Lesaka Increases Revenue 9% for the Fourth Quarter, Exceeding the Upper End of its Revenue Guidance

Rhea-AI Summary

Lesaka Technologies, Inc. released its Q4 2023 and FY 2023 results. Q4 2023 revenue increased by 9% to ZAR 2.5 billion ($133.1 million), with a 32% growth on a constant currency basis. Net loss improved by 21% to ZAR 223.2 million ($11.9 million). Group Adjusted EBITDA improved by 115% to ZAR 158.3 million ($8.4 million) and by 161% on a constant currency basis. Merchant Division delivered Segment Adjusted EBITDA of ZAR 154.2 million ($8.2 million) in Q4 2023. Consumer Division reported profitability with Segment Adjusted EBITDA of ZAR 46.5 million ($2.5 million). Positive outlook as Merchant expands in Southern Africa's informal market. Net cash provided by operating activities of ZAR 182.9 million ($9.8 million) in Q4 2023.

Positive

• Q4 2023 revenue increased by 9% to ZAR 2.5 billion ($133.1 million)
• Net loss improved by 21% to ZAR 223.2 million ($11.9 million)
• Group Adjusted EBITDA improved by 115% to ZAR 158.3 million ($8.4 million)
• Merchant Division delivered Segment Adjusted EBITDA of ZAR 154.2 million ($8.2 million) in Q4 2023
• Consumer Division reported profitability with Segment Adjusted EBITDA of ZAR 46.5 million ($2.5 million)
• Positive outlook as Merchant expands in Southern Africa's informal market
• Net cash provided by operating activities of ZAR 182.9 million ($9.8 million) in Q4 2023

Negative

• None.

JOHANNESBURG--(BUSINESS WIRE)-- Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released its results for the fourth quarter (“Q4 2023”) and full year (“FY 2023”) ended June 30, 2023.

Performance highlights for Q4 2023:

• Revenue of ZAR 2.5 billion ($133.1 million) in Q4 2023, compared to ZAR 1.9 billion ($121.8 million) for the quarter ended June 30, 2022 (“Q4 2022”), with the 9% increase attributable to inclusion of the Connect Group for the full period, excellent growth in the Merchant Division, driven by the Connect and Kazang businesses, as well as the successful turnaround of the Consumer Division. On a constant currency basis revenue grew 32%.
• The significant financial turnaround is demonstrated by a narrowing of the net loss to ZAR 223.2 million ($11.9 million) in Q4 2023, despite also including a non-cash impairment charge related to the pre-existing Merchant Division of ZAR 131.9 million ($7.0 million) and a non-cash PPA amortization charge of ZAR 67.3 million ($3.6 million). This compares to a net loss of ZAR 235.8 million ($15.1 million) in Q4 2022 and represents a 21% improvement. Excluding the impact of the non-cash impairment charge, Lesaka would have reported a net loss of ZAR 91.2 million ($4.9 million), representing a 68% improvement from the comparable prior year period.
• Operating loss was ZAR 124.3 million ($6.6 million) in Q4 2023, inclusive of a ZAR 131.9 million ($7.0 million) non-cash impairment charge and a ZAR 67.3 million ($3.6 million) non-cash PPA amortization charge. This is a significant improvement compared to the operating loss of ZAR 157.5 million ($10.1 million) in Q4 2022, inclusive of a PPA amortization charge ZAR 57.6 million ($3.7 million).
• Group Adjusted EBITDA of ZAR 158.3 million ($8.4million) represents an improvement of 115% compared to the Q4 2022 Group Adjusted EBITDA of ZAR 60.6 million ($3.9 million). On a constant currency basis Group Adjusted EBITDA increased by 161%.
• Excellent performance from Merchant, delivering Segment Adjusted EBITDA of ZAR 154.2 million ($8.2 million) in Q4 2023. Outlook remains positive as Merchant extends its footprint across Southern Africa’s largely untapped informal market.
• The Consumer Division reported a third consecutive quarter of profitability delivering Segment Adjusted EBITDA of ZAR 46.5 million ($2.5 million) in Q4 2023, compared to a loss of ZAR 19.2 million ($1.2 million) in Q4 2022. With the divisional turnaround largely complete, targeted interventions taken to grow the Consumer Division are yielding positive results with revenue increasing 26% on a constant currency basis, off a reduced cost base and in an increasingly difficult operating environment.
• Continued momentum in achieving positive net cash provided by operating activities of ZAR 182.9 million ($9.8 million) in Q4 2023, compared to net cash used by operating activities of ZAR 104.1 million ($6.7 million) in Q4 2022.

Lesaka Group CEO Chris Meyer said: “Fiscal 2023 represents a milestone for Lesaka. The successful turnaround in the Consumer Division, and the seamless integration of the Connect Group, enabled Lesaka to deliver continued growth and improved profitability despite the particularly challenging macroeconomic and socio-political conditions in South Africa. Simultaneously, our Merchant Division continues to outperform the acquisition base case, diversifying our business and positioning Lesaka as a true FinTech innovator. Our Consumer Division reported a third consecutive quarter of increasing profitability, evidencing our transition from turnaround to growth.”

Mr. Meyer continued, “We continue to innovate and deliver market-leading solutions to our customers with our results demonstrating the value our customers place on our services and the resilience of our business model in a challenging environment. The continued digitalization of South Africa’s informal economy serves as a durable catalyst for our business which we expect to continue over the long term.”

Full release and webcast details at https://ir.lesakatech.com/.

The discussion of our consolidated overall results of operations is based on amounts as reflected in our unaudited condensed consolidated financial statements which are prepared in accordance with U.S. GAAP. We analyze our results of operations both in U.S. dollars, as presented in the unaudited condensed consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our revenue and is the currency in which the majority of our transactions are initially incurred and measured. Due to the significant impact of currency fluctuations between the U.S. dollar and the ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business.

Use of Non-GAAP Measures

U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of EBITDA and Group Adjusted EBITDA are non-GAAP measures.

Below is the reconciliation between our GAAP measure and our non-GAAP measures.

	FY23 Q4		FY22 Q4		FY23 Q4		FY22 Q4
	ZAR’000		ZAR’000		$’000		$’000
Average exchange rate for conversion from ZAR to $	18.74		15.56		18.74		15.56
Loss attributable to Lesaka – GAAP	(223 192	)	(235 783	)	(11 909	)	(15 149	)
Loss from equity accounted investments	47 509		38 802		2 535		2 493
Net loss before loss from equity-accounted investments	(175 683	)	(196 981	)	(9 374	)	(12 656	)
Income tax (benefit) expense	(34 560	)	(6 646	)	(1 844	)	(427	)
Loss before income tax expense	(210 243	)	(203 627	)	(11 218	)	(13 083	)
Gain on disposal of equity securities	-		-		-		-
Net loss on disposal of equity-accounted investment	225		467		12		30
Impairment loss	131 921		-		7 039		-
Unrealized loss FV for currency adjustments	3 355		-		179		-
Operating income/(loss) after PPA amortization and net interest (non-GAAP)	(74 742	)	(203 160	)	(3 988	)	(13 053	)
PPA amortization (amortization of acquired intangible assets)	67 266		57 586		3 590		3 700
Operating income/(loss) before PPA amortization after net interest (non-GAAP)	(7 476	)	(145 574	)	(398	)	(9 353	)
Interest expense	96 687		55 362		5 159		3 557
Interest income	(10 945	)	(9 743	)	(584	)	(626	)
Operating income/(loss) before PPA amortization and net interest (non-GAAP)	78 266		(99 955	)	4 177		(6 422	)
Depreciation (excluding amortization of intangibles)	41 303		27 877		2 203		1 791
Stock-based compensation charges	25 376		19 471		1 354		1 251
Lease adjustments	12 201		20 358		651		1 308
Once-off items	1 199		92 887		64		5 968
Group Adjusted EBITDA (non-GAAP)	158 345		60 638		8 449		3 896

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230912482981/en/

Investor Relations Contacts:

Phillipe Welthagen

Email: phillipe.welthagen@lesakatech.com

Mobile: +27 84 512 5393



FNK IR:

Rob Fink / Matt Chesler, CFA

Email: lsak@fnkir.com



Media Relations Contact:

Janine Bester Gertzen

Email: janine@thenielsennetwork.com

Source: Lesaka Technologies, Inc.