Lesaka Technologies (LSAK) Q1 2025 earnings summary

Executive summary

• Revenue reached $145.5 million (ZAR 2.6 billion), up from $136.1 million (ZAR 2.5 billion) year-over-year, meeting guidance midpoint, driven by both Merchant and Consumer divisions.

• Group Adjusted EBITDA was $9.4 million (ZAR 168 million), a 12% increase in ZAR, also at guidance midpoint.

• Net loss improved 23% in ZAR to $4.5 million (ZAR 81.0 million), including $1.7 million in one-off Adumo acquisition costs.

• Completed the $96.2 million Adumo acquisition in October 2024, expanding the Merchant division's reach and capabilities.

• Leadership changes included a new CFO and integration of Adumo's CEO into the executive team.

Financial highlights

• Group revenue rose 3% year-over-year to ZAR 2.6 billion ($145.5 million); Net Revenue up 16% to ZAR 1.06 billion ($58.8 million).

• Group Adjusted EBITDA increased 12% year-over-year to ZAR 168 million ($9.4 million); Net debt/EBITDA improved to 2.6x from 3.8x.

• Consumer division revenue up 30% to ZAR 378 million ($21.1 million); Segment Adjusted EBITDA up 99% to ZAR 79 million ($4.4 million).

• Merchant division revenue flat at ZAR 2.25 billion ($125.3 million); Segment Adjusted EBITDA down 1% to ZAR 142 million ($7.9 million).

• GAAP loss per share improved 24% in ZAR to $0.07 (ZAR 1.26); fundamental earnings per share improved to $0.04 (ZAR 0.66).

Outlook and guidance

• FY25 revenue guidance reaffirmed at ZAR 10–11 billion; Group Adjusted EBITDA guidance at ZAR 900 million–1 billion.

• Net Revenue guidance for FY25 is ZAR 5.2–5.6 billion, implying 35% year-on-year growth at midpoint.

• Q2 FY25 revenue expected between ZAR 2.4–2.6 billion; Net Revenue ZAR 1.2–1.4 billion; Group Adjusted EBITDA ZAR 190–210 million.

• Guidance includes impact of Adumo acquisition and anticipated interest expense charges for the Consumer lending book.

• Management optimistic about resumed growth in merchant lending as macro conditions improve.