Lesaka(US:LSAK)2026-02-04 21:11Merchant Division Performance - Lesaka's Merchant Division reported an 8% increase in active merchants, reaching 132,443 in Q2 2026 compared to 122,846 in Q2 2025[238]. - The Merchant Division's Average Revenue Per User (ARPU) decreased by 10% to ZAR 1,835 in Q2 2026 from ZAR 2,030 in Q2 2025[238]. - The Merchant Division's Total Payment Volume (TPV) from Supplier Enabled Payments grew by 46% to ZAR 9.0 billion in Q2 2026 from ZAR 6.1 billion in Q2 2025[238]. - Merchant segment revenue decreased by 9% to $131.919 million[284]. Consumer Division Performance - The Consumer Division saw a 21% increase in active consumers, growing to 2.0 million in Q2 2026 from 1.6 million in Q2 2025[247]. - Lending origination in the Consumer Division surged by 88% to ZAR 1,156 million in Q2 2026, up from ZAR 617 million in Q2 2025[247]. - The Consumer Division's gross written premium from insurance policies increased by 38% to ZAR 134 million in Q2 2026 from ZAR 97 million in Q2 2025[247]. - Consumer segment revenue increased by 40% to ZAR 1,105,741, driven by higher transaction fees and loan originations[320]. Enterprise Division Performance - The Enterprise Division's Total Payment Volume (TPV) increased by 18% to ZAR 11.9 billion in Q2 2026 from ZAR 10.1 billion in Q2 2025[252]. - Enterprise segment revenue increased by 38% to ZAR 515,131, primarily due to the inclusion of Recharger[320]. Financial Performance - Revenue for the second quarter of fiscal 2026 increased by $2.5 million, or 1.4% in U.S. dollars, but decreased by ZAR 97.6 million, or 3.1% in ZAR, primarily due to a decrease in prepaid airtime sold[273]. - Consolidated revenue for the second quarter of fiscal 2026 was $178.734 million, a 1% increase from $176.216 million in the same period of fiscal 2025[284]. - Group Adjusted EBITDA for the second quarter of fiscal 2026 was $17.777 million, a 54% increase from $11.580 million in the same period of fiscal 2025[284]. - Operating income for the second quarter of fiscal 2026 was $2.15 million, a 293% increase compared to $547,000 in the same period last year[269]. - Operating income margin for the second quarter of fiscal 2026 was 1.2%, compared to 0.3% in the same period of fiscal 2025[278]. Cost and Expenses - Cost of goods sold, IT processing, servicing, and support decreased by $8.2 million (ZAR 244.7 million), or 6.2% (in ZAR 10.4%), primarily due to lower prepaid airtime costs[274]. - Selling, general and administration expenses increased by $3.9 million (ZAR 38.3 million), or 10.8% (in ZAR 5.9%), mainly due to the inclusion of Recharger and higher employee-related expenses[275]. - Depreciation and amortization expense increased by $5.3 million (ZAR 85.1 million), or 65.0% (57.8%), due to changes in useful life for certain intangible assets and acquisition-related amortization[276]. Taxation - The effective tax rate for fiscal 2026 was impacted by a tax expense of $0.7 million compared to a tax benefit of $(6.4) million in fiscal 2025[282]. - Total South African taxes paid in the first half of fiscal 2026 amounted to $4.994 million (ZAR 84.493 million), an increase from $3.068 million (ZAR 55.871 million) in the same period of fiscal 2025, representing a year-over-year increase of 62%[354]. - Total tax paid in the first half of fiscal 2026, including foreign taxes, was $5.138 million, up from $3.208 million in the first half of fiscal 2025, representing a 60% increase[354]. Cash Flow and Financing - Net cash utilized in operating activities during the second quarter of fiscal 2026 was $10.9 million, compared to $9.2 million in the same quarter of fiscal 2025[348]. - Cash and cash equivalents as of December 31, 2025, totaled $69.5 million, including ZAR 1.1 billion ($65.6 million) in ZAR-denominated balances[337]. - Long-term borrowings outstanding as of December 31, 2025, amounted to ZAR 3.6 billion ($217.1 million)[344]. - Cash flows from financing activities in the second quarter of fiscal 2026 included $20.5 million utilized from banking facilities to support Consumer lending growth, with $12.4 million repaid during the same period[359]. Acquisitions and Strategic Initiatives - The company closed the acquisitions of Adumo and Recharger in fiscal 2025, integrating their businesses into its operations[265]. - Lesaka finalized the lease for a new head office in Johannesburg, consolidating three offices into one hub to enhance operational efficiency[231]. - Lesaka's new brand launched in November 2025 aims to create a unified identity for customers and employees, supporting strategic initiatives for growth[230]. Other Financial Metrics - Net interest charge decreased to $4.08 million (ZAR 69.9 million) from $5.55 million (ZAR 99.4 million), primarily due to lower interest expenses[267]. - The company recorded an increase in the fair value of Cell C of $3.0 million (ZAR 50 million) during the second quarter of fiscal 2026[279]. - The company incurred transaction costs related to acquisitions totaling $141,000 for the six months ended December 31, 2025[334].