Lesaka Technologies (NASDAQ: LSAK), a South African fintech company, delivered a strong fiscal 2026 performance, marking a profitability inflection and outlining bold growth ambitions for the next three years. The company’s adjusted EBITDA surged 22% year-over-year to R367 million, while adjusted earnings per share (EPS) rose 166% to R2.40, beating analyst expectations by 114%. Full-year GAAP profitability was achieved for the first time since 2022, with net revenue climbing 20% to R6.33 billion and adjusted EBITDA expanding 41% to R1.27 billion. Despite a 4.9% drop in stock price to $4.27 following the announcement, shares rose 2.18% in pre-market trading, reflecting investor optimism about the company’s strategic direction and financial resilience.
The company’s three divisions—merchant, consumer, and enterprise—each contributed to its growth trajectory. The merchant division saw active merchants increase 12% to 132,000, with total payment volume rising 27% to R44 billion. Meanwhile, the consumer division expanded its active consumer base to 2 million, with lending origination volume growing 51% and insurance gross written premiums up 41%. The enterprise division’s total payment volume increased 20%, while its utilities business saw a 151% surge after the Recharger acquisition. Adjusted EBITDA across divisions grew 56% in consumer and 255% in enterprise, underscoring strong operational efficiency gains.
A key driver of Lesaka’s growth has been its strategic acquisitions, most notably Bank Zero, which received unconditional approval from South Africa’s Prudential Authority and Exchange Control. The deal, expected to close by December 2026, aims to accelerate deposit growth, with the initial deposit base expanding to R700 million and projected to exceed R4 billion by fiscal 2029. The acquisition is also expected to reduce net debt by approximately R2.3 billion by Q1 FY28, improving the net debt-to-adjusted EBITDA ratio below 1.0x.
For fiscal 2027, Lesaka expects net revenue to range between R7.0 billion and R7.7 billion, a 11% to 22% increase, while adjusted EBITDA is projected between R1.45 billion and R1.60 billion, reflecting a 14% to 26% rise. Adjusted EPS guidance ranges from R7.50 to R8.50, representing a 15% to 31% growth. Over the next three years, the company targets a 20% compound annual growth rate (CAGR) in net revenue, 30% in adjusted EBITDA, and 40% in adjusted EPS. Consumer division growth is expected to drive active consumers to 3 million, while merchant and enterprise divisions aim for 200,000 and R80 billion in total payment volume, respectively.
Management emphasized the strategic importance of the Bank Zero acquisition, highlighting its role in enabling Lesaka’s core fintech activities. Dan Mthimunye, CFO, noted that FY 2026 was a year of financial transformation, with the company delivering on adjusted EBITDA guidance and surpassing EPS expectations. Steve Posner, CSO, underscored Lesaka’s commitment to fintech innovation, stating that a banking license remains a critical enabler for its growth strategy.
Despite the stock’s recent decline, the company’s forward-looking guidance and operational milestones position it as a key player in South Africa’s fintech sector, with potential for significant upside as it executes its expansion plans.
