What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2024-02-06 · 1060 added, 833 removed, 640 unchanged (75% of the section changed)

47 unchanged sentences

“will,” “should,”

“plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms

“plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such

terms and other

comparable terminology.

11 unchanged sentences

should read this Form 10-Q and the documents that we reference herein and the documents we have filed as exhibits hereto

have filed with

the United States

Securities and

Exchange Commission

(“SEC”) completely

understanding that our

6 unchanged sentences

Recent Developments

profitability improving in both Consumer and Merchant divisions.

Revenue of $143.9 million (ZAR 2.7 billion) was within our revenue guidance of ZAR 2.7 billion to ZAR 2.8 billion for second

quarter of fiscal 2024, despite prevailing negative macroeconomic

and socio-political conditions in South Africa.

As of the date hereof, we have been successfully executing on our strategic objectives in building a leading fintech platform and

consolidating Southern

African fintech.

experienced continued improvement

in our financial

performance in the

third quarter of

fiscal 2024 with year-on-year revenue and profitability

improvements in both Merchant and Consumer divisions.

Operating income of $0.8 million (ZAR 15.0 million) improved

211% in ZAR, compared with an operating loss of

(ZAR 38.4 million) during the second quarter of fiscal 2023.

We exceeded the upper end of guidance of ZAR 170.0 million to

ZAR 180.0 million for second quarter of

fiscal 2024, delivering

Group Adjusted EBITDA, a non-GAAP measure, of $9.6 million (ZAR180.5 million) this quarter, a 38% increase in ZAR, compared

145% in ZAR, compared with an operating loss of $1.9 million

(ZAR 33.2 million) during the third quarter of fiscal 2023.

million) this

compared to $7.0 million (ZAR 124.6 million) in the third

quarter of fiscal 2023.

The continued resilience of our business model

challenging environment for our merchant and consumer customers demonstrates

the value they place on our services.

the value our customers place on our services.

Our mission at Lesaka is

19 unchanged sentences

inclusion, cash management and digitalization for micro, small and medium

enterprises (“MSMEs”), especially in the informal

markets of South Africa, where we have a leading market position.

enterprises (“MSMEs”), especially in the micro-

merchant sector of South Africa, where we have a leading market position.

Performance in our Merchant division has been driven by:

Kazang, our VAS

and supplier payments business,

continues to see adoption

by MSMEs in the informal

sector, with a

year-on-year and 3% quarter-on-quarter growth

in the number of devices deployed.

and supplier payments

business, continues to see

adoption by micro-merchants,

with a 12% year-on-year

growth in the number of devices deployed.

had approximately 80,250

devices deployed as of

March 31, 2024, compared

to approximately 71,800 devices

one year ago, and approximately

79,000 devices at the

end of the second quarter

of fiscal 2024.

to our device

placement strategy is

the decision to focus

on quality business and

optimizing our existing fleet,

which is reflected

in a healthy throughput and margin per device.

communicated,

significantly

comprise approximately

throughput, compared

to approximately

This change has had limited impact on profitability as money transfers are

a very low margin product.

throughput, excluding

the low-margin

money transfers, increased

36% year-on-year

traditionally

strongest quarter due to higher activity over the year-end festive

season benefitting certain product lines.

Whilst we saw

our traditional VAS

airtime and gaming,

been driven by the uptake of our supplier payments platform by micro-merchants.

As we bring more suppliers onto

approximately 100%

third quarter

approximately 35%

devices one year ago, and approximately 77,000 devices at the end

of the first quarter.

Core to our device placement

strategy is the decision to focus on quality business and optimizing our existing fleet, which is reflected in a healthy

throughput and margin per device.

throughput increased

21% year-on-year

and 17% quarter-on-quarter.

The second quarter

of our fiscal

traditionally our strongest quarter due to higher activity over the year-end

festive season benefitting certain product

As communicated

fourth quarter

margin money transfers reducing significantly due to a change in the regulatory environment impacting the

Money transfers currently comprise approximately 5% of VAS

throughput, compared to approximately

profitability

We provide card acquiring solutions in the

informal sector via Kazang

Pay and in the

formal sector we through

Card Connect.

Card-enabled POS devices

increased to approximately

48,200 as of December

31, 2023, a year-on-year

growth of 40% and

quarter-on-quarter growth of 4%.

on deployed devices increased 31%

year-on-year and 15% quarter-on-quarter

throughput volumes, compared to approximately 20% a year ago.

card acquiring solutions to

micro-merchants via Kazang Pay

and to small and medium

merchants through Card

Card-enabled POS devices increased to

approximately 50,200 as of March 31,

2024, a year-on-year growth of 21%.

Throughput on deployed devices increased 21% year-on-year

to R3.9 billion.

Merchant Credit

sector remains

merchant sector remains

suspended as we

reported in the

previous quarter.

Capital Connect

disbursed ZAR 219

quarter, compared to approximately ZAR 205 million in the comparable period last year, representing a 17% decrease.

deteriorating

strict application

credit criteria

quality of our book through this cycle.

Our loan book as of December 31, 2023 was R253 million compared to R290 million

as of December 31, 2022.

cash management

Cash Connect,

in approximately

stores, compared

to approximately

4,320 merchants’

stores a year

informal sector.

million during

this quarter, compared to ZAR 194 million

in the comparable period last year, representing a 13% increase.

Our digital cash management

offerings, Cash Connect and Kazang

Vaults, effectively “puts the bank” in approximately 4,460

merchants’ stores, compared to approximately 4,370 merchants’ stores a year ago.

We provide robust cash vaults in the

micro-merchant sector,

which enables

customer base

significantly mitigate their

operational risks pertaining

management and security.

new ATM recycler is generating

strong interest,

and this business

transferred to

Division, where

fully integrated

Cash Connect proposition as an alternative to vaults for our merchant

to significantly

mitigate their operational risks pertaining to cash management and

Acquisition of Touchsides

announced the

acquisition of

(“Touchsides”),

data analytics

from Heineken

International B.V.

The Touchsides

businesses are

highly complementary,

and the acquisition

significantly expands

In February 2024 we announced the

acquisition of Touchsides

(Pty) Ltd (“Touchsides”).

With closing conditions

now satisfied,

the deal closed

data analytics and

insights company,

and highly complementary

Kazang business.

The acquisition significantly

expands Kazang’s

footprint in the informal

market by adding an

established solution

informal licensed tavern market.

Touchsides has an installed base of over 10,000 active POS terminals across South Africa’s informal

licensed taverns,

and processes

transactions per

provides platform-as-a-service

software-as-a-service (SaaS) solutions to licensed tavern outlets, enabling the measurement of sales activity in real-time, management

of stock levels and informing commercial decisions, such as pricing

and promotional offers.

The data and insights gathered from these terminals carries significant value and potential to be monetized through relationships

route-to-market

We anticipate the

acquisition to close in March 2024 and it is subject to satisfaction of customary

closing conditions.

that has a strong presence in

the licensed tavern market.

has an installed base of over 10,000

active POS terminals across

South Africa’s licensed taverns, and processes more

than 1.5 million transactions

The business provides platform-as-a-service

software-as-a-service (“SaaS”)

licensed tavern

outlets, enabling

the measurement

time, management of stock levels and informing commercial decisions,

such as pricing and promotional offers.

data and insights

these terminals

and potential

through relationships

including fast-moving

consumer goods

companies, retailers,

wholesalers, route-to-market

suppliers, and

been allocated to our Merchant operating segment.

Acquisition of Adumo

we announced the

acquisition of Adumo

RF (Pty) Ltd, subject

to shareholder and

regulatory approvals.

serves approximately 23,000

active merchants.

operations include card acquiring,

integrated payments and reconciliation

services processing more than ZAR 24 billion in throughput per year.

The company’s corporate card services cover over 245,000 card

holders supporting payroll, incentives, rewards, and expense management.

also known as GAAP,

is the largest POS and

Software-as-a-Service solutions provider to the hospitality sector in

Southern Africa.

The acquisition

continues Lesaka’s

consolidation in

African fintech

ecosystem will

million active consumers, 119,000

merchants, and processes over ZAR

250 billion in throughput (cash, card

Group will have over 3,300 employees operating on the

ground in 5 countries:

South Africa, Namibia, Botswana, Zambia,

The acquisition enhances Lesaka's strengths in both the consumer

and merchant markets.

consideration will

combination of

of 17,279,803

and a ZAR 232 million ($12.5

million, translated at the prevailing rate of

ZAR 18.5 as of

May 6, 2024) payment in cash.

Consideration,

(“Apis”), African

Rainbow Capital

largest shareholder

Holdings (RF)

(“Crossfin”), as

International Finance Corporation and Adumo management.

The transaction is expected

to close in the

third calendar quarter of

2024 and is subject

to shareholder and regulatory

and satisfaction of customary closing conditions.

Consumer Division

Over the past six quarters we have

consistently referenced the three levers underpinning

our strategy of returning the Consumer

Division to profitability – (i) growing active EasyPay Everywhere (“EPE”) account numbers, (ii) increasing average revenue per

(“ARPU”) through cross-selling and (iii) cost optimization.

the progress made on these levers and the improved performance of

the Consumer division we are now focusing on enhancing our product and

service offering.

The progress on our three key initiatives is as follows:

strategic focus

areas underpinning

beneficiaries.

cross-selling

optimization,

profitability

Division in third quarter of fiscal 2024.

The progress on our key initiatives is as follows:

Driving customer acquisition

Gross EPE account activations, for the permanent base, during our current quarter showed significant improvement

approximately

to approximately

After accounting

active account

was approximately

92,000 accounts,

to approximately

second quarter of fiscal 2023.

Our total active EPE transactional account base stood at approximately 1.4 million at the end of December 2023, of

which more than

1.2 million (or

more than 85%)

are permanent grant

comprises Social Relief

of Distress (“SRD”) grant

recipients, which was introduced

during the COVID pandemic and

extended in calendar

Gross EPE account activations,

for the permanent base, during

our current quarter showed significant

improvement due to various strategic

We achieved approximately 63,000 gross account activations in

third quarter, compared

to approximately 38,000 in the

third quarter of fiscal 2023.

After accounting for churn, net

active account growth for the quarter

was approximately 28,000 accounts, compared to approximately 1,000

quarter of fiscal 2023.

transactional account

at approximately

which approximately

(or approximately

permanent grant

balance comprises

Social Relief of Distress

(“SRD”) grant recipients, which was

introduced during the COVID pandemic and

in calendar year 2023.

our permanent

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base due to the temporary nature of the grant.

beneficiaries,

increasing grant

and financial

challenges during

two quarters,

grant beneficiaries migrating to alternative financial service providers.

The measures taken by EasyPay

products, sales,

onboarding and

customer service

capabilities put

good position to benefit from this migration.

Progress on cross

2 unchanged sentences

consumer loan

increasing 26%

2023, compared

increasing 28% to ZAR 509 million as at March 31, 2024, compared to ZAR 397

million as of March 31, 2023.

amended our credit scoring or other lending criteria and the growth is reflective of the demand

tailored loan product for this market and growth in EPE bank account customer

cross-selling

capabilities.

implementation

lending campaigns during the current quarter.

lending campaigns and encouraging results from our digital channels during

the current quarter.

The portfolio loss ratio,

3 unchanged sentences

of the total loan book,

remained at approximately 6% on an annualized basis, in line with the first quarter

of fiscal 2024.

remained at approximately 6% on an annualized basis, in line with the first and

second quarter of fiscal 2024.

EasyPay Insurance

6 unchanged sentences

our active permanent grant

account base as of December

account base as of March

31, 2024, compared to

approximately 25% as of December

Approximately

policies were

approximately 28% as of March

Approximately 46,000

of active policies

new policies were written in the quarter, compared to approximately

36,000 in the comparable period in

active policies

to approximately

384,000 policies as

31, 2023, compared to December 31, 2022.

approximately ZAR 74 in the second quarter of fiscal 2023.

Economic Environment and Impact of loadshedding

Overall, we have

seen no significant change

in the operating environment

during the quarter.

The trading environment

challenging in South Africa

with interest rates

and unemployment remaining at elevated

These factors

are compounded by daily

load-shedding in

South Africa),

although we have

seen a marginal

load shedding

two quarters.

Power disruptions

adversely impact our customers,

especially in our Merchant

Division, where they lose

valuable trading

hours if they

access to alternative power

supplies and back-up

facilities to process electronic

payments and value-added

geographically

rotational nature

of load-shedding

localized power

periods, allowing

trading hours.

Notwithstanding

resilience of our business model, which is firmly underpinned by the relevance

and value of our offering to our target market.

Management changes

The Board has appointed Ali Mazanderani as Executive Chairman and Kuben Pillay as Lead Independent Director.

will conclude his

tenure as Group

CEO on February

his nearly three

years as Group

CEO, Chris has

led the successful

414,000 policies

compared to March 31, 2023.

our permanent

has increased

to approximately

third quarter

from approximately ZAR 78 in the third quarter of fiscal 2023.

Leadership Changes

On February 29, 2024 Mr.

Chris Meyer completed his tenure

as Group CEO of Lesaka, a

position he held since July 1,

Ali Mazanderani

Executive Chairman

setting the vision to build

the leading fintech platform in

Southern Africa that set Lesaka

on its journey.

He presented this strategy to

the market at

Lesaka’s Q4 2020 earnings call

and has played

in Lesaka’s evolution, serving as

a board director and

of the Capital Allocation Committee.

entrepreneur.

companies, including StoneCo in Brazil and Network International

Improvement in our Broad Based Black Economic

Empowerment (“B-BBEE”) rating to level 4

strategic priority

Achievement of

B-BBEE objectives

scorecard which

establishes a

independently

certificate that presents

BEE Contributor Status

Level, with level 1

being the highest and

“no rating” (a level

independently

simultaneously setting out our aim to achieve a level 4

rating by the end of fiscal year 2024.

We achieved this target during the second

quarter of fiscal 2024 and have received an independently verified B-BBEE rating

responsibilities

Mazanderani has been

integral to the

development of Lesaka’s

strategy and has

been a Non-Executive

Director since

leadership, Mr.

Kuben Pillay,

commenced his

Independent Director of Lesaka on February 1, 2024.

Critical Accounting Policies

30 unchanged sentences

Recent accounting pronouncements not yet adopted

as of December 31, 2023

pronouncements

condition, results of operations and cash flows.

as of March 31, 2024

pronouncements not yet adopted as

of March 31, 2024, including

the expected dates of adoption

and effects on our financial

results of operations and cash flows.

Currency Exchange Rate Information

2 unchanged sentences

Three months ended

Six months ended

Nine months ended

$ average exchange rate

9 unchanged sentences

Thus, the average rates used

to translate this

the three and

six months ended

December 31, 2023

and 2022, vary

slightly from the

averages shown

described below,

the translation rates we

use in presenting our

results of operations are

the rates shown in

to translate this data for the three and six months

ended March 31, 2024 and 2023, vary slightly

from the averages shown in the table

following table:

Three months ended

Six months ended

Nine months ended

Income and expense items:

Balance sheet items:

have translated

of operations

and operating

segment information

ended December

31, 2023, provided

in the tables

the actual average

exchange rates

per month (i.e.

October 2023, November

2023, and December

second quarter of

to reduce the

reconciliation of

information presented to our chief operating

decision maker.

The impact of

using this method compared with the average rate for

quarter and year to date is not significant, however, it does result in minor differences.

We believe that presentation using the average

information presented in our

external financial reporting and

leads to fewer

differences between our external reporting

measures which

are supplementally presented in ZAR, and our internal management

information, which is also presented in ZAR.

have translated the

results of operations and

operating segment information

for the three and

nine months ended March

2024, provided in

the tables below using

the actual average exchange

rates per month (i.e.

January 2024, February

and March 2024

for the third

quarter of fiscal

2024) between the

reduce the reconciliation

of information

presented to our chief

operating decision maker.

The impact of using this method

compared with the average

rate for the quarter and

is not significant,

does result in

minor differences.

believe that presentation

using the average

supplementally presented in ZAR, and our internal management information,

which is also presented in ZAR.

Results of Operations

30 unchanged sentences

reconciliation

unaudited condensed consolidated financial

statements in Note

operating decision maker

allocate once

defined below),

compensation charges,

and amortization,

impairment of goodwill or

other intangible assets, certain

lease charges (“Lease

adjustments”), other items (including

gains or losses

of investments,

adjustments to

equity securities,

adjustments to

currency options),

interest income,

interest expense, income tax expense or loss

from equity-accounted investments to our reportable segments.

Once-off items

non-recurring

costs related

or ultimately

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

Operations—Use of Non-GAAP Measures” below.

unaudited condensed

consolidated financial

statements in

chief operating

decision maker

Group Chief Executive

Officer until February 29,

our Executive Chairman

from March 1,

2024, and each

of them evaluates

segment performance based

on segment earnings

before interest, tax,

depreciation and amortization

(“EBITDA”), adjusted for

sentence (“Segment

Adjusted EBITDA”)

operating segment.

allocate once-off

defined below), stock-based compensation charges,

depreciation and amortization, impairment of goodwill or other

intangible assets,

certain lease expenses (“Lease expenses”), 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

accounted investments to

our reportable segments.

Once-off items represents

non-recurring expense items,

including costs related

acquisitions and transactions consummated

or ultimately not pursued.

The Lease expenses reflect lease

expenses (refer to Note

reconciling items to reconcile the reportable segments’ Segment Adjusted

EBITDA to our loss before income tax expense.

Group Adjusted

EBITDA represents

Adjusted EBITDA

after deducting

Lease expenses

“Results of Operations—Use of Non-GAAP Measures” below.

Connect is included for the entire year to date of fiscal 2024 and 2023.

10 unchanged sentences

in Eliminations.

Second quarter of fiscal 2024 compared to second quarter

Third quarter of fiscal 2024 compared to third quarter

of fiscal 2023

The following factors had

a significant impact on

our results of operations

during the second quarter

of fiscal 2024 as compared

The following

a significant

of operations

third quarter

with the same period in the prior year:

Higher revenue:

Our revenues increased 13% in

ZAR, primarily due to an increase in

low margin prepaid airtime sales and

in ZAR, primarily

increase in low

margin prepaid

airtime sales and

other value-added services, as well

3 unchanged sentences

lumpy nature of bulk sales;

profitability

various cost reduction initiatives in Consumer implemented in prior periods as well as the

contribution from Connect;

Operating income generated:

Operating profitability

continues to improve

as a result of

the increase in

the trading activity

as noted above off of a stable selling, general and administration base;

interest charge:

3 unchanged sentences

Foreign exchange

was 7% stronger

against the ZAR

during the second

quarter of fiscal

stronger against

compared to the prior period, which adversely impacted our U.S.

2 unchanged sentences

This discussion is based on the amounts prepared in accordance with U.S.

The following tables show the changes in the items comprising our statements of

operations, both in U.S.

The following tables show the changes in the items comprising our statements of operations,

dollars and in ZAR:

In United States Dollars

Three months ended December 31,

Three months ended March 31,

Cost of goods sold, IT processing, servicing and support

1 unchanged sentence

Depreciation and amortization

Transaction costs related to Adumo acquisition

Operating income (loss)

2 unchanged sentences

Interest expense

Loss before income tax expense

Income tax expense

Loss before income tax expense (benefit)

Income tax expense (benefit)

Net loss before earnings from equity-accounted investments

2 unchanged sentences

In South African Rand

Three months ended December 31,

Three months ended March 31,

Cost of goods sold, IT processing, servicing and support

1 unchanged sentence

Depreciation and amortization

Transaction costs related to Adumo acquisition

Operating income (loss)

2 unchanged sentences

Interest expense

Loss before income tax expense

Income tax expense

Loss before income tax expense (benefit)

Income tax expense (benefit)

Net loss before earnings from equity-accounted investments

4 unchanged sentences

primarily due

prepaid airtime sales

and other value-added

services, as well

as higher transaction, insurance

and lending revenues, which

was partially

offset by lower hardware sales revenue in our POS hardware distribution

business given the lumpy nature of bulk sales.

Cost of goods sold, IT processing, servicing and support increased by $5.4 million

(ZAR 0.2 billion), or 5.0% (in ZAR, 12.3%),

primarily due to the increase in low margin prepaid airtime sales, which were partially offset by

the benefits of various cost reduction

initiatives in Consumer and lower insurance-related claims.

Selling, general and administration expenses decreased by $2.0

million (ZAR 8.5 million), or 8.4%

transaction volumes processed, insurance premiums collected

and lending revenues following an increase in loan originations,

was partially offset

hardware sales in

our POS hardware

distribution business

lumpy nature of

Refer to discussion above at “—Recent Developments”

for a description of key trends impacting our revenue this quarter.

Cost of goods

sold, IT processing, servicing

and support increased

by $2.6 million

(ZAR 0.1 billion), or

2.4% (in ZAR, 7.9%),

was primarily due to

the benefits of

various cost reduction initiatives

in Consumer and lower

stock-based compensation charges, which

were partially offset by higher employee-related expenses and the year-over-year impact of inflationary increases on certain expenses.

primarily due to

the increase in low

margin prepaid airtime

sales and higher

insurance-related claims, which

were partially offset

the lower cost of goods sold related to fewer hardware sales.

Selling, general and administration expenses decreased

by $1.4 million (ZAR 3.4 million),

or 5.8% (in ZAR 0.8%).

primarily due

administration expenses,

partially offset

related expenses, higher

stock-based compensation charges

year-over-year impact of

inflationary increases on

certain expenses.

Depreciation and amortization expense

4 unchanged sentences

to additional POS devices deployed.

Our operating income (loss)

margin for the second

quarter of fiscal

2024 and 2023 was

1.6% and(1.6)%, respectively.

Transaction costs related to Adumo

acquisition includes fees

paid to external

service providers associated

with legal, commercial,

financial and tax due diligence activities performed and other legal

and advisory services procured.

Our operating income (loss) margin for

the third quarter of fiscal 2024 and 2023 was 0.6% and(1.4)

%, respectively.

the components of operating loss margin under “—Results of operations

by operating segment.”

did not record

any changes in

the fair value

of equity interests

in MobiKwik and

Cell C during

the second quarter

We did not record any changes in the fair

value of equity interests in MobiKwik and

Cell C during the third

quarter of fiscal 2024

or 2023, respectively.

We continue to carry our investment in Cell C

at $0 (zero).

Note 4 for the methodology and

used in the fair value calculation for Cell C.

Interest on surplus cash increased

to $0.5 million (ZAR 9.1

million) from $0.4 million (ZAR

6.8 million), primarily due to

interest rates.

expense increased

90.3 million)

76.9 million),

higher overall interest rates and higher overall borrowings during the second quarter of fiscal 2024 compared with comparable period

in the prior quarter, which was partially offset

by lower interest expense incurred on certain of our borrowing for which we were able

to negotiate lower rates of interest during the latter half of fiscal 2023.

Fiscal 2024 tax expense was $(0.7) million

(ZAR (12.8) million) compared to $0.4 million

(ZAR 6.4 million) in fiscal 2023.

effective tax rate for fiscal 2024 was impacted

by the tax expense recorded by our profitable South

African operations, a deferred tax

continue to carry our investment in Cell

C at $0 (zero).

Refer to Note

4 for the methodology and inputs used

in the fair value calculation for Cell C.

investment in Finbond.

cash increased

higher interest rates.

Interest expense

million) from

million), primarily

lower interest

expense incurred

borrowing for

calendar 2023,

which was partially

higher overall

base interest rates

overall borrowings

during the third

quarter of fiscal 2024 compared with comparable period in the prior quarter.

Fiscal 2024 tax

expense was $0.9

million (ZAR 17.6 million)

compared to a tax

benefit of $(0.9) million

(ZAR (15.4) million)

operations, a

benefit related

3 unchanged sentences

expenses, the

on-going losses

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

expense recorded

profitable South

African operations,

deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred

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 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, the

on-going losses incurred

by certain of our

8 unchanged sentences

results during

results during our fourth quarter.

entire remaining interest in Finbond during the second quarter of fiscal 2024.

results during

our fourth quarter.

entire remaining

Finbond during the

third quarter

below presents the relative (loss) earnings from our equity-accounted investments:

Three months ended December 31,

Three months ended March 31,

loss from equity-accounted investments

3 unchanged sentences

In United States Dollars

Three months ended December 31,

Three months ended March 31,

Operating Segment

2 unchanged sentences

consolidated revenue

Segment Adjusted EBITDA:

Group Adjusted EBITDA:

Lease expenses

Group Adjusted EBITDA (non-GAAP)

(1) Segment Adjusted

EBITDA for Merchant includes

retrenchments costs of

$0.01 million and Consumer

includes retrenchment

costs of $0.1 million for the second quarter of fiscal 2024.

(1) Segment Adjusted EBITDA Consumer includes retrenchment

costs of $0.01 million for the third quarter of fiscal 2024.

(2) Lease expenses which

were previously excluded

from the calculation of

Group Adjusted EBITDA

have now been included

in the calculation.

This change is

in response to comments received from

the staff of the SEC in

March 2024 regarding our non-GAAP

financial reporting.

Comparative information has been adjusted to conform

with the updated presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

3 unchanged sentences

In South African Rand

Three months ended December 31,

Three months ended March 31,

Operating Segment

2 unchanged sentences

consolidated revenue

Segment Adjusted EBITDA:

Group Adjusted EBITDA:

Lease expenses

Group Adjusted EBITDA (non-GAAP)

retrenchments

retrenchment costs of ZAR 1.3 million for the second quarter of fiscal 2024.

(1) Segment Adjusted EBITDA

for Consumer includes retrenchment

0.1 million for the

third quarter of

(2) Lease expenses which

were previously excluded

from the calculation of

Group Adjusted EBITDA

have now been included

in the calculation.

This change is

in response to comments received from

the staff of the SEC in

March 2024 regarding our non-GAAP

financial reporting.

Comparative information has been adjusted to conform

with the updated presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

2 unchanged sentences

GAAP Measures”.

Segment revenue

increased due

to the increase

in low margin

prepaid airtime

sales and other

value-added services,

partially offset

by lower hardware

sales revenue

given the lumpy

nature of bulk

sales as well

as lower revenue

from certain valued-

added services transactions

(such as international money

increase in Segment Adjusted

EBITDA is primarily

sales activity,

partially offset

Segment revenue increased due to the increase in prepaid airtime vouchers

sold and other value-added services provided, which

was partially offset

hardware sales in

our POS hardware

distribution business

lumpy nature of

lower revenue

services transaction

volumes processed

international money transfers).

In ZAR, the increase in Segment Adjusted EBITDA is

primarily due to the higher sales activity, which

was partially offset by lower

hardware sales.

Connect records

a significant

proportion of

significantly

Adjusted EBITDA margins shown by the business.

a significant proportion of

its airtime sales in

revenue (see further below)

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 margin

(calculated as Segment

Adjusted EBITDA divided

by revenue) for

the second quarter

of fiscal 2024 and 2023 was 6.8% and 7.6%, respectively.

Segment revenue increased

primarily due to

more transaction fees

generated from the

higher EPE account

holders base, higher

insurance revenues, and an increase

in lending revenue as

a result of an

increase in loan originations.

This increase in revenue,

with the cost reduction

initiatives initiated in fiscal

2022 and through

fiscal 2023, have

translated into a turnaround

in the Consumer

Division and the realization of sustained positive Segment Adjusted EBITDA.

EBITDA margin (calculated

as Segment Adjusted EBITDA

divided by revenue) for

the third quarter of

fiscal 2024 and 2023 was 6.9% and 7.0%, respectively.

Prepaid airtime sales

In South Africa and other countries, mobile network operators (“MNOs”) offer prepaid or contract (or postpaid) services to their

customers to telephony

services using a

mobile telephony network

also offer similar

products (prepaid or

for mobile data

which uses other

wireless network protocols

such as wireless

fidelity (“wifi”).

“prepaid airtime”

include both of these prepaid products.

Generally speaking, the difference between the two

models is that prepaid is

paid for upfront by the

customer and contract is

MNOs sell prepaid products directly to their customers and also indirectly

to their customers through distribution

(which include wholesalers, retailers and other parties, including ourselves).

a variety of products through our

distribution channels, including prepaid airtime,

prepaid electricity,

gaming vouchers.

We refer to these

products collectively as VAS.

In order to “load” airtime onto

a mobile device an MNOs customer

requires a prepaid airtime voucher.

A unique code is

to each prepaid

airtime voucher and

is required to

activate the prepaid

mobile device.

certain tangible goods,

customers cannot

return prepaid

airtime vouchers

to us (except

service provided

which rarely occurs).

agreed quantity

airtime vouchers

upfront directly

wholesalers or

other parties

called “Pinned airtime” - these electronic vouchers are stored

on a server owned and maintained by us and we treat

these vouchers as

merchants) as the airtime is sold by the merchant to MNOs customers (so called Pinless airtime).

insurance premiums collected and lending revenues following an increase in loan originations.

This increase in revenue has translated

into improved profitability,

which was partially

offset by higher

insurance-related claims and

higher employee-related

the year-over-year impact of inflationary increases on certain expenses.

Our Segment Adjusted EBITDA margin for the

second quarter of fiscal 2024 and 2023 was 17.6%

third quarter of fiscal 2024 and 2023 was 24.3%

and 10.4%, respectively.

7 unchanged sentences

and directors’ and officers’ insurance premiums.

Our group costs for

fiscal 2024 decreased compared

with the prior period

due to lower external

audit, legal and consulting

and lower provision for executive bonuses, which was partially offset

by higher employee costs.

First half of fiscal 2024 compared to first half of fiscal 2023

The following

factors had a

significant impact on

our results of

operations during

the first half

of fiscal 2024

as compared with

decreased modestly

compared with

external audit,

legal fees and

lower provision

for executive bonuses,

which was partially

higher employee

(base salary) costs,

consulting fees and

to date fiscal 2024 compared to year to date fiscal 2023

The following factors

had a significant

impact on our

results of operations

during the year

to date fiscal

2024 as compared

the same period in the prior year:

3 unchanged sentences

in low margin prepaid airtime

other value added services, as well as

higher transaction, insurance and lending revenues, which was partially offset by lower

other value-added services, as well

as higher transaction, insurance and lending revenues,

which was partially offset by lower

hardware sales revenue in our POS hardware distribution business given the

4 unchanged sentences

Higher net interest charge:

The net interest

charge increased to

The net interest charge increased to

$12.8 million (ZAR 239.0 million) from

$12.1 million (ZAR

million) from $7.6

131.5 million) primarily due to higher interest rates;

Foreign exchange movements:

stronger against the

ZAR during the

first half of

fiscal 2024 compared

to the prior period, which adversely impacted our U.S.

dollar reported

211.3 million) primarily due to higher interest

compared to the prior period, which adversely impacted our U.S.

reported results.

Consolidated overall results of operations

This discussion is based on the amounts prepared in accordance with U.S.

The following tables show the changes in the items comprising our statements of operations,

The following tables show the changes in the items comprising our statements of

operations, both in U.S.

dollars and in ZAR:

In United States Dollars

Six months ended December 31,

Nine months ended March 31,

Cost of goods sold, IT processing, servicing and support

1 unchanged sentence

Depreciation and amortization

Transaction costs related to Adumo acquisition

Operating income (loss)

Reversal of allowance for EMI doubtful debt receivable

Net gain on disposal of equity-accounted investments

Net loss on disposal of equity-accounted investments

Interest income

Interest expense

Loss before income tax expense

Income tax expense

Loss before income tax expense (benefit)

Income tax expense (benefit)

Net loss before loss from equity-accounted investments

2 unchanged sentences

In South African Rand

Six months ended December 31,

Nine months ended March 31,

Cost of goods sold, IT processing, servicing and support

1 unchanged sentence

Depreciation and amortization

Transaction costs related to Adumo acquisition

Operating income (loss)

Reversal of allowance for EMI doubtful debt receivable

Net gain on disposal of equity-accounted investments

Net loss on disposal of equity-accounted investments

Interest income

Interest expense

Loss before income tax expense

Income tax expense

Loss before income tax expense (benefit)

Income tax expense (benefit)

Net loss before loss from equity-accounted investments

1 unchanged sentence

Net loss attributable to us

Revenue increased

0.7 billion),

16.3%), primarily

prepaid airtime sales

and other value-added

services, as well

as higher transaction, insurance

and lending revenues, which

was partially

offset by lower hardware sales revenue in our POS hardware distribution

business given the lumpy nature of bulk sales.

Revenue increased by $23.4 million (ZAR 1.0 billion), or 5.9% (in ZAR, 14.1%), primarily

due to the increase in the number of

transaction volumes processed, insurance premiums collected

and lending revenues following an increase in loan

originations, which

was partially offset

hardware sales in

our POS hardware

distribution business

lumpy nature of

Cost of goods sold, IT processing, servicing and

1 unchanged sentence

0.7 billion), or 4.8% (in ZAR,

primarily due to the increase in low margin prepaid airtime sales, which were partially offset by the benefits of various

cost reduction

initiatives in Consumer and lower insurance-related claims.

primarily due to

the increase in low

margin prepaid airtime

sales, which were

partially offset by

the lower cost of

goods sold related

to fewer hardware sales.

Selling, general and administration expenses decreased by $3.8 million, or 5.4%, and in ZAR increased by ZAR 23.8 million, or

In ZAR, the increase was

primarily due to 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, which were partially

offset by the benefits

of various cost reduction initiatives in Consumer and lower stock-based

compensation charges.

was primarily

employee-related

expenses related

the expansion

management team and

the year-over-year impact of

inflationary increases on employee

-related expenses, which were

partially offset

by the benefits of various cost reduction initiatives in Consumer.

Depreciation and amortization expense decreased by $0.4 million, or 2.4%, and in ZAR increased by ZAR 16.0 million or 5.1%.

1 unchanged sentence

additional POS devices deployed.

Our operating income (loss) margin for the first half of fiscal 2024 and 2023 was 0.9% and (2.6)%, respectively.

We discuss the

Transaction costs related to Adumo

acquisition includes fees

paid to external

service providers associated

with legal, commercial,

financial and tax due diligence activities performed and other legal

and advisory services procured.

Our operating income (loss) margin for the year to date fiscal 2024 and 2023 was 0.8% and (2.2)%, respectively.

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 the first half of fiscal 2024 or

2023, respectively.

During the first half of fiscal 2024,

we received an outstanding amount of

$0.3 million related to the sale Carbon

in fiscal 2023,

did not record

any changes in the

fair value of

equity interests in MobiKwik

and Cell C during

date fiscal 2024

or 2023, respectively.

During the year to date fiscal 2024, we received an outstanding amount of $0.3

million related to the sale Carbon in fiscal 2023,

which resulted

1 unchanged sentence

million recorded

million related to the

disposal of our

entire interest in Carbon

during the first half

of fiscal 2023.

gain of $0.3 million

related to the disposal

of our entire interest

in Carbon during the

year to date fiscal

Refer to Note

1 unchanged sentence

information regarding this disposal.

We recorded a net

comprising a loss

million related to

minor portion

in Finbond and a $0.25 million gain related to the disposal of our entire interest in Carbon during the year to

date fiscal 2023.

Note 5 to our unaudited condensed consolidated financial statements for

additional information regarding this disposal.

million) from

2 unchanged sentences

Interest expense increased

to $9.7 million (ZAR

181.8 million) from

$8.4 million (ZAR

145.3 million), primarily

as a result of

higher overall interest rates and higher overall borrowings during the first half of fiscal 2024 compared with comparable period in the

prior year to

date, which was

partially offset

by lower interest

to $14.3 million

(ZAR 268.3 million)

from $13.4 million

(ZAR 233.3 million),

primarily as a

of higher overall interest rates and higher overall borrowings

during the year to date fiscal 2024 compared with

comparable period in

was partially

lower interest

expense incurred

on certain of our

borrowing for which

to negotiate lower rates of interest during the latter half of fiscal 2023.

Fiscal 2024 tax expense was $(1.0) million

(ZAR (17.7) million) compared to $0.4 million

(ZAR 6.8 million) in fiscal 2023.

effective tax rate for fiscal 2024 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, the

on-going losses

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

expense recorded

profitable South

African operations,

deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred

borrowing for

able to negotiate lower rates of interest during the latter half of fiscal 2023

and again towards the end of calendar 2023.

Fiscal 2024 tax expense was $1.9 million (ZAR 35.2 million) compared to a tax benefit of $(0.5) million (ZAR (8.1) million) in

Our effective tax

rate for fiscal

2024 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, the

on-going losses incurred

by certain of our

4 unchanged sentences

regarding net operating losses incurred by these entities.

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, 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.

Finbond is listed on the Johannesburg Stock

4 unchanged sentences

below presents the relative (loss) earnings from our equity-accounted

Six months ended December 31,

Nine months ended March 31,

Share of net loss

3 unchanged sentences

In United States Dollars

Six months ended December 31,

Nine months ended March 31,

Operating Segment

2 unchanged sentences

consolidated revenue

Segment Adjusted EBITDA:

Group Adjusted EBITDA:

Lease expenses

Group Adjusted EBITDA (non-GAAP)

(1) Segment Adjusted

EBITDA for Merchant includes

retrenchments costs of

$0.01 million and

Consumer includes retrenchment

costs of $0.1 million for first half of fiscal 2024.

(1) Segment Adjusted EBITDA for Merchant includes retrenchments costs of $0.2 million and Consumer includes retrenchment

costs of $0.2 million for year to date fiscal 2024.

(2) Lease expenses which

were previously excluded

from the calculation of

Group Adjusted EBITDA

have now been included

in the calculation.

This change is

in response to comments received from

the staff of the SEC in

March 2024 regarding our non-GAAP

financial reporting.

Comparative information has been adjusted to conform

with the updated presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

3 unchanged sentences

In South African Rand

Six months ended December 31,

Nine months ended March 31,

Operating Segment

2 unchanged sentences

consolidated revenue

Segment Adjusted EBITDA:

Group Adjusted EBITDA:

Lease expenses

Group Adjusted EBITDA (non-GAAP)

retrenchments

retrenchment costs of ZAR 1.3 million for first half of fiscal 2024.

retrenchment costs of ZAR 2.9 million for year to date fiscal 2024.

(2) Lease expenses which

were previously excluded

from the calculation of

Group Adjusted EBITDA

have now been included

in the calculation.

This change is

in response to comments received from

the staff of the SEC in

March 2024 regarding our non-GAAP

financial reporting.

Comparative information has been adjusted to conform

with the updated presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

2 unchanged sentences

GAAP Measures”.

Segment revenue

increased due

to the increase

in low margin

prepaid airtime

sales and other

value-added services,

partially offset by lower

hardware sales revenue given

the lumpy nature of bulk sales.

The increase in Segment Adjusted

primarily due to the higher sales activity,

which was partially offset by lower hardware sales.

Our Segment Adjusted EBITDA margin for the first half

of fiscal 2024 and 2023 was 6.7% and 7.4%, respectively.

Segment revenue increased due to the increase in prepaid

airtime vouchers sold and other value-added services provided, which

was partially offset

hardware sales in

our POS hardware

distribution business

lumpy nature of

lower revenue

services transaction

volumes processed

international money transfers).

In ZAR, the increase in Segment Adjusted EBITDA

is primarily due to the higher sales activity, which

was partially offset by lower hardware sales

Our Segment Adjusted EBITDA margin for the year

to date fiscal 2024 and 2023 was 6.8% and 7.3%, respectively.

Segment revenue increased

20 unchanged sentences

to date fiscal 2024

compared with year to

Our Segment Adjusted EBITDA margin for the first half of fiscal 2024

and 2023 was 16.8% and (2.7)%, respectively.

compared with year

Consumer Segment Adjusted EBITDA during the year to date fiscal 2024 was also impacted by higher credit losses (as a

increase in originations)

and higher insurance-related

higher number of

insurance policies) compared

with the year to date fiscal 2023.

Our Segment Adjusted EBITDA margin for the year

to date fiscal 2024 and 2023 was 19.5% and 1.8%, respectively.

Our group costs for

4 unchanged sentences

and lower provision for executive bonuses, which was partially offset

by higher employee costs.

by higher employee costs and travel expenses.

Use of Non-GAAP Measures

8 unchanged sentences

understanding

performance and

trends in our

business because

it excludes certain

non-cash expenses

(including depreciation

and amortization

stock-based compensation charges) and income

and expenses that we consider once-off in nature.

Non-GAAP Measures

3 unchanged sentences

options), (earnings)

loss from equity-accounted investments,

stock-based compensation charges, lease adjustments

and once-off items.

non-recurring

acquisitions and transactions consummated or ultimately not pursued.

equity-accounted investments,

stock-based compensation

represents non-recurring income and

expense items, including

costs related to

acquisitions and transactions consummated

or ultimately

Lease expenses

previously excluded

calculation of

Group Adjusted

the calculation.

change is in response

to comments received from

the staff of the

SEC in March 2024

regarding our non-GAAP

financial reporting.

Comparative information has been adjusted to conform

with the updated presentation.

The table below presents the reconciliation between GAAP net loss attributable

1 unchanged sentence

Three months ended

Six months ended

Nine months ended

Loss attributable to Lesaka - GAAP

12 unchanged sentences

Stock-based compensation charges

Lease adjustments

Once-off items

Unrealized gain FV for currency adjustments

Unrealized loss FV for currency adjustments

Group Adjusted EBITDA - Non-GAAP

2 unchanged sentences

Three months ended

Six months ended

Nine months ended

Transaction costs

Transaction costs related to Adumo acquisition

(Income recognized) Expenses incurred related to closure of legacy

Indirect taxes provision

Separation of employee expense

Employee misappropriation of company funds

Total once-off

13 unchanged sentences

costs incurred

which we are in the process of deregistering/ liquidation and therefore

we consider these costs non-operational and ad hoc in nature.

in the process of

deregistering/ liquidation and

therefore we consider

these costs non-operational

and ad hoc in

Indirect tax provision

includes non-recurring indirect

taxes which have been

provided related to

prior periods following an

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

period and we

consider these specific terminations

a non-recurring nature.

Employee misappropriation of company funds represents a once-off

loss incurred.

Liquidity and Capital Resources

As of December 31, 2023, our cash and cash

equivalents were $44.3 million and comprised of U.S.

dollar-denominated balances

As of March 31, 2024, our cash and cash equivalents were

$55.2 million and comprised of U.S.

dollar-denominated

$3.4 million, ZAR-denominated balances

million ($49.9 million), and

other currency deposits, primarily

Botswana pula,

of $2.0 million,

ZAR-denominated balances of

ZAR 688.5 million

($37.6 million), and

other currency deposits,

primarily Botswana

$2.2 million,

translated at

exchange rates

applicable as

in our unrestricted

all amounts translated

at exchange rates

applicable as of

March 31, 2024.

The increase in

our unrestricted cash

from June 30,

2023, was primarily

utilization of

our borrowings

facilities to

components of

our operations,

positive contribution from

our Merchant and Consumer

operations and utilization

borrowings facilities

certain components

partially offset

by the utilization

cash reserves to

fund certain scheduled

repayments of our

borrowings, purchase ATMs and vaults,

an investment

in working capital.

utilization of

cash reserves

scheduled and

other repayments

borrowings, purchase

and vaults, and

investment in

invest any surplus cash held by our

28 unchanged sentences

Summarized below are our short-term facilities available and utilized as of

December 31, 2023:

March 31, 2024:

RMB Facility E

16 unchanged sentences

Long-term borrowings

December 31, 2023)

as described in Note

These borrowings

include outstanding

long-term borrowings obtained

by Lesaka SA of

ZAR 1.0 billion,

including accrued

interest, which

partially fund

the acquisition of

We have aggregate long-term borrowing outstanding of ZAR 2.6 billion ($135.7 million translated at

exchange rates as of March

borrowings include

long-term borrowings

credit facility.

remaining balance available for utilization in the future.

In contemplation of the Connect transaction, Connect obtained total facilities

existing borrowings,

capital expenditures

transaction documents,

has subsequently

operational requirements

facility during the nine

months ended March

31, 2024, and

settled all drawn

2024, with the

full balance available

for utilization

in the future.

In contemplation

of the Connect

transaction, Connect

obtained total facilities

billion, which

were utilized to

repay its existing

borrowings, to fund

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 March 31,

credit facility,

which is utilized to fund a portion of our merchant finance loans receivable

300.0 million

merchant finance loans receivable book.

Restricted cash

4 unchanged sentences

equivalents and

restricted cash presented in

our consolidated statement

of cash flows

as of December

restricted cash

our consolidated

2024, includes

restricted cash of

$23.5 million

restricted cash

related to cash withdrawn from our debt facility to

14 unchanged sentences

cash presented in our consolidated

statement of cash flows as of December 31, 2023, includes restricted cash of

$0.1 million that has been ceded and pledged.

statement of cash flows as of March 31, 2024, includes restricted cash of $0.1 million

that has been ceded and pledged.

Cash flows from operating activities

Second quarter

Net cash provided by operating

activities during the second quarter of

fiscal 2024 was $0.6

million (ZAR 10.9 million) compared

to $3.4 million (ZAR 59.9 million) during the second quarter of fiscal 2023.

Excluding the impact of income taxes, our cash provided

Consumer, which was partially offset by growth in

our consumer and merchant finance loans

receivable books and temporary working

capital movements within

our merchant business

of quarter-end

transaction processing activities

settled in the following week.

During the second quarter of fiscal 2024, we

paid first provisional South African tax payments

of $0.1 million (ZAR 1.3 million)

related to our 2023

South African tax payments

related to prior years

of $0.1 million

(ZAR 1.3 million).

During the second

first provisional

South African

of $2.5 million

million) related

and additional

second provisional

South African

Third quarter

Net cash provided by

operating activities during the

third quarter of fiscal

2024 was $19.2 million

(ZAR 362.1 million) compared

to net cash used in operating

activities of $5.1 million (ZAR 91.6

million) during the third quarter of

Excluding the impact

processing activities

impacted by a

public holiday

settled in the

following week.

We didn’t pay any significant taxes during the

third quarter of fiscal

During the third quarter

of fiscal 2023, we

provisional South African

tax payments of $0.3

million (ZAR 5.1

million) related to certain

Connect entities’ 2023

tax year that had

not yet been aligned with ours.

Taxes paid during

the second quarter of fiscal 2024 and 2023 were as follows:

Three months ended December 31,

the third quarter of fiscal 2024 and 2023 were as follows:

Three months ended March 31,

First provisional payments

Taxation paid related

to prior years

Second provisional payments

Tax refund received

1 unchanged sentence

Foreign taxes paid

Net cash provided

by operating activities

first half of

was $4.0 million

million) compared

net cash used

activities of $4.2

million (ZAR 73.1

million) during

the first half

the impact of

income taxes, our cash provided by operating activities during the first half of fiscal 2024 was positively impacted by the contribution

from Merchant

and Consumer,

partially offset

merchant finance

loans receivable

and temporary

working capital

movements within

of quarter-end

transaction processing

closing on a Sunday and settled in the following week.

provisional South

related to our 2023 tax year and South African tax payments related to prior years

of $0.6 million (ZAR 12.2 million).

During the first

half of fiscal

2023, we paid

first provisional South

African tax payments

of $3.0 million

(ZAR 50.8 million)

related to our

year, and additional second provisional South

African tax payments of $0.2 million (ZAR 3.4 million) related to our 2022 tax

Net cash provided by operating activities during the year to

date of fiscal 2024 was $23.1 million (ZAR 434.0 million)

to net cash used

in operating activities of

$9.3 million (ZAR 162.7 million)

during the year to

date of fiscal 2023.

Excluding the impact

processing activities

impacted by a

public holiday

settled in the

following week.

During the year to date of

fiscal 2024, we paid first provisional

South African tax payments of

$2.7 million (ZAR 49.5 million)

related to our 2024 tax year and South African tax

payments related to prior years of $0.6

million (ZAR 12.2 million).

During the year

to date of fiscal 2023, we paid first provisional South African

tax payments of $3.0 million (ZAR 50.8 million) related to our 2023 tax

and additional

second provisional

South African

and as discussed above.

Taxes paid during

the first half of fiscal 2024 and 2023 were as follows:

Six months ended December 31,

the year to date of fiscal 2024 and 2023 were as follows:

Nine months ended March 31,

First provisional payments

6 unchanged sentences

Cash flows from investing activities

Second quarter

investing activities

second quarter

of fiscal 2024

capital expenditures of

Third quarter

activities for

capital expenditures

million), primarily due to the acquisition of vaults and POS devices.

activities for

million), primarily due to

the acquisition of vaults and

During the third quarter of

fiscal 2023, we received proceeds

$0.3 million related to the sale of minor positions in Finbond.

activities for

included capital

expenditures of

million), primarily due

to the acquisition of

vaults and POS devices

During the second

quarter of fiscal

to the acquisition

of vaults and

the year to date

of fiscal 2024,

we received proceeds

of $3.5 million related to the sale of remaining interest in Finbond and $0.25 million related to the second (and final) tranche from the

related to the

sale of remaining

interest in Finbond

and $0.25 million

related to the

second (and final)

tranche from the

disposal of our entire equity interest in Carbon.

investing activities

second quarter

of fiscal 2023

activities for

2023 included

capital expenditures

million (ZAR 229.9

million), due to the acquisition of vaults and POS devices.

Cash used in investing activities for the

first half of fiscal 2024 included capital

expenditures of $5.0 million (ZAR 93.7 million),

primarily due to

the acquisition of vaults

and POS devices.

the first half of fiscal

2024, we received proceeds

of $3.5 million

related to the sale of remaining interest in Finbond and $0.25 million related to the second (and final) tranche from the disposal of our

entire equity interest in Carbon.

investing activities for

the first half

2023 included capital

expenditures of $8.5

million (ZAR 146.5 million),

million), primarily

the acquisition

proceeds of $0.25 million related to the first tranche from the disposal of our

entire equity interest in Carbon.

received proceeds

million related

first tranche

equity interest

$0.4 million related to the sale of minor positions in Finbond.

Cash flows from financing activities

Second quarter

During the second quarter of fiscal 2024, we utilized $69.0 million from our South

African overdraft facilities to fund our ATMs

Third quarter

During the third

quarter of fiscal 2024

we utilized $24.9 million

from our South

African overdraft facilities

and our cash management business through Connect, and repaid

5 unchanged sentences

working capital requirements.

also paid $0.2

million to repurchase

shares from employees

the employees to

settle taxes due

related to the

vesting of shares of restricted stock.

During the second quarter

of fiscal 2023,

we utilized $167.2

million from our South

African overdraft facilities

During the third quarter of fiscal 2023,

we utilized $128.2 million from our South African overdraft facilities to fund

cash management business

through Connect,

and repaid $136.0

million of those

utilized approximately

million of our long-term borrowings to fund our merchant

finance loans receivable business, to fund the acquisition

of certain capital

expenditures and for working

capital requirements.

We repaid approximately $2.0 million of long-term borrowings

in accordance with

our repayment schedule.

received $0.1 million from the exercise of stock options.

also paid $0.2 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 the year to date

of fiscal 2024, we utilized

$153.5 million from our

South African overdraft facilities to

fund our ATMs

cash management

3 unchanged sentences

utilized $14.4

expenditures.

repaid $1.7 million of long-term borrowings in accordance

with our repayment schedule.

received $0.3 million

from the exercise of stock options.

We also paid $0.1 million to repurchase shares from employees in order for the

employees to settle

taxes due related to the vesting of shares of restricted stock.

During the first half of fiscal 2024, we utilized $128.6 million from our South African overdraft facilities to fund our ATMs

our cash management business through

Connect, and repaid $128.8 million

of those facilities.

utilized $11.0 million

term borrowings to fund

the acquisition of certain

capital expenditures and for

working capital requirements.

repaid $5.8 million

long-term borrowings

the acquisition

capital expenditures

working capital

requirements.

million of long-term borrowings

in accordance with

our repayment schedule as

settle a portion

of our revolving

credit facility

also paid $0.2

5 unchanged sentences

vesting of shares of restricted stock.

During the first half of fiscal 2023, we utilized $313.3 million from our South African overdraft facilities to fund our ATMs

our cash management business through

Connect, and repaid $312.3 million

of those facilities.

utilized $10.1 million of our

term borrowings

finance loans

receivable business

acquisition of

certain capital

expenditures.

stock options.

to repurchase

the employees

to settle taxes

due related to the vesting of shares of restricted stock.

During the year to date

of fiscal 2023, we utilized

$441.5 million from our South

African overdraft facilities to fund

cash management business

through Connect,

and repaid $448.3

million of those

utilized approximately

million of our long-term borrowings to fund our merchant

finance loans receivable business, to fund the acquisition

of certain capital

expenditures and for working

capital requirements.

We repaid approximately $5.3 million of long-term borrowings

in accordance with

our repayment schedule.

received $0.4 million from the exercise of stock options.

also paid $0.5 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.

Off-Balance Sheet Arrangements

2 unchanged sentences

Capital Expenditures

capital spending

third quarter

expect capital

include spending

2 unchanged sentences

our ATM infrastructure and branch network in South Africa.

expenditures for

are discussed

under “—Liquidity

from investing

activities.” All

capital expenditures

through internally

commitments as of December 31, 2023, of $0.1 million.

to fund these expenditures through internally generated funds and

available facilities.

Our capital expenditures for the third quarter of fiscal 2024 and 2023 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

following the

Connect acquisition,

our asset-backed

borrowing arrangement.

had outstanding

capital commitments

of March 31, 2023, of $0.2 million.

expect to fund these expenditures through internally generated funds and available

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis