JOHANNESBURG, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released results for the first quarter of fiscal 2025 ("Q1 2025”).
Q1 2025 performance:
- Revenue of $145.5 million (ZAR 2.6 billion) was at the mid-point of our revenue guidance and compares to $136.1 million (ZAR 2.5 billion) in Q1 2024.
- Operating loss of $0.05 million (ZAR 0.3 million) compares to operating income of $0.2 million (ZAR 4.2 million) in Q1 2024. The current quarter includes $1.7 million (ZAR 30.0 million) of one-off transaction costs relating to the acquisition of Adumo. Excluding the impact of these transaction costs, operating income would have been $1.7 million (ZAR 29.7 million).
- Net loss, including $1.7 million (ZAR 30.0 million) of one-off Adumo transaction costs, improved 23% in ZAR, to a net loss of $4.5 million (ZAR 81.0 million) in Q1 2025.
- GAAP loss per share improved 24% in ZAR to $0.07 (ZAR 1.26) from $0.09 (ZAR 1.66) in Q1 2024.
- Group Adjusted EBITDA (a non-GAAP measure) of $9.4 million (ZAR 168.1 million) was at the mid-point of our guidance range, improving 12% in ZAR from $8.0 million (ZAR 149.5 million) in Q1 2024.
- Fundamental earnings per share (a non-GAAP measure) of $0.04 (ZAR 0.66) improved by $0.04 (ZAR 0.74) compared to a fundamental loss per share of $0.00 (ZAR 0.08) in Q1 2024.
- Consumer Division revenue increased 30% in ZAR to $21.1 million (ZAR 378.1 million) and Segment Adjusted EBITDA increased 99% in ZAR, to $4.4 million (ZAR 78.7 million).
- Merchant Division revenue of $125.3 million (ZAR 2.3 billion) remained flat in ZAR and Segment Adjusted EBITDA contracted marginally, by 1% in ZAR, to $7.9 million (ZAR 142.1 million).
| (1) | Average exchange rates applicable for the quarter: ZAR 17.72 to $1 for Q1 2025, ZAR 18.71 to $1 for Q1 2024. The ZAR strengthened 5.3% against the U.S. dollar during Q1 2025 when compared to Q1 2024. | |
Outlook: Second Quarter 2025 ("Q2 2025”) and reaffirming Full Fiscal Year 2025 ("FY 2025”) outlook
While we report our financial results in USD, we measure our operating performance in ZAR, and as such we provide our guidance accordingly.
We have included guidance for Net Revenue, a non-GAAP measure, for the first time. This primarily eliminates the effect of changes in revenue mix between agency and principal sales of airtime, which can be material. Refer below to "Use of Non-GAAP Measures” for additional information.
For Q2 2025, the quarter ending December 31, 2024 we expect:
- Revenue between ZAR 2.4 billion and ZAR 2.6 billion.
- Net Revenue between ZAR 1.2 billion and ZAR 1.4 billion.
- Group Adjusted EBITDA between ZAR 190 million and ZAR 210 million.
- Revenue between ZAR 10.0 billion and ZAR 11.0 billion.
- Net Revenue between ZAR 5.2 billion and ZAR 5.6 billion.
- Group Adjusted EBITDA between ZAR 900 million and ZAR 1 billion
- Includes the impact of the acquisition of Adumo, which closed in October 2024 (in Q2 2025).
- Excludes the impact of unannounced mergers and acquisitions that we may conclude.
Management has provided its outlook regarding Net Revenue and Group Adjusted EBITDA, which are non-GAAP financial measures and excludes certain revenue and charges. Management has not reconciled these non-GAAP financial measures to the corresponding GAAP financial measures because guidance for the various reconciling items is not provided. Management is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the company's control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure are not available without unreasonable effort.
Earnings Presentation for Q1 2025 Results
Our earnings presentation will be posted to the Investor Relations page of our website prior to our earnings call.
Webcast and Conference Call
Lesaka will host a webcast and conference call to review results on November 7, 2024, at 8:00 a.m. Eastern Time which is 3:00 p.m. South Africa Standard Time ("SAST”). A replay of the results presentation webcast will be available on the Lesaka investor relations website following the conclusion of the live event.
Presentation webcast via Zoom:
Link to access the results webcast: https://bit.ly/3BB5RHG.
Participants using the webcast will be able to ask questions by raising their hand and then asking the question "live.”
Conference call dial-in:
- US Toll-Free: +1 929 205 6099 or +1 253 205 0468 or +1 253 215 8782
- South Africa Toll-Free: +27 21 426 8190 or +27 21 426 8191 or +27 87 550 3946
A replay of the results presentation webcast will be available on the Lesaka investor relations website following the conclusion of the live event.
Our Form 10-Q for the quarter ended September 30, 2024, as filed with the SEC, is available on our company website at www.lesakatech.com.
Use of Non-GAAP Measures
U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA, Group Adjusted EBITDA margin, Net Revenue, fundamental net (loss) income, fundamental (loss) earnings per share, and headline (loss) earnings per share are non-GAAP measures. Refer to Attachment A for a reconciliation of these non-GAAP measures.
Non-GAAP Measures
Group adjusted EBITDA
Group Adjusted EBITDA is net loss before interest, taxes, depreciation and amortization, adjusted for non-operational transactions (including loss on disposal of equity-accounted investments), loss from equity-accounted investments, stock-based compensation charges and once-off items. Once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. Group Adjusted EBITDA margin is Group Adjusted EBITDA divided by revenue.
Net Revenue
We generate revenue from the provision of transaction-processing services through our various platforms and service offerings. We use these platforms to (a) sell prepaid airtime vouchers which was held as inventory, and (b) distribute VAS, including prepaid airtime vouchers (which we do not hold as inventory), prepaid electricity, gaming vouchers, and other products, to users of our platforms. We act as a principal when we sell airtime vouchers that were held as inventory and record revenue and cost of sales on a gross basis when sold. We act as an agent in a transaction when we provide VAS products through our various platforms and services offerings because we do not control the good or service to be provided and we recognize revenue based on the amount that we are contractually entitled to receive for performing the distribution service on behalf of our customers using our platform. Our revenue under GAAP can fluctuate materially due to changes in the revenue mix between these revenue categories. Net Revenue is a non-GAAP measure and is calculated as revenue presented under GAAP less (i) the cost of prepaid airtime vouchers sold by us, and (ii) commissions paid to third parties selling all other agency-based VAS products (including pinless airtime, electricity and other products) provided through our distribution channels. We believe that the use of Net Revenue is meaningful to users of financial information because it seeks to eliminate the impact of the change in the revenue mix from the revenue categories over the periods presented.
Fundamental net earnings (loss) and fundamental earnings (loss) per share
Fundamental net earnings (loss) and earnings (loss) per share is GAAP net loss and loss per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), stock-based compensation charges, and unusual non-recurring items, including costs related to acquisitions and transactions consummated or ultimately not pursued.
Fundamental net earnings (loss) and earnings (loss) per share for fiscal 2024 also includes an impairment loss related to an equity-accounted investment, and a reversal of allowance for doubtful loan receivable.
Management believes that the Group Adjusted EBITDA, fundamental net earnings (loss) and fundamental earnings (loss) per share metrics enhance its own evaluation, as well as an investor's understanding, of our financial performance. Attachment A presents the reconciliation between GAAP net loss attributable to Lesaka and these non-GAAP measures.
Headline (loss) earnings per share ("H(L)EPS”)
The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.
H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment losses related to our equity-accounted investments and (profit) loss on sale of property, plant and equipment. Attachment C presents the reconciliation between our net (loss) income used to calculate (loss) earnings per share basic and diluted and H(L)EPS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.
About Lesaka (www.lesakatech.com)
Lesaka Technologies, (Lesaka™) is a South African Fintech company driven by a purpose to provide financial services and software to Southern Africa's underserviced consumers (B2C) and merchants (B2B), improving people's lives and increasing financial inclusion in the markets in which we operate. We offer a wide range of integrated payment solutions including transactional accounts (banking), lending, insurance, payouts, cash management solutions, card acceptance, supplier payments, software services and bill payments. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.
Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.lesakatech.com for additional information about Lesaka Technologies (Lesaka ™).
Forward-Looking Statements
This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as "expects,” "estimates,” "projects,” "believes,” "anticipates,” "plans,” "could,” "would,” "may,” "will,” "intends,” "outlook,” "focus,” "seek,” "potential,” "mission,” "continue,” "goal,” "target,” "objective,” derivations thereof, and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating to future financial results and future financing and business opportunities are forward-looking statements. Additional information concerning factors that could cause actual events or results to differ materially from those in any forward-looking statement is contained in our Form 10-K for the fiscal year ended June 30, 2024, as filed with the SEC, as well as other documents we have filed or will file with the SEC. We assume no obligation to update the information in this press release, to revise any forward-looking statements or to update the reasons actual results could differ materially from those anticipated in forward-looking statements.
Investor Relations and Media Relations Contacts:
Phillipe Welthagen
Email: phillipe.welthagen@lesakatech.com
Mobile: +27 84 512 5393
Media Relations Contact:
Ian Harrison
Email: ian@thenielsennetwork.com
| Lesaka Technologies, Inc. | ||||||||||||||||
| Attachment A | ||||||||||||||||
| Reconciliation of GAAP loss attributable to Lesaka to Group Adjusted EBITDA loss: | ||||||||||||||||
| Three months and year ended September 30, 2024 and 2023 and June 30, 2024 | ||||||||||||||||
| Three months ended | ||||||||||||||||
| September 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | ||||||||||||||
| Loss attributable to Lesaka - GAAP | $ | (4,542 | ) | $ | (5,651 | ) | $ | (5,035 | ) | |||||||
| Loss from equity accounted investments | (27 | ) | 1,405 | (40 | ) | |||||||||||
| Net loss before (earnings) loss from equity-accounted investments | (4,569 | ) | (4,246 | ) | (5,075 | ) | ||||||||||
| Income tax (benefit) expense | 78 | 264 | 1,482 | |||||||||||||
| Loss before income tax expense | (4,491 | ) | (3,982 | ) | (3,593 | ) | ||||||||||
| Reversal of allowance for doubtful EMI loans receivable | - | (250 | ) | - | ||||||||||||
| Unrealized (gain) loss FV for currency adjustments | (219 | ) | 102 | (184 | ) | |||||||||||
| Operating income/(loss) after PPA amortization and net interest (non-GAAP) | (4,710 | ) | (4,130 | ) | (3,777 | ) | ||||||||||
| PPA amortization (amortization of acquired intangible assets) | 3,747 | 3,608 | 3,657 | |||||||||||||
| Operating income/(loss) before PPA amortization after net interest (non-GAAP) | (963 | ) | (522 | ) | (120 | ) | ||||||||||
| Interest expense | 5,032 | 4,909 | 4,620 | |||||||||||||
| Interest income | (586 | ) | (449 | ) | (732 | ) | ||||||||||
| Operating income/(loss) before PPA amortization and net interest (non-GAAP) | 3,483 | 3,938 | 3,768 | |||||||||||||
| Depreciation (excluding amortization of intangibles) | 2,529 | 2,248 | 2,548 | |||||||||||||
| Interest adjustment | (831 | ) | - | - | ||||||||||||
| Stock-based compensation charges | 2,377 | 1,759 | 2,258 | |||||||||||||
| Once-off items | 1,805 | 78 | 1,684 | |||||||||||||
| Group Adjusted EBITDA - Non-GAAP | $ | 9,363 | $ | 8,023 | $ | 10,258 | ||||||||||
| Three months ended | ||||||||||||
| September 30, | Jun 30, | |||||||||||
| 2024 | 2023 | 2024 | ||||||||||
| Once-off items comprises: | ||||||||||||
| Transaction costs | $ | 103 | $ | 78 | $ | 56 | ||||||
| Transaction costs related to Adumo acquisition | 1,702 | - | 1,628 | |||||||||
| $ | 1,805 | $ | 78 | $ | 1,684 | |||||||
| Reconciliation of revenue under GAAP to Net Revenue: | ||||||||||||||
| Three months and year ended September 30, 2024 and 2023 and June 30, 2024 | ||||||||||||||
| Three months ended | ||||||||||||||
| September 30, | June 30, | |||||||||||||
| 2024 | 2023 | 2024 | ||||||||||||
| Revenue - GAAP | $ | 145,546 | $ | 136,089 | $ | 146,046 | ||||||||
| Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency-based products | (86,737 | ) | (87,326 | ) | (91,274 | ) | ||||||||
| Net Revenue (non-GAAP) | $ | 58,809 | $ | 48,763 | $ | 54,772 | ||||||||
| Net Revenue / revenue | 40 | % | 36 |
| ||||||||||