LSAK 10-K & 10-Q changes, risk factors and insider trading
Lesaka Technologies Inc. · Nasdaq · Functions Related To Depository Banking, Nec · CIK 1041514 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our Go--Market Model”
New heading “Our Merchant Market”
New heading “Alternative Digital Products (“ADP”):”
New heading “Consumer Market”
New heading “Consumer Solutions”
New heading “Enterprise Solutions”
New heading “Intellectual Property”
New heading “Defending our intellectual property rights or defending ourselves in infringement suits that may be brought against us is expensive and time-consuming and may not be successful”
New heading “Outside of South Africa”
New heading “Our future success, and our ability to sustain profitability and positive cash flow, is substantially dependent on our ability to complete the implementation of this strategy successfully.”
New heading “If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition.”
New heading “may not realize some or all of the anticipated benefits from the”
New heading “Tax (VAT) positions, transaction-level tax matters, which could require future adjustments to our financial statements.”
New heading “Africa or elsewhere could harm our operations.”
New heading “Our use of artificial intelligence (“AI”) may present risks that could adversely affect our business, results of operations reputation.”
New heading “If we do not achieve applicable”
New heading “BEE Status Level).”
New heading “economy exposed high inflation, tax, operating costs and thereby reduce our profitability.”
New heading “Risks Relating to Government Regulation”
New heading “It may change the manner in which we conduct likely lead to increased operating costs for our business as we work to ensure compliance with the new legislative and regulatory framework, which may have a material adverse effect on our business.”
New heading “NCA signed law in”
New heading “Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital.”
New heading “Act, especially over companies that we may acquire, could have a material adverse effect on our business and stock price.”
Removed heading “Accept Payments”
Removed heading “A Digital Engagement”
Removed heading “Accept Payments”
Removed heading “Merchant Competitive Landscape and Market Share”
Removed heading “Genesis Analytics”
Removed heading “Africa 2020, peer company public quarterly results from”
Removed heading “2024 and management’s best estimates).”
Removed heading “Our Consumer Segment”
Removed heading “Our Consumer Market”
Removed heading “Our Consumer Solutions”
Removed heading “Enterprise Segment”
Removed heading “Our Enterprise Market”
Removed heading “South African Treasury”
Removed heading “2024, Grand View Research”
Removed heading “2024 and management’s best estimates. Bill payments is a representation of the non-bank bill collection market in South Africa).”
Removed heading “Available information”
Removed heading “Risks Relating to Our Business”
Removed heading “Failure to complete, or delays in completing, the”
Removed heading “our ATM network requires that to have agreement”
Removed heading “African Bank to provide liquidity to operate our ATM network.”
Removed heading “Empowerment objectives in”
Removed heading “may not be able to effectively and efficiently manage the disruption to our operations erratic electricity supply in”
Removed heading “If this arrangement were to terminate, we would not be able to operate our EPE business without alternate means of access to a banking license.”
Removed heading “We are also required to comply with the requirements of payment schemes, including VISA and”
Removed heading “Mastercard. Furthermore, we provide certain of our services under partnerships banks.”
Removed heading “South African banks to provide our payments and card acquiring services.”
Removed heading “Amendments to the NCA were signed into law in in August 2019.”
Removed heading “The put right we granted to the IFC”
Removed heading “31% owned by two shareholders.”
Largest changes
“If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition.”see in full comparison
have a significant amount of indebtedness that requires ussee in full comparisonto complywith restrictive and financial covenants.If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there possibilitysee in full comparisoninterimmisstatement preventedordetectedon atimelybasis. The material weaknesses identified inItem 9A—“ControlsandProcedures.”, immaterial misstatements of prior period amounts, which have been corrected through revision of the prior period financial statements as described in Note 1 to our consolidated financial statements, and in a corrected immaterial current period misstatement related revenue; they did notresultrequirein adjustments or restatementsamendment ofour audited and unaudited or disclosures foranyprior periodpreviouslyreportedfiledby us.report.
“Countries across the globe have instituted sanctions and other penalties against Russia. The retaliatory measures that have been taken, and could be taken in the future, by the U.S., NATO, and other countries have created global security concerns that could result in broader European military and political conflicts and otherwise have a substantial impact on regional and global economies, any or all of which could adversely affect our business.”see in full comparison
A successful breach, especially with increased adoption of AI technologies, could result in financial losses, regulatory penalties, reputational damage, operational interruptions, and legal consequences. Prolonged frequent breaches disruptions diminish trust, potentially leading consider unreliable, which could impact adoption and harm brand reputation. Addressing breaches or system disruptions can significantly strain staff resources and delay new service launches. Furthermore, if customers rely on our products for critical transactions, a breach could disrupt their businesses and lead to claims for compensation. Even if unsuccessful, this type of claim could be time-consuming and costly for us to address.see in full comparison
“African Bank to provide liquidity to operate our ATM network.”see in full comparison
Full comparison: every changed paragraph (856)
You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this Annual Report. We undertake no obligation to release publicly revisions forward-looking statements after of this Report.
All references
Technologies,
Inc.
Technologies, subsidiaries, collectively, and all references to “Lesaka” are to Lesaka Technologies, Inc. only, except as otherwise indicated or where the context indicates otherwise.
Lesaka provides financial technology solutions to underserviced consumers, merchants and enterprises, improving the way they manage their daily financial activities and increasing financial inclusion in the markets in which we operate. In plain terms, we help our customers pay, receive, borrow, insure and : we enable them to make and accept payments, receive income such as wages and welfare grants, access credit, protect their families and assets through insurance, and grow their businesses and financial lives. We deliver these capabilities through three business divisions: Merchant, which provides payment acceptance, software, cash lending and alternative digital product solutions to merchants across our two channels; Community and Corporate. Consumer, provides banking, insurance solutions to consumers, principally recipients of social welfare grants in South Africa; and Enterprise, which provides payment processing, prepaid solutions and bill payment infrastructure connecting enterprises to consumers and businesses.
Lesaka enables underserviced consumers and businesses in the southern cone of Africa to manage their daily financial activities in a better way, improving people's lives and increasing financial inclusion in the markets in which we operate. We have developed a unique ecosystem of communities that provides:
(1) over 2 million consumers with specialized banking, credit, insurance and payout help them evolving needs;
125,000 sizes acceptance solutions to facilitate their daily commercial activities more efficiently and effectively; and (3) over 750 enterprises with proprietary network capabilities to facilitate payments between consumers and businesses in a fast and secure manner.
We bring these customer communities together within thea Lesakasingle ecosystem by enabling them to engage and transact with each other in a better, more convenient and safe manner.other.
For example, an enterprise biller connected to our proprietary biller network can collect payment from a consumer who pays their bill at a nearby merchant using cash withdrawn with a debit card linked to a transactional account we provide to that to receive their welfare grant or wages with the merchant, in turn, digitizing the cash received through one cloud-connected vaults.
Each participant chain customer, interaction deepens insight cross-sell opportunity. As of June 30, 2026, we served approximately 132,000 active merchants and approximately 2.1 million active consumers, and our Enterprise division connected a network of more than 650 billers and over 50 corporate clients across South Africa.
To build and maintain our ecosystem, we have approximately 3,900 employees operating on the ground in five countries: South Africa (our primary market), Namibia, Botswana, Zambia and Kenya 2026. Lesaka was created in 2022, and we since combined organic (April 2022), (October 2024), Recharger (March 2025), and the proposed acquisition of Bank Zero (agreement signed June 2025, and closing subject to achievement of relevant condition precedents) to assemble an integrated fintech platform, unified under a single Lesaka brand in fiscal 2026. For a discussion of specific developments during fiscal 2026, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Developments during Fiscal 2026”.
serve large structurally underpenetrated market.
remains dominant instrument much
Southern material portion of consumers and small businesses remain outside, or only partially served by, the formal system.
Across footprint adjacent markets accessible partnerships, serve approximately 250 million people with an estimated serviceable addressable market of approximately ZAR 416 billion in net revenue by 2030 Annual Report.
This estimate is derived from management analysis using a range of external sources including but not limited to: Population Reference Bureau, IMF Database, Global Findex Report - 2025, Global Data Analytics – SA Card and Payments Opportunities and Risks to 2028;
July 2024,
BDO –
Unlocking potential
Fintech in
Africa; June
For example, we offer bill payment solutions to consumers, merchants and enterprises by:
(1) connecting over
620 enterprise service providers to our proprietary biller network so that they can offer their customers a convenient channel to pay their respective bills;
(2) enabling over 95,000 merchants to offer our
Alternative Digital
Products (“ADP”) at their locations and then digitizing any cash payments they receive through one of our cloud-connected cash vaults or recycling the cash via an ATM may place in their store to drive foot-traffic;
and (3) offering consumers the convenience of paying their bills at a nearby merchant where they may already shop frequently, using cash withdrawn from one of our ATMs or paying with a debit card linked to a digital-bank account that we provided to them to deposit and manage the funds from their employer payrolls or welfare grants from the South African government.
build valuable growing ecosystem,
3,500 the ground five countries, including (our primary market), Namibia, Botswana, Zambia, and Kenya, and we have the ability to reach deeper and more broadly into adjacent markets through a variety of strategic partnerships. This enables us to target and serve a market with approximately 250 million people and an estimated serviceable addressable market of approximately $12 billion in net by 2030 according to reports by Global Data Analytics, McKinsey & Company, BDO, Genesis Analytics, the International Monetary Fund, Population Reference Bureau estimates.
According
2024, Boston
Consulting Group – Reimagining the Future of Finance; May 2023, combined with internal data, assumptions and management’s best estimates.
Our Go--Market Model
Our go-to-market model describes how we serve and grow customer relationships in practice. It has five elements:
Wide breadth of solutions – Our solutions span the five things we help customers do – pay, receive, borrow, insure and grow – and we win a customer relationship with a single critical financial service at a relatively stable customer acquisition cost, expanding there.
For example, community often first adopt supplier-enabled payments product to pay for inventory digitally, and subsequently add our cash vaults, or a merchant cash advance as their business grows. Similarly, a consumer typically joins us by opening a transactional account to receive their social security take up funeral policy.
approach increases customer lifetime value with little incremental acquisition cost.
2026, approximately
51% of active consumers and approximately 46% of our active merchants used two or more of our products;
Differentiated reach – Rather than relying on online-only sales or expensive branch networks, we deploy on-the-ground sales teams cost-efficient branches community centers rural peri-urban areas customers live and transact, including close to the locations where grant payments are disbursed. Our merchant community channel is built on the same principle, acquiring merchants through direct, face-to-face sales with rapid conversion cycles;
Digital engagement – After the initial in-person sale, we steer customers to digital channels to serve them more efficiently and deepen their use of our solutions.
For consumers, this includes our banking app and unstructured supplementary service data (“USSD”) channels that work in real time on any mobile phone, including basic feature phones without internet access – while merchants manage their deposits, settlements and supplier payments through our digital merchant account;
Proprietary access to – Our solutions give us unique visibility into the transaction flows of consumers and merchants, which we believe is rare markets, particularly among the underserviced. We put this data to work directly:
our consumer lending is underwritten using our view of the money flowing in and out of a consumer’s account, and our merchant is underwritten using our visibility into a merchant’s daily card and cash turnover; and 5.
A unified brand – In November 2025, we relaunched our businesses under a single Lesaka brand, and during fiscal 2026 we identity, consistent articulation segments – what enable customers to do:
pay, receive, borrow, insure and grow. We believe a unified brand and a consistent expression of our build trust, awareness divisions facilitate roll-out adoption solutions.
Consulting
Group, favorable secular tailwinds, have helped position
Africa as the fastest growing fintech market globally, that projects growth in the total African fintech revenue pool to grow by 13 times between 2021 and 2030, as illustrated below.
Our Strategy build our unique ecosystem and capture this large and attractive market opportunity, we developed a 5-phase strategy to win and serve customers across a diversified range of channels and markets. These phases include:
Address
First, develop acquire address and serve specialized needs segment.
Today, core platforms segments (or divisions), Consumer, Merchant and Enterprise;
Position - Second, we position ourselves in the market to gain data that gives us valuable insights into base.
develop enable learn flow funds behaviours customers daily lives to better understand their needs. For example, our banking solutions enable us to see the sources and frequency of consumer income deposits as well as their spending behaviours, while our merchant solutions enable us to see a merchant’s cash flows and selected spending such as inventory purchases and supplier payments;
Develop – Third, we develop and foster differentiation market by combining financial, software and technologies to create integrated, end-to-end fintech solutions that have superior functionality and convenience relative alternatives.
Competitor offerings typically legacy banks poor track service for the underserviced, (ii) government entities, such post office, with limited capabilities and R&D budgets to invest in solutions, or (iii) a fragmented universe of single-solution vendors who provide more narrow services, forcing a customer to spend more and manage multiple relationships to meet their end-to-end needs;
Management's Discussion & Analysis (MD&A)
New heading “One Lesaka: Unification of Group Branding”
New heading “Deleveraging: Approaching Our Medium-Term”
New heading “Portfolio Rationalization and Exit of Non-Core”
New heading “Proposed Acquisition of Bank Zero: Regulatory”
New heading “Operating Segment Level:”
New heading “Merchant: Acquiring”
New heading “Merchant: Software”
New heading “Merchant: Cash Management”
New heading “Merchant: Alternative Digital Products”
New heading “Notable developments within Merchant:”
New heading “Consumer: Transactional Accounts”
New heading “Consumer: Lending”
New heading “Consumer: Insurance”
New heading “Consumer: Lesaka Payouts”
New heading “Notable developments within Consumer:”
New heading “Enterprise: ADP”
New heading “Enterprise: Utilities”
New heading “Notable developments within Enterprise:”
New heading “Lower net interest charge:”
New heading “Consolidated overall results of operations”
New heading “Compared to Fiscal 2024”
New heading “Higher revenue:”
Removed heading “Software (technology products):”
Removed heading “Merchant acquiring”
Removed heading “3,144 (1) ARPU is calculated on a revenue per site basis, as monthly figure based on a three -month rolling average for the quarter ending June 30, 2025.”
Removed heading “Adumo Capital’s credit disbursed and net loan book.”
Removed heading “Unification of Merchant under Lesaka brands”
Removed heading “Consumer Division”
Removed heading “Transactional accounts (banking) - EPE”
Removed heading “Lending - EasyPay Loans”
Removed heading “Insurance - EasyPay Insurance”
Removed heading “Average month, quarter, (active customers) (ZAR)”
Removed heading “EasyPay Payouts”
Removed heading “(2) ARPU is calculated on a revenue per active consumer basis whereby an active consumer can be both a permanent and permanent grant beneficiary with prior periods adjusted for comparison purposes. Previously ARPU represented only accounted for permanent grant beneficiaries. ARPU is a monthly figure based on a 3-month rolling average for the quarter ended June 30, (3) Represents the 9-month period for given Adumo integration into results from the second quarter of onwards.”
Removed heading “EasyPay Insurance”
Removed heading “EasyPay Payouts”
Removed heading “Enterprise Division”
Removed heading “18% (1) The Recharger transaction closed on”
Removed heading “Utility payments throughput for fiscal 2025 is a 4-month contribution (comprising a”
Removed heading “1-month contribution quarter and a full quarter contribution fourth quarter).”
Removed heading “Utilities throughput shown combines historical performance pre -acquisition.”
Removed heading “Acquisition of Bank Zero”
Removed heading “Balance Sheet Optimization”
Removed heading “Debt refinance and new banking partner”
Removed heading “Refinancing the Merchant lending facility”
Removed heading “Association of South African Payment Providers (“ASAPP”)”
Removed heading “of investment in Cell C”
Removed heading “Revenue increased:”
Removed heading “Fiscal 2024 Compared to Fiscal 2023”
Removed heading “Higher net interest charge:”
Removed heading “Significant transaction costs:”
Removed heading “Table 8 (US GAAP)”
Removed heading “Presentation of Merchant, Consumer and Enterprise by segment for fiscal 2025, 2024 and 2023”
Removed heading “In United States dollars”
Removed heading “In United States dollars”
Removed heading “In United States dollars”
Removed heading “Loss attributable to Lesaka - GAAP”
Largest changes
“—Results segment” operating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue, as well as the reconciliation between our segment performance measure and net income (loss) before tax expense (see in full comparisonbenefitsbenefit)expense,, is presented in our audited consolidated financial statements in Note 21 to those statements.Our chief operating decision maker is our Executive Chairman he evaluates interest, tax, depreciation (“EBITDA”), adjusted for items mentioned next sentence (“Segment Adjusted EBITDA”) for each operating segment. We allocate once-off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, adjustments to equity securities, options), income, expense, segments.
“Impairment loss for fiscal 2026 includes an impairment loss of $2.6 million (ZAR 43.6 million) related to right-of-use assets and $1.0 16.5 leasehold improvements property, plant operating lease arrangements as certain of our leased facilities will no longer be utilized as originally intended as a planned head office, $0.7 11.5 property, plant and equipment as a result of the exit of the ATM business, and an impairment loss of $0.4 million (ZAR 6.5 million) related to goodwill allocated to our SwitchPay reporting unit within the Merchant segment. …”see in full comparison
“Chairman and he evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned next sentence (“Segment Adjusted EBITDA”) for each operating segment. We allocate once-off items (as defined below), stock-based compensation charges, impairment of other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities), interest income, interest expense, income segments.”see in full comparison
“(2) ARPU is calculated on a revenue per active consumer basis whereby an active consumer can be both a permanent and permanent grant beneficiary with prior periods adjusted for comparison purposes. Previously ARPU represented only accounted for permanent grant beneficiaries. ARPU is a monthly figure based on a 3-month rolling average for the quarter ended June 30, (3) Represents the 9-month period for given Adumo integration into results from the second quarter of onwards.”see in full comparison
“Fiscal 2026 income tax expense was $1.4 million (ZAR 23.6 million) compared to an income tax benefit of $16.0 million (ZAR 289.0 million) in fiscal 2025. Our effective tax rate for fiscal 2026 was impacted by the tax expense recorded by our profitable South African operations, non-taxable income (primarily related disposal of Cell C and other income) and non-deductible transaction-related expenditures the goodwill impairment).”see in full comparison
“The allowance losses related to these merchant finance loans receivables is calculated by multiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book. …”see in full comparison
Full comparison: every changed paragraph (1233)
U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these measures reconciliations most directly comparable GAAP measures.
Overview offer holistic multiproduct platform transactional accounts, lending, insurance, acquiring, ADP.
We earn revenue from merchant acquiring on an ad valorem basis, based on a percentage of the total transaction value processed through our network. We also earn revenue from transaction fees charged to merchants.
Software:
Software (technology products):
is generated providing licensing selling (such as POS devices) providing licensing software and technology services to merchants.
We earn revenue on an ad valorem basis, based on a percentage of the total cash settlements processed through our cash vaulting network. We also earn transaction fees when customers utilize our ATM network.
We also offer merchant customers access to platforms through which we (a) generate revenue from the sale of prepaid airtime and generate fees from distribution of ADP, including prepaid solutions (airtime, data, electricity and gaming), supplier enabled (bill payments, Internationalinternational Money Transfers (“IMT”) andtransfers supplier enabled payments.payments).
These fees are largely charged on an ad valorem basis.
earn charging a monthly fee on an ad valorem basis for goods services purchased.
Transactional fees associated consumerwith our accounts include monthly account service fees, ATM withdrawal fees, and other fees based on usage.
derived combination origination fees, outstanding loan balances and monthly service fees.
Revenue from our insurance offerings is earned monthly and includes premiums paid by the policyholders.
Our utilities vertical generates revenue predominantly through an annuity-based model, with fees charged on an ad valorem basis the total electricity vended through our platform. Ad-hoc hardware sales of utility meters also an additional contribution to revenue.revenue which are sold on a fixed price basis.
Other:
Payments:
Our payment solutions enable payment acceptance for us and external enterprises, on which we earn a fixed fee per transaction processed.
Developments during Fiscal 20252026 item discusses segments:
This item generally discusses our 2025 results compared to our 2024 results. Discussions 2024 results 2023 results can be found within our Annual Report on Form 10-K for the year ended June 30, 2024.
Merchant DivisionMerchant,
Consumer,
Enterprise.
Discussions of our fiscal 2025 results compared to our fiscal 2024 results can be found within our Annual Report on Form 10-K for the year ended June 30, 2025.
Group Level:
Fiscal 2026 marks a pivotal year of transformation and consolidation for Merchant.
Following the acquisitions of
Group in fiscal 2025, the division has been undertaking a deliberate, multi-faceted integration designed to eliminate duplication, unify go-to-market approach, build single, multi-product platform serving merchants segments.
transformation also included bolstering operational analytics, which now aligns the Merchant revenue drivers to a number of merchants and ARPU (Average Revenue Per User) basis, akin to Consumer.
New leadership was appointed to drive the integration executing against a clear set of priorities:
integrating our Community and Corporate channels under a unified model, rationalizing cost and infrastructure and deepening product penetration across our merchant base.
One Lesaka: Unification of Group Branding
In November
2025, we launched a refreshed Lesaka master brand, accelerating the realignment of all merchant-facing brands including Kazang, Adumo, GAAP, Card Connect, and Capital Connect under a single “One Lesaka” identity.
expect full alignment to be substantially complete by the end of calendar 2026, with certain brands already transitioned. This unification is merely cosmetic but it reflects the consolidation operating infrastructure, sales force, and distribution channels into a single integrated model. Coupled with the branding change, we have consolidated our Johannesburg office footprint into a single hub, similar exercises close to completion in both Cape Town and Durban. As a result of these unification actions, we have incurred Lesaka brand refresh expenses (treated once-off item) and increased intangible asset amortization charges the shortening deemed useful lives of certain brand trademark assets in fiscal 2026, and recorded right-of-use lease impairments.
Deleveraging: Approaching Our Medium-Term
Capital Structure Target structure strengthen course building refinancing actions in fiscal 2025 and 2026.
Net debt to
Group Adjusted EBITDA has reduced progressively through the year, from 2.9 times at the start fiscal year to 1.9 times by the end fiscal year, achieving our medium term target of 2.0 times or lower.
deleveraging has been achieved alongside continued investment in growth, including in our lending books, and reflects the combined benefit of the lower funding costs secured through our fiscal 2025 and 2026 refinancing, the cash generation of the underlying business, disciplined Group.
expect proposed transaction, once completed, further step-change in our funding profile by enabling Lesaka to fund lending growth increasingly through customer deposits rather wholesale debt, representing structural improvement Group's funding profile additional, deleveraging event at the Group level.
Portfolio Rationalization and Exit of Non-Core
Activities
During fiscal 2026, we have continued to simplify the
Group. In the third quarter, we made the decision to exit our ATM business, concluded structurally loss-making immaterial scale, recognizing once-off ZAR 27 connection wind-down.
In the same quarter, sunset
SwitchPay (“SwitchPay”), legacy buy-now-pay-later product, recognizing $0.4 deregistered Masterpayment GmbH (“Masterpayment”), a legacy offshore entity, recognizing a gain of $0.9 million (ZAR 14 million) on deregistration, and reversed a $1.5 million (ZAR 25 million) receivables allowance following the successful collection of monies owed in respect of a legacy investment. Earlier in fiscal 2026, we finalized the liquidation of CPS, releasing provisions of ZAR 65 disposed our remaining stake Cell-C of $3.9 (ZAR 50 actions collectively represent substantial completion non-core portfolio rationalization undertaken since 2023, allowing focus attention scalable, digitally-led platforms representative present-day Lesaka and no material legacy investments.
Performance in Merchant has been driven by:
Merchant acquiring
Merchant acquiring includes 84,541 devices deployed under the Adumo, Card Connect and Kazang brands.
Number of devices in deployment
84,541
51,880
44,935
63%
Total Throughput for the year (ZAR billions)
Proposed Acquisition of Bank Zero: Regulatory
Progress proposed
Mutual
Bank, announced
26, progressed milestones
What changed in the latest 10-Q
Risk Factors
New heading “Geopolitical conflicts, including the conflict between”
New heading “Ukraine and in the Middle”
New heading “East, may adversely affect business and results of operations.”
New heading “Our use of artificial intelligence (“AI”) may present risks that could adversely affect our business, results of operations reputation.”
Largest changes
“Our use of artificial intelligence (“AI”) may present risks that could adversely affect our business, results of operations reputation.”see in full comparison
“Global economic and geopolitical conditions continue to influence the environment in which we operate. Since our year ended June 30, 2025, heightened geopolitical tensions, including the conflict between Russia and Ukraine and ongoing conflicts in the Middle East, have contributed to volatility in global financial markets and increased macroeconomic uncertainty.”see in full comparison
“Compliance with such requirements may increase our costs, limit the use or effectiveness of AI in our business, or require changes to our products or operations. Failure to comply with applicable requirements, or the perception that our use of AI is inappropriate or controversial, could result in regulatory scrutiny, litigation, reputational harm or competitive disadvantage.”see in full comparison
Full comparison: every changed paragraph (37)
I of our Annual
Report on
FormI 10-Kof our Annual fiscal year ended June for a discussion factors (i) business, (ii) Africa markets, (iii) government regulation, and (iv) our common stock. Except as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, identify errors
second errors historical
During the current quarter we identified errors in the historical VAT treatment of certain gaming voucher transactions within our Merchant business. Although we have completed an initial review of the matter and determined to correct the identified errors through revisions to our previously issued financial statement, our review is ongoing. Refer to Note 1 to our unaudited condensed consolidated financial statements for additional information. The error arose from the incorrect application of indirect tax rules, the configuration of underlying systems, and operational practices involving downstream vendors.
While we have implemented remedial actions, including enhancing our system of internal control and conducting further analyses with our external advisors, there is a risk that we have not identified all errors associated with this matter.
Refer to Note 1 to our unaudited condensed financial statements for additional information.
The error arose from the incorrect application of indirect tax rules, the configuration of underlying systems, and operational practices involving downstream vendors.
While we are implementing remedial actions, enhancing controls, and conducting further analyses with our external advisors, there is a risk that we have not yet identified all errors associated with this matter. Additional issues may be discovered as we continue to evaluate historical periods, refine our technical tax conclusions, orinadequate integrate updated processes into ourupdates systems. Moreover, similar errors could exist in accounting and reporting for other indirect tax transactions particularly where our business involves complex multi-party arrangements, voucher products, commissions, or activities involving non-registered VAT vendors.
Identification errors require us record further adjustments, amend restate previously statements, update our tax filings, or make additional payments of tax, penalties, or interest.interest, or make further enhancements to our internal control processes. Any such developments could result in increased compliance costs, additional administrative burdens, diversion of attention, investor perceptions weaknesses compliance processes.
If material, additional errors could also adversely affect our financial condition, results of operations, liquidity, or internal control over financial reporting.
Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Form S-3 enables eligible issuers to conduct primary offerings “off the shelf” under Rule 415 of Securities Act 1933, amended (the “Securities Act”).
shelf registration process, combined ability forward incorporate information, allows issuers to avoid delays and interruptions in the offering process and to access the capital markets in a more expeditious and efficient manner than raising capital in a standard registered offering pursuant to a Registration Statement Form S-1. The ability to register securities for resale may also be limited as a result of the loss of Form S-3 eligibility.
SEC. Although we regained status as a current filer by filing our Form 10-K/A to amend our 2025 Form 10-K, we are currently ineligible to file new short form registration statements on Form S-3 and, absent a waiver of the Form S- 3 eligibility requirements, we are no longer permitted to use our existing registration statements on Form S-3. If we wish to pursue an offering now, to conduct the offering an exempt basis, such as in accordance Rule 144A, or file registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely ability to raise capital complete acquisitions companies timely manner.
Geopolitical conflicts, including the conflict between
Russia and
Ukraine and in the Middle
East, may adversely affect business and results of operations.
Global economic and geopolitical conditions continue to influence the environment in which we operate. Since our year ended June 30, 2025, heightened geopolitical tensions, including the conflict between Russia and Ukraine and ongoing conflicts in the Middle East, have contributed to volatility in global financial markets and increased macroeconomic uncertainty.
direct operations, exposure regions.
However, effects developments adversely environment, primary market, exchange volatility, inflationary pressures, tighter external funding conditions, and reduced consumer affordability.
Management concluded developments geopolitical environment resulted position, flows since Therefore, occurred that require adjustment to, or separate disclosure in, the condensed interim financial information, and that our existing risk management framework and mitigating actions, as disclosed in the annual financial statements, remain appropriate.
Geopolitical conditions remain fluid, to monitor developments.
Any material profile financial position will be disclosed in accordance with applicable regulatory requirements.
Our use of artificial intelligence (“AI”) may present risks that could adversely affect our business, results of operations reputation.
While our use of AI is not currently material, we may increasingly incorporate AI technologies into our systems, operations and product offerings. The development, deployment and use of AI present a number of risks and uncertainties.
AI systems may produce inaccurate, unreliable or otherwise flawed outputs, including as a result of limitations in model design, training data quality, bias or other technical constraints. Any such issues could impair the effectiveness of our products and services or expose us to liability.
The use of
AI may also increase cybersecurity, privacy, intellectual property and operational risks.
For example, the use of
AI involve processing sensitive data, reliance third-party tools, generation outputs misused misinterpreted.
addition,
AI technologies introduce new evolving vulnerabilities could exploited, management processes may not be effective in identifying or mitigating all such risks.
The legal and regulatory landscape relating to AI is rapidly evolving and uncertain. We may be subject to existing and emerging laws, regulations and regulatory expectations in the United States and other jurisdictions (including South Africa) relating to, among other things, data protection, consumer protection, intellectual property and the use of automated decision-making.
Compliance with such requirements may increase our costs, limit the use or effectiveness of AI in our business, or require changes to our products or operations. Failure to comply with applicable requirements, or the perception that our use of AI is inappropriate or controversial, could result in regulatory scrutiny, litigation, reputational harm or competitive disadvantage.
As AI technologies continue to develop, we may not be able to anticipate or effectively manage all associated risks. If any of these risks were to materialize, they could have a material adverse effect on our business, results of operations and financial condition.
Management's Discussion & Analysis (MD&A)
Largest changes
“Impairment loss for year to date fiscal 2026 includes an impairment loss of $1.5 million (ZAR 25.6 million) related to right-of-use assets recorded in plant and equipment for our existing operating lease arrangements as certain of our leased facilities will no longer be utilized as originally intended as a result of the planned transition to our new corporate head office, an impairment loss of $0.7 million (ZAR 11.5 million) related to ATMs recorded in property, plant and equipment as a result of the exit of the ATM and an impairment loss of $0.4 million (ZAR 6.5 million) related to goodwill …”see in full comparison
“$1.5 million (ZAR 25.6 million) related right-of-use assets recorded in plant and equipment for our existing operating lease as certain leased facilities will no longer be utilized as originally intended the planned transition to our new corporate head office, impairment loss of $0.7 million (ZAR 11.5 million) related to ATMs recorded in property, plant and equipment as a result of the exit $0.4 6.5 million) goodwill allocated Switchpay reporting unit within the Merchant segment.”see in full comparison
Fiscal 2026 income tax expense wassee in full comparison$0.5$2.0 million (ZAR8.933.2 million) compared to an income tax benefit of $(6.39.3) million (ZAR (115.6169.2) million) in fiscal2024.2025. Our effective tax rate for fiscal 2026 was impacted by the tax expense recorded by ourprofitableAfricanSouthoperations, non-taxable income (primarily related disposal of Cell C and other income) and non-deductible(includingtransaction-relatedexpenditures). The income tax expense was also impacted by a higher deferred tax benefit as a result ofthereductiongoodwillin the useful lives of certain of our brand and trademark intangible assets which has resulted in an increase in amortization expense during the fiscal 2026.impairment).
Our effective tax rate forsee in full comparisonfiscal 2026was impacted by the tax expense recorded byprofitableour Africanoperations,operationsnon-taxableand(primarily Cell income) deductiblenon-deductible expenses (including transaction-related expenditures impairment of goodwill).
“higher allowance for credit losses following an default experience on our Merchant lending book and in inventory written off, which was partially offset by lower IT processing, servicing and support and employment-related expenditures.”see in full comparison
Earnings from equity accounted investments (56) (12) (166) (89) Netsee in full comparisonincomeIncome (loss) before earnings from equity-accounted investments3,521(32,47822,345) (37,355873) (6,41259,700) 1,503 (2,934) (6,3349,268) Income (Loss) before income tax expense4,5914,4779,60414,081 (5081,154) (721645) (1,0472,201) (1,3071,952) (3,883) Net loss on impairment/ disposal of equity-accounted investment2,15020,4212,287(2,593) 54,152 4,085 6,372 PPA amortization (amortization of acquired intangible assets)9,4816,0444,8674,97418,61524,6598,61413,5884,0874,4993,3563,4557,84712,3465,8859,340 Impairments 1,916 1,916 Stock-based compensation charges Interest adjustment (757890) (1,5882,478) Once-off items2,2932,553 2,306 3,067 4,599 Unrealized gain (loss) FV for currency adjustments (133114) (19716)
Full comparison: every changed paragraph (820)
U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures provide reconciliations most comparable GAAP measures.
discuss why consider useful present these non -GAAP measures and the material risks and limitations of these measures, as well as a reconciliation of these GAAP measures most directly comparable GAAP financial measure below at “—Results of Operations—Use of Non-GAAP Measures” below.
Some of the statements in this Form 10-Q constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, or achievements to be materially different any future results, levels of activity, performance or achievements expressed, implied or inferred by these forward-looking statements. Such factors include, among other things, those listed under Item 1A.—“Risk Factors” in our Annual Report on Form 10-K for the InJune some30, cases, you can identify forward-looking by terminology such as “may”, “will”, “should ”, “could”, “would”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology.2025.
In some cases, you can identify forward-looking by terminology such as “may”, “will”, “should ”, “could”, “would”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology.
This item generally discusses our results for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025.
February
6,
Lesaka acquired 100% in MobileMart, distributor
ADP, prepaid solutions. Leveraging MobileMart’s existing direct integrations into multiple mobile network operators and suppliers, aims to enhance the unit economics of Merchant and Enterprise’s ADP product offering.
On March 27, 2026,
Lesaka amended its Working
Capital Facility agreement, increasing the size of its general banking facility by ZAR 400 million to approximately ZAR 1.1 billion. The amended agreement also includes additional operating subsidiaries as borrowers, enabling those entities to access the facility directly and better aligning the financing structure with the Group’s current operating structure. The increased facility provides additional liquidity and financial flexibility to support the Group’s operations and growth initiatives.
quarter, division exited ancillary better align resources core management offering and merchant lending ecosystem. The ATM segment was determined to be non-core due to its limited financial contribution and lack of operational synergy with the Merchant division’s primary product suite. This strategic wind-down allows for the reallocation of capital toward high-growth, data-driven merchant services.
Lesaka launched its new brand in November 2025 and will take the remainder of the 2026 calendar year to roll out the refreshed brand throughout the organization. This was more than a brand refresh, it is a necessary step in a set of strategic initiatives designed to create a “One Lesaka” identity for our customers and our employees. The brand is underpinned by a set of values that encapsulates what Lesaka stands for and the behaviors expected of all Lesaka employees.
new
Johannesburg head office finalized.
will consolidate offices across
Johannesburg into a single hub, fostering faster integration, simplification and result in positive long-term financial impact. We aim to complete the move by the end of this fiscal year.
A similar exercise is underway for our Durban and Cape Town regional hubs.
We have made continued progress in simplifying the business:
Each
Lesaka’s divisions now measured clear
KPIs direct outcomes.
measured number customers
ARPU (Average
Per
User), whilst measured throughput volumes take rates.
disclose
KPIs tables division.
We disposed of non-core assets such as Cell-C for ZAR 50 million.
Finalized the Cash Paymaster Services liquidation, releasing provisions of ZAR 65 million.
Regarding the Bank Zero transaction, Lesaka has received Competition Commission approval. Completion of the transaction is conditional upon obtaining regulatory approvals from the Prudential Authority and the Financial Surveillance Department of the South African Reserve Bank, as well as the satisfaction of other outstanding conditions precedent set forth in the agreement.
Corporate, which serves large -scale organizations franchises requiring customized, multi-product solutions through a strategic, long-term sales process.
2026, we introduced a refined reporting framework for the
2026, we introduced a refined reporting framework for the Merchant division to better represent the primary drivers of our revenue and performance.
Developed through a comprehensive review of our operational analytics, this framework aligns our Merchant metrics, specifically active merchant count and blended ARPU with our Consumer division to provide a holistic view ecosystem.
treating this updated approach baseline future comparisons ensure consistent reporting across our channels; as such, this transition may result in non-material inconsistencies with certain legacy metrics.
Our definition of an active merchant is any merchant that has made a voluntary transaction (debit and/or credit) within the last days.
Previously, points presence basis, focused device estate.
Our definition of an active merchant is any merchant that has made a voluntary transaction (debit and/or credit) within the last 90 days. Previously, we reported on a point of presence basis, which was more focused on our device estate. This updated methodology of an active merchant reflects the revenue generating engagement of our entire Merchant base and more accurately tracks our current and future monetization strategy for the division. Average Revenue Per User excludes once-off and non-recurring revenue such as hardware and installation costs as well as revenue from international subsidiaries, which are generally non-recurring in nature.subsidiaries.
Corporate, serves large -scale organizations franchises requiring customized, multi-product solutions through a strategic, long-term sales process.
124,522
122,846
1,760
1,835
Product Penetration Rate: 1+2 Productsor more products
Product Penetration Rate: 2+3 Productsor more products
7% (25%)
10%
73,521
67,652
9.9
11.3
3%
4,844
4,910 (0%)
27.5
30.4
Lending Origination (ZAR millions) (22%)
35%
LSAK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 2 trade dates, 43,000 shares, about $183.8K) and open-market sales in 2 filings (1 insider, 6 trade dates, 312,875 shares, about $1.5M). Net open-market shares: -269,875 (purchases minus sales); net value about -$1.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-16 | Mazanderani Ali |
Open-market purchase | 14,774 | $4.40 | $65.0K |
| 2026-09-15 | Mazanderani Ali |
Open-market purchase | 28,226 | $4.21 | $118.8K |
| 2026-04-16 | International Finance Corp |
Open-market sale | 66,437 | $4.90 | $325.5K |
| 2026-04-15 | International Finance Corp |
Open-market sale | 19,488 | $4.90 | $95.5K |
| 2026-04-14 | International Finance Corp |
Open-market sale | 106,948 | $4.90 | $524.0K |
| 2026-04-13 | International Finance Corp |
Open-market sale | 52,230 | $4.92 | $257.0K |
| 2026-04-10 | International Finance Corp |
Open-market sale | 57,894 | $4.98 | $288.3K |
| 2026-04-09 | International Finance Corp |
Open-market sale | 9,878 | $4.95 | $48.9K |
| 2025-12-01 | Kola Naeem Ebrahim |
Disposition to issuer | 68,319 | — | — |
Well-known investors holding LSAK (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 400,414 | $2.0M | 0.0% | Added 442% |
| Renaissance Technologies | 2026-06-30 | 168,100 | $835.5K | 0.0% | Reduced 10% |
| Millennium Management (Israel Englander) | 2026-06-30 | 29,646 | $147.3K | 0.0% | New position |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 12,717 | $63.2K | 0.0% | New position |