Lesaka(LSAK) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net revenue for Q2 reached ZAR 1.6 billion, a 16% year-on-year increase [12] - Group-adjusted EBITDA grew 47% year-on-year to ZAR 304 million [12][15] - Adjusted earnings per share increased more than sixfold to ZAR 1.34 [14][17] - Leverage ratio stands at 2.5 times, down from 2.9 times at year-end [14] Business Line Data and Key Metrics Changes - Merchant division net revenue decreased by 2% due to a refocus on high-potential clients and pricing pressure [15] - Consumer division net revenue rose 38% year-on-year to ZAR 567 million, marking a record performance [15] - Enterprise division net revenue increased by 67% year-on-year to ZAR 217 million, reflecting post-restructure growth [15] Market Data and Key Metrics Changes - Active merchants increased by 8% year-on-year to over 130,000 [22] - Consumer active base exceeded 2 million customers, a 21% increase over last year [30] - Total ADP TPV reached ZAR 11.9 billion, representing 18% year-on-year growth [37] Company Strategy and Development Direction - The company aims to build a leading independent fintech in Southern Africa, consolidating brands under "One Lesaka" [3][4] - Focus on expanding financial access through technology delivered with a human touch [7] - Plans to integrate Bank Zero for funding and balance sheet benefits [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational execution and resilience of the diversified business model [12] - Anticipated growth in consumer lending and insurance due to underserved markets [44][45] - Expectation of continued earnings momentum into FY 2027 [41] Other Important Information - The company exited its Cell C stake, receiving ZAR 50 million, and released ZAR 65 million from a legacy contract [9] - Significant investments in technology and distribution to enhance customer engagement and operational efficiency [8][30] Q&A Session Summary Question: Increase in transaction fees and growth in insurance and lending - Management confirmed that transaction fees are reviewed annually and that they are gaining market share from competitors, particularly in underserved markets [43][44] Question: Declining ARPU and future trends - Management expects ARPU to stabilize and increase over the next 12 months, driven by cross-selling opportunities [48][50] Question: Drivers behind consumer lending growth - The increase in loan sizes and the introduction of a digital USSD channel are key drivers for growth in consumer lending [54][55]