Lesaka Tech: Q4 2023 Revenue Surges, Losses Narrow

  • Lesaka Technologies reports a 9% revenue increase in Q4 2023, exceeding revenue guidance and achieving a 32% growth on a constant currency basis.
  • The company's net loss narrows by 21%, despite non-cash charges, reflecting a significant financial turnaround in its operations.
  • Lesaka's Merchant and Consumer divisions both contribute to improved profitability, demonstrating successful growth and innovation strategies.

In a significant financial turnaround, Lesaka Technologies, Inc. (LSAK), a South African fintech company, has reported a 9% increase in revenue for the fourth quarter of 2023, exceeding the upper end of its revenue guidance. The company’s Q4 2023 revenue stood at $133.1 million (ZAR 2.5 billion), compared to $121.8 million (ZAR 1.9 billion) in the same period in 2022.

This impressive performance can be attributed to the full-period inclusion of the Connect Group, which outperformed expectations, and the successful turnaround of the Consumer Division. On a constant currency basis, revenue experienced an even more significant surge, growing by an impressive 32%.

The key financial highlights for the fourth quarter include:

MetricQ4 2023 (USD ‘000s)Q4 2022 (USD ‘000s)Change (%)
Revenue$133,149$121,789+9%
Net Loss$11,909$15,149-21%
Operating Loss$6,631$10,122-34%
Group Adjusted EBITDA (loss) (1)$8,449$3,896+117%

(1) Group Adjusted EBITDA (loss) is a non-GAAP measure.

The net loss for Q4 2023, despite including a non-cash impairment charge and a non-cash PPA amortization charge, narrowed to $11.9 million, representing a 21% improvement compared to the same quarter in the previous year. Excluding the impact of the non-cash impairment charge, Lesaka would have reported a net loss of $4.9 million, marking a remarkable 68% improvement from the comparable prior year period.

The operating loss for Q4 2023 was $6.6 million, inclusive of a non-cash impairment charge and non-cash PPA amortization charge. This represents a significant improvement compared to the operating loss of $10.1 million in Q4 2022.

The standout performer in Lesaka’s portfolio has been its Merchant Division, which delivered Segment Adjusted EBITDA of $8.2 million in Q4 2023. This segment’s outlook remains positive as it extends its footprint across Southern Africa’s largely untapped informal market.

The Consumer Division also showed strong signs of improvement, reporting a third consecutive quarter of profitability, with Segment Adjusted EBITDA reaching $2.5 million in Q4 2023, compared to a loss of $1.2 million in Q4 2022. Targeted interventions and cost reductions have contributed to revenue growth of 26% on a constant currency basis.

Lesaka’s CEO, Chris Meyer, expressed his satisfaction with the company’s performance, saying, “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.”

Meyer added, “Our Consumer Division reported a third consecutive quarter of increasing profitability, evidencing our transition from turnaround to growth. We continue to innovate and deliver market-leading solutions to our customers.”

Looking ahead, Lesaka Technologies is optimistic about the future, with plans to continue delivering innovative financial solutions to both merchants and consumers in Southern Africa.

For the first quarter of 2024 (Q1 2024), the company expects revenue between ZAR 2.50 billion and ZAR 2.55 billion, with Group Adjusted EBITDA projected to be between ZAR 160 million and ZAR 165 million. For the full fiscal year 2024 (FY 2024), Lesaka anticipates revenue between ZAR 10.7 billion and ZAR 11.7 billion, with Group Adjusted EBITDA estimated to be between ZAR 680 million and ZAR 740 million.

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