Lesaka Technologies, Inc. Q3 FY2026 earnings call

• Strategic milestones: Received competition tribunal approval for combination with Bank Zero, announced and commenced consolidation of operating brands under single Lusaka brand. - Office consolidations: In June, will consolidate multiple Gauteng offices into single location in Johannesburg, also making progress in Cape Town and Durban. - Workforce: Approximately 3,750 employees across Southern Africa, with close to half focused on sales and marketing, 23% on servicing and operations, 20% in technical roles. - Business simplification: Exited sell-see stake and concluded legacy CPS contract, contributing positively to Q2 results. - Division performances: Merchant in transformation, consumer had strong quarter, enterprise showing solid progress.

Net revenue for Q2 was R1.6 billion, up 16% y-o-y. Merchant division net revenue pulled back 2% due to refocusing and pricing pressure; consumer division net revenue rose 38% y-o-y to R567 million; enterprise division net revenue was R217 million, a 67% y-o-y improvement. Group-adjusted EBITDA grew 47% y-o-y to R304 million. Merchant segment-adjusted EBITDA was R170 million, down 6% y-o-y; consumer segment-adjusted EBITDA more than doubled to R159 million; enterprise segment-adjusted EBITDA was R24 million. Active merchants increased 8% y-o-y to over 130,000. Consumer active base exceeded 2 million customers, a 21% increase y-o-y. Enterprise division total ADP TPV reached 11.9 billion, up 18% y-o-y, utilities total payment volume increased 15% y-o-y to R465 million in Q2.

• Third quarter guidance: Net revenue range R1.65 billion - R1.8 billion, midpoint implying ~27% growth; Group-adjusted EBITDA between R300 million - R340 million, midpoint implying ~37% growth. - Full year guidance: Reaffirms net revenue range R6.4 billion - R6.9 billion and Group Adjusted EBITDA range R1.25 billion - R1.45 billion, excluding Bank Zero impact if acquisition complete in financial year.

Q: Question about the consumer segment, increase in transaction fees, insurance premiums, and lending revenue. Is the increase in transaction fees annual, and on insurance and lending, underserved market or taking share from competitors?

A: Yes, review transaction fees annually, taking market share from post bank and other banks; loans and insurance for underserved customers, loans from unscrupulous microlenders, insurance not as penetrated as Lusaka.

Q: On merchants, declining ARPU, link drivers, ARPU trending, cross-sell timing, acquiring cross-sell.

A: ARPU principal driver is ADP, expect to stabilize and increase; product penetration rate increased marginally, strategy is land and expand, acquiring cross-sell is key opportunity.

Q: On consumers, lending growth drivers and outlook, marketing costs related to brand.

A: Lending growth due to increased loan size, tenure, digital channel; expect same level of growth; rebrand costs estimated between 50 - 75 million rand in next two quarters.

Q: Question about deposits transferred to Bank Zero.

A: Expect to reduce gross debt by north of a billion rand, deposit base to be substantively more, no specific number provided.