LSAK filing — read by section

Item 7. Management’s Discussion and Analysis

ITEM 7. 
MANAGEMENT’S DISCUSSION AND ANALYSIS 
OF FINANCIAL CONDITION AND 
 RESULTS 
OF OPERATIONS 
 The following 
discussion and 
analysis should 
be read 
in conjunction 
with Item 
8—“Financial Statements 
and Supplementary 
 Data.” In 
addition 
to historical 
consolidated 
financial 
information, 
the following 
discussion 
and 
analysis contains 
forward-looking 
 statements that involve risks, uncertainties and assumptions. See Item 1A— 
“Risk Factors” and “Forward Looking Statements.” 
 U.S. securities laws 
require that when 
we publish any 
non-GAAP measures, we 
disclose the reason 
for using these 
non-GAAP 
 measures 
and 
provide 
reconciliations 
to 
the 
most 
directly 
comparable 
GAAP 
measures. 
We 
discuss 
why 
we 
consider 
it 
useful 
to 
 present these non-GAAP 
measures and the 
material risks and 
limitations of these 
measures, as well 
as a reconciliation 
of these non-
 GAAP measures 
to the 
most directly 
comparable GAAP 
financial measure 
below at 
“—Results of Operations 
—Use of Non-GAAP 
 Measures” below. 
 Overview 
 We are a provider of financial technology, 
or fintech, products and services to unbanked and underbanked individuals and small 
 businesses, predominantly 
in South Africa. 
We 
have developed and 
own most of 
our payment technologies, 
and where possible, 
we 
 utilize this technology to 
provide financial and 
value-added services to 
our customers by 
including them in the 
formal financial system. 
 Sources of Revenue 
 We 
generate our 
revenues by 
charging 
transaction fees 
to merchants, 
financial service 
providers, utility 
providers, bill 
issuers 
 and consumers; 
by selling 
pinned airtime 
to merchants; 
by providing 
loans to 
merchants and 
consumers, and 
insurance products 
to 
 consumers and by selling hardware, licensing software and providing 
related technology services to merchants. 
 We act 
as a service provider whereby we 
own and operate the technology and 
apply it in a system ourselves, 
charging one-time 
 and ongoing fees for the use of the system either on 
a fixed or ad valorem basis. For instance, through 
the acquisition of Connect, we 
 now provide cash management and payment services to merchant customers through a digital vault (safe asset) which is located at the 
 customer’s premises and 
generate processing revenue from 
the provision of these services. 
We also 
offer merchant customers 
access 
 to platforms through 
which we (a) generate 
revenue from the sale 
of prepaid airtime and 
(b) generate fees from 
distribution of VAS, 
 including prepaid 
airtime, prepaid 
electricity, 
gaming voucher, 
and other 
services, to 
users of 
our platforms. 
We 
also generate 
fees 
 from debit 
and credit 
card transaction 
processing and 
interest revenue 
from qualifying 
merchant 
customers 
who are 
able to 
access 
 short-term loans. The revenue and costs associated with these services and 
sales are included in our merchant operating segment. 
 We 
provide consumers with 
bank accounts from 
which we generate 
a monthly fee 
and also charge 
fees on an ad 
valorem basis 
 for goods 
and services 
purchased. Usage 
of our 
bank accounts 
also provides 
our customers 
with access 
to short-term 
loans and 
life 
 insurance products. 
We 
also generate 
fees from 
consumers utilizing 
our ATM 
network. The 
revenue and 
costs associated 
with this 
 approach are reflected in our consumer operating segment. 
 Developments during Fiscal 2023 
 Fiscal 2023 represents a milestone for Lesaka. We 
made significant progress in our turnaround strategy and delivered continued 
 growth for Lesaka despite challenging macroeconomic and socio-political 
conditions. 

 We 
reported a 
net loss 
attributable to 
us of 
$35.1 million 
(ZAR 629.2 
million) during 
fiscal 2023 
compared with 
a net 
loss of 
 $43.9 million (ZAR 666.8 million) during fiscal 2022. Our Consumer Division (“Consumer”) returned to 
profitability and contributed 
 three 
sequential 
quarters 
of 
positive 
Segment 
Adjusted 
EBITDA, 
with 
our 
Merchant 
Division 
“(Merchant”) 
continuing 
to 
display 
 strong 
growth 
and 
Segment 
Adjusted 
EBITDA 
profitability 
during 
the 
entire 
fiscal 
year. 
We 
delivered 
Group 
Adjusted 
EBITDA 
 profit, 
a non-GAAP measure, of ZAR 497.6 million ($27.7 million) in fiscal 2023, compared with a Group Adjusted EBITDA loss of 
 ZAR 267.7 
million ($17.6 
million) in 
fiscal 2022, demonstrating 
successful execution 
against a 
carefully considered 
transformation 
 and growth strategy. 
Group Adjusted EBITDA 
is a non-GAAP measure, 
refer to reconciliation below 
at “—Results of Operations—
 Use of Non-GAAP Measures”. 
 Our mission at Lesaka is 
to enable merchants to compete and 
grow, and to improve the lives of 
South Africa’s grant beneficiaries 
 by providing access 
to innovative financial 
technology and value 
creating solutions. We 
achieve this through our 
vision to build 
and 
 operate the 
leading full-service 
fintech platform 
in Southern 
Africa, offering 
cash management, 
payment processing, 
Value 
Added 
 Services (“VAS”), 
capital and financial services to merchants and underserved consumers. 
 

 
 
 28 
 Merchant Division outperformance 
 Our Merchant Division has 
shown significant growth in our offering 
to MSME, which is supported 
by the robust secular trends 
 underpinning financial inclusion, cash management and digitalization 
for MSMEs. 

 Performance in our Merchant division has been driven by: 
 ●
 Kazang, which is our VAS and Supplier Payments Business, has seen 
strong adoption by MSMEs in 
the informal sector, with 
 a 47% year-on-year 
growth in the 
number of devices 
deployed. We 
had approximately 
75,000 devices deployed 
as of June 
 30, 2023, compared to approximately 51,000 devices one year ago; 
 ●
 We 
provide card acquiring 
solutions in the informal 
sector via Kazang 
Pay and in 
the formal sector we 
provide this service 
 through 
Card 
Connect. 
Card-enabled 
POS 
devices 
increased 
to 
approximately 
44,900 
as 
of 
June 
30, 
2023, 
compared 
to 
 approximately 22,650 a year ago, a growth of 98% in deployed devices; 

 ●
 We provide merchants access to credit through Capital 
Connect and Kazang Pay 
Advance. We continue to see strong demand 
 for this merchant 
credit offering 
and disbursed 
just over ZAR 
1.0 billion 
during the 
year, compared 
to approximately 
ZAR 
 0.6 billion in the comparable period last year, representing 
growth of 62%. 
 ●
 Our automated cash management and payments business, Cash 
Connect, effectively puts the “bank” in approximately 
4,390 
 merchants’ stores (compared to approximately 4,080 merchants’ 
stores a year ago). Cash 
Connect is a provider of 
robust cash 
 vaults in the 
formal sector, 
and is building 
a presence 
in the informal 
sector. 
Cash Connect enables 
our merchant 
customer 
 base to significantly mitigate their operational risks pertaining to cash management 
and security. 

 Consumer Division contributing sequential positive Segment Adjusted EBITDA 
and poised for growth 
 Over the past four quarters we have consistently referenced the 
three levers underpinning our strategy of returning the Consumer 
 Division 
to 
profitability 
- 
growing 
active 
EasyPay 
Everywhere 
(“EPE”) 
account 
numbers, 
increasing 
average 
revenue 
per 
user 
 (“ARPU”) through cross-selling and cost optimization. 

 The progress on our three key initiatives is as follows: 
 ●
 Driving customer acquisition
 ○
 Our total active EPE transactional account base 
stood at approximately 1.3 million at 
the end of June 2023, 
of which 
 approximately 
1.1 million 
(or approximately 
85%) are 
permanent grant 
recipients. The 
balance 
comprises Social 
 Relief of 
Distress (“SRD”) 
grant 
recipients, which 
was introduced 
during the 
COVID pandemic 
and extended 
in 
 calendar 2023. As of the end of June 
2023, we increased our permanent grant account base by 2% on 
a net basis and 
 our 
total 
grant 
base 
by 
10% 
on 
a 
net 
basis, 
compared 
to 
the 
prior 
year. 
The 
net 
growth 
of 
our 
permanent 
grant 
 recipient base has 
been slower 
than anticipated as 
we continue to 
transition the business 
into a 
sales driven, customer-
 centric, financial services provider. 

 ○
 Our priority 
is to grow 
our permanent 
grant recipient 
customers base, 
where we 
can build 
deeper relationships 
by 
 offering other products such as insurance and lending. We do not offer the same breadth of service to the SRD grant 
 base due to the temporary nature of the grant. 
 ○
 We continue to focus our efforts on designing and implementing products and services that we believe will enhance 
 the lives of these people and their families. This in turn should improve account 
activation and utilization. 
 ●
 Progress on cross 
selling 
 EasyPay Loans 

 o
 We originated approximately 850,000 loans in fiscal 2023 with our net consumer loan book increasing 19% to ZAR 
 415 
million 
as 
of 
June 
30, 
2023, 
compared 
to 
ZAR 
349 
million 
as 
of 
June 
30, 
2022. 
The 
loan 
conversion 
rate 
 continues to 
improve following 
the implementation 
of a 
number of 
targeted loan 
campaigns over 
the last 
quarter. 
 The portfolio loss ratio, 
calculated as the loans 
written off during the 
period as a percentage 
of the total loan book, 
 remains encouragingly low at approximately 6% per annum. 
 EasyPay Insurance 

 o
 Our insurance product sales 
continues 
to grow and 
is a material 
contributor to the 
improvement in our 
overall ARPU. 
 We 
have been 
able to improve 
customer penetration 
to approximately 
30% of our 
active permanent 
grant account 
 base as of June 30, 2023, compared to just below 20% as of June 30, 2022. Over 124,700 new policies were written 
 during fiscal 2023, compared to approximately 27,600 in the comparable period in fiscal 2022. The total number of 
 active policies has 
grown by 36% 
to approximately 335,000 policies 
as of June 
30, 2023, compared to 
June 30, 2022. 
 o
 We 
have experienced 
a reduction in 
the number of 
insurance claims incurred 
following the cancellation 
of certain 
 offerings and also as a result of reduction in the number of pandemic 
-related deaths. 

 
 
 29 
 ARPU 

 o
 ARPU for our 
permanent client base 
has increased 
to approximately ZAR 
80 for the 
fourth quarter of 
fiscal 2023, 
 from approximately ZAR 74 in the fourth quarter of fiscal 2022. 

 ●
 Cost optimization 
 o
 Successful execution 
of the 
cost optimization 
initiatives has 
contributed 
to our 
achievement of 
three consecutive 
 quarters of positive 
Segment Adjusted EBITDA. 
These initiatives included 
branch rationalizations, deployment 
of 
 our 
ATMs 
in 
third 
party 
merchant 
stores 
and 
reductions 
in 
our 
cash 
management 
expenditures. 
We 
continue 
to 
 evaluate 
and 
implement 
further 
optimization 
measures, 
particularly 
around 
our 
branch 
infrastructure 
and 
ATM 
 network, as we grow our Consumer Division. 

 Strengthening our relationships with key 
stakeholders 
 We continue to build our relationship with the South African Social Security Agency (“SASSA”) through proactive engagement 
 at a local, provincial, and national level. 

 We 
have 
also 
made 
good 
progress 
in 
enhancing 
our 
relationships 
with 
our 
shareholders, 
regulators, 
suppliers 
and 
other 
key 
 participants across our industry. 
 Economic Environment and Impact of loadshedding 

 The 
trading 
environment 
remains 
challenging 
in 
South 
Africa. 
High 
interest 
rates, 
inflation 
and 
unemployment 
are 
being 
 compounded by daily power 
cuts (known as load-shedding 
in South Africa). The power 
disruptions adversely impact our 
customers, 
 especially in our 
Merchant Division, where 
they lose valuable 
trading hours if 
they do not 
have access to 
alternative power supplies 
 and 
back-up 
facilities 
to 
process 
electronic 
payments 
and 
value-added 
services. 
The 
negative 
impact 
is, 
however, 
to 
some 
extent 
 mitigated as our customer base is geographically diversified, and the rotational nature of load-shedding results in 
localized power cuts 
 over shorter time periods. 
 According to data published by EskomSePush, our customers experienced significantly higher level of load-shedding during the 
 first six months of calendar 2023 of just over five hours, on average, per day, 
compared with just over two hours, on average, 
per day 
 during calendar 2022. Specifically, these power cuts intensified during 
the fourth quarter of 
fiscal 2023, frequently exceeding 10 hours 
 per day. 
This deterioration 
has severely 
impacted our 
merchant’s 
ability to 
make up 
lost trading 
hours and 
recharge back 
up power 
 supplies where available. 
 Notwithstanding 
the 
challenging 
operating 
environment 
our 
teams 
have 
delivered 
growth 
in 
the 
Merchant 
and 
Consumer 
 Divisions, demonstrating the resilience of our business model which is firmly underpinned by 
the relevance and value of our offering 
 to our target market. 

 Improvement in our Broad Based Black Economic 
Empowerment (“B-BBEE”) rating to level 5 
 B-BBEE is 
key 
strategic priority 
for us. 
Achievement 
of B-BBEE 
objectives 
is measured 
by a 
scorecard which 
establishes a 
 weighting 
for 
various 
elements. 
Scorecards 
are 
independently 
reviewed 
by 
accredited 
BEE 
verification 
agencies 
which 
issue 
a 
 certificate that presents 
an entity’s 
BEE Contributor Status 
Level, with level 1 
being the highest and 
“no rating” (a level 
below level 
 8) as the lowest. 
During fiscal 2023, we 
made significant progress in terms 
of improving our empowerment credentials 
and are pleased 
 to report 
that our 
independently 
verified 
B-BBEE rating 
has improved 
to a 
level 5 
rating from 
a level 
8 rating. 
Together 
with the 
 various other B-BBEE initiatives and programmes being 
rolled out, including our Youth 
Employment Services (“YES”) programme, 
 we aim to achieve a level 4 rating by the end of fiscal year 2024. 

 Employee Share Ownership Plan (“ESOP”) 
 Under 
the 
South 
African 
Competition 
Tribunal’s 
approval 
of 
the 
Connect 
acquisition, 
we 
are 
required 
to 
establish 
an 
ESOP 
 within 36 months of 
the implementation of the 
transaction that complies with certain 
design principles. This will 
benefit the workers 
 of the merged 
entity and result in 
them receiving a shareholding 
in our company equal 
in value to at 
least 3% of the 
issued shares in 
 our company as of April 14, 2022. If within 24 months of the implementation date of the transaction, we generate a positive net profit 
 for three consecutive 
quarters, the 
ESOP shall 
increase to 
5% of 
the issued 
shares in 
our company 
as of 
April 14, 
2022. We 
expect 
 that the majority 
of our South African 
workforce will be 
eligible to participate 
in the ESOP. 
We 
expect that participating 
employees 
 will be required 
to earn the 
shares awarded over 
a period of 
time, currently 
estimated at approximately 
seven years, 
but this vesting 
 period, as well as other 
terms of ESOP, 
have not been finalized 
as of the date of 
filing this Annual Report 
on Form 10-K and 
will be 
 subject to shareholder approval. 
 We 
currently 
expect to 
issue up 
to 5% 
of our 
issued share 
capital to 
the ESOP 
and 
we believe 
that this 
transaction 
will be 
a 
 qualifying transaction under South Africa’s Broad Based Black Economic Empowerment 
Act, and is a key strategic imperative for us 
 in achieving a target BBEE level 4 rating by 30 
June 2024. We are 
pleased to report that we progressed well on this 
initiative and are 
 confident that we will achieve this condition of the Connect acquisition within 
the time frames agreed. 

 
 
 30 
 Critical Accounting Policies 
 Our audited consolidated 
financial statements have 
been prepared in accordance 
with U.S. GAAP, 
which requires management 
 to 
make 
estimates 
and 
assumptions 
about 
future 
events 
that 
affect 
the 
reported 
amount 
of 
assets 
and 
liabilities 
and 
disclosure 
of 
 contingent 
assets and liabilities. As future 
events and their effects 
cannot be determined with 
absolute certainty, 
the determination of 
 estimates requires 
management’s 
judgment based 
on a 
variety of 
assumptions and 
other determinants 
such as 
historical experience, 
 current 
and 
expected 
market 
conditions 
and 
certain 
scientific 
evaluation 
techniques. 
Management 
believes 
that 
the 
following 
 accounting policies 
are critical due 
to the degree 
of estimation required 
and the impact 
of these policies 
on the understandi 
ng of the 
 results of our operations and financial condition. 
 Business Combinations and the Recoverability of Goodwill 

 A significant component 
of our growth 
strategy is to acquire 
and integrate businesses 
that complement 
our existing operations. 
 The purchase 
price of 
an acquired 
business is 
allocated to 
the tangible 
and intangible 
assets acquired 
and liabilities 
assumed 
based 
 upon their estimated 
fair value at the 
date of purchase. 
The difference between 
the purchase price and 
the fair value of 
the net assets 
 acquired is 
recorded as goodwill. 
In determining 
the fair value 
of assets acquired 
and liabilities assumed 
in a business 
combination, 
 we use various 
recognized valuation methods, including 
present value modeling. 
Further, we make assumptions 
using certain valuation 
 techniques, including discount rates and timing of future cash flows. 

 We review the carrying value of goodwill annually 
or more frequently if circumstances indicating impairment have occurred. In 
 performing this review, 
we are required to estimate 
the fair value of goodwill that 
is implied from a valuation of 
the reporting unit to 
 which the goodwill 
has been allocated 
after deducting the 
fair values of 
all the identifiable 
assets and liabilities 
that form part 
of the 
 reporting 
unit. 
The determination 
of 
the fair 
value 
of a 
reporting 
unit requires 
us 
to 
make 
significant 
judgments 
and estimates. 
In 
 determining the fair value of reporting units for 
fiscal 2023 
and 2022, we considered entity-specific growth rates, future expected cash 
 flows 
to 
be 
used 
in 
our 
discounted 
cash 
flow 
model, 
and 
the 
weighted-average 
cost 
of 
capital 
applicable 
to 
peer 
and 
industry 
 comparables of the reporting units. 
We base 
our estimates on assumptions 
we believe to be reasonable 
but that are unpredictable and 
 inherently uncertain. In addition, we make 
judgments and assumptions in allocating assets 
and liabilities to each of 
our reporting units. 
 The results of our impairment tests during fiscal 2023 
indicated that the fair value of our reporting units exceeded 
their carrying 
 values, 
with 
the 
exception 
of 
the 
$7.0 
million 
of 
goodwill 
impaired 
during 
fiscal 
2023, 
as 
discussed 
in 
Note 
10 
to 
our 
audited 
 consolidated financial statements. The 
results of our impairment tests 
during fiscal 2022 
indicated that the fair value 
of our reporting 
 units exceeded their carrying values and so did not require impairment. 
 Intangible Assets Acquired Through Acquisitions 
 The 
fair values 
of the 
identifiable 
intangible 
assets acquired 
through 
acquisitions 
were determined 
by management 
using 
the 
 purchase 
method 
of accounting. 
We 
completed 
the acquisition 
of 
Connect 
during 
fiscal 2022 
where 
we 
identified 
and 
recognized 
 intangible assets. We 
used the relief 
from royalty 
method to value 
identified brands 
and the multi-period 
excess earnings method 
to 
 value the 
integrated platform 
and identified 
customer relationships. 
We 
have used 
the relief 
from royalty 
method, the 
multi-period 
 excess earnings method, the income approach and the cost approach 
to value other historic acquisition-related intangible assets. In so 
 doing, 
we 
made 
assumptions 
regarding 
expected 
future 
revenues 
and 
expenses 
to 
develop 
the 
underlying 
forecasts, 
applied 
 contributory asset charges, discount rates, exchange rates, 
cash tax charges and useful lives. 

 The valuations were based on information available at the 
time of the acquisition and the expectations and 
assumptions that were 
 deemed reasonable by us. No assurance can be given, however, 
that the underlying assumptions or events associated with such assets 
 will occur as 
projected. For these 
reasons, among others, 
the actual cash 
flows may vary 
from forecasts of 
future cash flows. 
To 
the 
 extent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary. 
Management assess the 
 useful life of 
the acquired intangible 
assets upon initial 
recognition and revisions 
to the useful 
life or impairment 
of these intangible 
 assets may be necessary in the future. 
 Revenue recognition – principal versus agent considerations
 We generate 
revenue from the provision of transaction-processing 
services through our various platforms 
and service offerings. 
 We 
use 
these 
platforms 
to 
(a) 
sell 
prepaid 
airtime 
and 
(b) 
distribute 
VAS, 
including 
prepaid 
airtime, 
prepaid 
electricity, 
gaming 
 voucher, and other services, to 
users of our 
platforms. The determination 
of whether we 
act as 
a principal or 
as an agent 
when providing 
 these services 
requires a 
significant amount 
of judgement 
and is based 
on whether 
(i) we 
are primarily 
responsible for 
fulfilling the 
 promise to provide the specified goods or service, (ii) we have inventory risk before the specified good 
or service has been transferred 
 to a customer 
and (iii) we 
have discretion 
in establishing 
the price 
for the specified 
good or 
service. When 
we are the 
principal in 
a 
 transaction, 
such as 
when we 
purchase (and 
thus control 
and assume 
inventory risk) 
prepaid airtime 
before selling 
it to 
customers 
 utilizing our platform, 
revenue is reported 
on a gross 
basis. When we 
are an agent 
in a transaction, 
such as when 
we distribute VAS 
 on behalf of our customers, and do not control the good or service to be provided, revenue is recognized 
based on the amount that we 
 are contractually entitled to receive for performing the distribution 
service on behalf of our customers using our platform. 
 

 
 
 

 

 

 

 

 

 

 

 

 31 
 Valuation 
of investment in Cell C 
 We have elected to measure 
our investment in 
Cell C, an 
unlisted equity security, at fair 
value using the 
fair value option. 
Changes 
 in 
the 
fair 
value 
of 
this 
equity 
security 
are 
recognized 
in 
the 
caption 
“change 
in 
fair 
value 
of 
equity 
securities” 
in 
our 
audited 
 consolidated statements of operations. The tax impact related to the change in 
fair value of equity securities is included in income tax 
 expense in our audited 
consolidated statements of operation. 
The determination of 
the fair value of this 
equity security requires us 
to 
 make significant judgments 
and estimates. 
We base our estimates 
on assumptions we 
believe to be 
reasonable but that 
are unpredictable 
 and inherently uncertain. Refer 
to Note 6 
of our audited consolidated 
financial statements regarding the 
valuation inputs and 
sensitivity 
 related to our investment in Cell C. 
 We used a discounted cash flow model to determine the fair value of our investment in Cell C as of June 30, 2023 and 2022, and 
 valued Cell C at 
$0.0 (zero) as 
of each of 
June 30, 2023 
and 2022. We 
utilized the latest approved 
business plan provided 
by Cell C 
 management for 
the period 
ended December 
31, 2025, 
for the 
June 30, 
2023 
and 2022 
valuations, and 
the following 
key valuation 
 inputs were used: 
 Weighted Average 
Cost of Capital: 
 Between 20% and 31% over the period of the forecast 
 Long-term growth rate: 
 4.5% (3% as of June 30, 2022) 
 Marketability discount: 
 20% (10% as of June 30, 2022) 
 Minority discount: 
 24% (15% as of June 30, 2022) 
 Net adjusted external debt - June 30, 2023:
 (1)
 ZAR 8.1 billion ($0.4 billion), no lease liabilities included 
 Net adjusted external debt - June 30, 2022:
 (2)
 ZAR 13.5 billion ($0.8 billion), no lease liabilities included 
 (1) translated from ZAR to U.S. dollars at exchange rates applicable 
as of June 30, 2023. 
 (2) translated from ZAR to U.S. dollars at exchange rates applicable 
as of June 30, 2022.
 We 
believe the 
Cell C 
business plan 
is reasonable 
based on 
the current 
performance and 
the expected 
changes in 
the business 
 model. Refer to the sensitivity analysis included in 
Note 6 to our audited consolidated financial statements 
related to our valuation of 
 Cell C as of June 30, 2023. 
 Recoverability of equity securities and equity-accounted investments 
 We 
review our 
equity securities 
and equity-accounted 
investments for 
impairment whenever 
events or 
circumstances indicate 
 that the 
carrying amount 
of the 
investment may 
not be 
recoverable. 
In performing 
this review, 
we are 
required to 
estimate the 
fair 
 value of our 
equity-accounted investments and other 
equity securities. The 
determination of the 
fair value of 
these investments requires 
 us to make significant judgments and estimates. 

 Other equity securities include our investments in MobiKwik and CPS. These equity securities do not have readily determinable 
 fair 
values 
and 
therefore 
we 
have 
elected 
to 
measure 
these 
investments 
at 
cost 
minus 
impairment, 
if 
any, 
plus 
or 
minus 
changes 
 resulting 
from 
observable 
price 
changes 
in 
orderly 
transactions 
for 
the 
identical 
or 
a 
similar 
investment 
of 
the 
same 
issuer. 
If 
we 
 identify an impairment indicator related 
to these equity 
securities, we are required 
to assess the 
carrying value of these 
equity securities 
 against their fair 
value. We 
did not identify 
any impairment indicators 
during each 
of fiscal 2023, 
2022 
and 2021, 
and therefore did 
 not recognize any impairment losses related to these equity securities during 
those years. 
 The determination of the fair value of an investment requires us to make significant judgments and estimates. We are required to 
 base our 
estimates on 
assumptions 
which we 
believe to 
be reasonable, 
but these 
assumptions may 
be unpredictable 
and inherently 
 uncertain. 
 The Company did not 
identify any observable transactions during 
either of the 
years ended June 30, 
2023 
and 2022, and therefore 
 there was no 
change in the 
fair value of 
MobiKwik during 
the year. 
During the year 
ended June 30, 
2021, MobiKwik 
entered into a 
 number of separate 
agreements with new 
shareholders to raise 
additional capital through the 
issuance of additional 
shares. Specifically, 
 we used the 
following transactions as 
the basis for 
our fair value 
adjustments to our 
investment in MobiKwik 
during the year 
ended 
 June 30, 2021: (i) in 
early November 2020, $135.54 per 
share; (ii) in March 2021, $170.33 
per share; and (iii) in June 
2021, $245.50 
 per share. We 
considered each of these transactions to 
be an observable price change in 
an orderly transaction for similar or 
identical 
 equity securities issued by MobiKwik. Accordingly, 
the carrying value of our investment in MobiKwik increased 
from $27.0 million 
 as of June 30, 2020, to $76.3 million as of June 30, 2021. The change in the fair value 
of MobiKwik for the year ended June 30, 2021, 
 of 
$49.3 
million, 
is 
included 
in 
the 
caption 
“Change 
in 
fair 
value 
of 
equity 
securities” 
in 
our 
audited 
consolidated 
statement 
of 
 operations for the year ended June 30, 2021. 
 We did 
not identify any impairment indicators 
during fiscal 2022 and therefore 
did not recognize any impairment 
losses related 
 to our 
equity-accounted investments 
during that 
year. 
We 
performed impairment 
assessments 
during fiscal 
2023 
and 2021, 
for our 
 investment in 
Finbond Group 
Limited “(Finbond”) 
following the 
identification of 
certain impairment 
indicators. The 
results of 
our 
 impairment tests during 
fiscal 2023 
and 2021, resulted 
in impairments of 
$1.1 million and 
$21.1 million, respectively, 
related to our 
 equity-accounted investments. These impairments are discussed in 
Note 9 to our audited consolidated financial statements. 

 
 
 32 
 For fiscal 2023, in determining the fair value of Finbond, 
as it is listed on the Johannesburg Stock Exchange, 
its market price as 
 of the impairment assessment dates, 
adjusted for a liquidity discount 
of 25%. For fiscal 2021, 
in determining the fair value of 
certain 
 of our equity-accounted investments, we 
have considered (i) for Finbond 
specifically, its market price as of the 
impairment assessment 
 date, adjusted for a liquidity discount of 15%, 
and (ii) the net asset 
value of the equity-accounted investment being assessed as a proxy 
 of fair value because reasonable cash flow forecasts were not available. 
 We 
base our estimates on 
assumptions we believe to 
be reasonable but that 
are unpredictable and inherently 
uncertain. The fair 
 value of our investment in Finbond is sensitive to movements in its market price, which is quoted in ZAR, because we use the market 
 price as the basis of our valuation. 
 Deferred Taxation 
 We 
estimate 
our 
tax 
liability 
through 
the 
calculations 
done 
for 
the 
determination 
of 
our 
current 
tax 
liability, 
together 
with 
 assessing temporary 
differences 
resulting 
from the 
different 
treatment of 
items for 
tax and 
accounting purposes. 
These differ 
ences 
 result in deferred tax assets and liabilities which are disclosed on our balance 
sheet. 

 Management then 
has to assess 
the likelihood 
that deferred tax 
assets are more 
likely than not 
to be realized 
in the foreseeable 
 future. A valuation allowance is 
created if it is determined 
that a deferred tax asset will not 
be realized in the foreseeable 
future. Any 
 change to the valuation allowance 
would be charged or 
credited to income in the period 
such determination is made. In 
assessing the 
 need for a valuation allowance, 
historical levels of income, expectations 
and risks associated with estimates of 
future taxable income 
 and ongoing prudent and 
practicable tax planning strategies 
are considered. During fiscal 2023 
and 2022, respectively we recorded 
a 
 net decrease 
of $8.0 million 
and $1.7 million, 
to our valuation 
allowance, and during 
fiscal 2021 we 
recorded a net 
increase of $1.5 
 million. As of June 30, 
2023 and 2022, the valuation 
allowance related to deferred 
tax assets was $109.1 million 
and $117.1 million, 
 respectively. 
 Stock-based Compensation 
 Management is required to make estimates and assumptions related to our valuation and recording of stock-based 
compensation 
 charges under 
current accounting 
standards. These standards 
require all share-based 
compensation to employees 
to be recognized 
in 
 the 
statement 
of 
operations 
based on 
their 
respective 
grant date 
fair 
values 
over 
the requisite 
service 
periods 
and 
also 
requires 
an 
 estimation of forfeitures when calculating compensation expense. 

 We utilize the Cox Ross 
Rubinstein binomial model to 
measure the fair 
value of stock 
options granted to 
employees and directors. 
 We 
have also utilized 
a bespoke adjusted Monte 
Carlo simulation discounted 
cash flow model to 
measure the fair value 
of restricted 
 stock with market 
conditions granted to 
employees and directors. 
The stock-based compensation 
cost related to 
these valuations has 
 been 
recognized 
on 
a 
straight-line 
basis. 
These 
valuation 
models 
require 
estimates 
of 
a 
number 
of 
key 
valuation 
inputs 
including 
 expected volatility, expected dividend yield, expected term and 
risk-free interest rate. Our 
management has estimated forfeitures based 
 on 
historic 
employee 
behavior 
under 
similar 
compensation 
plans. 
The 
fair 
value 
of 
stock 
options 
is 
affected 
by 
the 
assumptions 
 selected. The fair value calculation is especially sensitive 
to our valuation assumption with respect to expected volatility. For instance, 
 a 5% increase (to 55%) or decrease (to 45%) in the expected volatility used (of 50%) to value stock options granted in February 2022, 
 would 
result 
in a 
charge 
that was 
9% 
higher 
(if 55% 
were used) 
or 9% 
lower (if 
45% 
were used). 
Net 
stock-based 
compensation 
 expense from continuing operations was $7.3 million, $3.0 million and $0.3 
million for fiscal 2023, 2022 and 2021, respectively. 
 

 
 
 33 
 Accounts Receivable and Allowance for Doubtful Accounts Receivable 
 We maintain an allowance for doubtful accounts receivable 
related to our Merchant 
and Consumer segments with respect 
to sales 
 or rental 
of hardware, 
support and 
maintenance 
services provided; 
or sale 
of licenses 
to customers; 
or the 
provision of 
transaction 
 processing services to our customers. 
 Our 
policy 
is 
to 
regularly 
review 
the 
aging 
of 
outstanding 
amounts 
due 
from 
customers 
and 
adjust 
the 
provision 
based 
on 
 management’s estimate of 
the recoverability of the amounts outstanding. 
 Management 
considers 
factors including 
period outstanding, 
creditworthiness 
of the 
customers, past 
payment 
history and 
the 
 results 
of 
discussions 
by 
our 
credit 
department 
(and 
in 
some cases 
including 
our 
sales and 
finance 
teams) 
with 
the 
customer. 
We 
 consider this policy to be appropriate taking into account factors such as historical 
bad debts, current economic trends and changes in 
 our customer 
payment patterns. 
Additional provisions 
may be 
required should 
the ability 
of our 
customers to 
make payments 
when 
 due 
deteriorate 
in 
the 
future. 
Judgment 
is 
required 
to 
assess 
the 
ultimate 
recoverability 
of 
these 
receivables, 
including 
ongoing 
 evaluation of the creditworthiness of each customer. 
 Lending 
 Merchant lending
 We maintain 
an allowance for doubtful finance loans 
receivable related to our Merchant services 
segment with respect to short-
 term loans 
to qualifying 
merchant 
customers. 
Our policy 
is to 
regularly 
review 
the ageing 
of outstanding 
amounts due 
from 
these 
 merchants and 
an allowance is 
created for 
the full amount 
outstanding if 
the customer is 
in arrears for 
more than 15 
days. We 
write 
 off 
loans and 
related 
interest and 
fees when 
it is 
evident 
that reasonable 
recovery 
procedures, 
including 
where 
deemed 
necessary, 
 formal legal action, have failed. 
 Our 
risk 
management 
procedures 
include 
adhering 
to 
our 
proprietary 
lending 
criteria 
which 
uses 
an 
online-system 
loan 
 application process, obtaining necessary customer transaction-history data and credit bureau checks. 
We consider these procedures to 
 be 
appropriate 
because 
it takes 
into 
account 
a 
variety 
of 
factors 
such 
as the 
customer’s 
credit 
capacity 
and 
customer-specific 
risk 
 factors when originating a loan. 

 Consumer microlending 
 We maintain an allowance for doubtful finance 
loans receivable related to our Consumer services segment with respect to short-
 term loans to qualifying customers. 
Our policy is to 
regularly review the ageing 
of outstanding amounts due from 
borrowers and adjust 
 the provision based on management’s 
estimate of the recoverability of finance loans receivable. We 
write off microlending loans and 
 related service fees if a borrower is in arrears with repayments for more than three months or 
dies. 
 Credit bureau checks as well as an affordability test are 
conducted as part of the origination process, both of which being in 
line 
 with local regulations. We consider this policy to be appropriate because the affordability 
test we perform takes into account a variety 
 of 
factors 
such 
as 
other 
debts 
and 
total 
expenditures 
on 
normal 
household 
and 
lifestyle 
expenses. 
Additional 
allowances 
may 
be 
 required should the ability of our customers to make payments when 
due deteriorates in the future. A significant amount of 
judgment 
 is required to assess the ultimate recoverability of these 
finance loan receivables, including ongoing evaluation of the creditworthiness 
 of each customer. 
 Recent Accounting Pronouncements 
 Recent accounting pronouncements adopted 
 Refer 
to 
Note 
2 of 
our 
audited consolidated 
financial 
statements for 
a full 
description 
of recent 
accounting 
pronouncements, 
 including the dates of adoption and effects on financial 
condition, results of operations and cash flows. 

 Recent accounting pronouncements not yet adopted as of June 30, 2023 
 Refer to Note 2 
of our audited consolidated 
financial statements for a 
full description of recent 
accounting pronouncements not 
 yet adopted as of June 30, 2023, including the expected dates of adoption 
and effects on financial condition, results of operations and 
 cash flows. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 34 
 Currency Exchange Rate Information 

 Actual exchange rates 
 The actual exchange rates for and at the end of the periods presented were 
as follows: 
 Table 1 
 June 30, 
 2023 
 2022 
 2021 
 ZAR : $ average exchange rate 

 17.7641 
 15.2154 
 15.4146 
 Highest ZAR : $ rate during period 

 19.7558 
 16.2968 
 17.6866 
 Lowest ZAR : $ rate during period 

 16.2034 
 14.1630 
 13.4327 
 Rate at end of period 

 18.8376 
 16.2903 
 14.3010 
 Translation Exchange Rates
 We are required 
to translate our results of operations from ZAR to U.S. dollars on a monthly 
basis. Thus, the average rates used 
 to translate this data for the years ended June 30, 2023, 2022 and 2021, vary slightly from the averages shown in the table above. The 
 translation rates we use in presenting our results of operations are the rates shown 
in the following table: 
 Table 2 
 June 30, 
 2023 
 2022 
 2021 
 Income and expense items: $1 = ZAR 

 17.9400 
 15.1978 
 15.7162 
 Balance sheet items: $1 = ZAR 

 18.8376 
 16.2903 
 14.3010 
 

 
 
 35 
 Results of operations
 The discussion 
of our 
consolidated overall 
results of 
operations is 
based on 
amounts 
as reflected 
in our 
audited consolidated 
 financial statements which are prepared in accordance 
with U.S. GAAP. 
We analyze our 
results of operations both in U.S. dollars, as 
 presented in the audited consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the 
 entities which contribute the majority of our results and is the currency 
in which the majority of our transactions are initially incurred 
 and 
measured. 
Presentation 
of 
our 
reported 
results 
in 
ZAR 
is 
a 
non-GAAP 
measure. 
Due 
to 
the 
significant 
impact 
of 
currency 
 fluctuations between 
the U.S. dollar 
and ZAR on 
our reported 
results and 
because we 
use the 
U.S. dollar as 
our reporting 
currency, 
 we believe that 
the supplemental presentation 
of our results 
of operations in 
ZAR is useful 
to investors to 
understand the changes 
in 
 the underlying trends of our business. 

 Our 
operating 
segment 
revenue 
presented 
in 
“—Results 
of 
operations 
by 
operating 
segment” 
represents 
total 
revenue 
per 
 operating segment before intercompany 
eliminations. A reconciliation between 
total operating segment revenue and 
revenue, 
as well 
 as the reconciliation because our segment performance measure and net loss before tax (benefits) expense, is presented in our audited 
 consolidated financial 
statements in 
Note 21 
to those 
statements. Our 
chief operating 
decision maker 
is our 
Group Chief 
Executive 
 Officer 
and 
he 
evaluates 
segment 
performance 
based 
on 
segment 
earnings 
before 
interest, 
tax, 
depreciation 
and 
amortization 
 (“EBITDA”), adjusted for 
items mentioned in 
the next sentence 
(“Segment Adjusted EBITDA”) 
for each operating 
segment. We 
do 
 not 
allocate 
once-off 
items 
(as 
defined 
below), 
stock-based 
compensation 
charges, 
depreciation 
and 
amortization, 
impairment 
of 
 goodwill or other intangible 
assets, certain lease charges 
(“Lease adjustments”), other 
items (including gains or 
losses on disposal of 
 investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest 
income, interest expense, 
 income tax 
expense or 
loss from 
equity-accounted investments 
to our 
reportable segments. 
Once-off 
items represents 
non-recurring 
 expense items, including costs related to acquisitions and 
transactions consummated or ultimately not pursued. The Lease 
adjustments 
 reflect lease charges and the Stock-based compensation adjustments reflect stock-based 
compensation expense and are both excluded 
 from 
the 
calculation 
of 
Segment 
Adjusted 
EBITDA 
and 
are 
therefore 
reported 
as 
reconciling 
items 
to 
reconcile 
the 
reportable 
 segments’ Segment Adjusted EBITDA to our loss before income tax 
expense. 
 Group 
Adjusted 
EBITDA 
represents 
Segment 
Adjusted 
EBITDA 
after 
deducting 
group 
costs. 
Refer 
also 
“Results 
of 
 Operations—Use of Non-GAAP Measures” below. 
 Fiscal 2023 includes 
Connect for 
the entire fiscal 
year and 
fiscal 2022 includes 
consolidation of 
Connect from 
April 14, 2022. 
 Refer also to Note 3 to the audited consolidated financial statements for 
additional information regarding this transaction. 
 We analyze our business and operations in terms of two 
inter-related but independent operating segments: (1) Merchant Division 
 and (2) 
Consumer Division. 
In addition, 
corporate activities 
that are 
impracticable to 
allocate directly 
to the 
operating segments, 
as 
 well as 
any inter-segment 
eliminations, are 
included in 
Group costs. 
Inter-segment revenue 
eliminations are 
included in 
Corporate/ 
 Eliminations. 

 Fiscal 2023 Compared to Fiscal 2022 
 The following factors had 
a significant influence on 
our results of 
operations during fiscal 
2023 as compared 
with the same 
period 
 in the prior year: 
 ●
 Higher revenue: 
 Our revenues 
increased by 
180.0% in 
ZAR, primarily 
due to 
the contribution 
from Connect 
in Merchant 
 and an increase in account fees and insurance revenues in Consumer;
 ●
 Lower operating 
losses: 
 Operating 
losses decreased, 
delivering 
an improvement 
of 55% 
in ZAR 
compared 
with the 
prior 
 period 
primarily 
due 
to 
the 
contribution 
from 
Connect, 
strong 
hardware 
sales, 
and 
the 
implementation 
of 
various 
cost 
 reduction 
initiatives 
in 
Consumer, 
which 
was 
partially 
offset 
by 
an 
increase 
in 
acquisition 
related 
intangible 
asset 
 amortization; 
 ●
 Higher 
net 
interest 
charge:
 
The 
net 
interest 
charge 
increased 
to 
ZAR 
299.9 
million 
from 
ZAR 
56.8 
million 
due 
to 
the 
 additional borrowings 
incurred in 
order to 
fund the 
acquisition of 
Connect as 
well as 
the debt 
acquired within 
the Connect 
 business itself; 
 ●
 Significant transaction costs:
 
We expensed $6.0 million of transaction 
costs related to 
the Connect acquisition in 
fiscal 2022; 
 and 
 ●
 Foreign exchange movements:
 
The U.S. dollar was 18.0% stronger against the ZAR 
during fiscal 2023, which impacted our 
 reported results. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 36 
 Consolidated overall results of operations 
 This discussion is based on the amounts prepared in accordance with U.S. GAAP. 
 The following tables show the changes in the items comprising our statements of operations, 
both in U.S. dollars and in ZAR: 

 Table 3 
 In U.S. Dollars 
 Year 
ended June 30, 
 2023 
 2022 
 $ % 
 

 $ ’000 
 $ ’000 
 change 
 Revenue 

 527,971 
 222,609 
 137% 
 Cost of goods sold, IT processing, servicing and support 

 417,544 
 168,317 
 148% 
 Selling, general and administration 

 95,050 
 74,993 
 27% 
 Depreciation and amortization 

 23,685 
 7,575 
 213% 
 Impairment loss 
 7,039 
 - 
 nm 
 Reorganization costs 
 - 
 5,894 
 nm 
 Transaction costs related to Connect acquisition 
 - 
 6,025 
 nm 
 Operating loss 
 (15,347) 
 (40,195) 
 (62%) 
 Gain related to fair value adjustment to currency options 
 - 
 3,691 
 nm 
 Loss on disposal of equity-accounted investment 
 205 
 376 
 (45%) 
 Gain on disposal of equity securities 
 - 
 720 
 nm 
 Interest income 

 1,853 
 2,089 
 (11%) 
 Interest expense 

 18,567 
 5,829 
 219% 
 Loss before income tax (benefit) expense 

 (32,266) 
 (39,900) 
 (19%) 
 Income tax (benefit) expense 
 (2,309) 
 327 
 nm 
 Net loss before loss from equity-accounted investments 

 (29,957) 
 (40,227) 
 (26%) 
 Loss from equity-accounted investments 

 (5,117) 
 (3,649) 
 40% 
 Net loss attributable to us 

 (35,074) 
 (43,876) 
 (20%) 
 Table 4 
 In South African Rand 
 Year 
ended June 30, 
 2023 
 2022 
 ZAR % 
 

 ZAR ’000 
 ZAR ’000 
 change 
 Revenue 

 9,471,800 
 3,383,166 
 180% 
 Cost of goods sold, IT processing, servicing and support 

 7,490,739 
 2,558,047 
 193% 
 Selling, general and administration 

 1,705,196 
 1,139,728 
 50% 
 Depreciation and amortization 

 424,909 
 115,123 
 269% 
 Impairment loss 
 126,280 
 - 
 nm 
 Reorganization costs 
 - 
 89,576 
 nm 
 Transaction costs related to Connect acquisition 
 - 
 91,567 
 nm 
 Operating loss 
 (275,324) 
 (610,875) 
 (55%) 
 Gain related to fair value adjustment to currency options 
 - 
 56,095 
 nm 
 Loss on disposal of equity-accounted investment 
 3,678 
 5,714 
 (36%) 
 Gain on disposal of equity securities 
 - 
 10,942 
 nm 
 Interest income 

 33,243 
 31,748 
 5% 
 Interest expense 

 333,092 
 88,587 
 276% 
 Loss before income tax (benefit) expense 

 (578,851) 
 (606,391) 
 (5%) 
 Income tax (benefit) expense 
 (41,423) 
 4,970 
 nm 
 Net loss before loss from equity-accounted investments 

 (537,428) 
 (611,361) 
 (12%) 
 Loss from equity-accounted investments 

 (91,799) 
 (55,457) 
 66% 
 Net loss attributable to us 

 (629,227) 
 (666,818) 
 (6%) 
 Revenue increased by $305.4 million (ZAR 6.1 billion), or 137.2% (in ZAR, 180.0%), primarily due to the inclusion of Connect 
 for 
the entire 
fiscal year, 
which has 
substantial low 
margin 
prepaid 
airtime sales 
in addition 
to its 
core processing 
revenue and 
an 
 increase in account fees and insurance revenues. 

 Cost of 
goods sold, 
IT processing, 
servicing and 
support increased 
by $249.2 
million (ZAR 
4.9 billion), 
or 148.1% 
(in ZAR, 
 192.8%), primarily due to the inclusion of Connect, 
which were partially offset by the benefits of 
various cost reduction initiatives in 
 Consumer and lower insurance-related claims. 

 
 
 37 
 Selling, general and administration expenses increased by $20.1 million (ZAR 0.6 billion), or 26.7% (in ZAR, 49.6%), primarily 
 due 
to 
higher 
employee-related 
expenses 
related 
to 
the 
expansion 
of 
our 
senior 
management 
team, 
the 
year-over-year 
impact 
of 
 inflationary 
increases 
on 
employee-related 
expenses 
and 
the 
inclusion 
of 
expenses 
related 
to 
Connect’s 
operations, 
which 
were 
 partially offset by the benefits of various cost reduction initiatives in Consumer. 
 Depreciation and 
amortization expense 
increased by $16.1 
million (ZAR 0.3 
billion), or 212.7% 
(in ZAR, 269.1%), 
due to the 
 inclusion of acquisition-related intangible asset amortization related 
to intangible assets identified pursuant to 
the Connect acquisition, 
 as well as the inclusion of depreciation expense related to Connect’s 
property, plant and equipment. 
 During fiscal 2023, we 
recorded an impairment loss 
of $7.0 million related 
to the impairment of 
our hardware/ software supply 
 business 
unit’s 
allocated 
goodwill. 
Refer 
to 
Note 
10 
of 
our 
audited 
consolidated 
financial 
statements 
for 
additional 
information 
 regarding these impairment losses. 
 We embarked on a retrenchment process on January 10, 2022, and incurred reorganization expenses of $5.9 million during fiscal 
 2022. 
 Transaction 
costs related 
to Connect 
acquisition in 
fiscal 2022 
includes fees 
paid to 
external service 
providers associated 
with 
 the contract drafting and negotiations; corporate finance advisory services; legal, financial and tax due diligence 
activities performed; 
 warranty and 
indemnity insurance 
related to the 
transaction; and other 
advisory services procured; 
as well as 
our portion 
of the fees 
 paid to competition authorities related to the regulatory filings made in 
various jurisdictions. 
 Our operating loss 
margin in fiscal 
2023 
and 2022 
was 
(2.9%) and 
(18.1%), respectively. 
 We 
 discuss the 
components of operating 
 loss margin under “—Results of operations by operating 
segment.” 

 We 
did 
not 
record 
any 
changes 
in 
the 
fair 
value 
of 
equity 
interests 
in 
MobiKwik 
and 
Cell 
C 
during 
fiscal 
2023 
and 
2022, 
 respectively. 
We continue 
to carry our investment 
in Cell C at $0 
(zero). Refer to Note 
9 to our consolidated financial 
statements for 
 the methodology 
and inputs used 
in the fair 
value calculation for 
MobiKwik and Note 
6 for the 
methodology and 
inputs used in 
the 
 fair value calculation for Cell C. 
 Gain related to fair value adjustment to currency 
options represents the realized gain related to foreign exchange 
option contracts 
 entered into in November 2021 
in order to manage the risk of 
currency volatility and to fix 
the USD amount to be utilized 
for part of 
 the Connect purchase 
consideration settlement. The 
foreign exchange option 
contracts matured on 
February 24, 2022. 
Refer to Note 
 6 to our consolidated financial statements for additional information 
related to these currency options. 
 We 
recorded 
a 
net 
loss 
of 
$0.2 
million 
comprising 
a 
loss 
of 
$0.4 
million 
related 
to 
the 
disposal 
of 
a 
minor 
portion 
of 
our 
 investment in Finbond and a $0.25 million gain related to 
the disposal of our entire interest in Carbon 
during fiscal 2023. We recorded 
 a loss of $0.4 million related to the disposal 
of a minor portion of our investment in Finbond during fiscal 
2022. Refer to Note 9 to our 
 consolidated financial statements for additional information regarding 
these disposals. 
 We recorded 
a gain of $0.7 million related to the disposal of our entire interest 
in an equity security during fiscal 2022. Refer to 
 Note 9 to our consolidated financial statements for additional information 
regarding this gain. 
 Interest on surplus cash decreased to $1.9 million (ZAR 
33.2 million) from $2.1 million (ZAR 31.7 million), primarily 
due to the 
 inclusion of Connect, which was partially offset by lower overall surplus 
cash balances following the acquisition of Connect. 
 Interest expense increased 
to $18.6 million 
(ZAR 333.1 million) 
from $5.8 million 
(ZAR 88.6 million), 
primarily as a result 
of 
 additional 
interest 
expense 
incurred 
related 
to 
borrowings 
obtained 
to 
partially 
fund 
the acquisition 
of 
Connect, 
interest 
expenses 
 incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our 
 ATMs, 
which was also coupled with an increase in base interest rates. 
 Fiscal 2023 
tax benefit was $(2.3) million (ZAR (41.4) million) compared 
to a tax expense of $0.3 million (ZAR 5.0 million) in 
 fiscal 2022. Our effective tax rate for fiscal 2023 was impacted by a reduction in 
the enacted South African corporate income tax rate 
 from 
28% 
to 
27% 
from 
January 
2023 
(but 
backdated 
to 
July 
1, 
2022), 
the 
tax 
expense 
recorded 
by 
our 
profitable 
South 
African 
 operations, a deferred 
tax benefit related to 
acquisition-related intangible asset 
amortization, non-deductible 
expenses, a deferred tax 
 benefit related 
to an 
expense paid 
by Connect 
before we 
acquired the 
business and 
which subsequently 
has been 
determined to 
be 
 deductible 
for 
tax 
purposes, 
the 
on-going 
losses 
incurred 
by 
certain 
of 
our 
South 
African 
businesses 
and 
the 
associated 
valuation 
 allowances created related to the deferred tax assets recognized regarding 
net operating losses incurred by these entities. 
 Our effective 
tax rate 
for fiscal 
2022 was 
impacted by 
the tax 
expense recorded 
by our 
profitable South 
African operations, 
a 
 deferred 
tax 
benefit 
related 
to 
acquisition-related 
intangible 
asset 
amortization, 
non-deductible 
expenses 
(including 
transaction 
 expenses 
related 
to 
the 
acquisition 
of 
Connect), 
the 
on-going 
losses 
incurred 
by 
certain 
of 
our 
South 
African 
businesses 
and 
the 
 associated valuation allowances created 
related to the deferred 
tax assets recognized regarding 
net operating losses incurred 
by these 
 entities. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 38 
 Finbond is listed on the Johannesburg Stock Exchange 
and reports its six-month results during 
our first half and its 
annual results 
 during 
our fourth 
quarter. 
 We 
 recorded 
impairment 
losses related 
to 
our investment 
in Finbond 
in fiscal 
2023 
following 
on-going 
 losses reported 
by Finbond 
and its 
lower listed 
share price. 
Refer to 
Note 9 
to our 
consolidated 
financial statements 
for additional 
 information regarding the impairments. 
The table below presents the relative loss from our equity accounted investments: 
 Table 5 
 Year 
ended June 30, 
 2023 
 2022 
 $ % 
 $ ’000 
 $ ’000 
 change 
 Finbond 
 (5,206) 
 (3,665) 
 42% 
 Share of net (loss) income 

 (4,096) 
 (3,665) 
 12% 
 Impairment 
 (1,110) 
 - 
 nm 
 Other 
 89 
 16 
 456% 
 Share of net income (loss) 
 89 
 16 
 456% 
 Total 
loss from equity-accounted investment 
 (5,117) 
 (3,649) 
 40% 
 Results of operations by operating segment
 The composition of revenue and the contributions of our business activities to operating 
(loss) income are illustrated below: 

 Table 6 
 In U.S. Dollars 
 Year 
ended June 30, 
 2023 
 % of 
 2022 
 % of 
 % 
 Operating Segment 
 $ ’000 
 total 
 $ ’000 
 total 
 change 
 Consolidated revenue: 
 Merchant 
 463,701 
 88% 
 156,689 
 70% 
 196% 
 Consumer 
 62,801 
 12% 
 65,932 
 30% 
 (5%) 
 Subtotal: Operating segments 

 526,502 
 100% 
 222,621 
 100% 
 137% 
 Not allocated to operating segments 
 1,469 
 - 
 - 
 - 
 nm 
 Corporate/Eliminations 

 - 
 - 
 (12) 
 - 
 nm 
 Total 
consolidated revenue 

 527,971 
 100% 
 222,609 
 100% 
 137% 
 Group Adjusted EBITDA: 
 Merchant 
 33,531 
 121% 
 12,646 
 (72%) 
 165% 
 Consumer
 (1)
 3,314 
 12% 
 (21,674) 
 123% 
 nm 
 Group costs 
 (9,109) 
 (33%) 
 (8,587) 
 49% 
 6% 
 Group Adjusted EBITDA (non-GAAP)
 (2)
 27,736 
 100% 
 (17,615) 
 100% 
 nm 
 (1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes reorganization 
cost of $5.9 million. 
 (2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation 
below at “—Results of Operations—Use of Non-
 GAAP Measures”. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 39 
 Table 7 
 In South African Rand 
 Year 
ended June 30, 
 2023 
 % of 
 2022 
 % of 
 % 
 Operating Segment 
 ZAR ’000 
 total 
 ZAR ’000 
 total 
 change 
 Consolidated revenue: 
 Merchant 
 8,318,796 
 88% 
 2,381,323 
 70% 
 249% 
 Consumer 
 1,126,650 
 12% 
 1,002,021 
 30% 
 12% 
 Subtotal: Operating segments 

 9,445,446 
 100% 
 3,383,344 
 100% 
 179% 
 Not allocated to operating segments 
 26,354 
 - 
 - 
 - 
 nm 
 Corporate/Eliminations 

 - 
 - 
 (178) 
 - 
 nm 
 Total 
consolidated revenue 

 9,471,800 
 100% 
 3,383,166 
 100% 
 180% 
 Group Adjusted EBITDA: 
 Merchant 
 601,546 
 121% 
 192,197 
 (72%) 
 213% 
 Consumer
 (1)
 59,453 
 12% 
 (329,403) 
 123% 
 nm 
 Group costs 
 (163,415) 
 (33%) 
 (130,503) 
 49% 
 25% 
 Group Adjusted EBITDA (non-GAAP)
 (2)
 497,584 
 100% 
 (267,709) 
 100% 
 nm 
 (1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes 
reorganization cost of ZAR 89.6 million. 
 (2) Group Adjusted EBITDA 
is a non-GAAP measure, refer 
to reconciliation below at 
“—Results of Operations—Use of 
Non-
 GAAP Measures”. 
 Merchant 
 Segment 
revenue 
increased 
due 
to 
the 
contribution 
from 
Connect 
for 
the 
full fiscal 
year 
compared 
with 
only 
two 
and a 
half 
 months in fiscal 
2022. This increase 
was partially offset 
by lower hardware 
sales revenue given 
the lumpy nature 
of bulk sales. 
The 
 increase in 
Segment Adjusted 
EBITDA is 
also due 
to the inclusion 
of Connect, 
which was partially 
offset by 
lower hardware 
sales. 
 Connect records a significant proportion of its airtime sales in revenue and cost of sales, while only earning a relatively small margin. 
 This significantly depresses the Segment Adjusted EBITDA margins 
shown by the business. 
 Our Segment 
Adjusted EBITDA 
(loss) margin 
(calculated as 
Segment Adjusted 
EBITDA (loss) 
divided by 
revenue) in 
fiscal 
 2023 
and 2022 was 7.2% and 8.1%, respectively. 
 Consumer
 Segment revenue increased primarily due to higher insurance revenues and higher account holder fees, though this was partially 
 offset by 
lower ATM 
transaction fees. 
We 
embarked on a 
retrenchment process 
during the third 
quarter of fiscal 
2022 and recorded 
 an expense of 
$5.9 million which is 
included in Segment 
Adjusted EBITDA loss. The 
cost reduction initiatives 
we initiated in 
fiscal 
 2022 delivered 
a significant 
reduction in 
Consumer’s operating 
expenses which 
resulted in 
a significantly 
lower Segment 
Adjusted 
 EBITDA 
loss 
compared 
with 
fiscal 
2022. 
Specifically, 
expenses 
associated 
with 
operating 
a 
mobile 
distribution 
network 
were 
 discontinued 
in 
early 
fiscal 
2022, 
and 
we 
have 
streamlined 
our 
fixed 
distribution 
network 
through 
reductions 
in 
certain 
expenses 
 including 
employee-related 
costs, 
security, 
guarding 
and 
premises costs. 
In 
June 
2022 
we 
recalibrated 
our 
allowance 
for 
doubtful 
 microlending finance 
loans receivable 
from 10% 
of the 
lending book 
outstanding to 
6.5% of 
the lending 
book, which 
resulted in 
a 
 release from the allowance in fiscal 2022. 
 Our Segment 
Adjusted EBITDA loss 
margin in 
fiscal 2023 
and 2022 
was 5.3% and 
(32.9%), respectively. 
After adjusting for 
 the 
reorganization 
charge 
our fiscal 
2022 
Segment 
Adjusted 
EBITDA 
loss margin 
was 
(23.9%). 
Segment 
Adjusted 
EBITDA 
loss 
 margin before the reorganization charge is a non-GAAP measure. We believe that the presentation of our Segment Adjusted EBITDA 
 loss margin 
before the 
reorganization 
charge 
is useful 
to investors 
to understand 
the improvement 
in the 
operating performance 
in 
 Consumer, before the reorganization 
charge, in fiscal 2023 compared with fiscal 2022. 

 Group costs 
 Our group 
costs primarily 
include employee 
related costs 
in relation 
to employees 
specifically hired 
for group 
roles and 
costs 
 related 
directly 
to 
managing 
the 
US-listed 
entity; 
expenditures 
related 
to 
compliance 
with 
the 
Sarbanes-Oxley 
Act 
of 
2002; 
non-
 employee directors’ fees; legal fees; group and US-listed related audit 
fees; and directors’ and officers’ insurance premiums. 
 Our 
group 
costs 
for 
fiscal 
2023 
increased 
compared 
with 
the 
prior 
period 
due 
to 
higher 
employee 
costs 
and 
an 
increase 
in 
 directors’ and officers’ insurance premiums. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 40 
 Fiscal 2022 Compared to Fiscal 2021 
 The following factors had 
a significant influence on 
our results of 
operations during fiscal 
2022 as compared with 
the same period 
 in the prior year: 
 ●
 Higher revenue: 
 Our revenues increased 
by 64.6% in 
ZAR, primarily due 
to the contribution 
from Connect, an 
increase in 
 hardware 
sales, 
an 
increase 
in 
merchant 
transaction 
processing 
fees, 
and 
a 
moderate 
increase 
in 
lending 
and 
insurance 
 revenues;
 ●
 Lower operating 
losses: 
 Operating 
losses decreased, 
delivering 
an improvement 
of 28% 
in ZAR 
compared 
with the 
prior 
 period 
primarily 
due 
to 
the 
positive 
contribution 
from 
Connect, 
the 
closure 
of 
the 
loss-making 
IPG 
operations 
and 
the 
 implementation of 
various cost reduction 
initiatives in our 
Consumer business, 
which was partially 
offset by 
an increase in 
 acquisition 
related 
intangible 
asset 
amortization 
and 
transaction 
costs. 
During 
fiscal 
2022, 
we 
recorded 
a 
reorganization 
 charge of $5.9 million related to the retrenchment process we 
commenced in January 2022; 
 ●
 Significant transaction costs:
 
We expensed $6.0 million of transaction 
costs related to 
the Connect acquisition in 
fiscal 2022; 
 and 
 ●
 Foreign exchange movements:
 
The U.S. dollar was 3.3% stronger 
against the ZAR during fiscal 2022, 
which impacted our 
 reported results. 
 The following tables show the changes in the items comprising our statements of 
operations, both in U.S. dollars and in ZAR: 
 Table 8 
 In U.S. Dollars 
 Year 
ended June 30, 
 2022 
 2021 
 $ % 
 

 $ ’000 
 $ ’000 
 change 
 Revenue 

 222,609 
 130,786 
 70% 
 Cost of goods sold, IT processing, servicing and support 

 168,317 
 96,248 
 75% 
 Selling, general and administration 

 74,993 
 84,063 
 (11%) 
 Depreciation and amortization 

 7,575 
 4,347 
 74% 
 Reorganization costs 
 5,894 
 - 
 nm 
 Transaction costs related to Connect acquisition 
 6,025 
 - 
 nm 
 Operating loss 
 (40,195) 
 (53,872) 
 (25%) 
 Change in fair value of equity securities 
 - 
 49,304 
 nm 
 Gain related to fair value adjustment to currency options 
 3,691 
 - 
 nm 
 Loss on disposal of equity-accounted investment 
 376 
 13 
 2,792% 
 Gain on disposal of equity securities 
 720 
 - 
 nm 
 Loss on disposal of equity-accounted investment - Bank Frick 
 - 
 472 
 nm 
 Interest income 

 2,089 
 2,416 
 (14%) 
 Interest expense 

 5,829 
 2,982 
 95% 
 Loss before income tax expense 

 (39,900) 
 (5,619) 
 610% 
 Income tax expense 
 327 
 7,560 
 (96%) 
 Net loss before loss from equity-accounted investments 

 (40,227) 
 (13,179) 
 205% 
 Loss from equity-accounted investments 

 (3,649) 
 (24,878) 
 (85%) 
 Net loss attributable to us 

 (43,876) 
 (38,057) 
 15% 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 41 
 Table 9 
 In South African Rand 
 (US GAAP) 
 Year 
ended June 30, 
 2022 
 2021 
 ZAR % 
 

 ZAR ’000 
 ZAR ’000 
 change 
 Revenue 

 3,383,166 
 2,055,459 
 65% 
 Cost of goods sold, IT processing, servicing and support 

 2,558,047 
 1,512,653 
 69% 
 Selling, general and administration 

 1,139,728 
 1,321,151 
 (14%) 
 Depreciation and amortization 

 115,123 
 68,318 
 69% 
 Reorganization costs 
 89,576 
 - 
 nm 
 Transaction costs related to Connect acquisition 
 91,567 
 - 
 nm 
 Operating loss 
 (610,875) 
 (846,663) 
 (28%) 
 Change in fair value of equity securities 
 - 
 774,872 
 nm 
 Gain related to fair value adjustment to currency options 
 56,095 
 - 
 nm 
 Loss on disposal of equity-accounted investment 
 5,714 
 204 
 2,701% 
 Gain on disposal of equity securities 
 10,942 
 - 
 nm 
 Loss on disposal of equity-accounted investment - Bank Frick 
 - 
 7,418 
 nm 
 Interest income 

 31,748 
 37,970 
 (16%) 
 Interest expense 

 88,587 
 46,866 
 89% 
 Loss before income tax expense 

 (606,391) 
 (88,309) 
 587% 
 Income tax expense 
 4,970 
 118,814 
 (96%) 
 Net loss before loss from equity-accounted investments 

 (611,361) 
 (207,123) 
 195% 
 Loss from equity-accounted investments 

 (55,457) 
 (390,988) 
 (86%) 
 Net loss attributable to us 

 (666,818) 
 (598,111) 
 11% 
 Revenue increased 
by $91.8 
million (ZAR 
1.3 billion), 
or 70.2% 
(in ZAR, 
64.6%), primarily 
due to 
the inclusion 
of Connect, 
 which has 
substantial low 
margin prepaid 
airtime sales 
in addition 
to its 
core processing 
revenue, an 
increase in 
hardware sales, 
an 
 increase in merchant transaction processing fees, and moderate increases in lending 
and insurance revenues. 

 Cost of goods 
sold, IT processing, 
servicing and support 
increased by $72.1 
million (ZAR 1.0 
billion), or 74.9% 
(in ZAR, 69.1%), 
 primarily due 
to the 
inclusion of 
Connect, an 
increase in 
the cost 
of hardware 
sales, higher 
costs related 
to transaction 
fees and 
an 
 increase in insurance-related claims experience, which 
were partially offset by the benefits of various cost reduction 
initiatives in our 
 Consumer business. 
 Selling, general and administration expenses decreased by $9.1 
million (ZAR 0.2 billion), or 10.8% (in ZAR, 13.7%), primarily 
 due 
to 
lower 
IPG-related 
expenses 
incurred 
following 
its 
closure, 
some 
benefits 
from 
our 
cost 
reduction 
initiatives, 
as 
well 
as 
a 
 recalibration, in June 2022, of 
our allowance for doubtful microlending finance loans 
receivable, in our Consumer business, from 10% 
 of the 
lending book 
outstanding to 
6.5% of 
the lending 
book, which 
resulted in 
a release 
from the 
allowance in 
fiscal 2022. 
These 
 reductions were partially offset by the 
inclusion of expenses related to 
Connect’s operations, higher employee-related expenses related 
 to 
the 
expansion 
of 
our 
senior 
management 
team, 
and 
the 
year-over-year 
impact 
of 
inflationary 
increases 
on 
employee-related 
 expenses. 
 Depreciation and amortization expense increased by $3.2 million (ZAR 46.8 million), or 74.3% (in ZAR, 68.5%), 
increased due 
 to 
the 
inclusion 
of 
acquisition-related 
intangible 
asset 
amortization 
related 
to 
intangible 
assets 
identified 
pursuant 
to 
the 
Connect 
 acquisition, as well as the inclusion of depreciation expense related to 
Connect’s property, 
plant and equipment. 
 We embarked on a retrenchment process on January 10, 2022, and incurred reorganization expenses of $5.9 million during 
fiscal 
 2022. 
 Transaction 
costs related 
to 
Connect 
acquisition 
includes 
fees 
paid 
to 
external 
service 
providers 
associated 
with 
the 
contract 
 drafting and 
negotiations; corporate 
finance advisory 
services; legal, 
financial and 
tax due 
diligence activities 
performed; warranty 
 and indemnity 
insurance related 
to the 
transaction; and 
other advisory 
services procured; 
as well 
as our 
portion 
of the 
fees paid 
to 
 competition authorities related to the regulatory filings made in various jurisdictions 
. 
 Our operating loss margin 
in fiscal 2022 and 2021 
was 
(18.1%) and 
(41.2%), 
respectively. Adjusting 
for the restructuring and 
 transaction costs incurred, the underlying 
operating loss margin in fiscal 
2022 was (12.7%). We 
discuss the components of operating 
 loss margin under “—Results of operations by operating 
segment.” 

 The 
change 
in 
fair 
value 
of 
equity 
securities 
during 
fiscal 
2021 
represents 
a 
non-cash 
fair 
value 
adjustment 
gain 
related 
to 
 MobiKwik. We 
continue to 
carry our investment 
in Cell C 
at $0 (zero). 
Refer to Note 
9 to our 
consolidated financial 
statements for 
 the methodology 
and inputs used 
in the fair 
value calculation for 
MobiKwik and Note 
6 for the 
methodology and 
inputs used in 
the 
 fair value calculation for Cell C. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 42 
 Gain related to fair value adjustment to currency 
options represents the realized gain related to foreign exchange 
option contracts 
 entered into in November 2021 
in order to manage the risk of 
currency volatility and to fix 
the USD amount to be utilized 
for part of 
 the Connect purchase 
consideration settlement. The 
foreign exchange 
option contracts matured 
on February 24, 
2022. Refer to 
Note 
 6 to our consolidated financial statements for additional information 
related to these currency options. 
 We recorded 
a gain of $0.7 million related to the disposal of our 
entire interest in an equity security during fiscal 2022. 
Refer to 
 Note 9 to our consolidated financial statements for additional information 
regarding this gain. 
 We 
recorded a 
loss of $0.4 
million related 
to the 
disposal of 
a minor 
portion of 
our investment 
in Finbond 
during fiscal 
2022. 
 Refer to Note 9 to our consolidated financial statements for additional information 
regarding these disposals. 
 We recorded 
a loss of $0.5 million related to the disposal of Bank Frick during fiscal 2021. 
 Interest on surplus cash decreased to $2.1 million (ZAR 
31.7 million) from $2.4 million (ZAR 38.0 million), 
primarily due to the 
 utilization of a significant portion 
of our surplus cash 
reserves to acquire Connect as 
well as lower average daily 
cash balances in fiscal 
 2022. 
 Interest 
expense increased 
to $5.8 
million (ZAR 
88.6) million 
from $3.0 
million (ZAR 
46.9 million), 
primarily 
as a 
result of 
 additional 
interest 
expense 
incurred 
related 
to 
borrowings 
obtained 
to 
partially 
fund 
the acquisition 
of 
Connect, 
interest 
expenses 
 incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our 
 ATMs 
. 
 Fiscal 2022 tax expense 
was $0.3 million (ZAR 
5.0 million) compared 
to $7.6 million (ZAR 
118.8 million) 
in fiscal 2021. Our 
 effective tax rate for fiscal 2022 was impacted 
by the tax expense recorded by our profitable South 
African operations, a deferred tax 
 benefit related to acquisition-related intangible asset amortization, non-deductible expenses (including transaction expenses related to 
 the 
acquisition 
of 
Connect), 
the 
on-going 
losses 
incurred 
by 
certain 
of 
our 
South 
African 
businesses 
and 
the 
associated 
valuation 
 allowances created related to the deferred tax assets recognized regarding 
net operating losses incurred by these entities. 
 Our effective tax rate for fiscal 2021 was 
impacted by the tax effect on the 
change in the fair value 
of our equity securities, which 
 is at 
a lower 
tax rate 
than 
the South 
African 
statutory 
rate, the 
tax charge 
related 
to our 
profitable 
South 
African operations, 
non-
 deductible expenses, the on-going losses incurred by certain of our 
South African businesses and the associated valuation allowances 
 created related to the deferred 
tax assets recognized regarding net 
operating losses incurred by these 
entities, which was partially offset 
 by the reversal of the deferred tax liability related to one of our equity-accounted 
investments following its impairment. 
 The disposal of certain of our equity-accounted investments in 
fiscal 2021, as well as a number of impairments, 
has impacted the 
 comparability of our 
loss from 
equity-accounted investments. We disposed of 
our investment 
in Bank Frick 
in fiscal 
2021. 
 We 
 recorded 
 an impairment loss related to our investment in Finbond in fiscal 2021 
following a slow-down in its business activity and lower listed 
 share price. 
Refer to Note 9 
to our audited consolidated financial statements 
for additional information regarding our equity-accounted 
 investments, including disclosure regarding the disposals and impairments. 

 The table below presents the relative loss from our equity accounted investments: 
 Table 10 
 Year 
ended June 30, 
 2022 
 2021 
 $ ’000 
 $ ’000 
 $ % change 
 Finbond 
 (3,665) 
 (22,009) 
 (83%) 
 Share of net (loss) income 

 (3,665) 
 (4,359) 
 (16%) 
 Impairment 
 - 
 (17,650) 
 nm 
 Bank Frick 
 - 
 1,156 
 nm 
 Share of net income 

 - 
 1,156 
 nm 
 Other 
 16 
 (4,025) 
 nm 
 Share of net loss 
 16 
 (531) 
 nm 
 Impairment 
 - 
 (3,494) 
 nm 
 Total 
loss from equity-accounted investments 
 (3,649) 
 (24,878) 
 (85%) 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 43 
 Results of operations by operating segment
 The composition of revenue and the contributions of our business activities to 
operating income are illustrated below: 
 Table 11 
 In U.S. Dollars 
 Year 
ended June 30, 
 2022 
 % of 
 2021 
 % of 
 % 
 Operating Segment 
 $ ’000 
 total 
 $ ’000 
 total 
 change 
 Consolidated revenue: 
 Merchant 
 156,689 
 70% 
 62,944 
 48% 
 149% 
 Consumer 
 65,932 
 30% 
 66,149 
 51% 
 (0%) 
 Subtotal: Operating segments 

 222,621 
 100% 
 129,093 
 99% 
 72% 
 Not allocated to operating segments 
 - 
 - 
 1,693 
 1% 
 nm 
 Corporate/Eliminations 

 (12) 
 - 
 - 
 - 
 nm 
 Total 
consolidated revenue 

 222,609 
 100% 
 130,786 
 100% 
 70% 
 Group Adjusted EBITDA: 
 Merchant 
 12,646 
 (72%) 
 5,411 
 (14%) 
 134% 
 Consumer
 (1)
 (21,674) 
 123% 
 (25,962) 
 68% 
 (17%) 
 Not allocated to operating segments 
 - 
 - 
 (10,899) 
 28% 
 nm 
 Group costs 
 (8,587) 
 49% 
 (6,965) 
 18% 
 23% 
 Group Adjusted EBITDA (non-GAAP)
 (2)
 (17,615) 
 100% 
 (38,415) 
 100% 
 (54%) 
 (1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes 
reorganization cost of $5.9 million. 
 (2) Group Adjusted EBITDA 
is a non-GAAP measure, refer 
to reconciliation below at 
“—Results of Operations—Use of 
Non-
 GAAP Measures”. 
 Table 12 
 In South African Rand 
 Year 
ended June 30, 
 2022 
 % of 
 2021 
 % of 
 % 
 Operating Segment 
 ZAR ’000 
 total 
 ZAR ’000 
 total 
 change 
 Consolidated revenue: 
 Merchant 
 2,381,323 
 70% 
 989,241 
 48% 
 141% 
 Consumer 
 1,002,021 
 30% 
 1,039,611 
 51% 
 (4%) 
 Subtotal: Operating segments 

 3,383,344 
 100% 
 2,028,852 
 99% 
 67% 
 Not allocated to operating segments 
 - 
 - 
 26,607 
 1% 
 nm 
 Corporate/Eliminations 

 (178) 
 - 
 - 
 - 
 nm 
 Total 
consolidated revenue 

 3,383,166 
 100% 
 2,055,459 
 100% 
 65% 
 Group Adjusted EBITDA: 
 Merchant 
 192,197 
 (72%) 
 85,040 
 (14%) 
 126% 
 Consumer
 (1)
 (329,403) 
 123% 
 (408,024) 
 68% 
 (19%) 
 Not allocated to operating segments 
 - 
 - 
 322,984 
 28% 
 nm 
 Group costs 
 (130,503) 
 49% 
 (109,463) 
 18% 
 19% 
 Group Adjusted EBITDA (non-GAAP)
 (2)
 (267,709) 
 100% 
 (603,738) 
 100% 
 (56%) 
 (1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes 
reorganization cost of ZAR 89.6 million. 
 (2) Group Adjusted EBITDA 
is a non-GAAP measure, refer 
to reconciliation below at 
“—Results of Operations—Use of 
Non-
 GAAP Measures”. 
 Merchant 
 Segment revenue 
increased due 
to the 
inclusion of 
Connect for 
two and 
a half 
months and 
an increase 
in hardware 
sales and 
 processing fees. The 
increase in Segment 
Adjusted EBITDA is 
primarily due to 
the inclusion of 
Connect, which was 
partially offset 
 by higher costs related 
to processing fees 
and higher employee-related expenses. Connect 
records a significant proportion 
of its airtime 
 sales in revenue 
and cost of 
sales, while only 
earning a relatively 
small margin. This depresses 
the Segment Adjusted EBITDA 
margins 
 shown by the business. 
 

 
 
 44 
 Our Segment Adjusted EBITDA margin for fiscal 2022 
and 2021 
was 8.1% and 8.6%, respectively. 
 Consumer
 The underlying decrease in revenue was primarily due to 
lower processing fees, partially offset by higher insurance 
and lending 
 revenue 
and account 
holder fees. 
We 
embarked 
on a 
retrenchment process 
during 
the third 
quarter of 
fiscal 2022 
and recorded 
an 
 expense 
of 
$5.9 
million 
which 
is 
included 
in 
the 
Segment 
Adjusted 
EBITDA 
loss, 
refer 
to 
Note 
1 
to 
our 
consolidated 
financial 
 statements for 
additional information 
regarding this 
process. 
Segment Adjusted 
EBITDA loss, 
excluding the 
reorganization charge, 
 has 
decreased 
primarily 
due 
to 
the 
implementation 
of 
various 
cost 
reduction 
initiatives 
and 
a 
recalibration, 
in 
June 
2022, 
of 
our 
 allowance for doubtful microlending finance loans receivable from 10% of the lending book outstanding to 6.5% of the lending book, 
 which resulted in a release from the allowance in 
fiscal 2022, which decreases were partially offset by an increase in 
insurance-related 
 claims experience. 
 Our Segment Adjusted EBITDA 
loss margin for fiscal 
2022 
and 2021 was 
(32.9%) and 
(39.2%), respectively. 
After adjusting 
 for the reorganization 
charge our fiscal 2022 
Segment Adjusted EBITDA loss 
margin was (23.9%) 
. 
We 
believe that the presentation 
 of our Segment Adjusted EBITDA loss margin before 
the reorganization charge is useful to investors to understand 
the improvement 
 in the operating performance in Consumer, before 
the reorganization charge, in fiscal 2022 
compared with fiscal 2021. 
 Group costs 
 Our group costs increased primarily due to higher employee 
costs, an increase in audit fees and directors’ 
and officers’ 
insurance 
 premiums. 
 Use of Non-GAAP Measures 
 U.S. securities laws 
require that when 
we publish any 
non-GAAP measures, we 
disclose the reason 
for using these 
non-GAAP 
 measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA 
 is 
a 
non-GAAP 
measure. 
We 
provide 
this 
non-GAAP 
measure 
to 
enhance 
our 
evaluation 
and 
understanding 
of 
our 
financial 
 performance. 
 Non-GAAP Measures 
 Group 
Adjusted 
EBITDA 
is 
earnings 
before 
interest, 
tax, 
depreciation 
and 
amortization 
(“EBITDA”), 
adjusted 
for 
non-
 operational transactions (including loss on disposal 
of equity-accounted investments, gain related to 
fair value adjustments to currency 
 options), (earnings) loss from 
equity-accounted investments, stock-based compensation charges, lease 
adjustments and once-off items. 
 Lease 
adjustments 
reflect 
lease 
charges 
and 
once-off 
items 
represents 
non-recurring 
expense 
items, 
including 
costs 
related 
to 
 acquisitions and transactions consummated or ultimately not pursued. 

 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 45 
 The table below presents the reconciliation between GAAP net loss attributable 
to Lesaka to Group Adjusted EBITDA: 
 Table 13 
 Years 
ended June 30, 
 2023 
 2022 
 2021 
 $ ’000 
 $ ’000 
 $ ’000 
 Loss attributable to Lesaka - GAAP 
 (35,074) 
 (43,876) 
 (38,057) 
 Loss from equity accounted investments 
 5,117 
 3,649 
 24,878 
 Net loss before loss from equity-accounted investments 
 (29,957) 
 (40,227) 
 (13,179) 
 Income tax (benefit) expense 
 (2,309) 
 327 
 7,560 
 Loss before income tax expense 
 (32,266) 
 (39,900) 
 (5,619) 
 Interest expense 
 18,567 
 5,829 
 2,982 
 Interest income 
 (1,853) 
 (2,089) 
 (2,416) 
 Gain on disposal of equity securities 
 - 
 (720) 
 - 
 Net loss on disposal of equity-accounted investment 
 205 
 376 
 13 
 Loss on sale of Bank Frick 
 - 
 - 
 472 
 Gain related to fair value adjustment to currency options 
 - 
 (3,691) 
 - 
 Change in fair value of equity securities 
 - 
 - 
 (49,304) 
 Operating loss 
 (15,347) 
 (40,195) 
 (53,872) 
 Impairment loss 
 7,039 
 - 
 - 
 PPA amortization 
(amortization of acquired intangible assets) 

 15,149 
 3,826 
 360 
 Depreciation 
 8,536 
 3,749 
 3,987 
 Stock-based compensation charges 
 7,309 
 2,962 
 344 
 Lease adjustments 
 2,906 
 3,955 
 4,148 
 Once-off items
 (1)
 1,922 
 8,088 
 6,618 
 Unrealized Loss FV for currency adjustments 
 222 
 - 
 - 
 Group Adjusted EBITDA - Non-GAAP 
 27,736 
 (17,615) 
 (38,415) 
 (1) The table below presents the components of once-off 
items for the periods presented: 
 Table 14 
 Years 
ended June 30, 
 2023 
 2022 
 2021 
 $ ’000 
 $ ’000 
 $ ’000 
 Non-recurring revenue not allocated to segments 
 (1,469) 
 - 
 - 
 Employee misappropriation of company funds 
 1,202 
 - 
 - 
 Transaction costs 
 850 
 6,460 
 1,879 
 Expenses incurred related to closure of legacy businesses 
 639 
 - 
 - 
 Indirect taxes provision 
 438 
 - 
 - 
 Separation of employee expense 
 262 
 - 
 - 
 Legacy processing adjustments 
 - 
 1,628 
 - 
 Allowance for doubtful EMI loans receivable 

 - 
 - 
 4,739 
 Total once-off 
items 
 1,922 
 8,088 
 6,618 
 Once-off items are non-recurring in nature, however, certain 
items may be reported in 
multiple quarters. For instance, transaction 
 costs include costs incurred related to acquisitions and 
transactions consummated or ultimately not pursued. The transactions can span 
 multiple quarters, for instance in fiscal 2022 we 
incurred significant transaction costs related to the acquisition Connect over 
a number 
 of quarters, and the transactions are generally non-recurring. 
 Non-recurring revenue not 
allocated to segments 
includes once off 
revenue recognized that 
we believe does 
not relate to 
either 
 our Merchant 
or Consumer 
divisions. Employee 
misappropriation of 
company funds 
represents a 
once-off 
loss incurred. 
Expenses 
 incurred 
related 
to 
close 
of 
legacy 
businesses 
represents 
costs 
incurred 
related 
to 
subsidiaries 
which 
we 
are 
in 
the 
process 
of 
 deregistering/ liquidation 
and therefore we 
consider these costs non-operational 
and ad hoc in 
nature. Indirect tax 
provision includes 
 non-recurring indirect taxes 
which have been 
provided related to 
prior periods following 
an on-going 
investigation from a 
tax authority. 
 We 
incurred separation 
costs related 
to the 
termination of 
certain senior-level 
employees, including 
an executive 
officer and 
senior 
 managers, during 
the fiscal 
year and 
we consider 
these specific 
terminations to 
be of 
a non-recurring 
nature. The 
legacy processing 
 adjustments represents amounts we 
identified during fiscal 2022 
related to prior 
periods that are 
payable to third 
parties. 
The allowance 
 for doubtful 
EMI loans 
receivable relates 
to provision 
created in 
fiscal 2021 
related to 
loan provided 
to certain 
of our 
then equity-
 accounted investments. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 46 
 Liquidity and Capital Resources
 At June 30, 
2023, our unrestricted 
cash and cash 
equivalents were $35.5 
million and comprised 
of ZAR-denominated 
balances 
 of ZAR 
0.6 million ($29.2 
million), U.S. dollar-denominated 
balances of $4.5 
million, and other 
currency deposits, primarily 
Botswana 
 pula, of 
$1.8 million, 
all amounts translated 
at exchange 
rates applicable 
as of 
June 30, 
2023. The 
decrease in 
our unrestricted 
cash 
 balances 
from 
June 
30, 
2022, 
was 
primarily 
due 
to 
the 
utilization 
of 
cash 
reserves 
to 
fund 
certain 
scheduled 
repayments 
of 
our 
 borrowings, fully settle our revolving credit facility, purchase ATMs 
and safe assets, and to make an investment in working capital in 
 our 
Consumer 
and 
Merchant 
operation, 
which 
was 
partially 
offset 
by 
the 
utilization 
of 
our 
available 
borrowings 
and 
a 
positive 
 contribution from Connect and certain of our Consumer operations. 
 We generally 
invest any surplus cash held by our 
South African operations in overnight 
call accounts that we maintain at 
South 
 African banking institutions, 
and any surplus 
cash held by 
our non-South African 
companies in 
U.S. dollar-denominated money market 
 accounts. 

 Historically, 
we have financed 
most of our 
operations, research and 
development, working capital, 
and capital expenditures, 
as 
 well 
as 
acquisitions 
and 
strategic 
investments, 
through 
internally 
generated 
cash 
and 
our 
financing 
facilities. 
When 
considering 
 whether to borrow under our financing 
facilities, we consider the cost 
of capital, cost of financing, opportunity cost 
of utilizing surplus 
 cash and 
availability of 
tax efficient 
structures to 
moderate financing 
costs. For 
instance, in 
fiscal 2022, 
we obtained 
loan facilities 
 from RMB 
to fund 
a portion 
of our 
acquisition of 
Connect. 
Following the 
acquisition of 
Connect, we 
now utilize 
a combination 
of 
 short 
and 
long-term 
facilities to 
fund our 
operating 
activities and 
a long-term 
asset-backed 
facility to 
fund 
the acquisition 
of POS 
 devices and 
safe assets. 
Refer to 
Note 12 
to our 
consolidated financial 
statements for 
the year 
ended June 
30, 2023, 
for additional 
 information related to our borrowings. 
 Available short-term 
borrowings 
 Summarized below are our short-term facilities available and utilized as of 
June 30, 2023: 
 Table 15 
 RMB Facility E 
 RMB Indirect 
 RMB Connect 
 Nedbank 
 $ ’000 
 ZAR ’000 
 $ ’000 
 ZAR ’000 
 $ ’000 
 ZAR ’000 
 $ ’000 
 ZAR ’000 
 Total 
short-term facilities 
 available, comprising: 
 Overdraft 

 - 
 - 
 - 
 - 
 10,882 
 205,000 
 - 
 - 
 Overdraft restricted as to 
 use
 (1)
 74,319 
 1,400,000 
 - 
 - 
 - 
 - 
 - 
 - 
 Total overdraft 
 74,319 
 1,400,000 
 - 
 - 
 10,882 
 205,000 
 - 
 - 
 Indirect and derivative 
 facilities
 (2)
 - 
 - 
 7,167 
 135,000 
 - 
 - 
 8,311 
 156,556 
 Total 
short-term facilities 
 available 
 74,319 
 1,400,000 
 7,167 
 135,000 
 10,882 
 205,000 
 8,311 
 156,556 
 Utilized short-term 
 facilities: 
 Overdraft 

 - 
 - 
 - 
 - 
 9,025 
 170,000 
 - 
 - 
 Overdraft restricted as to 
 use
 (1)
 23,021 
 433,654 
 - 
 - 
 - 
 - 
 - 
 - 
 Indirect and derivative 
 facilities
 (2)
 - 
 - 
 1,757 
 33,100 
 - 
 - 
 112 
 2,110 
 Total 
short-term facilities 
 available 
 23,021 
 433,654 
 1,757 
 33,100 
 9,025 
 170,000 
 112 
 2,110 
 Interest rate, based on South 
 African prime rate 
 11.75% 
 11.65% 
 (1) Overdraft may only be used to fund ATMs 
and upon utilization is considered restricted cash. 
 (2) Indirect and derivative facilities may only be used for guarantees, letters of credit and forward 
exchange contracts to support 
 guarantees issued by RMB and Nedbank to various third parties on our behalf.
 

 
 
 47 
 Long-term borrowings 
 We have 
aggregate long-term borrowing 
outstanding of ZAR 2.5 billion 
($133.1 million translated at exchange 
rates as of June 
 30, 2023) as 
described in Note 
12. These borrowings 
include outstanding 
long-term borrowings 
obtained by Lesaka 
SA of ZAR 
0.9 
 billion, 
including 
accrued 
interest, 
which 
was 
used 
to 
partially 
fund 
the 
acquisition 
of 
Connect. 
The 
Lesaka 
SA 
borrowing 
 arrangements were amended 
in March 2023 
to include a 
ZAR 200 million 
revolving credit facility. 
The revolving credit 
facility had 
 been repaid in full as of June 30, 2023, and the entire balance is available for utilization. In contemplation of the Connect transaction, 
 Connect obtained 
total facilities 
of approximately 
ZAR 1.3 
billion, which 
were utilized 
to repay 
its existing 
borrowings, 
to fund 
a 
 portion of its capital expenditures and to settle obligations under the transaction documents, and which has subsequently been upsized 
 for its 
operational requirements 
and has 
an outstanding 
balance as 
of June 
30, 2023, 
of ZAR 
1.2 billion, 
We 
also have 
a revolving 
 credit facility, of ZAR 300.0 million 
which is utilized to fund a portion of our merchant finance loans receivable book. 
 Restricted cash 
 We 
have credit 
facilities with RMB 
in order 
to access cash 
to fund 
our ATMs 
in South Africa. 
Our cash, cash 
equivalents and 
 restricted cash 
presented in 
our consolidated 
statement of 
cash flows 
as of 
June 30, 
2023, includes 
restricted cash 
of approximately 
 $23.0 
million 
related 
to 
cash withdrawn 
from 
our 
debt 
facility 
to 
fund 
ATMs. 
This 
cash 
may 
only 
be 
used 
to 
fund 
ATMs 
and 
is 
 considered restricted as to use and therefore is classified as restricted cash on 
our consolidated balance sheet. 
 We 
have also 
entered into 
cession and 
pledge agreements 
with Nedbank 
related to 
our Nedbank 
credit facilities 
and we 
have 
 ceded and 
pledged certain 
bank accounts 
to Nedbank. 
The funds 
included in 
these bank 
accounts are 
restricted as 
they may 
not be 
 withdrawn without 
the express permission 
of Nedbank. Our 
cash, cash equivalents 
and restricted cash 
presented in our 
consolidated 
 statement of cash flows as of June 30, 2023, includes restricted cash of approximately 
$0.2 million that has been ceded and pledged. 
 Cash flows from operating activities 
 Net cash provided 
by operating activities 
during fiscal 
2023 
was $0.4 million 
(ZAR 7.4 million) 
compared to 
net cash utilized 
 by 
operating 
activities 
of 
$37.2 
million 
(ZAR 
565.3 
million) 
during 
fiscal 
2022. 
Excluding 
the 
impact 
of 
income 
taxes, 
our 
cash 
 provided by operating activities 
during fiscal 2023 
was impacted by 
the positive contribution from 
Connect and certain 
business within 
 our consumer 
business, which was 
partially offset 
by growth 
in our consumer 
and merchant finance 
loans receivable 
books. During 
 fiscal 2023, we 
observed fluctuations in 
our working capital, primarily 
within our merchant business, 
as a result of 
monthly changes 
 in our inventory and prepayment 
account balances as a result of 
payments made to secure prepaid 
airtime inventory. 
Certain of these 
 purchases were funded from our borrowing arrangements and the 
impact of the funding is included in financing activities. 
 Net cash used in operating activities during fiscal 2022 was $37.2 million (ZAR 565.3 million) compared to $58.4 million (ZAR 
 887.1 million) generated during fiscal 
2021. Excluding the impact of income 
taxes, our cash used in operating activities during 
fiscal 
 2022 was impacted by 
the cash losses incurred by 
the majority of our 
continuing operations, the reorganization 
costs paid during the 
 third quarter of 
fiscal 2022, and 
transactions costs paid 
related to our 
acquisition of Connect. 
In fiscal 2022, 
we absorbed $5 
million 
 into working capital compared to a $4.7 million release from working capital 
in fiscal 2021. 
 During fiscal 2023, 
we paid our 
first provisional South 
African tax payments 
of $3.0 million 
(ZAR 50.8 million) 
related to our 
 2023 
tax year. During fiscal 2023, we 
also made our second 
provisional South African tax 
payments 
of $4.1 million (ZAR 
76.1 million 
 related to our 2023 tax 
year and received tax refunds 
of $0.2 million (ZAR (3.8) 
million). We 
also paid taxes totaling $0.4 
million in 
 other tax jurisdictions, primarily in the Botswana. 
 During fiscal 2022, 
we made our 
first provisional South 
African tax payments 
of $0.6 million 
(ZAR 9.1 million) 
related to our 
 2022 
tax year. During fiscal 2022, we 
also made our second 
provisional South African tax 
payments 
of $0.7 million (ZAR 
10.9 million 
 related to our 2022 tax year and made an additional tax payment of $0.0 million (ZAR 
0.0 million) related to our 2021 tax year. 

 During fiscal 2021, we made our first provisional South 
African tax payments 
of $0.8 million (ZAR 11.9 million) 
related to our 
 2021 
tax year. During fiscal 2021, we also 
made our second provisional South African 
tax payments 
of $0.5 million (ZAR 8.0 
million) 
 related to our 2021 tax year and made an additional 
tax payment of $0.8 million (ZAR 11.6 
million) related to our 2020 tax year. 
We 
 also paid taxes totaling $4.3 million in other tax jurisdictions, primarily in the U.S. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 48 
 Taxes paid during 
fiscal 2023, 2022 and 2021 were as follows: 
 Table 16 
 Year 
ended June 30, 
 2023 
 2022 
 2021 
 2023 
 2022 
 2021 
 $ 
 $ 
 $ 
 ZAR 
 ZAR 
 ZAR 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 First provisional payments 

 2,955 
 585 
 825 
 50,798 
 9,142 
 11,934 
 Second provisional payments 

 4,079 
 691 
 470 
 76,089 
 10,929 
 8,038 
 Taxation paid related 
to prior years 

 15 
 1 
 782 
 273 
 19 
 11,620 
 Tax refund received 
 (210) 
 (300) 
 (1,339) 
 (3,756) 
 (4,542) 
 (19,245) 
 Total South African 
taxes paid 

 6,839 
 977 
 738 
 123,404 
 15,548 
 12,347 
 Foreign taxes paid 
 361 
 161 
 4,263 
 6,482 
 2,482 
 62,302 
 Total 
tax paid 

 7,200 
 1,138 
 5,001 
 129,886 
 18,030 
 74,649 
 We expect to make additional provisional 
income tax payments in South Africa related to our 2023 tax year in the first quarter of 
 fiscal 2024, however, the amount was not quantifiable 
as of the date of the filing of this Annual Report on Form 10-K. 
 Cash flows from investing activities 
 Cash used 
in investing 
activities for 
fiscal 2023 
included capital 
expenditures of 
$16.2 million 
(ZAR 289.8 
million), primarily 
 due to the 
acquisition of ATMs 
. 
During fiscal 2023, 
we received proceeds 
of $0.25 million 
related to the 
first tranche (of 
two) from 
 the disposal of our entire equity interest in Carbon and $0.4 million related to 
the sale of minor positions in Finbond. 
 During fiscal 
2022, we 
paid approximately 
$4.6 million 
(ZAR 69.3 
million), primarily 
due to 
the roll 
out of 
our new 
express 
 branches, acquisitions of ATMs and the acquisition of 
computer equipment. During fiscal 
2022, we paid approximately 
$202.2 million 
 (ZAR 2.9 billion), net of cash acquired, for 100% of Connect. We 
also received funds totaling approximately $11.4 
million related to 
 the sale of Bank 
Frick in fiscal 
2021, proceeds from sale of 
property, plant and equipment of $4.2 million, 
and proceeds of $0.9 
million 
 and $0.7 million, respectively, related to the sale of minor positions in Finbond and from the disposal of our entire interest in Revix in 
 fiscal 2022. 
 During 
fiscal 
2021, 
we paid 
approximately 
$4.3 million 
(ZAR 65.1 
million), 
primarily 
for 
the acquisition 
of motor 
vehicles, 
 which largely comprised a fleet of customized mobile ATMs 
used to deliver a service to rural communities, computer equipment 
and 
 leasehold improvements in South 
Africa. In February 2021, we disposed 
of our investment in Bank 
Frick and received $18.6 million 
 of the $30.0 million 
sales proceeds, the remainder 
of which was expected 
to be received in 
fiscal 2022 and 2023. 
We 
received $20.1 
 million in September 2020 related to the sale of our South Korean 
business in fiscal 2020 following the successful refund application 
 of 
the 
amounts 
withheld 
and 
paid 
to 
the 
South 
Korean 
tax 
authorities 
pursuant 
to 
that 
transaction. 
We 
received 
$6.0 
due 
on 
the 
 remaining deferred sale proceeds related to the fiscal 2020 sale of DNI. We also extended loan funding of $1.0 million to V2 and $0.2 
 million to Revix. 
 Cash flows from financing activities 
 During fiscal 2023, we utilized approximately $520.1 
million from our South African overdraft facilities to fund 
our ATMs 
and 
 our cash management business through Connect and repaid 
$547.3 million of these facilities. We utilized approximately $24.4 million 
 of our long-term 
borrowings to settle approximately 
$10.5 million of our 
revolving credit facilities, 
fund our merchant 
finance loans 
 receivable business, and to fund the acquisition of certain capital expenditures 
. 
We repaid approximately 
$17.5 million of these long-
 term, including approximately $10.5 million to settle our 
revolving credit balance in full. We 
received $0.5 million from the exercise 
 of stock options. We also paid $1.3 million to repurchase shares from employees in order for the employees to settle taxes due related 
 to the vesting of shares of restricted stock and to settle the strike price due and taxes 
due related to the exercise of stock options. 
 During fiscal 2022, we utilized approximately $570.9 million 
from our South African overdraft facilities to fund our ATMs 
and 
 our cash management business through Connect and 
repaid $525.5 million of these facilities. 
We utilized approximately $78.9 million 
 of our long-term borrowings 
to fund a portion 
of the acquisition of Connect, 
to fund our merchant 
finance loans receivable business, 
 and to fund the acquisition 
of certain capital expenditures. We 
repaid approximately $5.6 million 
of these long-term borrowings. 
We 
 also received $0.8 million from the exercise of stock options. 
 During fiscal 2021, we utilized approximately $360.1 million 
from our South African overdraft facilities to fund our ATMs 
and 
 repaid $365.4 million of these facilities. 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 49 
 Contractual Obligations 

 The following table sets forth our contractual obligations as of June 30, 2023: 

 Table 17 
 Payments due by Period, as of June 30, 2023 (in $ ’000s) 
 Total 
 Less than 1 
 year 
 2-3 years 
 3-5 years 
 Thereafter 
 Short-term credit facilities
 (A)
 32,046 
 32,046 
 - 
 - 
 - 
 Long-term borrowings 
 Principal repayments
 (A)(B)
 133,118 
 3,663 
 68,901 
 60,554 
 - 
 Interest payments
 (A)(B)
 55,766 
 16,861 
 28,313 
 10,592 
 - 
 Operating lease liabilities, including imputed interest
 (C)
 5,813 
 2,123 
 2,055 
 1,635 
 - 
 Purchase obligations 
 3,010 
 3,010 
 - 
 - 
 - 
 Capital commitments 
 54 
 54 
 - 
 - 
 - 
 Other long-term obligations reflected on our balance 
 sheet
 (D)(E)
 1,982 
 - 
 - 
 - 
 1,982 
 Total 
 231,789 
 57,757 
 99,269 
 72,781 
 1,982 
 
(A) – Refer to Note 12 to our audited consolidated financial statements. 
 
(B) – Long-term 
borrowings principal 
repayments for the 
3-5 year period 
includes all unamortized 
fees as of 
June 30, 2023. 
 Interest payments based on 
applicable interest rates as of 
June 30, 2023, and expected 
outstanding long-term borrowings over 
 the period. All amounts converted from ZAR to USD using the June 30, 2023, 
USD/ ZAR exchange rate. 
 
(C) – Refer to Note 8 to our audited consolidated financial statements. 
 
(D) – Includes policyholder liabilities of $1.8 million related to 
our insurance business. All amounts are translated at exchange 
 rates applicable as of June 30, 2023. 

 
(E) – 
We 
have excluded 
cross-guarantees in 
the aggregate 
amount of 
$0.1 million 
issued as 
of June 
30, 2023, 
to RMB 
and 
 Nedbank 
to secure 
guarantees it 
has issued 
to third 
parties on 
our behalf 
as the 
amounts that 
will be 
settled in 
cash are 
not 
 known and the timing of any payments is uncertain. 
 Off-Balance Sheet Arrangements
 We have no off 
-balance sheet arrangements. 
 Capital Expenditures
 Capital expenditures for the years ended June 30, 2023, 2022 and 2021 
were as follows: 
 Table 18 
 2023 
 2022 
 2021 
 2023 
 2022 
 2021 
 $ 
 $ 
 $ 
 ZAR 
 ZAR 
 ZAR 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 ‘000 
 Consumer 
 3,170 
 1,712 
 3,433 
 56,870 
 26,019 
 52,174 
 Merchant 
 12,986 
 2,846 
 852 
 232,969 
 43,253 
 12,949 
 Total 
 16,156 
 4,558 
 4,285 
 289,839 
 69,272 
 65,123 
 Our capital expenditures 
for fiscal 2023, 
2022 and 2021, are 
discussed under “—Liquidity 
and Capital Resources—Cash 
flows 
 from investing activities.” 
 All of our capital expenditures 
for the past three fiscal 
years were funded through 
internally-generated funds, except 
for certain 
 capital 
expenditures 
of 
POS devices 
and 
safe 
assets, made 
by 
Connect 
which 
were funded 
through 
the utilization 
of asset-backed 
 borrowings. 
We 
had 
outstanding 
capital commitments 
as of 
June 30, 
2023, 
of $0.1 
million. 
We 
expect 
to fund 
these expenditures 
 through 
internally-generated 
funds. 
In 
addition 
to 
these 
capital 
expenditures, 
we 
expect 
that 
capital 
spending 
for 
fiscal 
2024 
will 
 include acquisition 
of POS devices, 
safe assets, vehicles, 
computer and office 
equipment, as well 
as for our 
ATM 
infrastructure and 
 branch 
network 
in 
South 
Africa. 
These 
assets 
will 
be 
funded 
through 
the 
use 
of 
internally-generated 
funds 
and 
our 
asset-backed 
 borrowing arrangement. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 50
LESAKA TECHNOLOGIES INC 10-K

Item 7. Management’s Discussion and Analysis
