Executive Summary
Lesaka Technologies reported a USD 146.8 million net revenue in Q2 2025, underscoring continued top-line momentum after the Adumo acquisition. Net income of -USD 32.1 million and EBITDA of -USD 24.2 million reflected the quarter’s substantial non-cash and one-off costs, including a material fair-value adjustment on MobiKwik and elevated integration-related expenditures. Management highlighted a strategic inflection point driven by inorganic expansion (Adumo, upcoming Recharger) and a renewed focus on a three-pillared platform (Merchant, Consumer, Enterprise), with the group guiding 2025 annual EBITDA of roughly USD 0.9–1.0 billion Rand-equivalent (by management USD proxy around mid-year translation) and a long-term objective to reach a ~2x net debt to EBITDA target. The quarter also emphasized a deliberate restructuring of the enterprise division and a near-term refinancing plan to optimize cost of debt, extend tenure, and reduce interest expenses. The earnings call conveyed management confidence in sustainable consumer growth, upside from cross-selling (loans, insurance, payout solutions via Adumo Payouts), and the scalable economics of a digitizing SA, while acknowledging currency volatility and integration risk as the primary near-term macro-structural headwinds. Investors should weigh the upside from continued platform synergies, versus near-term profitability pressure from front-loaded investments and higher interest costs as the group de-leverages through debt refinancing and asset monetization (e.g., MobiKwik).
Key Performance Indicators
QoQ: 1 826.67% | YoY:-65.82%
QoQ: -607.49% | YoY:-1 087.07%
QoQ: -471.43% | YoY:-900.00%
Key Insights
Economics and momentum across Lesaka’s three pillars point to a multi-year build: (i) Revenue: USD 146.8m in Q2 2025, up YoY by 2.0% and QoQ by 0.9%; (ii) Gross Profit: USD 45.5m, margin 31.0%, up 53.6% YoY and 31.3% QoQ; (iii) Operating Income: USD 0.78m (margin 0.53%), but total other income/expenses net [USD -39.35m] drags pretax and net income; (iv) Net Income: USD -32.13m (EPS -0.40); (v) EBITDA: USD -24.17m; (vi) Group Adjusted EBITDA (Rand): ~ZAR 212m, indicative of ~US$12m translating ...
Financial Highlights
Economics and momentum across Lesaka’s three pillars point to a multi-year build: (i) Revenue: USD 146.8m in Q2 2025, up YoY by 2.0% and QoQ by 0.9%; (ii) Gross Profit: USD 45.5m, margin 31.0%, up 53.6% YoY and 31.3% QoQ; (iii) Operating Income: USD 0.78m (margin 0.53%), but total other income/expenses net [USD -39.35m] drags pretax and net income; (iv) Net Income: USD -32.13m (EPS -0.40); (v) EBITDA: USD -24.17m; (vi) Group Adjusted EBITDA (Rand): ~ZAR 212m, indicative of ~US$12m translating at spot rates; (vii) Net Debt to EBITDA: targeted ~2.0–2.4x post-refinancing and monetization of liquid MobiKwik stake; (viii) Cash flow: Operating cash flow negative in GAAP terms due to investments, but cash from operations before financing was positive at the Rand level and free cash flow remains constrained by growth capex and working capital dynamics around Adumo integration.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
146.82M |
2.03% |
0.87% |
| Gross Profit |
45.52M |
53.64% |
31.34% |
| Operating Income |
777.00K |
-65.82% |
1 826.67% |
| Net Income |
-32.13M |
-1 087.07% |
-607.49% |
| EPS |
-0.40 |
-900.00% |
-471.43% |
Key Financial Ratios
operatingProfitMargin
0.53%
operatingCashFlowPerShare
$-0.12
freeCashFlowPerShare
$-0.21
Management Commentary
Key management takeaways from the QQ2 2025 earnings call:
- Strategy and market opportunity: Ali Mazanderani emphasized a large SA serviceable addressable market and a move to a customer-led platform, with Adumo and other acquisitions expanding scale and product breadth. He framed SA as a ~US$4 billion addressable net revenue pool, growing to >US$12 billion in five years, with EBITDA margins north of 30% at maturity. Quote: “Today, we believe our existing products in our three divisions operating in South Africa represent an addressable market net revenue pool of more than $4 billion… the addressable market will grow to more than $12 billion in five years’ time.”
- Acquisition-driven performance: Dan Smith noted that Adumo materially uplifted net revenue and group adjusted EBITDA, with the integration of Adumo into Merchant and Adumo Payouts into Consumer; the group had already baked Adumo into FY2025 guidance. Quote: “Adumo has led to a large uplift in net revenue and group adjusted EBITDA.”
- Consumer growth and sustainability: Lincoln Mali stressed sustainable consumer growth through market-share gains (target >10% in the long term), higher ARPU (to ~R94 in SA EasyPay accounts), and cross-sell expansion into loans and insurance within the EasyPay Everywhere base. Quote: “I think it is sustainable. We are only at 12% market share in that base... we can also penetrate more from an insurance point of view… there is still room to grow.”
- Debt and capital structure: Dan Smith discussed a program to refinance debt to optimize tenor and cost, with potential net debt to EBITDA around 2.1–2.4x depending on Adumo's full-year contribution; liquidity measures include monetization of MobiKwik and a plan to deleverage post-refinancing. Quote: “We are in the process of effecting a comprehensive refinance of our capital structure… I expect us to complete this in the current quarter.”
- Regulatory environment and policy: Ali highlighted regulatory changes in SA ( ASAP and potential Banks Act exemptions) that could enable non-banks to be regulated by activity, reducing gatekeeping and enhancing disruption potential. Quote: “ASAP… committed to putting forward an exemption to the Banks Act… allowing nonbanks to be regulated by activity.”
"Today, we believe our existing products in our three divisions operating in South Africa represent an addressable market net revenue pool of more than $4 billion. We believe the underlying market that we are addressing is growing by 10% to 15% and that through organic and inorganic product and geographical expansion, the addressable market will grow to more than $12 billion in five years' time. Comparable business models to ours at maturity routinely achieve EBITDA margins of north of 30%..."
— Ali Mazanderani
"Adumo has led to a large uplift in net revenue and group adjusted EBITDA."
— Dan Smith
Forward Guidance
Guidance and outlook reflect a phase of platform buildout and integration benefits, balanced against macro headwinds and 투자 that front-load growth costs. Key points:
- FY2025 guidance reaffirmed: Revenue R10–11 billion, Net Revenue R5.2–5.6 billion, Group Adjusted EBITDA R900 million–R1.0 billion (Rand terms). The company has already incorporated the Adumo uplift; potential extra ~R40 million EBITDA contribution from Recharger in FY2025, though management notes the guidance remains robust irrespective of unannounced acquisitions.
- Q3 FY2025 implied range: Revenue R2.4–2.6 billion, Net Revenue R1.3–1.5 billion, Group Adjusted EBITDA R230–260 million.
- FY2026 guidance: Group Adjusted EBITDA range of R1.25–1.45 billion, implying ~42% year-on-year growth at the midpoint. Excludes further acquisitions but includes expected contributions from Recharger and nine months of Adumo for FY2026.
- Achievability assessment: The guidance reflects near-term tailwinds from Adumo integration and cross-sell opportunities in Consumer (EasyPay Everywhere, Adumo Payouts) and Merchant (Kazan, CardConnect, Adumo). The main risks to achieving the targets include currency volatility (USD vs Rand), duration of integration costs, potential regulatory changes, and the execution risk of Recharger integration. Monitoring points for investors include: (1) pace of Adumo Payouts cross-sell into consumer segments; (2) revenue mix stability in merchant throughput (especially with supplier payments and digital wallet add-ons); (3) debt refinancing progress and realized interest savings; (4) timing and scale of Recharger contributions; (5) MobiKwik monetization timing post-lockup.