Lesaka Technologies, a leading Fintech company with a strong presence on both the Nasdaq and the Johannesburg Stock Exchange (JSE), has announced its impressive first-quarter financial results for 2024, demonstrating robust growth and a significant return to profitability. The company’s performance is a testament to its resilience and adaptability in an ever-changing economic landscape.
Table 1: Lesaka Technologies Q1 2024 Financial Performance
Financial Metrics | Q1 2024 (USD ‘000s) | Q1 2023 (USD ‘000s) | % Change (USD) | % Change (ZAR) |
---|---|---|---|---|
Revenue | 136,089 | 124,786 | 9% | 19% |
Operating Income (Loss) | 228 | (4,671) | nm (not meaningful) | nm |
Net Loss Attributable to Lesaka | (5,651) | (10,696) | -47% | -42% |
GAAP Loss Per Share (USD) | (0.09) | (0.17) | -48% | -44% |
Group Adjusted EBITDA (USD ‘000s) | 8,719 | 4,199 | 108% | 127% |
Fundamental Loss Per Share (USD) | – | (0.08) | nm | nm |
(Source: Lesaka Technologies Q1 2024 Financial Results)
Lesaka Technologies reported Q1 2024 revenue of $136.1 million (ZAR 2.5 billion), marking a 9% increase compared to the same period in 2023. This impressive growth was primarily driven by a surge in low-margin prepaid airtime sales and other value-added services, as well as higher transaction, insurance, and lending revenues. The company’s operations in South Africa’s informal market continue to thrive, contributing to a substantial revenue increase of 19% in South African Rand (ZAR).
Furthermore, Lesaka achieved a return to operating profitability with an operating income of $0.2 million (ZAR 4.2 million) for Q1 2024, in stark contrast to an operating loss of $4.7 million (ZAR 80.0 million) in Q1 2023. This turnaround was propelled by cost reduction initiatives in the Consumer Division and the significant growth in the Merchant Division.
Lesaka Technologies’ net loss continued to narrow, reporting a net loss of $5.7 million (ZAR 105.6 million) in Q1 2024. This represents a remarkable 42% improvement in ZAR compared to the same period in 2023.
Group Adjusted EBITDA, a key performance metric for the company, showed substantial improvement. Lesaka reported Group Adjusted EBITDA of $8.7 million (ZAR 162.5 million) for Q1 2024, a remarkable 108% increase compared to Q1 2023. In ZAR, Group Adjusted EBITDA increased by an even more substantial 126%, underlining the company’s robust financial performance.
The Merchant Division, a core part of Lesaka’s business, demonstrated continued year-on-year growth in profitability. In Q1 2024, it delivered Segment Adjusted EBITDA of $8.1 million (ZAR 150.2 million), showcasing an 11% increase in ZAR compared to Q1 2023. The positive outlook for the Merchant Division is driven by its expanding footprint in South Africa’s informal market.
The Consumer Division reported its fourth consecutive quarter of profitability, delivering Segment Adjusted EBITDA of $2.5 million (ZAR 46.6 million) in Q1 2024. This significant turnaround marks a substantial improvement from a loss of $1.4 million (ZAR 23.9 million) in Q1 2023. Initiatives aimed at growing the Consumer Division are yielding positive results, with revenue increasing by 13% in ZAR. This growth is achieved while operating in a challenging economic environment.
Lesaka Technologies maintained momentum in achieving positive net cash provided by operating activities, reporting $3.4 million (ZAR 63.2 million) in Q1 2024. This marks a notable shift from the net cash used in operating activities of $7.7 million (ZAR 131.2 million) in Q1 2023.
The company reaffirmed its guidance for fiscal 2024, demonstrating confidence in its future performance. For the second quarter of 2024 (Q2 2024), ending on December 31, 2023, Lesaka anticipates:
Table 2: Lesaka Technologies Q2 2024 Guidance
Q2 2024 Guidance | Low (ZAR) | High (ZAR) |
---|---|---|
Revenue | 2.65 billion | 2.75 billion |
Group Adjusted EBITDA | 170 million | 180 million |
For the full fiscal year 2024 (FY 2024), ending on June 30, 2024, Lesaka Technologies expects:
Table 3: Lesaka Technologies FY 2024 Guidance
FY 2024 Guidance | Low (ZAR) | High (ZAR) |
---|---|---|
Revenue | 10.7 billion | 11.7 billion |
Group Adjusted EBITDA | 680 million | 740 million |
Lesaka’s management has provided this guidance based on ZAR financial metrics, as the company primarily measures its operating performance in South African Rand. It’s essential to note that Group Adjusted EBITDA is a non-GAAP financial measure and excludes certain charges. The company has not reconciled this non-GAAP financial measure to the corresponding GAAP financial measure due to factors outside its control.
The impressive results can be attributed to several factors:
Lesaka Technologies evaluates segment performance based on Segment Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), adjusted for specific items. Key segment results include:
Lesaka Technologies reported cash and cash equivalents of $35.1 million as of September 30, 2023, with unrestricted cash balances increasing due to positive contributions from the Merchant and Consumer divisions. The company utilized cash reserves for scheduled loan repayments, investments in assets, and working capital.
Lesaka Technologies continues to demonstrate its strength and resilience in the Fintech sector. The company’s ability to adapt and thrive in challenging economic conditions is evident in its Q1 2024 results. With a positive outlook and reaffirmed guidance for fiscal 2024, Lesaka Technologies is poised for continued growth and success.
Lesaka Group CEO Chris Meyer commented on the encouraging results, stating, “It has been yet another encouraging quarter for us. We achieved a major milestone by returning to profitability at an operating level for the quarter. In a tough economic environment, the continued growth in all our key revenue drivers demonstrates the resilience of our business model and the relevance of our services to our customers. We will continue to innovate and extend the positive impact we are having on the lives of South Africa’s small merchants and grant beneficiaries as the digitalization trend in the informal economy continues.”
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