LESAKA TECHNOLOGIES (LSAK)·Q2 2026 Earnings Summary

Lesaka Posts First-Ever Profit as South African Fintech Hits Major Milestone

February 05, 2026 · by Fintool AI Agent

Lesaka Technologies delivered a milestone quarter, reporting its first positive GAAP net income since the company's formation in 2022. Q2 FY2026 results crushed expectations across the board: revenue of $178.7M beat consensus by 13%, adjusted EPS of $0.08 topped estimates by 167%, and Group Adjusted EBITDA surged 47% year-over-year to $17.8M.

The stock closed down 1.9% at $4.56 on the day but jumped 5.3% in after-hours trading to $4.80 following the earnings release, reflecting investor enthusiasm for the profitability milestone.

Did Lesaka Beat Earnings?

Yes — decisively across all key metrics.

Consensus estimates from S&P Global.

This marks Lesaka's 14th consecutive quarter meeting or beating guidance — an impressive streak that has rebuilt credibility with investors after years of losses.

Chairman Ali Mazanderani emphasized the significance: "I am delighted that for the first time since the creation of Lesaka in 2022, we have delivered a positive Net Income and met our guidance for the 14th consecutive quarter."

What Changed From Last Quarter?

Two strategic milestones defined Q2 beyond the profitability achievement:

1. Competition Tribunal approval for Bank Zero — A significant step forward in the combination, with ongoing engagement with South Africa's Prudential Authority for final approval.

2. One Lesaka brand consolidation — The company announced consolidation of all operating brands under a single "One Lesaka" identity, with a new visual logo inspired by a footprint symbolizing "presence, partnership, and purpose." In June, multiple Kazang offices will consolidate into a single Johannesburg location for cost and cultural efficiencies.

The profitability inflection point arrived this quarter after several quarters of improving fundamentals:

Key drivers of the improvement:

• Consumer segment EBITDA doubled to $9.3M vs. $4.3M YoY (+106%)
• Enterprise segment swung to profitability ($1.4M EBITDA vs. loss last year)
• Operating income expanded to $2.2M vs. $0.5M in the prior year (+265%)

How Did Each Segment Perform?

The story is one of diversification away from Merchant toward higher-margin Consumer and Enterprise businesses:

Merchant Segment (74% of Revenue)

The Merchant segment saw revenue decline due to lower volumes in prepaid airtime distribution, but net revenue (which strips out pass-through costs) remained relatively stable. Management introduced new terminology to better reflect their go-to-market strategy:

Merchant outlook: Management expects merchant growth to be flat for the rest of FY26 as they complete the transformative integration, with a return to growth in FY27.

Consumer Segment (19% of Revenue) — Fastest Growing

The Consumer segment is Lesaka's growth engine, offering financial services to underserved South African consumers. In a major milestone, Lesaka recorded the highest net new additions in the grant beneficiary market during Q2, surpassing Capitec and other competitors for the first time. Key KPIs show strong momentum:

The lending business has nearly doubled origination volumes, crossing ZAR 1 billion in quarterly originations for the first time — a milestone achievement. Key drivers:

• Medium-term loans (9-month tenure, up to ZAR 4,000) now represent 40% of originations
• Digital USSD channel now accounts for 8% of new loan originations, enabling instant disbursements without branch visits
• 78% of originations are to repeat borrowers, with 80% being clients of 2+ years — indicating strong credit quality visibility

Enterprise Segment (8% of Revenue) — Turned Profitable

Enterprise now contributes meaningfully to profitability after years of investment. Key channel wins during the quarter:

• Shoprite: Airtime products across 2,500+ stores in South Africa
• Investec: Airtime purchases through native app/web for 150,000+ customers
• SPAR: Bill payments functionality across 850+ stores

ADP TPV grew 18% YoY to R11.9B, while Utilities TPV increased 15% to R465M with 357k active meters. A key development: the proprietary payment switch launched by Enterprise now processes 40% of merchant card acquiring volumes in-house, reducing reliance on third parties and improving both profitability and product innovation speed.

Operating Leverage Taking Hold

The profitability milestone reflects meaningful operating leverage improvements:

Capex is declining as a percentage of EBITDA as the business scales, with growth capex falling to R31M (vs R57M YoY) and maintenance capex dropping to R33M (vs R63M YoY).

What Did Management Guide?

Q3 FY2026 Guidance (Quarter ending March 31, 2026)

Full Year FY2026 Guidance — Reaffirmed

Important note: Guidance excludes the Bank Zero acquisition, which is pending regulatory approval.

How Did the Stock React?

The after-hours move reflects the positive surprise from the profitability milestone. LSAK is now trading near its 52-week high of $5.20.

Valuation context: At $4.80, Lesaka trades at:

• Market cap: ~$392M
• ~22x FY2026E adjusted earnings (using midpoint EPS guidance of ZAR 4.60 ≈ $0.22)

Q&A Highlights

Management fielded questions from analysts Theodore O'Neill (Litchfield Hills Research) and Ross Krige (Investec). Key takeaways:

On Consumer segment growth drivers:

"We are taking market share from an existing competitor, largely the Postbank, and from other banks. We are growing net addition customers more than our competitors... When it comes to loans and insurance, these customers are underserved. Many of them do not have any formal institutions that are able to provide them with loans or insurance." — Lincoln Mali, COO

On Merchant ARPU outlook:

"We expect that ARPU to stabilize and then ultimately increase over the coming 12 months. The driver of that increase is not individual product ARPU... it's effectively as a consequence of the collective." — Ali Mazanderani, Chairman

On lending growth trajectory:

"I would see the same level of growth because we are still at an early stage of the evolution of this loan product. 40% are taking up [the new medium-term loan]. We think that a larger group will take that in the near term." — Lincoln Mali, COO

On Bank Zero deposits:

"We expect, as a consequence of the Bank Zero acquisition, that we would be reducing the gross debt of the business by north of ZAR 1 billion. I would say that that is the lower bound." — Ali Mazanderani, Chairman

On One Lesaka rebrand costs: Marketing costs for the brand launch are estimated at ZAR 50-75 million over the next two quarters, excluded from adjusted EBITDA.

What Are the Key Risks?

1. Currency exposure: Lesaka reports in USD but operates primarily in ZAR. The ZAR/USD exchange rate of 16.96 in Q2 FY26 vs. 17.85 in Q2 FY25 created headwinds for USD-reported revenue.

2. Merchant segment pressure: The core Merchant business declined 13% YoY on revenue, reflecting structural challenges in prepaid airtime distribution.

3. Prior period corrections: The company disclosed immaterial revisions to prior period financials related to indirect tax accounting errors dating back to June 2022.

4. Bank Zero execution risk: The pending acquisition is subject to regulatory approvals and adds integration complexity.

What's Next for Lesaka?

Near-term catalysts:

• Bank Zero acquisition closing (pending regulatory approval)
• Q3 FY2026 results (May 2026)
• Continued Consumer and Enterprise segment growth

The key question: Can Lesaka sustain profitability and continue its diversification away from the declining Merchant segment? The Consumer and Enterprise businesses are growing rapidly, but they need to offset Merchant headwinds.

Historical Performance

Data from S&P Global and company filings.

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Related: View LSAK Company Page | Q2 FY2026 8-K Filing