure of profit or loss
$
18,952
$
12,312
Operating loss: Group costs
(3,611)
(2,949)
Once-off costs
(267)
(1,805)
Interest adjustment
Unrealized Gain FV for currency adjustments
Stock-based compensation charge adjustments
(1,861)
(2,377)
(12,894)
(6,276)
(584)
(4,898)
(5,032)
Loss before income tax expense
$
(4,560)
$
(4,491)
The segment
information as
reviewed by
the chief operating
decision maker
does not include
a measure of
segment assets per
segment as all of
the significant assets are
used in the operations
of all, rather than
any one, of the
segments. The Company does
not
have dedicated assets
assigned to a
particular operating segment.
Accordingly,
it is not meaningful
to attempt an arbitrary
allocation
and segment asset allocation is therefore not presented.
Income tax
Income tax in interim periods
For the purposes of interim
financial reporting, the Company
determines the appropriate income
tax provision by first applying
the effective
expected to
be applicable
for the
full fiscal
year to
ordinary income.
This amount
is then
adjusted for
the tax
effect
of
significant
unusual
items,
for
instance,
changes
in
tax
law,
valuation
allowances
and
expenses that
are reported
separately,
and have an
impact on the
tax charge.
The cumulative effect
of any change
in the enacted
tax
rate, if and when applicable, on the opening balance of deferred tax assets
and liabilities is also included in the tax charge as a discrete
event in the interim period in which the enactment date occurs.
For the three months ended September 30, 2025, the Company’s
effective tax rate was impacted by the tax expense recorded by
the
profitable
South
African
and
expenditures).
The
Company’s income
tax benefit was impacted by a higher
deferred tax benefit as a result
of the reduction in the useful
lives of certain
of the
brand and
trademark intangible
assets which
has resulted
in an
increase in
amortization expense
three
months ended September 30, 2025.
For the three months ended September 30, 2024, the Company’s
effective tax rate was impacted by the tax expense recorded by
the
profitable
South
African
operations,
expenditures),
the
on-
going losses incurred
by certain of
South African businesses
and the associated
valuation allowances created
related
to the deferred tax assets recognized regarding net operating losses incurred
by these entities.
Uncertain tax positions
As of three months ended September 30, 2025 and
June 30, 2025, the Company had
no
unrecognized tax benefits. The Company
files income tax
returns mainly
in South Africa,
Botswana, Namibia and
in the U.S.
federal jurisdiction.
As of September
the Company’s South African subsidiaries are no longer subject to income tax examination by
the South African Revenue Service for
periods before
- The
Company is
subject to
income tax
in other
jurisdictions outside
South Africa,
none of
which are
i
ndividually material to its financial position, statement of cash flows, or results of operations.
Commitments and contingencies
Guarantees
The South African
Revenue Service and
certain of the
Company’s customers,
suppliers and other
business partners have
asked
to provide
them with
guarantees, including
standby letters
of credit,
issued by
South African
banks. The
Company is
required to procure these guarantees for these third parties to operate
its business.
RMB has
issued
guarantees
to
these
third
parties
amounting
to
ZAR
33.1
million
($
1.9
translated
at
rates
applicable as of September 30, 2025) thereby utilizing part of the Company’s
short-term facilities.
Nedbank has
issued guarantees
to these
third parties
amounting to
ZAR
2.1
0.1
rates
applicable as of September 30, 2025) thereby utilizing part of the Company’s short-term facilities. The Company pays commission of
between
0.47
% per annum to
1.84
% per annum of the face
value of these guarantees and does
not recover any of the commission
from
third parties.
The Company has not recognized any obligation related to these
guarantees in its consolidated balance sheet as of September 30,
- The maximum
potential amount that
the Company could
pay under these
guarantees is ZAR
35.1
2.0
rates applicable
as of September
30, 2025).
has ceded
and pledged
certain bank
accounts to
Nedbank as
security
for
the guarantees
issued by
them with
an aggregate
value
of ZAR
2.1
0.1
rates
applicable as of September 30, 2025).
Contingencies
The
Company
is
subject
to
a
variety
of
insignificant
claims
and
suits
that
arise
from
time
to
time
in
the
ordinary
course
of
business. Management
currently believes
that the
resolution of
these other
matters, individually
or in
the aggregate,
will not
have a
material adverse impact on the Company’s
financial position, results of operations or cash flows.
Subsequent events
Agreement to sell shares in Cell C
As discussed in Note 5, the Company holds, through
Lesaka SA, shares in Cell C. It is intended that a restructure
of Cell C will
be undertaken, which will include the establishment of a
new holding company for Cell C, Cell
C Holdings Limited (“Cell C Listco”),
and the
transfer of
shares in
Cell C by
its existing
shareholders to
Cell C Listco
in exchange
for Cell
C Listco
issuing shares
to the
Cell
C
shareholders
(the
“Flip-up”).
It
is
further
intended
that
the
shares
of
Cell C
Listco
will
be
listed
on
the
operated
by the
JSE Limited
(the “Listing”).
On October
31,
2025,
in considering
the proposed
restructure
and
Listing,
Lesaka SA entered
into an agreement with
The Prepaid Company Proprietary
Limited (“TPC”) to dispose
of its shares in
Cell C (or,
after the Flip-up is implemented, its shares in Cell C Listco) (“Relevant Shares”), if certain conditions are met. Under the terms of the
agreement, if:
(1)
the Listing occurs by November 30, 2025, and the value of Lesaka SA’s
shares in Cell C is less than ZAR
million , then
Lesaka SA
can choose
to either hold
the shares,
or sell the
Relevant Shares
to TPC
for a purchase
price equal
to ZAR
million; or
(2)
the Listing does
not occur by
November 30, 2025 (or, earlier
than this date,
it is determined
that the Listing
will not proceed),
then Lesaka
SA will sell
the Relevant Shares
to TPC for
ZAR
million. If, after
this sale and
before April
30, 2026, the
Listing occurs and the list price per share
(“A”) is more than the price
paid per Lesaka share (the aggregate ZAR
(“B”), then TPC shall pay an amount equal to the difference between A
and B, multiplied by the number of Relevant Shares
to Lesaka SA as a top-up to the purchase consideration.
Issue of guarantee to RMB in October 2025
In October
2025, the
Company provided
a ZAR
19.0
1.1
million) guarantee
to RMB in
connection with
a guarantee
facility extended by RMB to Sandulela under the terms of February 2025
Common Terms Agreement.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.