Executive Summary
Lesaka Technologies delivered a meaningful quarterly and full-year performance in QQ4 2024, underscored by accelerating EBITDA gains, improving cash generation, and successful integration of acquisitions that broaden the group’s scale and addressable market. In USD terms, revenue for the quarter stood at 146.0 million with EBITDA of 8.38 million and a net loss of 5.04 million, reflecting ongoing investments and a higher concentration of growth initiatives within the merchant and consumer ecosystems. Management emphasized the Adumo acquisition close in October 2024 and the strategic restructuring to create a three-pillar merchant platform (micro-merchant, merchant, and enterprise) with Prism Switch and EasyPay as core enablers. The consumer franchise showed pronounced profitability acceleration, with consumer segment adjusted EBITDA up 361% for the year to 274 million ZAR, highlighting durable cross-sell dynamics across lending and micro-insurance. Importantly, Lesaka reiterated FY2025 guidance (in ZAR) of 10-11 billion revenue and 900 million to 1 billion EBITDA, underscoring an explicitly higher-growth, more scalable platform post-Adumo. The callout on leverage targets and capital allocation signals a disciplined path to a mid-teens to low-20s percent revenue growth and like-for-like EBITDA expansion, contingent on Adumo timing and macro conditions. Investors should monitor: (i) Adumo integration progress and cross-sell momentum into the non-grant customer base, (ii) normalize EBITDA trajectory excluding one-off items and Nuets/Kazang Pay Advance effects, (iii) working capital and cash flow from operations, and (iv) currency effects given Rand-USD translation dynamics.
Key Performance Indicators
QoQ: -79.30% | YoY:104.45%
QoQ: -24.41% | YoY:57.72%
QoQ: -37.00% | YoY:56.74%
Key Insights
1) Revenue progression and margins (USD, Q4 2024): Revenue 146.0m; Gross profit 32.98m; Gross margin 22.58%; EBITDA 8.38m; EBITDA margin 5.74%; Operating income 0.30m; Net income -5.04m; Net income margin -3.45%; EPS -0.0822; Diluted EPS -0.0822. QoQ and YoY show improving top-line and margin trajectory, with Q4 2024 YoY revenue up 9.69% and gross profit up 9.01% while EBITDA rose 0? to 8.38m (EBITDA margin ~5.7%). 2) Segment commentary (USD): Merchant segment growth, including Touchsides and Ad...
Financial Highlights
1) Revenue progression and margins (USD, Q4 2024): Revenue 146.0m; Gross profit 32.98m; Gross margin 22.58%; EBITDA 8.38m; EBITDA margin 5.74%; Operating income 0.30m; Net income -5.04m; Net income margin -3.45%; EPS -0.0822; Diluted EPS -0.0822. QoQ and YoY show improving top-line and margin trajectory, with Q4 2024 YoY revenue up 9.69% and gross profit up 9.01% while EBITDA rose 0? to 8.38m (EBITDA margin ~5.7%). 2) Segment commentary (USD): Merchant segment growth, including Touchsides and Adumo dynamics, drove throughput expansion; Consumer segment delivered a material EBITDA uplift (FY2024 Consumer EBITDA +361% to 274m ZAR) driven by higher cross-sell penetration and higher ARPU. 3) Cash flows and balance sheet: Net cash from operations 5.65m USD in Q4; full-year net cash from operating activities notated as 5.38b ZAR in the text (≈ mid-20s million USD depending on FX); Free cash flow 0.88m USD for the quarter; End-period cash ~65.9m USD; Net debt to adjusted EBITDA improved to 2.5x; Total debt ~166.7m USD; Cash and equivalents ~59.1m USD; Equity remains robust with total stockholders’ equity ~255.3m USD. 4) Guidance and capital allocation (FX-adjusted view): FY2025 guidance for revenue 10–11b ZAR and EBITDA 0.9–1.0b ZAR; Q1 2025 run-rate revenue 2.5–2.7b ZAR and EBITDA 160–180m ZAR. The company expects gross profit guidance to be introduced for the first time and aims to reduce net debt to around 2x in the medium term. 5) Management sentiment and currency risk: Management reiterated the Rand as the operational currency and US GAAP reporting, noting currency fluctuations can materially affect reported USD results.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
146.05M |
9.69% |
5.68% |
| Gross Profit |
32.98M |
9.01% |
8.71% |
| Operating Income |
295.00K |
104.45% |
-79.30% |
| Net Income |
-5.04M |
57.72% |
-24.41% |
| EPS |
-0.08 |
56.74% |
-37.00% |
Key Financial Ratios
operatingProfitMargin
0.2%
operatingCashFlowPerShare
$0.09
freeCashFlowPerShare
$0.01
priceEarningsRatio
-14.42
Management Commentary
Theme: Strategic M&A and platform expansion: Ali Mazanderani highlighted that Adumo acquisition closes in October 2024 and expands the merchant pillar, strengthening scale and product breadth (including GARP hospitality platform) and cross-sell opportunities across micro, merchant, and enterprise segments. Quote: “The Adumo transaction which is expected to close in October 2024, will enhance our platform, adding customers and products as well as meaningful scale.” (Ali Mazanderani). Theme: Growth and KPI momentum in Merchant: Steve Heilbron noted FY2024 merchant revenue up 43% YoY with organic growth; VAS throughput up 43% and card throughput up 30% for the year; Touchsides integration added 6,400 sites at go-live with a 15% device deployment uplift; Quote: “FY 2024 was up 43% on FY 2023… card throughput growth rate for FY 2024 is a 30% year-on-year.” (Steve Heilbron). Theme: Consumer division turnaround and sustainability: Lincoln Mali emphasized a 4-quarter consecutive revenue/profit improvement, permanent grant base growth to 1.33 million, gross lending book up 32% YoY to 548m ZAR, and ARPU of 90 ZAR/month, with cross-sell expansion (loan and insurance) and USSD/digital channel acceleration; Quote: “Our consumer business today is unrecognizable… we are enrollING 20,000 new permanent grant EPE customers per month and dispersing over ZAR1.7 billion in credit annually.” (Lincoln Mali). Theme: Financial health and cash generation: Naeem Kola highlighted EBITDA up 55% to 691m ZAR and net debt to EBITDA improving to 2.5x; cash provided by operating activities 538m ZAR (per the annual narrative) and strong balance sheet with non-core assets (MobiKwik); Quote: “Group adjusted EBITDA increased 55% to ZAR691 million, in line with our guidance… net debt to group adjusted EBITDA ratio improved to 2.5 times from 4.5 times a year ago.” (Naeem Kola). Theme: Outlook and capital allocation discipline: Ali Mazanderani discussed the plan to present more granular KPIs post-Adumo, including gross profit guidance for the first time; emphasis on disciplined leverage around 2x and ongoing M&A execution to augment scale. Quote: “We will present our KPIs and performance with a more granular breakdown… we expect revenue to be between ZAR10 billion and ZAR11 billion for FY 2025… group adjusted EBITDA to be between ZAR900 million and ZAR1 billion” (Ali Mazanderani).
“The Adumo transaction which is expected to close in October 2024, will enhance our platform, adding customers and products as well as meaningful scale.”
— Ali Mazanderani
“Group adjusted EBITDA increased 55% to ZAR691 million, in line with our guidance for the year.”
— Naeem Kola
Forward Guidance
Management and industry trends indicate a multi-year path to scale for Lesaka through inorganic growth (Adumo) and continued organic expansion in the three-pillar merchant platform. The FY2025 guidance, anchored by a mid-to-high teen revenue growth and 30-45% EBITDA growth, implies a stronger profitability trajectory once Adumo is consolidated. Key targets and considerations include: (i) Revenue trajectory: FY2025 revenue guidance of ZAR10–11 billion (net revenue impact expected as gross vs. agency revenue shifts are largely immaterial to profitability). The midpoint implies like-for-like growth above prior-year levels, aided by Adumo and cross-sell. FX sensitivity should be considered given Rand-denominated results translated to USD; (ii) Profitability and margins: FY2025 EBITDA guidance of ZAR900 million–1,000 million, translating to roughly USD 48–54 million using a rough FX of 18.5 ZAR/USD; excluding Adumo and currency effects, like-for-like growth is targeted at >30% YoY. The company anticipates gross profit guidance to be introduced for the first time, providing better visibility into margin progression in a high-growth mix; (iii) Leverage and capital structure: Target net debt to EBITDA around 2x in the medium term; ongoing debt reduction not guaranteed but contemplated with deleveraging post-Adumo and improved cash flows. (iv) M&A cadence: Continues to pursue add-ons and transformative acquisitions (Connect, Adumo) to augment scale and addressable market; (v) Key catalysts to monitor: integration execution risk for Adumo and Velocity of cross-sell into Adumo’s payout and hospitality verticals; expansion of consumer base to 1.7 million post-Adumo; performance of Kazang Pay and Prism Switch within the expanded merchant ecosystem; macro backdrop, currency volatility, and regulatory developments in southern Africa. Overall investment thesis: Leveraged scale via Adumo and Touchsides, rising cross-sell and annuity-like revenue streams (lending, insurance, VAS), and a disciplined capital plan support a shift toward sustainable margin expansion and higher ROIC, albeit with sensitivity to FX and macro headwinds.