Lesaka EBITDA Jumps 61% in Fiscal Q4

Key Points

• Group Adjusted EBITDA reached $16.7 million (ZAR 305.6 million), rising 61% year-over-year in ZAR during Q4 FY2025 as the company achieved non-GAAP profitability guidance for FY2025.

• Net loss widened mainly due to large one-time non-cash charges, increasing to $28.8 million in Q4 FY2025.

• Management reaffirmed guidance for 2026, targeting at least 35% year-over-year adjusted EBITDA growth for FY2026 and positive net income.

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Lesaka Technologies (NASDAQ:LSAK), a South African fintech company specializing in digital financial services for underserved consumers and merchants, released its Q4 FY2025 earnings on September 10, 2025. The report highlighted strong gains in key operating metrics, including non-GAAP profitability and revenue, and confirmed delivery on management’s operational guidance. However, a larger GAAP net loss—primarily from one-time and non-cash charges related to non-core assets—tempered headline results. The company also restated prior financials for Q1, Q2, and Q3 FY2025 due to a required change in revenue classification, which added complexity but was not expected to alter profit or cash flows. Overall, the quarter continued Lesaka’s momentum in expanding its fintech platform and integrating recent acquisitions.

Business Overview and Strategic Focus

Lesaka Technologies is a full-service fintech provider, offering transactional accounts, digital payments, lending, and insurance to about 1.5 million South African consumers and over 96,600 merchant clients as of the FY2024 Annual Report. Its platform addresses the financial needs of underserved and informal market participants, who often lack access to traditional banking.

The company’s recent strategy emphasizes growth through acquisitions and building a seamless multi-product ecosystem. Lesaka’s market expansion, particularly through its October 2024 acquisition of Adumo, brought scale and broadened its reach to about 140 million potential customers across several Southern African nations, as disclosed by the company regarding its addressable market after the acquisition. Key success factors include integrating these new businesses, sustaining financial inclusion, and leveraging proprietary technology to digitize cash-heavy markets.

Quarter Highlights and Drivers of Performance

In the quarter, Lesaka’s core operating achievements centered on robust expansion and margin improvement. Net revenue—revenue less the cost of goods sold for agency arrangements—grew 47% year-over-year in Q4 FY2025, aided in large part by consolidating Adumo’s results and continued gains in both consumer and merchant activities. Group Adjusted EBITDA (non-GAAP), a measure of operating profit that excludes non-cash and one-time charges, surged 61% year-over-year in ZAR in Q4 FY2025. This performance allowed the company to meet or beat its previously stated operational guidance for fiscal 2025.

The Merchant division was a key growth driver, with higher transactional volume and revenue uplift attributed to the operations of Adumo, which focuses on payment and financial technology solutions for merchants. The Consumer division expanded its active client base and increased loan and insurance cross-selling. The Enterprise segment, which provides business technology services, remained in its early buildout phase and was not yet a significant profit generator.

Despite these advances, the company’s GAAP net loss increased sharply from the previous year. The widening loss mostly related to non-core, non-operational items. These included a $49.3 million non-cash charge reflecting a change in value and the sale of Lesaka’s MobiKwik investment, and an $18.4 million impairment on other assets, alongside $17.8 million in acquisition transaction costs.

Another notable development was the restatement of prior interim financial statements. The company determined that certain revenue should have been classified differently, from a principal to an agent basis, resulting in changes in how both revenue and cost of goods sold were reported. Management stated that this revision would have no effect on operating income or cash, but withdrew some earlier revenue guidance in response. The event did add a layer of short-term uncertainty as the restatement and related audit are finalized.

Looking Ahead: Guidance and Investor Focus

Management outlined a positive financial outlook for fiscal 2026. It guided for net revenue (non-GAAP) of ZAR 6.4–6.9 billion and adjusted EBITDA (non-GAAP) of ZAR 1.25–1.45 billion in FY2026 (at least 35% year-over-year growth), with a goal of turning net income positive for the first time. Adjusted earnings per share (non-GAAP) are expected to more than double from ZAR 2.29 in FY2025 to at least ZAR 4.60 in FY2026. For Q1 FY2026, the company forecasts net revenue of ZAR 1.50–1.65 billion and adjusted EBITDA of ZAR 260–300 million. These targets exclude any potential impact from the acquisition of Bank Zero and any additional mergers and acquisitions not yet announced.

Investors should monitor ongoing developments related to the financial restatement and the integration of Adumo, as these could influence both financial reporting clarity and operational performance. The absence of any announced dividend remains unchanged.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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