Lesaka Technologies 2025 Q3 Earnings Misses Targets as Net Income Worsens by 444.6%

Lesaka Technologies (LSAK) reported its fiscal 2025 Q3 earnings on May 07th, 2025. The company missed expectations with a net loss widening significantly to $22.04 million, a 444.6% increase from the previous year's $4.05 million loss. Earnings per share deepened to a loss of $0.27, compared to a loss of $0.06 per share in 2024 Q3. Lesaka reaffirmed its full-year guidance for FY2025, expecting revenue between ZAR 10.0 billion and ZAR 11.0 billion. The company remains optimistic about achieving positive net income in FY2026.

Revenue

Lesaka Technologies saw a decline in total revenue by 1.8% to $135.67 million in Q3 2025, compared to $138.19 million in Q3 2024. The Merchant division contributed $102.44 million, while the Consumer segment generated $24.10 million. Revenue from the Enterprise segment was $9.14 million, culminating in the total revenue of $135.67 million.

Earnings/Net Income

Lesaka Technologies experienced a significant setback as its losses per share expanded from $0.06 in Q3 2024 to $0.27 in Q3 2025, marking a 350.0% increase in loss per share. The company's net loss grew substantially to $22.04 million. These results indicate a challenging earnings period for Lesaka.

Post-Earnings Price Action Review

Investors adopting the strategy of purchasing Lesaka Technologies (LSAK) shares after a quarter's revenue increase and holding them for 30 days achieved a 49% return over the past year. However, this strategy proved less effective in the long term, with only a 0.8% gain over three years. The past year's performance underscores the strategy's capacity to capture short-term growth, yet the three-year perspective reveals ongoing challenges in achieving sustained profitability. This is a critical factor for shareholders seeking long-term wealth creation. While the strategy shows potential during periods of market volatility, it may not be sufficiently robust for enduring investment interest.

CEO Commentary

Ali Mazanderani, Chairman of Lesaka Technologies, expressed satisfaction with the company's ability to meet guidance for Q3 2025 and reaffirmed the full-year outlook for FY2025. He highlighted the growth in Net Revenue and Group Adjusted EBITDA, indicating a positive trajectory for the business. Mazanderani emphasized the strategic focus on driving revenue and profitability while managing costs, despite facing transaction costs that impacted operating income. He conveyed optimism about achieving projected positive net income in FY2026, reflecting confidence in the company's operational performance and market positioning.

Guidance

For FY2025, Lesaka Technologies expects revenue to range between ZAR 10.0 billion and ZAR 11.0 billion, with net revenue projected between ZAR 5.2 billion and ZAR 5.6 billion. Group Adjusted EBITDA is anticipated to be between ZAR 900 million and ZAR 1 billion. Looking ahead to FY2026, the company forecasts revenue between ZAR 11.4 billion and ZAR 12.2 billion, net revenue between ZAR 6.4 billion and ZAR 6.9 billion, and Group Adjusted EBITDA between ZAR 1.25 billion and ZAR 1.45 billion, with a positive net income attributable to Lesaka.

Additional News

Lesaka Technologies recently completed the acquisition of Adumo, significantly expanding its Merchant division by adding 27,000 devices and increasing quarterly throughput to ZAR 11.3 billion. The company is also awaiting regulatory approval for its proposed acquisition of Recharger, which will allow entry into the private utilities market, aligning with their strategy to diversify the Enterprise division. Furthermore, Lesaka has improved its B-BBEE rating to Level 3, enhancing its competitive position for securing government contracts and partnerships in South Africa, which is expected to unlock new revenue opportunities.