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][18] - Leverage ratio stands at 2.5x, down from 2.9x 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 [15] - Enterprise division net revenue increased by 67% year-on-year to ZAR 217 million [15] Market Data and Key Metrics Changes - Active merchants increased by 8% year-on-year to over 130,000 [22] - Consumer base exceeded 2 million customers, a 21% increase year-on-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 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 continued growth, particularly in the consumer lending segment [32] - The company anticipates a transformative year for the merchant division, expecting growth to return in FY27 [16] - Future guidance for net revenue is set between ZAR 6.4 billion and ZAR 6.9 billion, implying growth rates of 21%-30% [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] - Approximately 60% of employees are under the age of 40, reflecting a young and diverse workforce [8] Q&A Session Summary Question: Increase in transaction fees and growth in insurance and lending revenue - Management confirmed that transaction fees are reviewed annually and that they are gaining market share from competitors, particularly in underserved markets [44][45] Question: Declining ARPU in the merchant segment - Management expects ARPU to stabilize and increase over the next 12 months, driven by cross-selling opportunities [49][51] Question: Drivers behind consumer lending growth - The increase in loan sizes and the introduction of a digital USSD channel have significantly contributed to growth, with 40% of originations coming from the new medium-term loan product [53][55]