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What changed in LESAKA TECHNOLOGIES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LESAKA TECHNOLOGIES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+477 added−453 removedSource: 10-K (2025-09-29) vs 10-K (2024-09-11)

Top changes in LESAKA TECHNOLOGIES INC's 2025 10-K

477 paragraphs added · 453 removed · 235 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese favorable tailwinds have helped position Africa as the fastest-growing Fintech market globally, according to a report by Boston Consulting Group that projects growth in the African Fintech revenue pool to grow by 13 times between 2021 and 2030.
Biggest changeAccording to a report by Boston Consulting Group, favorable secular tailwinds, have helped position Africa as the fastest growing fintech market globally, that projects growth in the total African fintech revenue pool to grow by 13 times between 2021 and 2030, as illustrated below. 3 Our Strategy To build our unique ecosystem and capture this large and attractive market opportunity, we developed a 5-phase strategy to win and serve customers across a diversified range of channels and markets.
We offer the following development programs to enhance employee performance and skills: • unemployed and employed learnerships; • internships; • leadership development programs; • training programs; • financial assistance to pursue further studies and obtain formal qualifications; • other in-house and cross-functional training to aid with career advancement; and • succession planning – training interventions to address scarce and critical skills.
We offer the following development programs to enhance employee performance and skills: • training programs; • leadership development programs; • unemployed and employed learnerships; • internships; • financial assistance to pursue further studies and obtain formal qualifications; • other in-house and cross-functional training to aid with career advancement; and • succession planning – training interventions to address scarce and critical skills.
Mr. Heilbron has two decades of financial services experience, having spent 19 years working for Investec in South Africa and the UK, where he served as Global Head of Private Banking and Joint Chief Executive Officer of Investec Bank plc. He led a private consortium that acquired Cash Connect Management Solutions (Pty) Ltd (“CCMS”) in 2013. Mr.
Heilbron has two decades of financial services experience, having spent 19 years working for Investec in South Africa and the UK, where he served as Global Head of Private Banking and Joint Chief Executive Officer of Investec Bank plc. He led a private consortium that acquired Cash Connect Management Solutions (Pty) Ltd (“CCMS”) in 2013. Mr.
The information contained on, or accessible through, our website is not incorporated into this Annual Report. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 10
The information contained on, or accessible through, our website is not incorporated into this Annual Report. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 13
We have taken positive strides towards a rewards philosophy that rewards high performance, is externally benchmarked and focuses on equal pay for work of equal value. Employee compensation programs We are committed to ensuring that all our employees are paid fair and competitive remuneration.
We have taken positive strides towards a rewards philosophy that rewards high performance and focuses on equal pay for work of equal value. Employee compensation programs We are committed to ensuring that all our employees are paid fair and competitive remuneration.
Kola was Senior Vice President for Investments, Strategy and Business Planning at EMP. Since the acquisition of EMP by Network International in 2017, Mr. Kola has been an Operations Director and Strategic Advisor to the emerging market private equity firm Actis, where he again focused on fintech businesses. Lincoln C.
Kola was Senior Vice President for Investments, Strategy and Business Planning at Network International. Since the acquisition of EMP by Network International in 2017, Mr. Kola had been an Operations Director and Strategic Advisor to the emerging market private equity firm Actis, where he again focused on fintech businesses.
In 2008, Lesaka listed on the JSE in a secondary listing, which enabled the former Aplitec shareholders (as well as South African residents generally) to hold Lesaka common stock directly. Available information We maintain a website at www. lesakatech.com.
In 2005, Lesaka completed an initial public offering and listed on the NASDAQ Stock Market. In 2008, Lesaka listed on the JSE in a secondary listing, which enabled the former Aplitec shareholders (as well as South African residents generally) to hold Lesaka common stock directly. Available information We maintain a website at www. lesakatech.com.
Merchant includes one executive officer for each of fiscal 2024, 2023 and 2022. Group includes two executive officers for fiscal 2024 and 2023 and three for fiscal 2022.
Merchant includes one executive officer for each of fiscal 2024 and 2023. Group includes five executive officers for fiscal 2025, and two executive officers for each of fiscal 2024 and 2023.
We have implemented and regularly update human capital-related policies that are designed to ensure compliance with applicable South African laws and regulations. 8 Our Executive Officers The table below presents our executive officers, their ages and their titles: Name Age Title Ali Mazanderani 42 Executive Chairman and Director Naeem E. Kola 51 Group Chief Financial Officer and Director Lincoln C.
We have implemented and regularly update human capital-related policies that are designed to ensure compliance with applicable South African laws and regulations. 11 Our Executive Officers The table below presents our executive officers, their ages and their titles: Name Age Title Ali Mazanderani 43 Executive Chairman and Director Dan L. Smith 53 Group Chief Financial Officer and Director Naeem E.
Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley Management College, various diplomas and attended an Advanced Management Program at Harvard Business School. Steven J. Heilbron has been the Chief Executive Officer of the Connect Group since 2013 and joined us following the acquisition of Connect in the same capacity.
Mr. Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley Management College, various diplomas and attended an Advanced Management Program at Harvard Business School. Steven J. Heilbron joined us following the acquisition of Connect in 2022. Mr.
He holds postgraduate degrees in Economics from the University of Pretoria, Oxford University and the London School of Economics, an MBA from INSEAD and a Masters in Business Law from the University of St Gallen. Naeem E. Kol a has been our Group Chief Financial Officer since March 1, 2022. Mr.
He holds postgraduate degrees in Economics from the University of Pretoria, Oxford University and the London School of Economics, an MBA from INSEAD and a Masters in Business Law from the University of St Gallen. Dan L. Smith has been our Group Chief Financial Officer since October 1, 2024.
Heilbron has presided over significant organic growth in the rebranded Connect Group, as well as spearheading the successful acquisition and integration of Kazang and EFTpos acquired from the Paycorp Group in February 2020. He is a member of the South African Institute of Chartered Accountants.
Heilbron has presided over significant organic growth in the rebranded Connect Group, as well as spearheading the successful acquisition and integration of Kazang and EFTpos acquired from the Paycorp Group in February 2020.
This commitment extends to all levels of our organization, including within senior management and our board of directors. 7 As of June 30, 2024, the composition of our workforce was: • 55% female and 45% male; • 40% between 18 and 34 years old, 55% between 35 and 54 years old, and 5% over 55 years old; and • 69% Black, 11% two or more races, 8% Indian and 12% White.
This commitment extends to all levels of our organization, including within senior management and our board of directors. 10 As of June 30, 2025, the composition of our workforce was: • 53% female and 47% male; • 42% between 18 and 34 years old, 53% between 35 and 54 years old, and 5% over 55 years old; and • 66% Black, 9% two or more races, 10% Indian and 15% White.
Mali 56 Chief Executive Officer: Southern Africa and Director Steven J. Heilbron 59 Executive and Director Ali Mazanderani has been our Executive Chairman since February 1, 2024. He is a fintech investor and entrepreneur. He is the co-founder and chairman of Teya, a pan-European fintech.
Kola 52 Group Chief Operating Officer and Director Lincoln C. Mali 57 Chief Executive Officer: Southern Africa and Director Steven J. Heilbron 60 Head of Corporate Development and Director Ali Mazanderani has been our Executive Chairman since February 1, 2024. He is a fintech investor and entrepreneur. He is the co-founder and chairman of Teya, a pan-European fintech.
Our number of employees allocated on a segmental and group basis as of the years ended June 30, 2024, 2023 and 2022, is presented in the table below: Number of employees 2024 2023 2022 Consumer (1) 1,333 1,306 1,826 Merchant (1) 1,189 990 824 Total segments 2,522 2,296 2,650 Group (1) 9 7 7 Total 2,531 2,303 2,657 (1) Consumer includes one executive officer for each of fiscal 2024, 2023 and 2022.
Our number of employees allocated on a segmental and group basis as of the years ended June 30, 2025, 2024 and 2023, is presented in the table below: Number of employees 2025 2024 2023 Consumer (1) 1,542 1,333 1,306 Merchant (1) 1,957 1,059 872 Enterprise (1) 213 130 118 Total segments 3,712 2,522 2,296 Group (1) 16 9 7 Total 3,728 2,531 2,303 (1) Consumer includes one executive officer for each of fiscal 2024 and 2023.
Revenues based on the geographic location from which the sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in the table below: Revenue (1) Long lived assets 2024 2023 2022 2024 2023 2022 $'000 $'000 $'000 $'000 $'000 $'000 South Africa 537,594 505,558 215,046 286,700 300,104 359,725 India (MobiKwik) - - - 76,297 76,297 76,297 Rest of the world 26,628 22,413 7,563 2,548 2,197 2,811 Total 564,222 527,971 222,609 365,545 378,598 438,833 (1) Refer to Note 16 to our audited consolidated financial statements included in this Annual Report which contains detailed financial information about our revenue for fiscal 2024, 2023 and 2022. 9 Corporate history Lesaka was incorporated in Florida in May 1997 as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies, Inc. on May 12, 2022.
Revenues based on the geographic location from which the sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in the table below: Revenue (1) Long lived assets 2025 2024 2023 2025 2024 2023 $'000 $'000 $'000 $'000 $'000 $'000 South Africa 624,846 537,594 505,558 392,098 286,700 300,104 India (MobiKwik) - - - - 76,297 76,297 Rest of the world 34,855 26,628 22,413 3,055 2,548 2,197 Total 659,701 564,222 527,971 395,153 365,545 378,598 (1) Refer to Note 16 to our audited consolidated financial statements included in this Annual Report which contains detailed financial information about our revenue for fiscal 2025, 2024 and 2023.
Financial Information about Geographical Areas and Operating Segments Refer to Note 21 to our audited consolidated financial statements included in this Annual Report contains detailed financial information about our operating segments for fiscal 2024, 2023 and 2022.
He is a member of the South African Institute of Chartered Accountants . 12 Financial Information about Geographical Areas and Operating Segments Refer to Note 21 to our audited consolidated financial statements included in this Annual Report contains detailed financial information about our operating segments for fiscal 2025, 2024 and 2023.
Equal opportunity Having an inclusive and diverse workforce which reflects our economically active population and society in general, is crucial for helping the organization attract and retain talent and is important for long-term organizational success. Our human resources team emphasizes recruiting and retaining a talented and diverse workforce with special focus on hiring previously disadvantaged groups whenever possible.
Equal opportunity Having an inclusive and diverse workforce which reflects our economically active population and society in general, is crucial for helping the organization attract and retain talent and is important for long-term organizational success.
As such, while we offer a range of formal programs (as listed further below), more importantly, we continue to encourage a culture of learning in everything that we do. Sustainable employee training and development programs impact employee retention, and we believe that our willingness to invest in employee development contributes to employee satisfaction and belonging.
Employee training and skills development We strongly believe that learning is an ongoing process and that the majority of learning is in the doing. As such, while we offer a range of formal programs (as listed further below), more importantly, we continue to encourage a culture of learning in everything that we do.
On a functional basis, four of our employees are our named executive officers, 1,350 were employed in sales and marketing, 500 were employed in finance and administration, 266 were employed in information technology and 411 were employed in operations.
On a functional basis, as of June 30, 2025, five of our employees were our named executive officers, 1,567 were employed in sales and marketing, 703 were employed in finance and administration, 432 were employed in information technology and 1,021 were employed in operations.
Mali chaired the board of directors of Diners Club South Africa until April 2021, and was a member of the Central and Eastern Europe, Middle East and Africa Business Council for Visa. Mr.
Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, having served in many different roles within that organization since 2001. Mr. Mali chaired the board of directors of Diners Club South Africa until April 2021, and was a member of the Central and Eastern Europe, Middle East and Africa Business Council for Visa.
Our products are designed for consumers at the lower socioeconomic end of the market within Living Standards Measures (“LSMs”) 1 to 6, which comprises approximately 26 million people as of 2023 (according to a report by Genesis Analytics). As of the date of this Annual Report, we have approximately 1.5 million active consumer customers.
Our products are designed for consumers at the lower socioeconomic end of the market within Living Standards Measures (“LSMs”) 1 to 6, which comprises approximately 26 million people as of 2023 (according to a report by Genesis Analytics). LSM is a research tool used in South Africa to segment the population based on living standards rather than income alone.
These are our values that underpin our mission to enable Merchants to compete and grow, and Grant Beneficiaries to improve their lives, by providing innovative financial technology and value -creating solutions. Employee training and skills development We strongly believe that learning is an ongoing process and that the majority of learning is in the doing.
These are our values that underpin our mission to enable Merchants to compete and grow, and for our Consumer customers, which comprise mainly grant beneficiaries, to improve their lives, by providing innovative financial technology and value-creating solutions.
Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executive with over 25 years in the industry. Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, having served in many different roles within that organization since 2001. Mr.
He is a qualified Chartered Accountant (SA) and a member of the South African Institute of Chartered Accountants. Lincoln C. Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executive with over 25 years in the industry.
In 2004, Lesaka acquired Net1 Applied Technology Holdings Limited (“Aplitec”), a public company listed on the Johannesburg Stock Exchange (“JSE”). In 2005, Lesaka completed an initial public offering and listed on the NASDAQ Stock Market.
Corporate history Lesaka was incorporated in Florida in May 1997 as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies, Inc. on May 12, 2022. In 2004, Lesaka acquired Net1 Applied Technology Holdings Limited (“Aplitec”), a public company listed on the Johannesburg Stock Exchange (“JSE”).
At an enterprise level, our financial switch and VAS and bill payments business competes with BankservAfrica, Pay@, eCentric and Transaction Junction. Human Capital Resources Over the last two years we have built a diverse team of high-caliber individuals, from different organizations, to form our leadership group.
Like our Merchant Division and Consumer Division, we have competitors within each of our core products, however no specific competitor participating across the integrated suite of products, offered in our Enterprise Division. 9 Human Capital Resources Over the last few years we have built a diverse team of high-caliber individuals, from different organizations, to form our leadership group.
Our core purpose is to provide financial services to Southern Africa’s underserviced consumers and merchants, improving people’s lives and increasing financial inclusion in the markets in which we operate.
ITEM 1. BUSINESS Overview Lesaka enables underserviced consumers and businesses in the southern cone of Africa to manage their daily financial activities in a better way, improving people's lives and increasing financial inclusion in the markets in which we operate.
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ITEM 1. BUSINESS Overview Lesaka is a South African Fintech company that utilizes its proprietary banking and payment technologies to deliver financial services solutions and software to consumers and merchants in Southern Africa. Our vision is to build and operate the leading full-service fintech platform in Southern Africa.
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We have developed a unique ecosystem of communities that provides: (1) over 2 million consumers with specialized banking, credit, insurance and payout solutions to help them manage their evolving financial needs; (2) over 125,000 merchants of all sizes with payment acceptance solutions to facilitate their daily commercial activities more efficiently and effectively; and (3) over 750 enterprises with proprietary network capabilities to facilitate payments between consumers and businesses in a fast and secure manner.
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We achieve this through our ability to efficiently digitalize the last mile of financial inclusion, providing a full-service fintech platform offering both cash and digital, and facilitating the secular shift from cash to digital that is currently taking place.
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We bring these communities together within the Lesaka ecosystem by enabling them to engage and transact with each other in a better, more convenient and safe manner.
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We offer a wide range of solutions including transactional accounts (banking), lending, insurance, cash management solutions, card acceptance, supplier payments, software services and bill payments. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.
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For example, we offer bill payment solutions to consumers, merchants and enterprises by: (1) connecting over 620 enterprise service providers to our proprietary biller network so that they can offer their customers a convenient channel to pay their respective bills; (2) enabling over 95,000 merchants to offer our Alternative Digital Products (“ADP”) at their locations and then digitizing any cash payments they receive through one of our cloud-connected cash vaults or recycling the cash via an ATM that we may place in their store to drive foot-traffic; and (3) offering consumers the convenience of paying their bills at a nearby merchant where they may already shop frequently, using cash withdrawn from one of our ATMs or paying with a debit card linked to a digital-bank account that we provided to them to deposit and manage the funds from their employer payrolls or welfare grants from the South African government.
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In May 2024 we announced the acquisition of Adumo RF (Pty) Ltd (“Adumo”), an acquisition subject to satisfaction of customary closing conditions, expected to close in October 2024. The acquisition continues Lesaka’s consolidation in the Southern African fintech sector and enhances Lesaka's strengths in both the consumer and merchant markets.
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To build and maintain our valuable and growing ecosystem, we have over 3,500 employees operating on the ground in five countries, including South Africa (our primary market), Namibia, Botswana, Zambia, and Kenya, and we have the ability to reach deeper and more broadly into adjacent markets through a variety of strategic partnerships.
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Reportable Segments We operate through two divisions: Our B2C Consumer Division (“Consumer”) and our B2B Merchant Division (“Merchant”). Within these two divisions, Lesaka has four broad customer types: consumers, micro-merchants, merchants, and enterprise clients. While there are mutually reinforcing dynamics and overlap between our verticals, within each vertical, we offer distinct brands with unique value propositions.
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This enables us to target and serve a market with approximately 250 million people and an estimated serviceable addressable market of approximately $12 billion in net revenue by 2030 according to reports by Global Data Analytics, McKinsey & Company, BDO, Genesis Analytics, the International Monetary Fund, the Population Reference Bureau and internal management estimates.
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Our platform addresses a wide range of customers that are not generally serviced by our competitors, an advantage that we use to benefit from economies of scale. We believe that we deliver high quality products that provide excellent value to our customers.
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These phases include: 1. Address - First, we develop or acquire a platform to address and serve the specialized financial needs of a specific customer segment. Today, we have three core platforms allocated to each of our reported business segments (or divisions), Consumer, Merchant and Enterprise; 2.
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While we operate in competed markets, we believe that we are unique in offering a comprehensive product portfolio, serving both formal and informal consumers and merchants with omnichannel financial services through physical and digital touchpoints. 3 Consumer (B2C) Customers Through Consumer we focus on individuals who have historically been excluded from traditional financial services.
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Position - Second, we position ourselves in the market to gain access to data that gives us valuable insights into our customer base. We develop solutions that enable us to learn from the flow of funds and financial behaviours in our customers daily lives to better understand their needs.
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Products We offer consumers transactional accounts (banking), insurance, lending (short-term loans), payments solutions (digital wallet) and various value-added services to underserved consumers in South Africa.
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For example, our banking solutions enable us to see the sources and frequency of consumer income deposits as well as their spending behaviours, while our merchant solutions enable us to see a merchant’s cash flows and selected spending such as inventory purchases and supplier payments; 3.
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Our value proposition and products are designed to be simple, relevant and cost effective for our target market. 4 Merchant (B2B) Customers Through Merchant, we focus on micro-merchants, merchants and enterprises operating in the informal and formal sectors of the Southern African economy.
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Develop – Third, we develop and foster differentiation in the market by combining financial, software and hardware technologies to create integrated, end-to-end fintech solutions that have superior functionality and convenience relative to available alternatives.
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Micro-merchants, or informal sector merchants, are often sole proprietors, usually with lower revenues, that operate in rural areas or in informal urban areas and do not always have access to a full-suite of traditional banking products. Merchants, or formal sector merchants, are generally in urban areas, have higher revenues and have access to multiple service providers.
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Competitor offerings are typically provided by (i) legacy banks with poor track records of customer service for the underserviced, (ii) government entities, such as the post office, with limited capabilities and R&D budgets to invest in solutions, or (iii) a fragmented universe of single-solution vendors who provide more narrow services, forcing a customer to spend more and manage multiple relationships to meet their end-to-end needs; 4.
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Enterprises are large-scale corporate and government organizations, including but not limited to banks, mobile network operators (“MNOs”) and municipalities. Including micro-merchants and merchants, there are more than 2.7 million merchants in South Africa, of which more than 890,000 merchants are immediately serviceable merchants for Lesaka.
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Combine – Fourth, we combine our data-driven insights with our suite of solutions to sell, cross-sell and serve our customers in an advantaged way.
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Merchant currently has over 96,600 customers in Southern Africa, of which more than 87,000 are in South Africa (this excludes the impact of the Adumo acquisition, not effective at June 30, 2024 and expected to close in October 2024).
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We use the advantages embedded in our strategy to (i) drive client acquisition and retention with targeted offers that may best meet their needs, (ii) bundle or cross-sell new solutions that may be suitable for their evolving financial journeys, (iii) underwrite and manage risk effectively; and 5.
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Products To micro-merchant and merchant customers (B2B), we offer cash management and digitalization solutions through our proprietary vault technology, card acceptance, supplier payments, software services, lending, prepaid accounts and bill payments to empower merchants to grow their businesses and transact more efficiently.
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Consolidate – Fifth, we identify and execute on attractive consolidation opportunities with potential revenue synergies to grow our customer base, extend our capabilities and expand our ecosystem into new areas, and potential cost synergies to scale our ecosystem and improve our operating efficiencies.
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To larger enterprise customers (B2B), we offer bill and supplier payments and VAS products through our proprietary financial switch, as well as point of sale device and maintenance, bank and SIM card production and other specialized technology products.
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For example, in fiscal 2025 we closed and are integrating two acquisitions which expanded our customer base, broadened our suite of solutions, and provided additional cross- selling opportunities, including: a.
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Market Opportunity Our primary market is currently South Africa with its approximately 62 million population and $381 billion economy (GDP, according to IMF World Economic Outlook Database as of October 2023).
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Adumo – a payments and commerce enablement platform that provides payment processing and integrated software solutions to approximately 29,000 active merchants (as of June 30, 2025) in a variety of business verticals across South Africa, Namibia, Botswana and Kenya. This acquisition has enabled us to extend our reach into larger merchants with more sophisticated point-of-sale (“POS”) software needs.
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With the acquisition of Adumo (an acquisition subject to regulatory approvals and satisfaction of customary closing conditions, expected to close in October 2024) we augment our presence in South Africa, Namibia, Botswana and Zambia and expand into Kenya.
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Adumo was integrated into our Merchant Segment and has contributed to our fiscal 2025 financial results since October 1, 2024. b. Recharger – a prepaid electricity platform that provides submetering administration and payment processing solutions to an installed base of over 500,000 registered prepaid electricity meters across South Africa.
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Together this represents a 140 million population addressable market, larger than that of Mexico or Japan (GDP according to IMF World Economic Outlook Database as of October 2023). 5 Over the past decade, both financial inclusion and smartphone penetration throughout the region have grown significantly.
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This acquisition has enabled us to enter the private utilities market and extend our payment solutions into a large, new customer base. Recharger was integrated into our Enterprise Segment and has contributed to our fiscal 2025 financial results since March 3, 2025.
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According to a report by Genesis Analytics, between 2015 and 2023, the proportion of low-income workers in South Africa that had used a debit card to transact rose from 17% to 50%.
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Our Go- To -Market Model To go-to-market, we created a proprietary business model to reach, engage and serve our Merchant, Consumer and Enterprise Segments’ customers over time. The five elements of our go-to-market model include: 1.
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According to the same report, between 2015 and 2021, the proportion of South Africans accessing online banking services increased from 31% to 55%, and between 2018 and 2024, smartphone penetration increased from 55% to 76%.
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Wide-Breadth of Solutions – We have a large and growing suite of solutions that we sell to our customers at different stages of their financial journeys using a Land and Expand approach. We start by offering critical financial services needed to win a customer relationship at a relatively stable customer acquisition cost (“CAC”).
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Given the significant challenges in delivering financial services in Southern Africa; however, many service providers in our markets continue to rely on expensive and unreliable legacy systems and focus on narrow customer segments with mono-line (single- line) products.
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These include our government grant and bill payment solutions for consumers, and our card acquiring and cash management solutions for merchants. Then we offer a growing range of complementary services to expand our share of wallet, bundling or cross- selling complementary or adjacent services as a customer’s needs grow.
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We believe that this presents a significant opportunity for Lesaka to build and operate the leading full-service Fintech platform in Southern Africa, empowering underserviced consumers and merchants by delivering innovative financial services focused on their specific needs. 6 Competition With our comprehensive offerings to both consumers and merchants, we compete with a wide range of service providers.
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We believe this increases the lifetime value (“LTV”) of our customer base with very little incremental CAC, increasing our LTV/CAC ratio and compounding value over time.
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While there are competitors for specific products and services, few offer end-to-end solutions, particularly in the lower-income consumer market and the informal merchant market, where we have a significant footprint and strong penetration. In our Consumer Division, there are a number of traditional and digital providers of low-cost transactional bank accounts and micro financial services.
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We organize our solutions across our customers’ financial lifecycles including: (1) Receive Money , Manage Money , Borrow Money , and Protect Assets for our consumers, and (2) Accept Payments , Manage Money , Grow Revenue, and Access Capital for our merchants. 4 2.
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These include South African banks such as FNB, Standard Bank, Absa, Nedbank, African Bank and Capitec, the South African Post Bank, and digital banks such as, Tyme Bank and Bank Zero. In the South African ATM network market, we compete against the South African banks, ATM Solutions and Spark ATM Systems.
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Differentiated Reach in the Market – Instead of relying on online sales or using expensive bank branches, we reach our customers close to where they live or close to government offices that disburse grant payments by deploying on-the ground sales teams and low-cost retail offices, or hubs.
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In the informal merchant sector, there are no competitors which offer a comprehensive product set of cash, card, payment, VAS and capital solutions, such as ours. In the formal merchant sector there is significantly more competition, with banks and non-bank fintech companies targeting these merchants.
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Our salespeople are trained to engage in-person and educate customers on the value and advantages of our solutions in a friendly and respectful manner. 3.
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In card acquiring, competitors include Yoco, iKhokha, Sureswipe and the South African banks; in VAS and bill payments, they include Flash, Blue Label, Shop2Shop, Pay@ and Ukeshe; in lending, they include Lulalend, Merchant Capital, Retail Capital and the South African banks; and in cash management, they include Fidelity, G4S, Cashnet and the South African banks.
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A Digital Engagement Approach – After our initial sale, we want to utilize technology to engage more efficiently and effectively with our customers, so we train and steer them to use our digital apps to manage and grow their financial services over time.
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This increases loyalty, which will in turn contribute to employee retention.
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We have developed a variety of digital apps for our customers to use when engaging with our different solutions including a digital banking app for our consumers and a payments management account app for our merchants. 4.
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Proprietary Access to Data – We leverage our solutions to gain access to data that provides us with unique insights into our customers, which we use to serve them more effectively. For example, we can often see the timing, amount and frequency of a consumer’s income deposits and how they spend their money and pay their bills.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlso, under South Africa’s exchange control laws, the approval of SARB or an Authorised Dealer is required before a defendant resident in South Africa may pay money to a non-resident plaintiff in satisfaction of a foreign judgment enforced by a court in South Africa.
Biggest changeAdditional, practical, considerations relating to the enforcement of foreign judgments and arbitration awards in South Africa include the following: ● If a foreign judgment is enforced by a South African court, the approval of the SARB (or an Authorised Dealer of SARB) is required (i) before a defendant resident in South Africa may pay money to a non-resident plaintiff; and (ii) to settle the judgement in a currency other than South African Rand; and ● A plaintiff who is not resident in South Africa may be required to provide security for costs when initiating court proceedings in South Africa (including for the enforcement of foreign judgments and awards). 27 ITEM 1B.
We cannot insure against certain risks of loss or theft of cash from our delivery and collection vehicles and we will therefore bear the full cost of certain uninsured losses or theft in connection with the cash handling process, and such losses could materially and adversely affect our financial condition, cash flows and results of operations.
We cannot insure against certain risks of loss or theft of cash from our delivery and collection vehicles, and we will therefore bear the full cost of certain uninsured losses or theft in connection with the cash handling process Such losses could materially and adversely affect our financial condition, cash flows and results of operations.
In particular, we may be held liable for the actions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations and financial condition.
In particular, we may be held liable for the actions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations and financial condition.
Furthermore, we have to comply with the South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing control regulations, when we open new bank accounts for our customers and when they transact. Failure to effectively implement and monitor responses to the legislation and regulations may result in significant fines or prosecution of Grindrod Bank and ourselves.
Furthermore, we have to comply with the South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing control regulations, when we open new bank accounts for our customers and when they transact. Failure to effectively implement and monitor responses to the legislation and regulations may result in significant fines or prosecution of African Bank and ourselves.
We may also suffer reputational damage if our service levels are negatively impacted due to the unavailability of cash. Our consumer microlending loan book and merchant lending book expose us to credit risk and our allowance for doubtful finance loans receivable may not be sufficient to absorb future write-offs.
We may also suffer reputational damage if our service levels are negatively impacted due to the unavailability of cash. 16 Our consumer microlending loan book and merchant lending book expose us to credit risk and our allowance for doubtful finance loans receivable may not be sufficient to absorb future write-offs.
All of these risks could materially and adversely affect our business and results of operations. We are continuing to monitor the situation in Ukraine and the Middle East and globally and assessing the potential impact on our business. 13 A prolonged economic slowdown or lengthy or severe recession in South Africa or elsewhere could harm our operations.
All of these risks could materially and adversely affect our business and results of operations. We are continuing to monitor the situation in Ukraine, the Middle East and globally and assessing the potential impact on our business. A prolonged economic slowdown or lengthy or severe recession in South Africa or elsewhere could harm our operations.
The occurrence of, or failure to remediate, these material weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy and reliability of our financial statements and have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the SEC or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation. 22 Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, especially over companies that we may acquire, could have a material adverse effect on our business and stock price.
The occurrence of, or failure to remediate, these material weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy and reliability of our financial statements and have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the SEC or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation. 25 Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, especially over companies that we may acquire, could have a material adverse effect on our business and stock price.
The BEE scorecard includes a component relating to management control, which serves to determine the participation of Black people within the board, as well as at various levels of management within a measured entity (including, inter alia , Executive Management, Senior Management, Middle Management and Junior Management).
The BEE scorecard includes a component relating to management control, which serves to determine the participation of Black people in the board, as well as at various levels of management within a measured entity (including, inter alia, Executive Management, Senior Management, Middle Management and Junior Management).
You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions based upon U.S. laws, including federal securities laws or other foreign laws, against us or certain of our directors and officers and experts.
You may experience some difficulties in effecting service of legal process, enforcing U.S and/or foreign judgments or bringing original actions based upon U.S. laws, including federal securities laws or other foreign laws, against us or certain of our directors and officers and experts.
The requirement to evaluate and report on our internal controls also applies to companies that we acquire. Some of these companies, such as Adumo, may not be required to comply with Sarbanes prior to the time we acquire them.
The requirement to evaluate and report on our internal controls also applies to companies that we acquire. Some of these companies, such as Adumo and Recharger, may not be required to comply with Sarbanes prior to the time we acquire them.
A supply interruption, such as the recent global shortage of semiconductors, or an increase in demand beyond current suppliers’ capabilities could harm our ability to distribute our equipment and thus to acquire new customers who use our technology.
A supply interruption, such as the previous global shortage of semiconductors, or an increase in demand beyond current suppliers’ capabilities could harm our ability to distribute our equipment and thus to acquire new customers who use our technology.
RISK FACTORS OUR OPERATIONS AND FINANCIAL RESULTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW, THAT COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS, CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOCK Risks Relating to Our Business To achieve our mission, our strategy is to build and operate the leading South African full service fintech platform offering cash management, payment and financial services.
RISK FACTORS OUR OPERATIONS AND FINANCIAL RESULTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW, THAT COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS, CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOC K Risks Relating to Our Business To achieve our mission, our strategy is to build and operate the leading South African full service fintech platform offering cash management, payment and financial services.
While the broader consequences are uncertain at this time, the continuation and/or escalation of the Russian and Ukraine and Israel- Hamas conflicts, along with any expansion of the conflict to surrounding areas, create a number of risks that could adversely impact our business, including: • increased inflation and significant volatility in the macroeconomic environment; • disruptions to our technology infrastructure, including through cyberattacks, ransom attacks or cyber-intrusion; • adverse changes in international trade policies and relations; • disruptions in global supply chains; and • constraints, volatility or disruption in the credit and capital markets.
While the broader consequences are uncertain at this time, the continuation and/or escalation of the conflicts, along with any expansion of the conflict to surrounding areas, create a number of risks that could adversely impact our business, including: • Increased inflation and significant volatility in the macroeconomic environment; • Disruptions to our technology infrastructure, including through cyberattacks, ransom attacks or cyber-intrusion; • Adverse changes in international trade policies and relations; • Disruptions in global supply chains; and • Constraints, volatility or disruption in the credit and capital markets.
We granted the IFC Investors certain rights, including the right to require us to repurchase any share held by the IFC Investors pursuant to the May 2016 transaction upon the occurrence of specified triggering events, which we refer to as a “put right.” The put price per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price per share prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror.
We granted the IFC Investors certain rights, including the right to require us to repurchase any share held by the IFC Investors pursuant to the May 2016 and October 2024 transactions upon the occurrence of specified triggering events, which we refer to as a “put right.” The put price per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price per share prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror.
Our means of protecting our intellectual property rights in countries where we currently have patent or trademark protection, or any other country in which we operate, may not be adequate to fully protect our intellectual property rights.
Our means of protecting our intellectual property rights in countries where we currently have protection, or any other country in which we operate, may not be adequate to fully protect our intellectual property rights.
Our businesses in South Africa are dependent on electricity generated and supplied by the state-owned utility, Eskom, in order to operate, and Eskom has been unable to generate and supply the amount of electricity required by the South African economy which has resulted in significant and often unpredictable electricity supply disruptions.
Our businesses in South Africa are dependent on electricity generated and supplied by the state-owned utility, Eskom, in order to operate, and, in recent years, Eskom has been unable to consistently generate and supply the amount of electricity required by the South African economy which has resulted in significant and often unpredictable electricity supply disruptions.
Our response to any such offer could also be complicated, delayed or otherwise influenced by the existence of the put right. 21 Approximately 35% of our outstanding common stock is owned by two shareholders. The interests of these shareholders may conflict with those of our other shareholders.
Our response to any such offer could also be complicated, delayed or otherwise influenced by the existence of the put right. Approximately 31% of our outstanding common stock is owned by two shareholders. The interests of these shareholders may conflict with those of our other shareholders.
Eskom has implemented a number of short- and long- term mitigation plans to correct these issues but supply disruptions continued to occur regularly and with no predictability in recent years, although consistency of electricity supply has improved significantly since April 2024.
Eskom has implemented a number of short- and long-term mitigation plans to correct these issues, but supply disruptions continued to occur regularly and with no predictability, although consistency of electricity supply has improved significantly since April 2024.
Our solutions may be vulnerable to breaches in security due to defects in the security mechanisms, the operating system, applications or the hardware platform as well as through risk introduced into our environment through third party supplies, which the group relies heavily on. Security vulnerabilities could jeopardize the security of information transmitted using our solutions.
Our solutions and systems may be vulnerable to breaches in security due to defects in the security mechanisms, the operating system, applications or the hardware platform as well as through risk introduced into our environment through third party suppliers, which the group relies heavily on. Security vulnerabilities could jeopardize the security of information transmitted using our solutions.
Many of our competitors are well-established, represented nationally and market similar products and we therefore may not be able to effectively penetrate the South African insurance market. 16 Risks Relating to Operating in South Africa and Other Foreign Markets Operating in Southern Africa, an emerging market, subjects us to greater risks than those we would face if we operated in more developed markets.
Many of our competitors are well-established, represented nationally and market similar products and we therefore may not be able to effectively penetrate the South African insurance market. 18 Risks Relating to Operating in South Africa and Other Foreign Markets Operating in Southern and East Africa, both emerging markets, subjects us to greater risks than those we would face if we operated in more developed markets.
For example, we may incur unexpected costs, charges or expenses resulting from the transaction, including charges to future earnings if Adumo’s business does not perform as expected. Our expectations regarding Adumo’s business and prospects may not be realized, including as a result of changes in the financial condition of the markets that Adumo serves.
For example, we may incur unexpected costs, charges or expenses resulting from the transaction, including charges to future earnings if Bank Zero’s business does not perform as expected. Our expectations regarding Bank Zero’s business and prospects may not be realized, including as a result of changes in the financial condition of the markets that Bank Zero serves.
For example, integrating Adumo into our company will require significant attention from our senior management which may divert their attention from our day-to-day business. The difficulties of integration may also be increased by cultural differences between our two organizations and the necessity of retaining and integrating personnel, including Adumo’s key employees.
For example, integrating Bank Zero into our company will require significant attention from our senior management which may divert their attention from our day-to-day business. The difficulties of integration may also be increased by cultural differences between our two organizations and the necessity of retaining and integrating personnel, including Bank Zero’s key employees.
There is a concentration of ownership of our outstanding common stock because approximately 35% of our outstanding common stock is owned by two shareholders.
There is a concentration of ownership of our outstanding common stock because approximately 31% of our outstanding common stock is owned by two shareholders.
All of our microfinance loans made are for a period of six months or less and all of our merchant lending through Connect is for a period of less than 12 months. We have created an allowance for doubtful finance loans receivable related to these books.
All of our microfinance loans made are for a period of nine months or less and all of our merchant lending is for a period of less than 12 months. We have created an allowance for doubtful finance loans receivable related to these books.
A prolonged economic downturn or recession in South Africa could materially impact our results from operations, particularly in light of on-going electricity disruptions during calendar 2022 and 2023, a significantly weak USD/ ZAR exchange rate compared with previous periods, and our strategic decision to focus on our South African operations.
A prolonged economic downturn or recession in South Africa could materially impact our results from operations, particularly in light of electricity disruptions, a significantly weak USD/ ZAR exchange rate compared with previous periods, and our strategic decision to focus on our South African operations.
We are not currently so registered, but we have an agreement with Grindrod Bank, a subsidiary of African Bank Limited, that enables us to implement our EPE program in compliance with the relevant laws and regulations.
We are not currently so registered, but we have an agreement with African Bank Limited, that enables us to implement our EPE program in compliance with the relevant laws and regulations.
Based on their most recent SEC filings disclosing ownership of our shares, Value Capital Partners (Pty) Ltd, or VCP, and IFC Investors, beneficially own approximately 24% and 11% of our outstanding common stock as of June 30, 2024, respectively. The interests of VCP and the IFC Investors may be different from or conflict with the interests of our other shareholders.
Based on their most recent SEC filings disclosing ownership of our shares, Value Capital Partners (Pty) Ltd, or VCP, and IFC Investors, beneficially own approximately 19% and 12% of our outstanding common stock as of June 30, 2025, respectively. The interests of VCP and the IFC Investors may be different from or conflict with the interests of our other shareholders.
We may need to record write-downs from future impairments of goodwill or other intangible assets, which could reduce our future reported earnings. Geopolitical conflicts, including the conflict between Russia and Ukraine and between Israel and Hamas, may adversely affect our business and results of operations.
We may need to record write-downs from future impairments of goodwill or other intangible assets, which could reduce our future reported earnings. 15 Geopolitical conflicts, including the conflict between Russia and Ukraine and in the Middle East, may adversely affect our business and results of operations.
Our EasyPay Insurance business exposes us to risks typically experienced by life assurance companies. EasyPay Insurance is a life insurance company and exposes us to risks typically experienced by life assurance companies.
Our EasyPay Insurance business exposes us to risks typically experienced by life assurance companies. EasyPay Insurance Limited (“EasyPay Insurance”) is a life insurance company and exposes us to risks typically experienced by life assurance companies.
In addition, there are risks associated with Adumo’s product and service offerings or results of operations, including the risk of failing to comply with certain regulatory rules required to operate its business. 12 Further, there are numerous challenges, risks and costs involved with integrating the operations of Adumo with ours.
In addition, there are risks associated with Bank Zero’s product and service offerings or results of operations, including the risk of failing to comply with certain regulatory rules required to operate its business. Further, there are numerous challenges, risks and costs involved with integrating the operations of Bank Zero with ours.
The security arrangements and covenants included in our lending facilities may reduce our operating flexibility or our ability to engage in other transactions that may be beneficial to us. If we are unable to comply with the covenants in South Africa, we could be in default and the indebtedness could be accelerated.
These security arrangements and covenants may reduce our operating flexibility or our ability to engage in other transactions that may be beneficial to us. If we are unable to comply with the covenants, we could be in default and the indebtedness could be accelerated.
In our merchant business we collect and process large volumes of cash from our customers, assuming the risk of loss from the moment that cash is deposited into our vaults. We are then responsible for its collection and transportation to processing centers, which we outsource to various cash in transit service providers.
In our merchant business we collect and process large volumes of cash from our customers, assuming the risk of loss from the moment that cash is deposited into our vaults. We are then responsible for its collection and transportation to processing centers, which we outsource to various cash-in-transit service providers. These services extend across all areas of South Africa.
If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition. As of June 30, 2024, we had aggregate long-term borrowing outstanding of ZAR 2.6 billion ($143.2 million translated at exchange rates as of June 30, 2024).
If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition. As of June 30, 2025, we had aggregate borrowings outstanding of ZAR 3.6 billion ($200.8 million translated at exchange rates as of June 30, 2025).
The ICT Sector Code and the FS Sector Code have been amended and aligned with the new BEE Codes and were promulgated in November 2016 and December 2017, respectively. Licensing and/ or regulation authorities overseeing these South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating license to trade.
The FS Sector Code have been amended and aligned with the new BEE Codes and were promulgated in December 2017. Licensing and/or regulatory authorities overseeing these South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating license to trade. The minimum requirement under the Financial Sector Code is Level 8.
This facility contains customary covenants that require the borrowing parties to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities. 11 These security arrangements and covenants may reduce our operating flexibility or our ability to engage in other transactions that may be beneficial to us.
This facility contains customary covenants that require the borrowing parties to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities.
If we fail to successfully integrate the operations of Adumo into our internal control over financial reporting for fiscal 2025, our internal control over financial reporting may not be effective.
If we fail to successfully integrate the operations of Adumo, Recharger and Bank Zero into our internal control over financial reporting, our internal control over financial reporting may not be effective.
In that event, in order to maintain competitiveness with both government and private sector clients, we may have to seek to increase compliance through other means, including by selling or placing additional shares of Lesaka or of our South African subsidiaries to Black South Africans (either directly or indirectly), over and above what has already been approved.
In that event, in order to maintain competitiveness in the South African marketplace, we may have to seek to increase compliance through other means, including by selling or placing additional shares of Lesaka or of our South African subsidiaries to Black South Africans (either directly or indirectly), over and above what has already been approved, and/or changing to suppliers that have higher BEE Status Levels.
Our ability to continue the uninterrupted operation of our ATM network will be adversely impacted by our failure to renew our debt facilities, any adverse change to the terms of our credit facilities, or a significant reduction in the amounts available under our credit facilities, or our failure to increase our facilities if required.
Our ability to continue the uninterrupted operation of our ATM network will be adversely impacted by our failure to renew these arrangements, any adverse change to the terms of these arrangements, or a significant reduction in the amounts provided under these arrangements.
If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us.
If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us. 24 Issuances of significant amounts of stock in the future could potentially dilute your equity ownership and adversely affect the price of our common stock.
In addition, South Africa has a high prevalence of HIV/AIDS and tuberculosis. Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of citizens under previous governments may increase our costs and reduce our profitability, all of which could negatively affect our business.
In addition, South Africa has a high prevalence of HIV/AIDS and tuberculosis, the impact of which may be exacerbated in the short-term by the discontinuation of the U.S. government’s funding of certain HIV/AIDS research and outreach programs. 20 Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of citizens under previous governments may increase our costs and reduce our profitability, all of which could negatively affect our business.
If the security of our solutions is compromised, our reputation and marketplace acceptance of our solutions may be adversely affected, which would cause our business to suffer, and we may become subject to damage claims. We have not yet experienced any significant security breaches affecting our business.
If the security of our solutions is compromised, our reputation and marketplace acceptance of our solutions may be adversely affected, which would cause our business to suffer, and we may become subject to damages claims.
We do not maintain any “key person” life insurance policies. If we fail to attract, integrate, retain and incentivize key personnel and skilled employees, our ability to manage and grow our business could be harmed and our product development and marketing activities could be negatively affected. System failures, including breaches in the security of our system, could harm our business.
We do not maintain any “key person” life insurance policies. If we fail to attract, integrate, retain and incentivize key personnel and skilled employees, our ability to manage and grow our business could be harmed and our product development and marketing activities could be negatively affected. Cybersecurity breaches and other system disruptions pose a significant threat to business operations.
A significant amount of judgment is required to assess the ultimate recoverability of these microfinance loan receivables. 14 We may face competition from other companies that offer innovative payment technologies and payment processing, which could result in the loss of our existing business and adversely impact our ability to successfully market additional products and services.
We may face competition from other companies that offer innovative payment technologies and payment processing, which could result in the loss of our existing business and adversely impact our ability to successfully market additional products and services.
This BEE verification process must be conducted on an annual basis, and the resultant BEE verification certificate is only valid for a period of 12 months from the date of issue of the verification certificate. We currently have a level 4 BEE rating for our South African business.
This BEE verification process must be conducted on an annual basis, and the resultant BEE verification certificate is only valid for a period of 12 months from the date of issue. Under our consolidated scorecard, which includes all South African businesses, we currently hold a BEE Status Level 2.
These services extend across all areas of South Africa. South Africa suffers from high levels of crime and in particular cash in transit heists.
South Africa suffers from high levels of crime and in particular cash-in-transit heists.
We may not be able to effectively and efficiently manage the disruption to our operations as a result of erratic electricity supply in South Africa, which could adversely affect our, financial position, cash flows and future growth.
We continually seek ways to improve our BEE Status Level, especially the ownership (so-called “equity”) and procurement elements thereof. We may not be able to effectively and efficiently manage the disruption to our operations as a result of erratic electricity supply in South Africa, which could adversely affect our, financial position, cash flows and future growth.
The current conflict between Russia and Ukraine and between Israel and Hamas are creating substantial uncertainty about the future of the global economy. Countries across the globe are instituting sanctions and other penalties against Russia.
The current conflicts between Russia and Ukraine, and in the Middle East are creating substantial uncertainty about the future of the global economy. Countries across the globe have instituted sanctions and other penalties against Russia.
We may not realize some or all of the anticipated benefits from the Adumo acquisition. Even if we complete the Adumo acquisition, we may experience unforeseen events, changes or circumstances that may adversely affect us.
We may not realize some or all of the anticipated benefits from the Bank Zero acquisition or we may fail to realize some or all of the expected benefits of certain recently integrated acquisitions, including Adumo and Recharger Even if we complete the Bank Zero acquisition, we may experience unforeseen events, changes or circumstances that may adversely affect us.
Any failure by us to adopt appropriate compliance procedures and ensure that our employees, agents and business partners comply with the anti-corruption laws and regulations could subject us to substantial penalties, and the requirement that we comply with these laws could put us at a competitive disadvantage against companies that are not required to comply.
Some of the international locations in which we operate or have investments lack a developed legal system and have higher than normal levels of corruption. 21 Any failure by us to adopt appropriate compliance procedures and ensure that our employees, agents and business partners comply with the anti-corruption laws and regulations could subject us to substantial penalties, and the requirement that we comply with these laws could put us at a competitive disadvantage against companies that are not required to comply.
If, for any reason, the acquisition is not completed, or its completion is materially delayed and/or the transaction agreement is terminated, the market price of our common stock may be materially and adversely affected.
We cannot provide any assurance regarding if or when all conditions precedent to the acquisition will be satisfied or waived. If, for any reason, the acquisition is not completed, or its completion is materially delayed and/or the transaction agreement is terminated, the market price of our common stock may be materially and adversely affected.
As a result, even though you could effect service of legal process upon Lesaka, as a Florida corporation, in the United States, you may not be able to collect any judgment obtained against Lesaka in the United States, including any judgment based on the civil liability provisions of U.S. federal securities laws, because substantially all of our assets are located outside the United States.
As a result, even though you could effect service of legal process upon Lesaka, as a Florida corporation, in the United States, you may not be able to collect any judgment obtained against Lesaka in the United States, including any judgment based on the civil liability provisions of U.S. federal securities laws, because substantially all of our assets are located outside the United States. 26 Any legal processes initiating action in the United States against Lesaka's directors, officers, and experts who are located outside of the United States, will need to be served on them in that country, in accordance with the procedures prescribed by the relevant U.S. court.
If we are unable to comply with the covenants, we could be in default and the indebtedness could be accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as a result, our business, financial condition and stock price would suffer.
If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as a result, our business, financial condition and stock price would suffer. Failure to complete, or delays in completing, the Bank Zero acquisition, could materially and adversely affect our results of operations and stock price.
Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement this new legislation in our lending processes and practices. Non-compliance with the provisions of this new legislation may result in financial loss and penalties, reputational loss or other administrative punishment.
Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement this new legislation in our lending processes and practices.
These borrowings contain customary covenants that require Lesaka Technologies (Pty) Ltd (“Lesaka SA”) to maintain a specified total asset cover ratio and restrict the ability of Lesaka, Lesaka SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities.
Certain of these borrowings contain customary covenants which include a requirement for Lesaka SA to maintain specified Net Debt to EBITDA and Interest Cover Ratios (as defined in the lending agreements) and restricts the ability of Lesaka SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities.
In addition, the majority of Lesaka’s directors and all its officers reside outside of the United States and the majority of our experts, including our independent registered public accountants, are based in South Africa.
While Lesaka is incorporated in the state of Florida, United States, substantially all of the company’s assets are located outside the United States. For this reason, the majority of Lesaka’s directors and all its officers reside outside of the United States and the majority of our experts, including our independent registered public accountants, are based in South Africa.
We cannot guarantee that we will enter into hedging transactions in the future or, if we do, that these transactions will successfully protect us against currency fluctuations. 18 South Africa’s high levels of poverty, unemployment and crime may increase our costs and impair our ability to maintain a qualified workforce While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment, relative to peer countries in Africa and other emerging economies, and there are significant differences in the level of economic and social development among its people, with large parts of the population, particularly in rural areas, having limited access to adequate education, healthcare, housing and other basic services, including water and electricity.
While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment, relative to peer countries in Africa and other emerging economies, and there are significant differences in the level of economic and social development among its people, with large parts of the population, particularly in rural areas, having limited access to adequate education, healthcare, housing and other basic services, including water and electricity.
We cannot assure you that we will achieve, sustain or increase profitability in the future and if we do not, our business will be materially and adversely affected.
We cannot assure you that we will achieve, sustain or increase profitability in the future and if we do not, our business will be materially and adversely affected. We have a significant amount of indebtedness that requires us to comply with restrictive and financial covenants.
However, additional allowances may be required should the ability of our customers to make payments when due deteriorate in the future.
However, additional allowances may be required should the ability of our customers to make payments when due deteriorate in the future. A significant amount of judgment is required to assess the ultimate recoverability of these microfinance loan receivables.
In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws in countries where we currently have patent protection.
Any loss of, or inability to protect, intellectual property in our technology could diminish our competitive advantage and also seriously harm our business. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws in countries where we currently have protection.
Compliance with the requirements under the various regulatory regimes may cause us to incur significant additional costs and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability. 19 We are required to comply with anti-corruption laws and regulations, including the FCPA and UK Bribery Act, in the jurisdictions in which we operate our business, which could adversely impact our future growth.
Compliance with the requirements under the various regulatory regimes may cause us to incur significant additional costs and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability.
As a group of South African private companies, Adumo is not required to comply with Sarbanes prior to the time we acquire it. The integration of Adumo into our internal control over financial reporting would be expected to require significant time and resources from our management and other personnel and is expected to increase our compliance costs.
The integration of Adumo, Recharger and Bank Zero into our internal control over financial reporting would be expected to require significant time and resources from our management and other personnel and is expected to increase our compliance costs.
If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of the transaction, finance it or, if the transaction occurs, integrate the new business into our existing business. These transactions may require debt financing or additional equity financing, resulting in additional leverage or dilution of ownership.
However, we may not be able to locate suitable acquisition candidates at prices that we consider appropriate. If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of the transaction, finance it or, if the transaction occurs, integrate the new business into our existing business.
Acquisitions are an integral part of our new growth strategy as we seek to expand our business and deploy our technologies in new markets in Southern Africa. However, we may not be able to locate suitable acquisition candidates at prices that we consider appropriate.
We may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business. Acquisitions are an integral part of our new growth strategy as we seek to expand our business and deploy our technologies in new markets in Southern Africa.
We obtain our smart cards, ATMs, POS devices, components for our safe assets, and the other hardware we use in our business from a limited number of suppliers, and do not manufacture this equipment ourselves. We generally do not have long-term agreements with our manufacturers or component suppliers.
We obtain our smart cards, ATMs, electronic payment and POS devices, components for our vaults, components to repair the ISV (independent software vendor) division’s POS hardware, and the other hardware we use in our business from a limited number of suppliers, and do not manufacture this equipment ourselves.
The regulatory approval processes may take a lengthy period of time to complete, and there can be no assurance as to the outcome of the approval processes, including the undertakings and conditions that may be required for approval, or whether the regulatory approvals will be obtained at all.
The regulatory approval processes may take a lengthy period of time to complete, and there can be no assurance as to the outcome of the approval processes, including the undertakings and conditions that may be required for approval, or whether the regulatory approvals will be obtained at all. 14 In addition, the completion of the acquisition is conditional on, among other things, no action or circumstance occurring that would result in a material adverse effect on the Bank Zero’s business operations or financial results.
The restructuring of the consumer business and acquisition of Connect were integral parts of the strategy to return the business to profitability and positive cash flow. We have made significant progress on both of these initiatives however we cannot assure you that we will be able to complete our strategy successfully and return to profitability and positive cash flow.
We have made significant progress on both of these initiatives, including the acquisitions of Adumo and Recharger, and the proposed acquisition of Bank Zero (which remains subject to the fulfilment or waiver of various conditions precedent), however we cannot assure you that we will be able to complete our strategy successfully and return to profitability and positive cash flow.
Such sales or placements of shares could have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline.
Such sales or placements of shares could have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline. We expect that our BEE Status Level will be important in order for us to remain competitive in the South African marketplace.
In addition, the South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries between financial product suppliers and consumers in South Africa to register as financial service providers.
The South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries between financial product suppliers and consumers in South Africa to register as financial service providers. EasyPay Insurance was granted a Financial Service Provider (“FSP”) license on June 9, 2015, and EP FS was granted a FSP license on July 11, 2017.
Our Sarbanes-Oxley Act of 2002 (“Sarbanes”) management certification and auditor attestation regarding the effectiveness of our internal control over financial reporting as of June 30, 2024, excludes the operations of Adumo, as we only expect to close the transaction in fiscal 2025. The requirement to evaluate and report on our internal controls also applies to companies that we acquire.
Our Sarbanes-Oxley Act of 2002 (“Sarbanes”) management certification and auditor attestation regarding the effectiveness of our internal control over financial reporting as of June 30, 2025, excludes the operations of Adumo and Recharger as these transactions were only closed during fiscal 2025.
The operational maintenance of our ATM network, along with an increase in our consumer banking client base, necessitates access to large amounts of cash to stock the ATMs and maintain uninterrupted service levels. We have credit facilities from a South African bank which includes security arrangements as well as restrictive and financial covenants.
The operational maintenance of our ATM network, along with an increase in our consumer banking client base, necessitates access to large amounts of cash to stock the ATMs and maintain uninterrupted service levels. In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transit service providers to fund our ATMs.
Acquisitions of businesses or other material operations and the integration of these acquisitions or their businesses will require significant attention from members of our senior management team, which may divert their attention from our day-to-day business. The difficulties of integration may be increased by the necessity of integrating personnel with disparate business backgrounds and combining different corporate cultures.
These transactions may require debt financing or additional equity financing, resulting in additional leverage or dilution of ownership. Acquisitions of businesses or other material operations and the integration of these acquisitions or their businesses will require significant attention from members of our senior management team, which may divert their attention from our day-to-day business.
We also may not be able to retain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits that we anticipated when selecting our acquisition candidates. Acquisition candidates may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition.
The difficulties of integration may be increased by the necessity of integrating personnel with disparate business backgrounds and combining different corporate cultures. We also may not be able to retain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits that we anticipated when selecting our acquisition candidates.
If some or all of the aforementioned or other risks materialize, our ability to realize the anticipated benefits of Adumo could be materially impaired, and as a result, our financial condition, results of operations, cash flows and stock price could suffer. We may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business.
As such, if some or all of the aforementioned risks materialize, our ability to successfully integrate Bank Zero’s operations into our business and realize the associated benefits of that acquisition could be adversely impacted. This could lead to the recording of material impairments, and as a result, our financial condition, results of operations, cash flows and stock price could suffer.
If this arrangement were to terminate, we would not be able to operate our EPE business without alternate means of access to a banking license. The South African retail banking market is highly regulated.
If this arrangement were to terminate, we would not be able to operate our EPE business without alternate means of access to a banking license. We are also required to comply with the requirements of payment schemes, including VISA and Mastercard. Furthermore, we provide certain of our services under partnerships with South African banks.
The second draft of the Conduct of Financial Institutions Bill was published for public comment on September 29, 2020. 20 We may be subject to regulations regarding privacy, data use and/or security, which could adversely affect our business.
We may be subject to regulations regarding privacy, data use and/or security, which could adversely affect our business.
Finally, because our customers may use our products for critical transactions, any system failures could result in damage to our customers’ businesses. These customers could seek significant compensation from us for their losses. Even if unsuccessful, this type of claim could be time-consuming and costly for us to address.
Furthermore, if customers rely on our products for critical transactions, a breach could disrupt their businesses and lead to claims for compensation. Even if unsuccessful, this type of claim could be time-consuming and costly for us to address.
Failure to complete, or delays in completing, the Adumo acquisition, could materially and adversely affect our results of operations and stock price. The completion of the Adumo acquisition is subject to a number of conditions precedent, including receipt of regulatory approvals and certain third-party consents. Some of these conditions are outside our control.
The completion of the Bank Zero acquisition is subject to a number of conditions precedent, including receipt of regulatory approvals and certain third-party consents. Some of these conditions are outside our control. To complete the acquisition, we must make certain filings with, and obtain certain consents and approvals from, various governmental and regulatory authorities.
Litigation to enforce our patents, trademarks or other intellectual property rights or to protect our trade secrets could result in substantial costs and may not be successful. Any loss of, or inability to protect, intellectual property in our technology could diminish our competitive advantage and also seriously harm our business.
Defending our intellectual property rights or defending ourselves in infringement suits that may be brought against us is expensive and time-consuming and may not be successful. Litigation to enforce our trademarks or other intellectual property rights or to protect our trade secrets could result in substantial costs and may not be successful.
In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors, of which, as of June 30, 2024, the IFC Investors held 7,366,866 shares.
In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors. Certain IFC Investors were also investors in Adumo and on October 1, 2024, we issued an aggregate of 1,989,162 additional shares of our common stock to these IFC Investors pursuant to the Adumo transaction agreement.
Our donations to this fund included food, blankets, and replacements for personal belongings and household goods, helping community members recover and regain economic stability. However, it is possible that these and other actions may not be sufficient to enable us to achieve the applicable BEE objectives set out for specific financial years.
The Lesaka ESOP Trust is also expected to advance our transformation initiatives and plays an important role in improving our BEE Status Level. However, it is possible that these and other actions may not be sufficient to enable us to achieve the applicable BEE objectives set out for specific financial years.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and information systems. Our cybersecurity program is aligned with industry standards and best practices, specifically the Payment Card Industry Data Security Standard (“PCI DSS”) and the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.
Biggest changeWe have implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and information systems.
We use various tools and methodologies to manage cybersecurity risk—including, but not limited to, the following: the use of a Managed Endpoint Detection and Response (“EDR”) software and Managed Network Detection and Response (“MNDR”) for our Local Area Network (LAN) monitoring with internal and external Security Operations Center (“SOC”) real-time monitoring, Data Loss Prevention (“DLP”) enabled across email and web channels as well as mandatory Multi-factor Authentication (“MFA”) in our IT environment.
We use various tools and methodologies to manage cybersecurity risk—including, but not limited to, the following: the use of a Managed Endpoint Detection and Response (“EDR”) software and Managed Network Detection and Response (“MNDR”) for our Local Area Network (“LAN”) monitoring with internal and external Security Operations Center (“SOC”) real-time monitoring, Data Loss Prevention (“DLP”) enabled across email and web channels as well as mandatory Multi-factor Authentication (“MFA”) in our IT environment.
We periodically conduct a third-party Security Risk Assessment (“SRA”) to identify the potential impact and likelihood of various cyber scenarios and to determine the appropriate mitigation strategies and controls. We also use this SRA to inform our cybersecurity roadmap and strategies to ensure the best IT security environment is implemented at our company.
We periodically conduct a third -party Security Risk Assessment (“SRA”) to identify the potential impact and likelihood of various cyber scenarios and to determine the appropriate mitigation strategies and controls. We also use this SRA to inform our cybersecurity roadmap and strategies to ensure a robust IT security environment is implemented at our company.
It should be read in conjunction with the other sections of this Annual Report, particularly Item 1A—“Risk Factors.”, for a comprehensive understanding of the risks and uncertainties related to our business and operations. 25
This Item 1C should be read in conjunction with the other sections of this Annual Report, particularly Item 1A “Risk Factors,” for a comprehensive understanding of the risks and uncertainties related to our business and operations. 28
The CISO also has a Master’s Degree in Information Security from Royal Holloway, University of London. As of the date of this Annual Report, we do not believe any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our results of operations or financial condition.
As of the date of this Annual Report, we do not believe any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our results of operations or financial condition.
Our Board of Directors exercises its oversight role through the Audit Committee, which provides the Board with regular reports and findings from our Group Chief Information Security Officer (“CISO”). Our CISO has 24+ years of experience in Information Technology, 20 years specifically in IT and IT Security combined.
Our Board of Directors exercises its oversight role through the Audit Committee , which provides the Board with regular reports and findings from our Group Chief Information Security Officer (“ CISO ”) , a qualified cybersecurity professional with over 25 years of experience and a Master’s in Information Security from Royal Holloway, University of London .
Added
Our cybersecurity program is aligned with industry standards and best practices, specifically the Payment Card Industry Data Security Standard (“PCI DSS”), the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and more recently the SARB Directive No. 01 of 2024, focusing on cybersecurity and cyber-resilience within the National Payment System (“NPS”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease our corporate headquarters facility which consists of approximately 81,000 square feet in Johannesburg, South Africa. We also lease properties throughout South Africa, including an approximately 10,000 square foot manufacturing facility in Lazer Park, Johannesburg, 194 financial services branches, 14 financial service express stores and 14 satellite branches.
Biggest changeITEM 2. PROPERTIES We lease our corporate headquarters facility which consists of approximately 81,000 square feet in Johannesburg, South Africa. We also lease properties throughout South Africa, including 207 financial services branches, 14 financial service express stores, 17 satellite branches and 14 sites to support our integrated POS software and hardware to the hospitality industry operations.
We also lease additional office space in Johannesburg, Cape Town and Durban, South Africa; and Gaborone, Botswana. These leases expire at various dates through 2029, assuming the exercise of options to extend. We believe that we have adequate facilities for our current business operations.
We also lease additional office space in Johannesburg, Cape Town and Durban, South Africa; Gaborone, Botswana; Windhoek Namibia; and Nairobi, Kenya. These leases expire at various dates through 2030, assuming the exercise of options to extend. We believe that we have adequate facilities for our current business operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
ITEM 3. LEGAL PROCEEDINGS Litigation related to CPS As a result of significant obligations relating to, and ongoing litigation arising out of, CPS’ SASSA contract, including the exhaustion of CPS’ legal appeals against a court judgment to repay additional SASSA implementation costs, CPS was placed into liquidation in October 2020.
Added
ITEM 3. LEGAL PROCEEDINGS Litigation related to CPS Lesaka SA is a party to proceedings in the Constitutional Court of South Africa involving its subsidiary, Cash Paymaster Services Proprietary Limited (“CPS”), which is currently in liquidation.
Removed
As a result, CPS’ liquidators are currently in control of the CPS liquidated estate and are managing the affairs in relation thereto. We have proven our claims and are noted as a creditor along with other creditors in the liquidated estate. See Item 1A—“Risk Factors —Cash Paymaster Services, or CPS, has been placed into liquidation.
Added
The objective of these proceedings is to procure an order for CPS to pay to SASSA the profit generated by CPS pursuant to an agreement concluded between SASSA and CPS, following the award of a tender to CPS.
Removed
While no claim has been made against Lesaka for CPS’ obligations, we cannot provide assurance that no such claim will be made” for additional information. There are no other material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.
Added
This arose as a consequence of prior court proceedings which concluded that the tender should not have been awarded to CPS (for technical reasons not related to any conduct by CPS). Lesaka SA has been included in these proceedings in order to provide information relevant to determining the profit so made by CPS.
Added
A hearing was held in the Constitutional Court on May 27, 2025 and we await the ruling of the Constitutional Court.
Added
While no formal steps have been taken by CPS or any other party to these proceedings to claim that Lesaka SA should be liable to SASSA or to CPS as a consequence of the proceedings currently before the Constitutional Court, it is difficult to anticipate what the ruling of the Constitutional Court will be.
Added
General From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business.
Added
As of the date of this Annual Report on Form 10-K, we are not a party to any litigation or legal proceeding or subject to any claim that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations.
Added
However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe future dividend policy will depend on our earnings, capital requirements, debt commitments, expansion plans, financial condition and other relevant factors. Issuer purchases of equity securities On February 5, 2020, our board of directors approved the replenishment of our existing share repurchase authorization to repurchase up to an aggregate of $100 million of common stock.
Biggest changeThe future dividend policy will depend on our earnings, capital requirements, debt commitments, expansion plans, financial condition and other relevant factors. Issuer purchases of equity securities On September 2, 2025, our board of directors approved a share repurchase authorization to repurchase up to an aggregate of $15 million of our common stock. The authorization has no expiration date.
These shares do not reduce the repurchase authority under the share repurchase program. 27 Share performance graph The chart below compares the five-year cumulative return, assuming the reinvestment of dividends, where applicable, on our common stock with that of the S&P 500 Index and the NASDAQ Industrial Index.
These shares do not reduce the repurchase authority under our previous $100 million share repurchase program. 30 Share performance graph The chart below compares the five-year cumulative return, assuming the reinvestment of dividends, where applicable, on our common stock with that of the S&P 500 Index and the NASDAQ Industrial Index.
This graph assumes $100 was invested on June 30, 2019, in each of our common stock, the companies in the S&P 500 Index, and the companies in the NASDAQ Industrial Index. ITEM 6. [RESERVED] 28
This graph assumes $100 was invested on June 30, 2020, in each of our common stock, the companies in the S&P 500 Index, and the companies in the NASDAQ Industrial Index. ITEM 6. [RESERVED] 31
Our transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, New Jersey, 07310. According to the records of our transfer agent, as of August 30, 2024, there were 7 shareholders of record of our common stock.
Our transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, New Jersey, 07310. According to the records of our transfer agent, as of September 25, 2025, there were 6 shareholders of record of our common stock.
The table below presents information relating to purchases of shares of our common stock during the fourth quarter of fiscal 2024: Period (a) Total number of shares purchased (b) Average price paid per share ($) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Maximum dollar value of shares that may yet be purchased under the plans or programs ($) April 2024 0 - - 100,000,000 May 2024 (1) 262,468 4.84 - 100,000,000 June 2024 (1) 3,568 4.58 - 100,000,000 Total 266,036 - (1) Relates to the delivery of shares of our common stock to us by certain of our employees to settle their income tax liabilities.
The table below presents information relating to purchases of shares of our common stock during the fourth quarter of fiscal 2025: Period (a) Total number of shares purchased (b) Average price paid per share ($) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Maximum dollar value of shares that may yet be purchased under the plans or programs ($) April 2025 0 - - 100,000,000 May 2025 (1) 230,442 4.49 - 100,000,000 June 2025 (1) 2,853 4.19 - 100,000,000 Total 233,295 - (1) Relates to the delivery of shares of our common stock to us by certain of our employees to settle their income tax liabilities.
Added
This share purchase authorization replaces our $100 million share repurchase authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFiscal 2023 Compared to Fiscal 2022 The following factors had a significant influence on our results of operations during fiscal 2023 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased by 180.0% in ZAR, primarily due to the contribution from Connect in Merchant and an increase in account fees and insurance revenues in Consumer; ● Lower operating losses: Operating losses decreased, delivering an improvement of 55% in ZAR compared with the prior period primarily due to the contribution from Connect, strong hardware sales, and the implementation of various cost reduction initiatives in Consumer, which was partially offset by an increase in acquisition related intangible asset amortization; ● Higher net interest charge: The net interest charge increased to ZAR 299.9 million from ZAR 56.9 million due to the additional borrowings incurred in order to fund the acquisition of Connect as well as the debt acquired within the Connect business itself; ● Significant transaction costs: We expensed $6.0 million of transaction costs related to the Connect acquisition in fiscal 2022; and ● Foreign exchange movements: The U.S. dollar was 18.0% stronger against the ZAR during fiscal 2023, which impacted our reported results. 45 The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 8 In U.S.
Biggest changeFiscal 2025 Compared to Fiscal 2024 The following factors had a significant influence on our results of operations during fiscal 2025 as compared with the same period in the prior year: ● Revenue increased: Our revenues increased by 16.9% in U.S. dollar and 13.5% in ZAR, primarily due to the inclusion of Adumo and Recharger, an increase in value-added services activity in Merchant, higher Pinned Airtime sales, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset by a lower contribution from our legacy Enterprise businesses; ● Operating income increase, before transaction costs: Operating income, before transaction and related costs, increased significantly primarily due to contribution s from Adumo from October 1, 2024 and Recharger from March 3, 2025, which were partially offset by increased costs and an increase in amortization of acquisition-related intangible assets related to the acquisition of Adumo and Recharger; ● Non-cash fair value adjustment related to equity securities: We recorded a non -cash fair value loss of $59.8 million during fiscal 2025 related to the disposal of our investment in MobiKwik; ● Higher net interest charge: Net interest charge increased to $18.9 million (ZAR 342.8 million) from $16.6 million (ZAR 311.1 million) primarily due to higher overall borrowings, which was partially offset by an increase in interest received as a result of the inclusion of Adumo; and ● Foreign exchange movements: The U.S. dollar was 4.2% weaker against the ZAR during fiscal 2025 compared to the prior period, which positively impacted our U.S. dollar reported results. 42 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S.
We also paid $1.5 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock. During fiscal 2023, we utilized approximately $520.1 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect and repaid $547.3 million of these facilities.
We also paid $1.5 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock. During fiscal 2023, we utilized $520.1 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect and repaid $547.3 million of these facilities.
We utilized approximately $24.4 million of our long-term borrowings to settle approximately $10.5 million of our revolving credit facilities, fund our merchant finance loans receivable business, and to fund the acquisition of certain capital expenditures. We repaid approximately $17.5 million of these long- term, including approximately $10.5 million to settle our revolving credit balance in full.
We utilized $24.4 million of our long-term borrowings to settle $10.5 million of our revolving credit facilities, fund our merchant finance loans receivable business, and to fund the acquisition of certain capital expenditures. We repaid $17.5 million of these long-term, including $10.5 million to settle our revolving credit balance in full.
Loans to customers have a tenor of up to six months, with the majority of loans originated having a tenor of six months. 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.
Loans to customers have a tenor of up to nine months, with the majority of loans originated having a tenor of six months. 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.
During fiscal 2024, we paid our first provisional South African tax payments of $2.7 million (ZAR 49.5 million) related to our 2024 tax year. During fiscal 2024, we also made our second provisional South African tax payments of $2.9 million (ZAR 52.7 million related to our 2024 tax year and received tax refunds of $0.04 million (ZAR 0.8 million).
During fiscal 2024, we paid our first provisional South African tax payments of $2.7 million (ZAR 49.5 million) related to our 2024 tax year. During fiscal 2024, we also made our second provisional South African tax payments of $2.9 million (ZAR 52.7 million related to our 2024 tax year and received tax refunds of $0.0 million (ZAR 0.8 million).
We repaid approximately $20.1 million of these long-term in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility utilized. We received $0.1 million from the exercise of stock options.
We repaid $20.1 million of these long-term in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility utilized. We received $0.1 million from the exercise of stock options.
We used a discounted cash flow model to determine the fair value of our investment in Cell C as of June 30, 2024 and 2023, and valued Cell C at $0.0 (zero) as of each of June 30, 2024 and 2023.
We used a discounted cash flow model to determine the fair value of our investment in Cell C as of June 30, 2024 and 2023, and valued Cell C at $0.0 (zero) as of each of June 30, 2025 and 2024.
We believe that presentation using the average exchange rates per month compared with the average exchange rate per quarter and for the year improves the accuracy of the information presented in our external financial reporting and leads to fewer differences between our external reporting measures which are supplementally presented in ZAR, and our internal management information, which is also presented in ZAR. 39 Results of operations The discussion of our consolidated overall results of operations is based on amounts as reflected in our audited consolidated financial statements which are prepared in accordance with U.S.
We believe that presentation using the average exchange rates per month compared with the average exchange rate per quarter and for the year improves the accuracy of the information presented in our external financial reporting and leads to fewer differences between our external reporting measures which are supplementally presented in ZAR, and our internal management information, which is also presented in ZAR. 41 Results of operations The discussion of our consolidated overall results of operations is based on amounts as reflected in our audited consolidated financial statements which are prepared in accordance with U.S.
Depreciation and amortization expense decreased by $0.02 million (in USD, 0.1%), and increased by ZAR 17.7 million (in ZAR, 4.2%). In ZAR, the increase was due to an increase in depreciation expense related to additional POS devices deployed.
Depreciation and amortization expense decreased by $0.02 million (in USD, and increased by ZAR 17.7 million (in ZAR, 4.2%). In ZAR, the increase was due to an increase in depreciation expense related to additional POS devices deployed.
(B) – Long-term borrowings principal repayments for the 3-5 year period includes all unamortized fees as of June 30, 2024. Interest payments based on applicable interest rates as of June 30, 2024, and expected outstanding long-term borrowings over the period. All amounts converted from ZAR to USD using the June 30, 2024, USD/ ZAR exchange rate.
(B) – Long-term borrowings principal repayments for the 3-5 year period includes all unamortized fees as of June 30, 2025. Interest payments based on applicable interest rates as of June 30, 2025, and expected outstanding long-term borrowings over the period. All amounts converted from ZAR to USD using the June 30, 2025, USD/ ZAR exchange rate.
(2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2023. We believe the Cell C business plan is reasonable based on the current performance and the expected changes in the business model.
(2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2024. We believe the Cell C business plan is reasonable based on the current performance and the expected changes in the business model.
We wrote off loans and related interest and fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legal action, had failed. Consumer microlending The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the lifetime loss rate with the month-end outstanding lending book.
We wrote off loans and related interest and fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legal action, had failed. Consumer microlending The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the lifetime loss rate with the month-end outstanding lending book , excluding upfront initiation fees.
The performing component (that is, outstanding loan payments not in arrears) of the book exceeds more than 98% of outstanding lending book as of June 30, 2024. Prior to July 1, 2023, we maintained an allowance for credit losses - finance loans receivable related to our Consumer services segment with respect to short-term loans to qualifying customers.
The performing component (that is, outstanding loan payments not in arrears) of the book exceeds more than 98% of outstanding lending book as of June 30, 2025. 39 Prior to July 1, 2023, we maintained an allowance for credit losses - finance loans receivable related to our Consumer services segment with respect to short-term loans to qualifying customers.
Dollars Year ended June 30, 2024 2023 $ % $ ’000 $ ’000 change Revenue 564,222 527,971 7% Cost of goods sold, IT processing, servicing and support 442,673 417,544 6% Selling, general and administration 92,001 95,050 (3%) Depreciation and amortization 23,665 23,685 (0%) Impairment loss - 7,039 nm Transaction costs related to Adumo transaction 2,293 - nm Operating income (loss) 3,590 (15,347) nm Reversal of allowance for EMI doubtful debt receivable 250 - nm Loss on disposal of equity-accounted investment - 205 nm Interest income 2,294 1,853 24% Interest expense 18,932 18,567 2% Loss before income tax expense (benefit) (12,798) (32,266) (60%) Income tax expense (benefit) 3,363 (2,309) nm Net loss before loss from equity-accounted investments (16,161) (29,957) (46%) Loss from equity-accounted investments (1,279) (5,117) (75%) Net loss attributable to us (17,440) (35,074) (50%) Table 4 In South African Rand Year ended June 30, 2024 2023 ZAR % ZAR ’000 ZAR ’000 change Revenue 10,553,233 9,471,800 11% Cost of goods sold, IT processing, servicing and support 8,280,262 7,490,739 11% Selling, general and administration 1,720,585 1,705,196 1% Depreciation and amortization 442,570 424,909 4% Impairment loss - 126,280 nm Transaction costs related to Adumo transaction 42,561 - nm Operating income (loss) 67,255 (275,324) nm Reversal of allowance for EMI doubtful debt receivable 4,741 - nm Loss on disposal of equity-accounted investment - 3,678 nm Interest income 42,896 33,243 29% Interest expense 354,048 333,092 6% Loss before income tax expense (benefit) (239,156) (578,851) (59%) Income tax expense (benefit) 62,616 (41,423) nm Net loss before loss from equity-accounted investments (301,772) (537,428) (44%) Loss from equity-accounted investments (24,298) (91,799) (74%) Net loss attributable to us (326,070) (629,227) (48%) Revenue increased by $36.3 million (ZAR 1.1 billion), or 6.9% (in ZAR, 11.4%), primarily due to the increase in the number of low-margin prepaid airtime vouchers sold and an increase in volume of other value-added services provided, as well as higher transaction volumes processed, insurance premiums collected and lending revenues following an increase in loan originations, which was partially offset by a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales.
Dollars Year ended June 30, 2024 2023 $ % $ ’000 $ ’000 change Revenue 564,222 527,971 7% Cost of goods sold, IT processing, servicing and support 442,673 417,544 6% Selling, general and administration 91,969 95,050 (3%) Depreciation and amortization 23,665 23,685 (0%) Impairment loss - 7,039 nm Transaction costs related to Adumo and Recharger acquisitions 2,325 - nm Operating income (loss) 3,590 (15,347) nm Reversal of allowance for EMI doubtful debt receivable 250 - nm Loss on disposal of equity-accounted investment - 205 nm Interest income 2,294 1,853 24% Interest expense 18,932 18,567 2% Loss before income tax expense (benefit) (12,798) (32,266) (60%) Income tax expense (benefit) 3,363 (2,309) nm Net loss before loss from equity-accounted investments (16,161) (29,957) (46%) Loss from equity-accounted investments (1,279) (5,117) (75%) Net loss attributable to us (17,440) (35,074) (50%) Table 8 In South African Rand (US GAAP) Year ended June 30, 2024 2023 ZAR % ZAR ’000 ZAR ’000 change Revenue 10,553,233 9,471,800 11% Cost of goods sold, IT processing, servicing and support 8,280,262 7,490,739 11% Selling, general and administration 1,719,992 1,705,196 1% Depreciation and amortization 442,570 424,909 4% Impairment loss - 126,280 nm Transaction costs related to Adumo and Recharger acquisitions 43,154 - nm Operating income (loss) 67,255 (275,324) nm Reversal of allowance for EMI doubtful debt receivable 4,741 - nm Loss on disposal of equity-accounted investment - 3,678 nm Interest income 42,896 33,243 29% Interest expense 354,048 333,092 6% Loss before income tax expense (benefit) (239,156) (578,851) (59%) Income tax expense (benefit) 62,616 (41,423) nm Net loss before loss from equity-accounted investments (301,772) (537,428) (44%) Loss from equity-accounted investments (24,298) (91,799) (74%) Net loss attributable to us (326,070) (629,227) (48%) Revenue increased by $36.3 million (ZAR 1.1 billion), or 6.9% (in ZAR, 11.4%) , primarily due to the increase in the number of low-margin prepaid airtime vouchers sold and an increase in volume of other value-added services provided, as well as higher transaction volumes processed, insurance premiums collected and lending revenues following an increase in loan originations, which was partially offset by a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales.
Cash flows from investing activities Cash used in investing activities for fiscal 2024 included capital expenditures of $12.7 million (ZAR 236.6 million), primarily due to the acquisition of vaults and POS devices.
Cash used in investing activities for fiscal 2024 included capital expenditures of $12.7 million (ZAR 236.6 million), primarily due to the acquisition of vaults and POS devices.
Thus, the average rates used to translate this data for the years ended June 30, 2024, 2023 and 2022, vary slightly from the averages shown in the table above.
Thus, the average rates used to translate this data for the years ended June 30, 2025, 2024 and 2023, vary slightly from the averages shown in the table above.
We do not allocate once-off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, certain lease expenses (“Lease expenses”), other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments.
We do not allocate once-off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments.
Cash flows from financing activities During fiscal 2024, we utilized approximately $183.0 million from our South African overdraft facilities to fund our ATMs and repaid $199.6 million of these facilities. We utilized approximately $23.7 million of our long-term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements.
During fiscal 2024, we utilized approximately $183.0 million from our South African overdraft facilities to fund our ATMs and repaid $199.6 million of these facilities. We utilized $23.7 million of our long-term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements.
Consumer Segment Adjusted EBITDA during fiscal 2024 was also impacted by higher credit losses (as a result of an increase in originations) and higher insurance-related claims (as a result of a higher number of insurance policies) compared with fiscal 2023. Our Segment Adjusted EBITDA margin in fiscal 2024 and 2023 was 21.2% and 5.3%, respectively.
Consumer Segment Adjusted EBITDA during fiscal 2024 was also impacted by higher credit losses (as a result of an increase in originations) and higher insurance-related claims (as a result of a higher number of insurance policies) compared with fiscal 2023. Our Segment Adjusted EBITDA margin in fiscal 2024 and 2023 was 18.3% and 2.7%, respectively.
The translation rates we use in presenting our results of operations are the rates shown in the following table: Table 2 June 30, 2024 2023 2022 Income and expense items: $1 = ZAR 18.6844 17.9400 15.1978 Balance sheet items: $1 = ZAR 18.1808 18.8376 16.2903 We have translated the results of operations and operating segment information for the year ended June 30, 2024, provided in the tables below using the actual average exchange rates per month between the USD and ZAR in order to reduce the reconciliation of information presented to our chief operating decision maker.
The translation rates we use in presenting our results of operations are the rates shown in the following table: Table 2 June 30, 2025 2024 2023 Income and expense items: $1 = ZAR 17.9031 18.6844 17.9400 Balance sheet items: $1 = ZAR 17.7554 18.1808 18.8376 We have translated the results of operations and operating segment information for the year ended June 30, 2025 and 2024, provided in the tables below using the actual average exchange rates per month between the USD and ZAR in order to reduce the reconciliation of information presented to our chief operating decision maker.
Management believes that the following accounting policies are critical due to the degree of estimation required and the impact of these policies on the understanding of the results of our operations and financial condition. Business Combinations and the Recoverability of Goodwill A significant component of our growth strategy is to acquire and integrate businesses that complement our existing operations.
Management believes that the following accounting policies are critical due to the degree of estimation required and the impact of these policies on the understandi ng of the results of our operations and financial condition. Recoverability of Goodwill A significant component of our growth strategy is to acquire and integrate businesses that complement our existing operations.
Recent accounting pronouncements not yet adopted as of June 30, 2024 Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of June 30, 2024, including the expected dates of adoption and effects on financial condition, results of operations and cash flows. 38 Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1 June 30, 2024 2023 2022 ZAR : $ average exchange rate 18.7070 17.7641 15.2154 Highest ZAR : $ rate during period 19.4568 19.7558 16.2968 Lowest ZAR : $ rate during period 17.6278 16.2034 14.1630 Rate at end of period 18.1808 18.8376 16.2903 Translation Exchange Rates We are required to translate our results of operations from ZAR to U.S. dollars on a monthly basis.
Recent accounting pronouncements not yet adopted as of June 30, 2025 Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of June 30, 2025, including the expected dates of adoption and effects on financial condition, results of operations and cash flows. 40 Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1 June 30, 2025 2024 2023 ZAR : $ average exchange rate 18.1644 18.7070 17.7641 Highest ZAR : $ rate during period 19.6350 19.4568 19.7558 Lowest ZAR : $ rate during period 17.1144 17.6278 16.2034 Rate at end of period 17.7554 18.1808 18.8376 Translation Exchange Rates We are required to translate our results of operations from ZAR to U.S. dollars on a monthly basis.
We utilized the latest business plan provided by Cell C management for the period ended December 31, 2027, for the June 30, 2024 and 2023 valuations, and the following key valuation inputs were used: Weighted Average Cost of Capital: Between 21% and 26% over the period of the forecast Long-term growth rate: 4.5% (4.5% as of June 30, 2023) Marketability discount: 21% (20% as of June 30, 2023) Minority discount: 24% (24% as of June 30, 2023) Net adjusted external debt - June 30, 2024: (1) ZAR 8 billion ($0.4 billion), no lease liabilities included Net adjusted external debt - June 30, 2023: (2) ZAR 8.1 billion ($0.4 billion), no lease liabilities included (1) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2024.
We utilized the latest business plan provided by Cell C management for the period ended May 31, 2030, for the June 30, 2025, valuation and the business plan approved by Cell C management for the period ended December 31, 2027, for the June 30, 2024, valuation, and the following key valuation inputs were used: Weighted Average Cost of Capital: 24% as of June 30, 2025 and between 21% and 23% as of June 30, 2024 Long-term growth rate: 4.5% (4.5% as of June 30, 2024) Marketability discount: 15% (20% as of June 30, 2024) Minority discount: 17% (24% as of June 30, 2024) Net adjusted external debt - June 30, 2025: (1) ZAR 8.3 billion ($0.5 billion), no lease liabilities included Net adjusted external debt - June 30, 2024: (2) ZAR 8 billion ($0.4 billion), no lease liabilities included (1) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2025.
The performing component (that is, outstanding loan payments not in arrears), under-performing component (that is, outstanding loan payments that are in arrears) and non-performing component (that is, outstanding loans for which payments appeared to have ceased) of the book represents approximately 84%, 15% and 1%, respectively, of the outstanding lending book as of June 30, 2024.
The performing component (that is, outstanding loan payments not in arrears), under-performing component (that is, outstanding loan payments that are in arrears) and non-performing component (that is, outstanding loans for which payments appeared to have ceased) of the book represents approximately 95%, 4% and 1%, respectively, of the outstanding lending book as of June 30, 2025.
The allowance for credit losses related to these microlending finance loans receivables is calculated by multiplying the lifetime loss rate with the month end outstanding lending book. The lifetime loss rate as of each of July 1, 2023 and June 30, 2024, was 6.50%.
The allowance for credit losses related to these microlending finance loans receivables is calculated by multiplying the lifetime loss rate with the month end outstanding lending book, excluding upfront initiation fees. The lifetime loss rate as of each of June 30, 2024 and June 30, 2024, was 6.50%.
Fiscal 2024 Compared to Fiscal 2023 The following factors had a significant influence on our results of operations during fiscal 2024 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased by 11.4% in ZAR, primarily due to an increase in low margin prepaid airtime sales and other value-added services, as well as higher transaction, insurance and lending revenues, which was partially offset by lower hardware sales revenue in our POS hardware distribution business given the lumpy nature of bulk sales; ● Operating income generated: Operating profitability was achieved following years of operating losses as a result of the various cost reduction initiatives in Consumer implemented in prior periods as well as the contribution from Connect; ● Higher net interest charge: The net interest charge increased to ZAR 311.2 million from ZAR 299.9 million primarily due to higher interest rates; ● Significant transaction costs: We expensed $2.3 million of transaction costs related to the Adumo transaction in fiscal 2024; and ● Foreign exchange movements: The U.S. dollar was 4.1% stronger against the ZAR during fiscal 2024 compared to the prior period, which adversely impacted our U.S. dollar reported results. 40 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S.
Fiscal 2024 Compared to Fiscal 2023 The following factors had a significant influence on our results of operations during fiscal 2024 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased by 6.9% in U.S. dollar and 11.4% in ZAR, primarily due to an increase in low margin prepaid airtime sales and other value-added services, as well as higher transaction, insurance and lending revenues, which was partially offset by lower hardware sales revenue in our POS hardware distribution business given the lumpy nature of bulk sales; ● Operating income generated: Operating profitability was achieved following years of operating losses as a result of the various cost reduction initiatives in Consumer implemented in prior periods as well as the contribution from Connect; ● Higher net interest charge: The net interest charge increased to $16.6 million (ZAR 311.1 million) from $16.7 million (ZAR 299.9 million) primarily due to higher interest rates; ● Significant transaction costs: We expensed $2.3 million of transaction costs related to the Adumo transaction in fiscal 2024; and ● Foreign exchange movements: The U.S. dollar was 4.1% stronger against the ZAR during fiscal 2024 compared to the prior period, which adversely impacted our U.S. dollar reported results. 46 The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 7 In U.S.
(E) – We have excluded cross-guarantees in the aggregate amount of $0.1 million issued as of June 30, 2024, to RMB and Nedbank to secure guarantees it has issued to third parties on our behalf as the amounts that will be settled in cash are not known and the timing of any payments is uncertain. 54 Off-Balance Sheet Arrangements We have no off -balance sheet arrangements.
(F) – We have excluded cross-guarantees in the aggregate amount of $0.1 million issued as of June 30, 2025, to RMB and Nedbank to secure guarantees it has issued to third parties on our behalf as the amounts that will be settled in cash are not known and the timing of any payments is uncertain.
Non-GAAP Measures Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non- operational transactions (including loss on disposal of equity-accounted investments, gain related to fair value adjustments to currency options), (earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items.
Non-GAAP Measures Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non- operational transactions (including loss on disposal of equity-accounted investments, change in fair value of equity securities), (earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items.
Our effective tax rate for fiscal 2023 was impacted by a reduction in the enacted South African corporate income tax rate from 28% to 27% from January 2023 (but backdated to July 1, 2022), the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, a deferred tax benefit related to an expense paid by Connect before we acquired the business and which subsequently has been determined to be deductible for tax purposes, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. 47 Our effective tax rate for fiscal 2022 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses (including transaction expenses related to the acquisition of Connect), the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities.
Our effective tax rate for fiscal 2023 was impacted by a reduction in the enacted South African corporate income tax rate from 28% to 27% from January 2023 (but backdated to July 1, 2022), the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, a deferred tax benefit related to an expense paid by Connect before we acquired the business and which subsequently has been determined to be deductible for tax purposes, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. 48 Results of operations by operating segment and group costs The composition of revenue and the contributions of our business activities to Group Adjusted EBITDA are illustrated below: Table 9 In U.S.
The Lease expenses reflect lease expenses (refer to Note 8 to our audited consolidated financial statements) and the Stock- based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to our loss before income tax expense.
The Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to our loss before income tax expense.
The determination of the fair value of a reporting unit requires us to make significant judgments and estimates. In determining the fair value of reporting units for fiscal 2024, our key judgements related to reporting unit revenue growth rates and the weighted-average cost of capital applicable to peer and industry comparables of the reporting units.
In determining the fair value of reporting units for fiscal 2024 and 2023, our key judgements related to reporting unit revenue growth rates and the weighted-average cost of capital applicable to peer and industry comparables of the reporting units.
The determination of the fair value of this equity security requires us to make significant judgments and estimates. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Refer to Note 6 of our audited consolidated financial statements regarding the valuation inputs and sensitivity related to our investment in Cell C.
We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Refer to Note 6 of our audited consolidated financial statements regarding the valuation inputs and sensitivity related to our investment in Cell C.
Excluding the impact of income taxes, our cash provided by operating activities during the fiscal 2024 was positively impacted by the contribution from Merchant and Consumer, the sale of Cell C inventory and temporary working capital movements within our merchant business as a result of quarter-end transaction processing activities closing on a Sunday and which were settled in the following week, which was partially offset by growth in our consumer finance loans receivable book.
Excluding the impact of income taxes, our cash provided by operating activities during the fiscal 2024 was positively impacted by the contribution from Merchant and Consumer, the sale of Cell C inventory and temporary working capital movements within our merchant business as a result of quarter-end transaction processing activities closing on a Sunday and which were settled in the following week, which was partially offset by growth in our consumer finance loans receivable book During fiscal 2025, we paid our first provisional South African tax payments of $4.2 million (ZAR 76.1 million) related to our 2025 tax year.
In determining the fair value of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods, including present value modeling. Further, we make assumptions using certain valuation techniques, including discount rates and timing of future cash flows. We review the carrying value of goodwill annually or more frequently if circumstances indicating impairment have occurred.
In determining the fair value of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods, including present value modeling. Further, we make assumptions using certain valuation techniques, including discount rates and timing of future cash flows.
Merchant Segment revenue increased due to the increase in prepaid airtime vouchers sold and other value-added services provided, which was partially offset by a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales as well as lower revenue generated from a decrease in certain valued-added services transaction volumes processed (such as international money transfers).
Enterprise Segment revenue decreased due to a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales as well as lower revenue generated, which was partially offset by the increase in prepaid airtime vouchers sold and other value-added services provided .
Taxes paid during fiscal 2024, 2023 and 2022 were as follows: Table 16 Year ended June 30, 2024 2023 2022 2024 2023 2022 $ $ $ ZAR ZAR ZAR ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 First provisional payments 2,663 2,955 585 49,534 50,798 9,142 Second provisional payments 2,861 4,079 691 52,721 76,089 10,929 Taxation paid related to prior years 641 15 1 12,187 273 19 Tax refund received (38) (210) (300) (768) (3,756) (4,542) Total South African taxes paid 6,127 6,839 977 113,674 123,404 15,548 Foreign taxes paid 379 361 161 7,063 6,482 2,482 Total tax paid 6,506 7,200 1,138 120,737 129,886 18,030 We expect to make additional provisional income tax payments in South Africa related to our 2024 tax year in the first quarter of fiscal 2025, however, the amount was not quantifiable as of the date of the filing of this Annual Report.
Taxes paid during fiscal 2025, 2024 and 2023 were as follows: Table 17 Year ended June 30, 2025 2024 2023 2025 2024 2023 $ $ $ ZAR ZAR ZAR ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 First provisional payments 4,182 2,663 2,955 76,118 49,534 50,798 Second provisional payments 2,198 2,861 4,079 39,279 52,721 76,089 Taxation paid related to prior years 225 641 15 4,081 12,187 273 Tax refund received (438) (38) (210) (7,173) (768) (3,756) Total South African taxes paid 6,167 6,127 6,839 112,305 113,674 123,404 Foreign taxes paid 314 379 361 5,738 7,063 6,482 Total tax paid 6,481 6,506 7,200 118,043 120,737 129,886 55 We expect to make additional provisional income tax payments in South Africa related to our 2025 tax year in the first quarter of fiscal 2026, however, the amount was not quantifiable as of the date of the filing of this Annual Report.
We use these platforms to (a) sell prepaid airtime vouchers which was held as inventory and (b) distribute VAS, including prepaid airtime vouchers (which we do not hold as inventory), prepaid electricity, gaming voucher, and other services, to users of our platforms.
We use these platforms to (a) sell prepaid airtime vouchers that are held as inventory and (b) distribute ADP, including prepaid airtime vouchers (which we do not hold as inventory), prepaid electricity, gaming vouchers, and other services, to end consumers through our platforms.
The results of our impairment tests during fiscal 2023 indicated that the fair value of our reporting units exceeded their carrying values, with the exception of the $7.0 million of goodwill impaired during fiscal 202 3, as discussed in Note 10 to our audited consolidated financial statements.
The results of our impairment tests during fiscal 2025 and 2023 indicated that the fair value of our reporting units exceeded their carrying values, with the exception of the $17.0 million (related to the Cash Connect, Adumo Technologies, Adumo Payouts and EasyPay reporting units) and $7.0 million (related to the PPT/ NUETS reporting unit), respectively, of goodwill impaired during fiscal 2025 and 2023, as discussed in Note 10 to our audited consolidated financial statements.
We do not offer the same breadth of service to the SRD grant base due to the temporary nature of the grant. ● Progress on cross selling EasyPay Loans o We originated approximately 1.06 million loans during the year with our consumer loan book, before allowances (“gross book”), increasing 32% to ZAR 548 million as of June 30, 2024, compared to ZAR 415 million as of June 30, 2023. o We have not amended our credit scoring or other lending criteria and the growth is reflective of the demand for our tailored loan product for this market, growth in EPE bank account customer base and improved cross-selling capabilities. o The loan conversion rate continues to improve following the implementation of a number of targeted Consumer lending campaigns and encouraging results from our digital channels during the year. o The portfolio loss ratio of approximately 6%, calculated as the loans written off during fiscal 2024 as a percentage of the total gross loan book at the end of the period, remained stable on an annualized basis, compared to fiscal 2023. 33 EasyPay Insurance o Our funeral insurance product continued its strong growth and is a material contributor to the improvement in our overall ARPU.
EasyPay Loans o We originated approximately 1.3 million loans during the year, with our consumer loan book, before allowances (“gross book”), increasing 82% to ZAR 996 million as of June 30, 2025, compared to ZAR 548 million as of June 30, 2024. o We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our tailored loan product for this market, growth in EPE bank account customer base and improved cross-selling capabilities. o The loan conversion rate continues to improve following the implementation of several targeted Consumer lending campaigns and encouraging results from our digital channels. o The portfolio loss ratio, calculated as the loans written off over the last 12 months as a percentage of the total gross loan book at the end of the quarter, has remained stable at approximately 6% on an annualized basis, compared to a year ago (fourth quarter of fiscal 2024).
We have been able to improve customer penetration to approximately 33% of our active permanent grant account base as of June 30, 2024, compared to approximately 31% as of June 30, 2023. Approximately 170,000 new policies were written during fiscal 2024, increasing 37%, compared to approximately 124,000 in fiscal 2023.
We have been able to improve customer penetration to approximately 34% of our active permanent grant account base as of June 30, 2025, compared to 33% as of June 30, 2024. Approximately 210,000 new policies were written in the year, increasing 23% compared to approximately 170,000 a year ago.
Developments during Fiscal 2024 This item generally discusses our 2024 results compared to our 2023 results. Discussions of our 2023 results compared to our 2022 results can be found within our Annual Report on Form 10-K for the year ended June 30, 2023. Fiscal 2024 represents a transformative year for Lesaka.
Discussions of our 2024 results compared to our 2023 results can be found within our Annual Report on Form 10-K for the year ended June 30, 2024.
We recently (in the past three years) commenced lending to merchant customers and uses historical default experience over the lifetime of loans generated thus far in order to calculate a lifetime loss rate for the lending book.
We recently (in the past three years) commenced lending to merchant customers and uses historical default experience over the lifetime of loans generated thus far in order to calculate a lifetime loss rate for the lending book. In addition, management determines the expected write-off rate for doubtful or legal debt based on historical recovery trends for defaulted receivables.
Our chief operating decision maker was our Group Chief Executive Officer until February 29, 2024 and has been our Executive Chairman since March 1, 2024, and our Group Chief Executive Officer evaluated and our Executive Chairman evaluates, respectively, segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”) for each operating segment.
Our chief operating decision maker is our Executive Chairman and he evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”) for each operating segment.
We used the relief from royalty method to value identified brands and the multi-period excess earnings method to value the integrated platform and identified customer relationships. We have used the relief from royalty method, the multi-period excess earnings method, the income approach and the cost approach to value other historic acquisition-related intangible assets.
We used the relief from royalty method to value identified brands identified in the Adumo acquisition, and the multi-period excess earnings method to value identified customer relationships and the replacement cost approach to value the identified technology assets related to Adumo and Recharger .
We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. In addition, we make judgments and assumptions in allocating assets and liabilities to each of our reporting units.
We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. In addition, we make judgments and assumptions in allocating assets and liabilities to each of our reporting units. Refer to Note 10 to our audited consolidated financial statements for a summary of the key judgements used in our impairment testing.
Non-recurring revenue not allocated to segments includes once off revenue recognized that we believe does not relate to either our Merchant or Consumer divisions. Employee misappropriation of company funds represents a once-off loss incurred. Indirect tax provision includes non-recurring indirect taxes which have been provided related to prior periods following an on-going investigation from a tax authority.
Non-recurring revenue not allocated to segments includes once off revenue recognized that we believe does not relate to either our Merchant or Consumer divisions. Employee misappropriation of company funds represents a once -off loss incurred.
Capital Expenditures Capital expenditures for the years ended June 30, 2024, 2023 and 2022 were as follows: Table 18 2024 2023 2022 2024 2023 2022 $ $ $ ZAR ZAR ZAR ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 Consumer 1,317 3,170 1,712 24,607 56,870 26,019 Merchant 11,348 12,986 2,846 212,030 232,969 43,253 Total 12,665 16,156 4,558 236,637 289,839 69,272 Our capital expenditures for fiscal 2024, 2023 and 2022, are discussed under “—Liquidity and Capital Resources—Cash flows from investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally-generated funds, except for certain capital expenditures of POS devices and safe assets, made by Connect which were funded through the utilization of asset-backed borrowings.
Capital Expenditures Capital expenditures for the years ended June 30, 2025, 2024 and 2023 were as follows: Table 19 2025 2024 2023 2025 2024 2023 $ $ $ ZAR ZAR ZAR ’000 ’000 ’000 ’000 ’000 ’000 Merchant 18,117 11,202 12,812 324,350 209,302 229,847 Consumer 1,500 1,317 3,170 26,855 24,607 56,870 Enterprise 1,482 146 174 26,532 2,728 3,122 Total 21,099 12,665 16,156 377,737 236,637 289,839 Our capital expenditures for fiscal 2025, 2024 and 2023, are discussed under “—Liquidity and Capital Resources—Cash flows from investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally-generated funds, except for certain capital expenditures of POS devices and vaults, made by Connect which were funded through the utilization of asset-backed borrowings.
The results of our impairment tests during fiscal 2024 indicated that the fair value of our reporting units exceeded their carrying values and so did not require impairment.
The results of our impairment tests during fiscal 2024 indicated that the fair value of our reporting units exceeded their carrying values and so did not require impairment. Intangible Assets Acquired Through Acquisitions The fair values of the identifiable intangible assets acquired through acquisitions were determined by management using the purchase method of accounting.
No assurance can be given, however, that the underlying assumptions or events associated with such assets will occur as projected. For these reasons, among others, the actual cash flows may vary from forecasts of future cash flows. To the extent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary.
For these reasons, among others, the actual cash flows may vary from forecasts of future cash flows. To the extent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary.
(C) – Refer to Note 8 to our audited consolidated financial statements. (D) – Includes policyholder liabilities of $2.6 million related to our insurance business. All amounts are translated at exchange rates applicable as of June 30, 2024.
(E) – Includes policyholder liabilities of $3.2 million related to our insurance business. All amounts are translated at exchange rates applicable as of June 30, 2025.
A significant amount of judgment is required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer. We have operated this lending book for more than five years and use historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for the lending book.
We have operated this lending book for more than five years and use historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for the lending book.
Long-term borrowings We have aggregate long-term borrowings outstanding of ZAR 2.6 billion ($143.2 million translated at exchange rates as of June 30, 2024) as described in Note 12. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 1.0 billion, including accrued interest, which was used to partially fund the acquisition of Connect.
Long-term borrowings We have aggregate long-term borrowing outstanding of ZAR 3.6 billion ($200.8 million translated at exchange rates as of June 30, 2025) as described in Note 12. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 3.1 billion, which was used to refinance our previous long-term borrowings. We have utilized all of these long-term borrowings.
Changes in the fair value of this equity security are recognized in the caption “change in fair value of equity securities” in our audited consolidated statements of operations. The tax impact related to the change in fair value of equity securities is included in income tax expense in our audited consolidated statements of operation.
The tax impact related to the change in fair value of equity securities is included in income tax expense in our audited consolidated statements of operation. The determination of the fair value of this equity security requires us to make significant judgments and estimates.
During fiscal 2023, we received proceeds of $0.25 million related to the first tranche (of two) from the disposal of our entire equity interest in Carbon and $0.4 million related to the sale of minor positions in Finbond. 53 During fiscal 2022, we paid approximately $4.6 million (ZAR 69.3 million), primarily due to the roll out of our new express branches, acquisitions of ATMs and the acquisition of computer equipment.
During fiscal 2023, we received proceeds of $0.25 million related to the first tranche (of two) from the disposal of our entire equity interest in Carbon and $0.4 million related to the sale of minor positions in Finbond.
We write off microlending finance loans receivable and related service fees and interest if a borrower is in arrears with repayments for more than three months or is deceased.
We wrote off microlending loans and related service fees if a borrower is in arrears with repayments for more than three months or , in the event of the borrower’s death, or if the borrower was under debt review.
Net cash provided by operating activities during fiscal 2023 was $0.4 million (ZAR 7.4 million) compared to net cash utilized by operating activities of $37.2 million (ZAR 565.3 million) during fiscal 2022.
Net cash provided by operating activities during fiscal 2024 was $28.8 million (ZAR 537.9 million) compared to $0.4 million (ZAR 7.4 million) during fiscal 2023.
Refer to discussion above at “—Recent Developments” for a description of key trends impacting our revenue this fiscal year. 41 Cost of goods sold, IT processing, servicing and support increased by $25.1 million (ZAR 0.8 billion), or 6.0% (in ZAR, 10.5%), primarily due to the increase in low margin prepaid airtime sales, which were partially offset by the lower cost of goods sold related to fewer hardware sales.
Cost of goods sold, IT processing, servicing and support increased by $25.1 million (ZAR 0.8 billion), or 6.0% (in ZAR, 10.5%), primarily due to the increase in low margin prepaid airtime sales, which were partially offset by the lower cost of goods sold related to fewer hardware sales. 47 Selling, general and administration expenses decreased by $3.1 million (ZAR 14.8 million), or 3.2% (in ZAR, 0.9%).
In determining the fair value of reporting units for fiscal 2023, we considered entity-specific growth rates, future expected cash flows to be used in our discounted cash flow model, and the weighted-average cost of capital applicable to peer and industry comparables of the reporting units.
In determining the fair value of reporting units for fiscal 2025, we considered key judgements related to reporting unit revenue growth rates, the weighted-average cost of capital applicable to peer and industry comparables of the reporting units and the forecast period to be used.
During fiscal 2023, we recorded an impairment loss of $7.0 million related to the impairment of our hardware/ software supply business unit’s allocated goodwill. Refer to Note 10 of our audited consolidated financial statements for additional information regarding these impairment losses.
During fiscal 2025, we recorded an impairment loss which includes an impairment of goodwill of $17.0 million related to the impairment of goodwill allocated to each of Merchant, Consumer and Enterprise as well as an impairment of intangible assets of 1.8 million. Refer to Note 10 of our audited consolidated financial statements for additional information regarding these impairment losses.
Overview We offer a wide range of solutions including transactional accounts (banking), lending, insurance, cash management solutions, card acceptance, supplier payments, software services and bill payments. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.
Overview We offer an integrated and holistic multiproduct platform that provides transactional accounts, lending, insurance, merchant acquiring, cash management, software and ADP. Targeted solutions and integrations facilitate payments between consumers and businesses. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.
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 July 1, 2023 and June 30, 2024, was approximately 1.18%.
The allowance for credit losses related to these merchant finance loans receivables is calculated by multiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book.
Dollars Year ended June 30, 2024 % of 2023 % of % Operating Segment $ ’000 total $ ’000 total change Consolidated revenue: Merchant 498,314 89% 463,701 88% 7% Consumer 69,211 12% 62,801 12% 10% Subtotal: Operating segments 567,525 101% 526,502 100% 8% Not allocated to operating segments - - 1,469 - nm Corporate/Eliminations (3,303) (1%) - - nm Total consolidated revenue 564,222 100% 527,971 100% 7% Group Adjusted EBITDA: Merchant (1) 33,368 90% 33,531 135% (0%) Consumer (1) 14,650 40% 3,314 13% 342% Lease expenses (2) (3,238) (9%) (2,906) (11%) 11% Group costs (7,844) (21%) (9,109) (37%) (14%) Group Adjusted EBITDA (non-GAAP) (3) 36,936 100% 24,830 100% 49% (1) Segment Adjusted EBITDA for Merchant includes retrenchments costs of $0.3 million and Consumer includes retrenchment costs of $0.2 million for fiscal 2024.
Dollars Year ended June 30, 2024 % of 2023 % of % Operating Segment $ ’000 total $ ’000 total change Consolidated revenue: Merchant 459,790 81% 416,562 79% 10% Consumer 69,211 12% 62,801 12% 10% Enterprise 46,897 8% 50,456 10% (7%) Subtotal: Operating segments 575,898 101% 529,819 101% 9% Not allocated to operating segments - - 1,469 - nm Eliminations (11,676) (1%) (3,317) (1%) 252% Total consolidated revenue 564,222 100% 527,971 100% 7% Group Adjusted EBITDA: Merchant (1)(2) 29,170 78% 29,008 117% 1% Consumer (1)(2) 12,679 34% 1,675 7% 657% Enterprise (2) 2,931 8% 3,256 13% (10%) Group costs (7,844) (21%) (9,109) (37%) (14%) Group Adjusted EBITDA (non-GAAP) (3) 36,936 100% 24,830 100% 49% (1) Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant $0.3 million and Consumer of $0.2 million.
Intangible Assets Acquired Through Acquisitions The fair values of the identifiable intangible assets acquired through acquisitions were determined by management using the purchase method of accounting. We did not identify any significant intangible assets related to the Touchsides acquisition in fiscal 2024. We completed the acquisition of Connect during fiscal 2022 where we identified and recognized intangible assets.
We completed the acquisition of Adumo and Recharger during fiscal 2025 where we identified and recognized intangible assets. We did not identify any significant intangible assets related to the Touchsides acquisition in fiscal 2024.
In addition to these capital expenditures, we expect that capital spending for fiscal 2025 will include acquisition of POS devices, safe assets, vehicles, computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa. These assets will be funded through the use of internally-generated funds and our asset-backed borrowing arrangement. 55
We had outstanding capital commitments as of June 30, 2025, of $0.2 million. In addition to these capital expenditures, we expect that capital spending for fiscal 2026 will include acquisition of POS devices, vaults, computer software, computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa .
Management assess the useful life of the acquired intangible assets upon initial recognition and revisions to the useful life or impairment of these intangible assets may be necessary in the future. Revenue recognition – principal versus agent considerations We generate revenue from the provision of transaction-processing services through our various platforms and service offerings.
Revenue recognition – principal versus agent considerations We generate revenue from the provision of transaction-processing services through our various platforms and service offerings.
We write off merchant and working capital finance receivables and related fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legal action, have failed. 37 Lending Merchant lending The allowance for credit losses related to 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.
Finance Loans Receivable and Allowance for Credit Losses Merchant lending The allowance for credit losses related to Merchant finance loans receivables is calculated by multiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book.
Our policy was to regularly review the ageing of outstanding amounts due from borrowers and adjust the provision based on management’s estimate of the recoverability of finance loans receivable. We wrote off microlending loans and related service fees if a borrower is in arrears with repayments for more than three months or dies.
Our policy was to regularly review the ageing of outstanding amounts due from borrowers and adjust the provision based on management’s estimate of the recoverability of finance loans receivable.
For instance, transaction costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span multiple quarters, for instance in fiscal 2024 we incurred significant transaction costs related to the acquisition of Adumo over a number of quarters, and the transactions are generally non-recurring.
The transactions can span multiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo and Recharger over a number of quarters, and the transactions are generally non-recurring Indirect tax provision release relates to the reversal of a non-recurring indirect tax provision created in fiscal 2023 which was resolved in fiscal 2025 following settlement of the matter with the tax authority.
The increase in our unrestricted cash balances from June 30, 2023, was primarily due to a positive contribution from our Merchant and Consumer operations, the sale of certain Cell C prepaid inventory held, higher year end clearing accounts and vendor wallet balances, and utilization of our borrowings facilities to fund certain components of our operations, which was partially offset by the utilization of cash reserves to fund certain scheduled and other repayments of our borrowings, pay transaction related expenses, purchase ATMs and vaults, and to make an investment in working capital.
The increase in our unrestricted cash balances from June 30, 2024, was primarily due to the positive contribution from all of our operating segments, proceeds from the sale of MobiKwik, and utilizing of our borrowing facilities, which was partially offset by the utilization of cash reserves to fund certain scheduled and other repayments of our borrowings, settle the cash portion of the purchase consideration related to our various acquisitions, purchase ATMs and vaults and other items of capital expenditure, pay annual bonuses, pay for expenses included in our group costs, and to make an investment in working capital.
Once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued.
We have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for fiscal 2025. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued.
The table below presents the reconciliation between GAAP net loss attributable to Lesaka to Group Adjusted EBITDA: Table 13 Years ended June 30, 2024 2023 2022 $ ’000 $ ’000 $ ’000 Loss attributable to Lesaka - GAAP (17,440) (35,074) (43,876) Loss from equity accounted investments 1,279 5,117 3,649 Net loss before loss from equity-accounted investments (16,161) (29,957) (40,227) Income tax expense (benefit) 3,363 (2,309) 327 Loss before income tax expense (12,798) (32,266) (39,900) Interest expense 18,932 18,567 5,829 Interest income (2,294) (1,853) (2,089) Reversal of allowance for doubtful EMI loan receivable (250) - - Gain on disposal of equity securities - - (720) Net loss on disposal of equity-accounted investment - 205 376 Gain related to fair value adjustment to currency options - - (3,691) Operating loss 3,590 (15,347) (40,195) Impairment loss - 7,039 - PPA amortization (amortization of acquired intangible assets) 14,419 15,149 3,826 Depreciation 9,246 8,536 3,749 Stock-based compensation charges 7,911 7,309 2,962 Once-off items (1) 1,853 1,922 8,088 Unrealized Loss FV for currency adjustments (83) 222 - Group Adjusted EBITDA - Non-GAAP (A) 36,936 24,830 (21,570) (A) As noted in footnote (3) to table 11 and 12, Lease expenses which were previously excluded from the calculation of Group Adjusted EBITDA have now been included in the calculation.
Once-off items represents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. 52 The table below presents the reconciliation between GAAP net loss attributable to Lesaka to Group Adjusted EBITDA: Table 14 Years ended June 30, 2025 2024 2023 $ ’000 $ ’000 $ ’000 Loss attributable to Lesaka - GAAP (87,634) (17,440) (35,074) Loss from equity accounted investments (114) 1,279 5,117 Net loss before loss from equity-accounted investments (87,748) (16,161) (29,957) Income tax expense (benefit) (18,198) 3,363 (2,309) Loss before income tax expense (105,946) (12,798) (32,266) Interest expense 21,453 18,932 18,567 Interest income (2,596) (2,294) (1,853) Reversal of allowance for doubtful EMI loan receivable - (250) - Net loss on disposal of equity-accounted investment 161 - 205 Change in fair value of equity securities 59,828 - - Operating (loss) income (27,100) 3,590 (15,347) Impairment loss 18,863 - 7,039 PPA amortization (amortization of acquired intangible assets) 21,384 14,419 15,149 Depreciation 12,337 9,246 8,536 Stock-based compensation charges 9,550 7,911 7,309 Interest adjustment (2,195) - - Once-off items (1) 17,826 1,853 1,922 Unrealized Loss FV for currency adjustments 23 (83) 222 Group Adjusted EBITDA - Non-GAAP 50,688 36,936 24,830 (1) The table below presents the components of once-off items for the periods presented: Table 15 Years ended June 30, 2025 2024 2023 $ ’000 $ ’000 $ ’000 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 16,159 2,325 - Transaction costs 1,794 480 850 Indirect taxes provision (127) - 438 (Income recognized) Expenses incurred related to closure of legacy businesses - (952) 639 Non-recurring revenue not allocated to segments - - (1,469) Employee misappropriation of company funds - - 1,202 Separation of employee expense - - 262 Total once-off items 17,826 1,853 1,922 Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters.
(3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. 43 Table 7 In South African Rand Year ended June 30, 2024 % of 2023 % of % Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue: Merchant 9,320,468 89% 8,318,796 88% 12% Consumer 1,294,632 12% 1,126,650 12% 15% Subtotal: Operating segments 10,615,100 101% 9,445,446 100% 12% Not allocated to operating segments - - 26,354 - nm Corporate/Eliminations (61,867) (1%) - - nm Total consolidated revenue 10,553,233 100% 9,471,800 100% 11% Group Adjusted EBITDA: Merchant (1) 624,111 90% 601,546 135% 4% Consumer (1) 274,190 40% 59,453 13% 361% Lease expenses (2) (60,543) (9%) (52,134) (11%) 16% Group costs (146,815) (21%) (163,415) (37%) (10%) Group Adjusted EBITDA (non-GAAP) (3) 690,943 100% 445,450 100% 55% (1) Segment Adjusted EBITDA for Merchant includes retrenchments costs of ZAR 4.9 million and Consumer includes retrenchment costs of ZAR 3.5 million for fiscal 2024.
Table 10 In South African Rand Year ended June 30, 2024 % of 2023 % of % Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue: Merchant 8,599,450 81% 7,473,122 79% 15% Consumer 1,294,632 13% 1,126,650 12% 15% Enterprise 877,317 8% 905,181 10% (3%) Subtotal: Operating segments 10,771,399 102% 9,504,953 100% 13% Not allocated to operating segments - - 26,354 - nm Eliminations (218,166) (2%) (59,507) - 267% Total consolidated revenue 10,553,233 100% 9,471,800 100% 11% Group Adjusted EBITDA: Merchant (1)(2) 545,472 79% 520,403 117% 5% Consumer (1)(2) 237,362 34% 30,049 7% 690% Enterprise (2) 54,924 8% 58,413 13% (6%) Group costs (146,815) (21%) (163,415) (37%) (10%) Group Adjusted EBITDA (non-GAAP) (3) 690,943 100% 445,450 100% 55% (1) Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant of ZAR 4.9 million and Consumer of ZAR 3.5 million.
The funds included in these bank accounts are restricted as they may not be withdrawn without the express permission of Nedbank.
The funds included in these bank accounts are restricted as they may not be withdrawn without the express permission of Nedbank. Our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows as of June 30, 2025, includes restricted cash of $0.1 million that has been ceded and pledged.
When we are an agent in a transaction, such as when we distribute VAS on behalf of our customers, and do not control the good or service to be provided, revenue is recognized based on the amount that we are contractually entitled to receive for performing the distribution service on behalf of our customers using our platform. 35 Valuation of investment in Cell C We have elected to measure our investment in Cell C, an unlisted equity security, at fair value using the fair value option.
When we are an agent in a transaction, revenue is recognized based on the amount that we are contractually entitled to receive for performing the distribution service on behalf of our customers.
When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. For instance, in fiscal 2022, we obtained loan facilities from RMB to fund a portion of our acquisition of Connect.
When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. Refer to Note 12 to our consolidated financial statements for the year ended June 30, 2025, for additional information related to our borrowings.
We also generate fees from debit and credit card transaction processing and interest revenue from qualifying merchant customers who are able to access short-term loans. The revenue and costs associated with these services and sales are included in our merchant operating segment. We also generate fees from consumers utilizing our ATM network.
We also earn transaction fees when customers utilize our ATM network. ● Lending: We generate interest revenue from qualifying merchant customers who are able to access short-term business loans.
(3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. Merchant Segment revenue increased due to the contribution from Connect for the full fiscal year compared with only two and a half months in fiscal 2022.
(3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. 45 Merchant Segment revenue primarily increased due to the inclusion of Adumo, and a higher volume of ADP provided (Pinless Airtime and gaming) and an increase in fewer Pinned Airtime sales.
We also offer merchant customers access to platforms through which we (a) generate revenue from the sale of prepaid airtime and (b) generate fees from distribution of VAS, including prepaid airtime, prepaid electricity, gaming voucher, and other services, to users of our platforms.
This revenue stream includes interest charged on outstanding loan balances. ● ADP: We also offer merchant customers access to platforms through which we (a) generate revenue from the sale of prepaid airtime and generate fees from distribution of ADP, including prepaid solutions (airtime, data, electricity and gaming), bill payments, International Money Transfers (“IMT”) and supplier enabled payments.
Our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows as of June 30, 2024, includes restricted cash of approximately $0.1 million that has been ceded and pledged. 52 Cash flows from operating activities Net cash provided by operating activities during fiscal 2024 was $28.8 million (ZAR 537.9 million) compared to $0.4 million (ZAR 7.4 million) during fiscal 2023.
Cash flows from operating activities Net cash used in operating activities during fiscal 2025 was $9.1 million (ZAR 163.3 million) compared to net cash provided by operating activities of $28.8 million (ZAR 537.9 million) during fiscal 2024.
Excluding the impact of income taxes, our cash provided by operating activities during fiscal 2023 was impacted by the positive contribution from Connect and certain business within our consumer business, which was partially offset by growth in our consumer and merchant finance loans receivable books.
Excluding the impact of income taxes, our cash used in operating activities during fiscal 2025 includes cash utilized for the settlement of working capital movements within our Merchant and Enterprise businesses related to quarter-end transaction processing activities and which were settled in the following week (our fourth quarter of fiscal 2024 closed on a Sunday), and the net growth in our Consumer and Merchant finance loans receivable books, which was partially offset by the positive contribution from our Merchant and Consumer businesses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−0 removed13 unchanged
Biggest changeInterest rates in South Africa have been trending upwards in recent quarters but have, as of the date of this Annual Report, stabilized and are expected to remain at current levels, or perhaps even decline moderately towards the last quarter of calendar 2024. We periodically evaluate the cost and effectiveness of interest rate hedging strategies to manage this risk.
Biggest changeInterest rates in South Africa have been trending downwards in recent quarters and as of the date of this Annual 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.
With respect to credit risk on financial instruments, we maintain 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. 56 Consumer microlending credit risk We are exposed to credit risk in our Consumer microlending activities, which provides unsecured short-term loans to qualifying customers.
With respect to credit risk on financial instruments, we maintain 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. 58 Consumer microlending credit risk We are exposed to credit risk in our Consumer microlending activities, which provides unsecured short-term loans to qualifying customers.
We have used forward contracts in order to limit our 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. We had no outstanding foreign exchange contracts as of June 30, 2024 and 2023.
We have used forward contracts in order to limit our 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. We had no outstanding foreign exchange contracts as of June 30, 2025 and 2024.
The effect of a hypothetical 1% (i.e. 100 basis points) increase and a 1% decrease in the interest rates applicable to the borrowings as of June 30, 2024, are shown. The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios.
The effect of a hypothetical 1% (i.e. 100 basis points) increase and a 1% decrease in the interest rates applicable to the borrowings as of June 30, 2025, are shown. The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios.
The following table illustrates the effect on our annual expected interest charge, translated at exchange rates applicable as of June 30, 2024, as a result of changes in the South African prime and 3-month JIBAR interest rates, using our outstanding short and long-term borrowings as of June 30, 2024.
The following table illustrates the effect on our annual expected interest charge, translated at exchange rates applicable as of June 30, 2025, as a result of changes in the South African prime and 3-month JIBAR interest rates, using our outstanding short and long-term borrowings as of June 30, 2025.
Equity Securities Price Risk Equity price risk relates to the risk of loss that we would incur as a result of the volatility in the exchange -traded price of equity securities that we hold. As of June 30, 2024, we did not have any equity securities that were exchange-traded and held as available for sale.
Equity Securities Price Risk Equity price risk relates to the risk of loss that we would incur as a result of the volatility in the exchange -traded price of equity securities that we hold. As of June 30, 2025, we did not have any equity securities that were exchange-traded and held as available for sale.
As of June 30, 2024, we did not own any exchange-traded equity securities. 57
As of June 30, 2025, we did not own any exchange-traded equity securities. 59
We generally maintain investments in cash equivalents and held to maturity investments and have occasionally invested in marketable securities. We have short and long-term borrowings in South Africa as described in Note 12 to our consolidated financial statements which attract interest at rates that fluctuate based on changes in the South African prime and 3-month JIBAR interest rates.
We have short and long-term borrowings in South Africa as described in Note 12 to our consolidated financial statements which attract interest at rates that fluctuate based on changes in the South African prime and 3-month JIBAR interest rates.
Table 19 As of June 30, 2024 Annual expected interest charge ($ ’000) Hypothetical change in interest rates Impact of hypothetical change in interest rates ($ ’000) Estimated annual expected interest charge after hypothetical change in interest rates ($ ’000) Interest on South Africa borrowings 19,930 1% 1,599 21,529 (1%) (1,598) 18,332 Credit Risk Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties.
Table 20 As of June 30, 2025 Annual expected interest charge ($ ’000) Hypothetical change in interest rates Impact of hypothetical change in interest rates ($ ’000) Estimated annual expected interest charge after hypothetical change in interest rates ($ ’000) Interest on South Africa borrowings 23,987 1% 2,262 26,249 (1%) (2,262) 21,725 Credit Risk Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties.
Added
We periodically evaluate the cost and effectiveness of interest rate hedging strategies to manage this risk. We generally maintain investments in cash equivalents and held to maturity investments and have occasionally invested in marketable securities.

Other LSAK 10-K year-over-year comparisons