Lesaka Technologies, Inc.

Reported Q3 FY2026 net revenue was ZAR 1.58 billion, up 16% year over year. Group adjusted EBITDA was ZAR 337 million, up 45%, and adjusted earnings were ZAR 148 million versus ZAR 43 million last year; adjusted EPS was ZAR 1.80 versus ZAR 0.52. Merchant net revenue declined 4% to ZAR 751 million; Consumer net revenue increased 41% to ZAR 627 million; Enterprise net revenue increased 51% to ZAR 220 million. Merchant segment adjusted EBITDA increased 3% to ZAR 151 million; Consumer segment adjusted EBITDA increased 81% to ZAR 213 million; Enterprise contributed ZAR 35 million. Operating margin rose from 17.2% a year ago to 21.4% this quarter. Cash generated from business operations was ZAR 365 million, operating cash flow was ZAR 608 million, CapEx was ZAR 76 million, cash interest paid was ZAR 98 million, and net debt to group adjusted EBITDA was 2.1x. Management updated FY2026 guidance to net revenue of ZAR 6.2 billion to ZAR 6.5 billion, group adjusted EBITDA of ZAR 1.25 billion to ZAR 1.35 billion, and adjusted EPS of ZAR 5.50 to ZAR 6.00. They also said net income should be profitable in FY2026, the first year since Lesaka’s creation. Merchant net revenue is expected to be flat next quarter.

Ali Zaynalabidin Mazanderani framed the quarter as evidence that Lesaka’s integrated platform is working, with strong like-for-like growth, improving profitability, and better capital efficiency. He emphasized a simplified operating framework centered on the main revenue drivers, plus a shift toward One Lesaka, deeper digitization, AI use, and blockchain-enabled payment rails. His tone was constructive and upbeat, but measured, with repeated references to future margin expansion and multi-year guidance to come in September.

Daniel Smith focused on financial discipline, noncore exits, and improving underlying economics. He highlighted impairment and one-off items tied to the ATM exit, Switchpay sunset, rebrand costs of ZAR 16 million, lease impairment of ZAR 26 million, and a ZAR 25 million receivables allowance reversal, while noting a ZAR 14 million gain on Masterpayment and guided total rebrand costs of ZAR 50 million to ZAR 75 million. He also pointed to ZAR 365 million of cash from operations, only ZAR 10 million of additional lending-book funding, ZAR 76 million of CapEx, and a net debt/EBITDA ratio of 2.1x, with CapEx expected to stay below ZAR 400 million per year.

Analysts focused on Consumer margin expansion, Merchant ARPU and margin runway, working-capital seasonality, credit provisioning, and the impact of the Middle East conflict. Management said Consumer margins can keep expanding, with year-over-year margin rising from 26% to 34%, and said Consumer provisioning appears conservative versus actual experience. On Merchant, they said ARPU may be affected by mix but expect community ARPU to improve with scale and product penetration, while Merchant EBITDA margins should continue evolving toward about 30% over time. They also said the Middle East conflict has not caused material credit or collection issues, though fuel-price moves can create opportunities and exchange-rate movements affect POS device costs.