Financial Performance - Lesaka Technologies reported net revenue of R5.3 billion and EBITDA of R922 million for FY 2025, with adjusted earnings increasing from R51 million to R186 million, resulting in adjusted earnings per share growing from R0.80 to R2.29 [4][12] - For Q4 2025, net revenue was R1.5 billion, up 47% year on year, and group adjusted EBITDA was R306 million, reflecting a 61% increase [11][12] - The net debt to adjusted EBITDA ratio increased from 2.5 times to 2.9 times at year-end, but annualizing Q4 results suggests a leverage ratio of 2.2 times, approaching the target of less than 2 times [12][20] Business Line Performance - The Merchant division achieved net revenue of R3 billion, up 46% year on year, and EBITDA of R657 million, up 20% year on year, driven partly by acquisitions [6][38] - The Consumer division saw net revenue grow by 35% to R1.7 billion and EBITDA increase by 83% to R435 million, reflecting strong performance in cross-selling initiatives [7][52] - The Enterprise division reported a decline in net revenue of 9% to R651 million and EBITDA decreased from R55 million to R24 million due to restructuring and closure of non-core business units [7][59] Market Performance - The Merchant division expanded its acquiring footprint to 84,541 points of presence, up from 51,880 a year ago, indicating a 16% annualized growth [32] - The Consumer division increased its active consumer base to 348,000, a 23% increase year on year, with a significant share of new customers coming from Postbank migrations [46][50] - The Enterprise division's net revenue for Q4 was R190 million, with a focus on expanding distribution channels and integrating acquired businesses [58][59] Company Strategy and Industry Competition - Lesaka is focused on building an integrated fintech platform through strategic acquisitions, including the recent acquisition of BankZero, which will enhance its banking capabilities for merchants [41][61] - The company aims to consolidate its brand identity and streamline operations to improve efficiency and reduce costs, with plans to reduce the number of offices and unify its branding [64][65] - The competitive landscape includes banks, retailers, and mobile network operators vying for merchant engagement, with Lesaka differentiating itself through a comprehensive product suite [24][41] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting the successful execution of both organic and inorganic growth strategies [9][61] - The focus for FY 2026 includes optimizing the balance sheet, enhancing unit economics, and driving sustainable growth across all business divisions [20][22] - The management team emphasized the importance of cross-selling and bundling services to improve customer engagement and drive revenue growth [30][31] Other Important Information - The company incurred significant non-recurring costs related to acquisitions and restructuring, including ZAR 239 million in transaction costs and ZAR 335 million in non-cash goodwill impairments [15][17] - Operating cash flow increased to R370 million in Q4, reflecting strong cash generation capabilities despite fluctuations in working capital [18][19] - Capital expenditures for the quarter were R103 million, with expectations to maintain disciplined investment below R400 million annually [21][22] Q&A Session Summary Question: What are the expectations for the BankZero acquisition? - Management highlighted that BankZero will enhance Lesaka's banking capabilities, allowing for tailored banking solutions for small-to-medium merchants and improving overall service offerings [41][61] Question: How does the company plan to address the integration of acquired businesses? - The focus will be on streamlining operations, reducing duplication, and enhancing cross-sell opportunities across the integrated platform [27][29] Question: What are the growth prospects for the Consumer division? - The Consumer division is expected to continue its growth trajectory, leveraging increased market share and expanding product offerings beyond the grant beneficiary segment [46][52]

Financial Data and Key Metrics Changes - Service revenue grew 53% year-over-year and 6% sequentially to $86.5 million, representing 83% of total revenue, up from 79% in the previous year [20][6][19] - Adjusted EBITDA reached $21.6 million, a 58% increase year-over-year, exceeding consensus estimates by over $1 million [21][19] - Service adjusted EBITDA gross margins hit 76%, contributing to a 300 basis point expansion in adjusted EBITDA gross margins to 67% [23][19] Business Line Data and Key Metrics Changes - AI video bookings increased by 52% quarter-over-quarter, indicating strong demand for Unity solutions [8] - New customer logo wins grew by 14% sequentially, driven by enterprise and mid-market traction [8] - High-value deals of over $100,000 ARR were added across 11 diverse sectors, showcasing the broad appeal of Unity solutions [7] Market Data and Key Metrics Changes - The pipeline with major channel partners in North America improved by 28% sequentially, reflecting robust market engagement [8][52] - The company is seeing increased penetration of safety and compliance modules among major national and international enterprises [9] Company Strategy and Development Direction - The company is focusing on a SaaS-centric strategy to improve predictability, scale margins, and enhance customer lifetime value [6][20] - A partnership with MTM business was announced, which is expected to open a vast total addressable market (TAM) in high-growth regions [10] - The company is committed to mitigating tariff-related cost pressures through strategic supply chain evolution [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit service growth as the year progresses, despite macroeconomic uncertainties [56][58] - The company is optimistic about the trajectory of its SaaS revenue mix and the potential for improved product revenue as market conditions stabilize [67][68] Other Important Information - The company achieved $11 million in annualized savings in Q1 FY 2026, contributing to its goal of $18 million for the full year [28][19] - The net debt to EBITDA ratio improved to 2.97 times, down from 3.2 times at the end of FY 2025 [26] Q&A Session Summary Question: Can you provide metrics around the MTN relationship and its implementation timeline? - Management indicated that the MTN partnership represents a significant opportunity across multiple countries and is expected to begin implementation in the second half of the year [50][51] Question: How do you view product contributions going forward given economic headwinds? - Management remains cautious but confident in achieving a 10% SaaS growth rate, emphasizing the importance of their pivot towards a SaaS mix [56][58] Question: What is the status of the AT&T enterprise rollout? - Management reported that AT&T is tracking well, with increased interest in Unity's modularity and a rise in the number of products purchased by customers [62][63] Question: What are the expected gross margins for the company in the future? - Management aims for SaaS revenue to exceed 85% of total revenue, with gross margins for services expected to reach 80% plus [68] Question: Can you provide subscriber and ARPU numbers for the quarter? - The growth in services was primarily ARPU driven, with a modest increase in subscribers [71][72] Question: Will you exceed your stated expense synergy goals for the year? - Management is focused on achieving the $18 million target for the year, with ongoing efforts to drive performance [75][76] Question: How is the mix of new business changing with more SaaS sales? - Management confirmed a shift towards selling more applications and modular solutions, reducing reliance on hardware sales [78][79]

Financial Performance - Total revenue increased by 38% year-over-year to $104.1 million[17] - Adjusted EBITDA increased by 58% year-over-year to $21.6 million[17] - Adjusted EBITDA gross margins increased from 64% to 67% year-over-year[17] - Service revenue grew sequentially by 6% and now represents 83% of total revenue[17, 56] - Net debt to EBITDA ratio improved to 2.97x compared to 3.17x in the prior quarter[17] Go-to-Market Momentum - New logo wins increased sequentially by 14% QoQ, with over 175 B2B customers[18] - AI video ARR bookings increased by 52% compared to the previous quarter, driven by indirect channel partners[18] - In-warehouse recurring revenue increased by 24% year-over-year[19] - ARR pipeline build increased by 19% compared to the prior quarter[19] Key Wins and Partnerships - Secured strategic deals with TCV ranging from $400K+ to $750K+ with companies in logistics, food & beverage, rental & leasing, agriculture, and manufacturing[21] - Partnered with MTN Business, one of the world's largest mobile network operators with $7.4 billion annual revenue and 297 million customers, to accelerate enterprise IoT adoption[22, 23] - Won a large-scale operation-wide deployment with SIXT Rental, focusing on AI-powered control over costs, productivity, and accountability[24, 25] Transformation Initiatives - Actioned $11 million in annualized savings in Q1 FY26, part of the $18 million committed for FY26[68, 70] - Expects Net Debt to EBITDA to improve from ~3.25 times at year end FY25 to less than 2.25 times at year end FY26[63, 64]

Core Viewpoint - The article discusses the strategic shift of GritGene, a 3D graphics engine company, from a heavy reliance on smart city business to focusing on new terminal products like smart vehicles, consumer smartphones, and XR devices, highlighting the challenges and opportunities in the 3D engine market [2][3][30]. Group 1: Business Strategy - GritGene decided to reduce its smart city business, which previously accounted for nearly half of its revenue, to pivot towards new terminal products [2][3]. - The company aims to avoid direct competition with established players like Unreal Engine and Unity in the gaming sector, instead focusing on non-gaming applications where 3D engines can thrive [8][30]. - GritGene's strategy involves deep collaboration with major clients like BYD to create benchmark cases that can help standardize processes and expand market reach [15][14]. Group 2: Market Challenges - The article notes the decline in investment interest during the capital market downturn, which has affected many tech startups, including GritGene [6][5]. - The company faced challenges due to external factors such as U.S. sanctions on Chinese tech firms, impacting its partnerships and project timelines [6][7]. - GritGene's revenue is expected to decline in 2023 but is projected to double by 2024 and potentially double again by 2025, indicating a recovery trajectory [3][30]. Group 3: Technological Innovation - GritGene is focusing on developing a 3D-AI engine that integrates AI capabilities across various subsystems, enhancing flexibility and efficiency in 3D content creation [18][19]. - The company emphasizes a hybrid computing architecture that combines edge and cloud computing to optimize performance for mobile devices and smart vehicles [24][23]. - GritGene's engine architecture allows for modular adjustments, enabling clients to customize functionalities without affecting other components, which is crucial for diverse application needs [25][26]. Group 4: Future Outlook - GritGene plans to leverage its unique engine capabilities to provide customizable 3D data generation tools for the AI industry, aiming to transition from algorithm-driven to data-driven approaches [30][32]. - The company is also considering a return to the gaming sector with innovative concepts that blend elements from successful games, targeting a broad audience [31][32]. - The narrative suggests that GritGene's journey reflects broader trends in the tech industry, emphasizing the importance of long-term vision and technological integration in navigating market challenges [34][33].