South African payments giant takes a hit

Lesaka reported mixed but strategically positive third-quarter results, with its investment in Mobikwik requiring a significant fair value adjustment.

Lesaka is a South African fintech company that operates across the continent and focuses on underserved consumers and merchants. 

Therefore, its payment offerings are heavily focused on South Africa’s large and growing informal economy. For example, its Kazang offering services micro-merchants like shop owners, traders and other entrepreneurs.

However, the company began moving into the formal economy in late 2024 with its acquisition of Adumo.

Lesaka offers an integrated multiproduct platform that provides transactional accounts,  lending, insurance, payouts, card acquiring, cash management, software and Alternative Digital Payments (ADP). 

ADP includes the company’s pre-paid solutions and supplier-enabled payments, which it recently expanded with the acquisition of prepaid electricity submetering and payments business Recharger.

For the third quarter of its 2025 financial year, Lesaka reported a slight decrease in revenue compared to the third quarter of the prior year, from R2.6 billion to R2.5 billion.

However, it noted that this figure remained around the midpoint of its revenue guidance.

The company also reported a decline in operating income, going from R15 million in the third quarter of its 2024 financial year to R10.9 million in 2025.

Lesaka attributed this to the inclusion of R42.3 million once-off transaction costs in Q3 2025, compared to R17.1 million in Q3 2024. 

The company’s net loss widened further, increasing to R404.3 million compared to R76.4 million the year prior. This was largely due to a non-cash R310.6 million fair value adjustment for its Mobikwik investment in the period.

Mobikwik is one of the largest fintech companies in India, in which Lesaka has a significant equity stake.

Despite this hit from its Mobikwik investment, Lesaka reported some organic growth in net revenue, EBITDA, and fundamental earnings.

Lesaka’s Group Adjusted EBITDA improved by 29% to R236.8 million compared to R183.3 million the year prior.

While the company’s loss per share worsened to R5.02 per share, its fundamental earnings increased by 98% to R58 million.

Lesaka’s best-performing division in the three-month period was its Consumer Division, which grew revenue by 32% to R445.8 million and its Segment Adjusted EBITDA by 65% to R117.1 million.

The company’s Merchant Division did not perform as well, with revenue decreasing by 10% to R1.9 billion. However, its EBITDA increased by 7% to R149.9 million.

Looking forward, the company expects its revenue for the 2025 financial year to be between R10 billion and R11 billion. In addition, the company projected that its full-year EBITDA would fall between R900 million and R1 billion.