What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-02-05 compared with 2024-11-06 · 1212 added, 788 removed, 531 unchanged (79% of the section changed)

12 unchanged sentences

reconciliations

present these non

-GAAP measures and

the material risks

and limitations of

these measures, as

reconciliation of these

present these non-GAAP

measures and the

material risks and

limitations of these

measures, as well

as a reconciliation

of these non-

GAAP measures

54 unchanged sentences

Recent Developments

underserviced

We offer a wide

integrated payment solutions

including transactional accounts

(banking), lending, insurance,

fintech platform in our connected ecosystem, we facilitate the digitization

of commerce in our markets.

We experienced continued improvement in our financial and operational performance in the first quarter of fiscal 2025.

of $145.5 million

(ZAR 2.6 billion) was

at the mid-point of

our revenue guidance

and compares to $136.1

million (ZAR 2.5

transaction costs.

attributable to

81.0 million)

first quarter

fiscal 2025 compared with a net loss of $5.7 million (ZAR 105.6 million) during

the first quarter of fiscal 2024.

Group Adjusted EBITDA of $9.4 million

(ZAR 168.1 million) was at

the mid-point of our guidance range,

representing the ninth

successive quarter of

Lesaka achieving or

outperforming its Group

Adjusted EBITDA guidance.

Group Adjusted EBITDA

GAAP measure, refer to reconciliation below at “—Results of Operations

—Use of Non-GAAP Measures”.

to broaden our product proposition and solve for both consumer and merchant

Beginning in the

second quarter of fiscal

year 2025, Lesaka has

commenced disclosing its

financial results across

three distinct

operating divisions:

Merchant, Consumer

and Enterprise.

We are building an

integrated multiproduct platform that

is organized around

addressing a number of customer needs.

Division (“Consumer”)

substantially the

transactional account,

and insurance.

On 1 October the Adumo Payouts business officially

became part of Consumer.

The Merchant Division (“Merchant”) serves merchants

and micro-merchants, combining existing Connect, Kazang and

Insights (previously known

as Touchsides) operations, as

Adumo, specifically its

merchant acquiring and

business and its GAAP hospitality platform.

Combined the Lesaka

offering will be amongst the most comprehensive

in the market in

businesses in

Our integrated

multi-product range

provides merchants

card acquiring, cash management, lending, software and Alternative Digital Payments (“ADP”).

our pre-paid solutions

and supplier enabled payments (previously referred to as our value-added services).

(“Enterprise”)

municipalities.

Our offering includes our bill and

utility payments platform, a new

payment switch, Prism Switch, as

well as Hardware

Security Modules,

party vending

Enterprise serves

corporates and

the technology

our Consumer and Merchant Divisions.

Merchant Division

The year-on-year

performance in

Division (“Merchant”)

robust secular

trends underpinning

cash management

digitalization

micro-merchants,

efficiently and fulfill their potential.

This division provides merchant acquiring, software, cash management services, lending and ADP, that empower merchants and

micro-merchants to transact efficiently and fulfill their

Performance in Merchant has been driven by:

and supplier payments business continues to see adoption by micro

Fiscal quarter ended September 30,

Approximate number of devices in deployment

Throughput for the quarter (ZAR billions)

international

(“IMT”) (ZAR billions)

Throughput for the quarter supplier

payments (ZAR billions)

Merchant acquiring

Fiscal quarter ended December 31,

Number of devices in deployment

Total Throughput

for the quarter excluding IMT and supplier

payments (ZAR billions)

2025 includes approximately

5,430 devices attributable

to the acquisition of

effective May 1, 2024,

not enabled for VAS

and supplier payments on the Kazang platform.

approximately

for the quarter (ZAR billions)

Merchant acquiring includes 80,178 devices deployed under the Adumo, Card Connect and Kazang brands.

approximately

September 30,

includes approximately

27,000 devices

in Touchsides

and supplier payments on the Kazang platform.

placement strategy

which is reflected in a healthy throughput growth and margin

and supplier payments throughput increased 38% to R9.9 billion.

We have separately disclosed supplier payments

from traditional VAS

as it is becoming a material contributor to our

throughput and attracts a lower gross profit margin.

Supplier payments

important part

-merchant ecosystem

developing as

provide a holistic offering to micro-merchants in informal markets.

international money

transfer throughput

recovered significantly

approaching the

Our card acceptance solutions to micro-merchants is through Kazang

Pay and to merchants through Card Connect.

Fiscal quarter ended September 30,

Approximate number of devices in deployment

Total Throughput

for the quarter (ZAR billions)

throughput to R4.2 billion for the quarter

solutions offered to merchants through Capital Connect in

the merchant market.

Fiscal quarter ended September 30,

deployed under

transaction closing

October 1, 2024.

Throughput increased

driven mainly

supported by 19% year-on-year increase in throughput

attributable to Kazang Pay.

solutions are

offered through

operations in

South Africa,

point-of-sales

hospitality industry in Southern Africa, serving clients such as KFC, McDonald’s,

Pizza Hut, Nando’s and

Krispy Kreme.

Fiscal quarter ended December 31,

Number of GAAP sites

Approximate ARPU per site (ZAR)

ARPU is calculated on a

revenue per site basis, as

monthly figure based on a

three-month rolling average for the quarter

ending December 31, 2024.

The Adumo transaction closed on October 1, 2024.

The number of

GAAP sites was 9,705 as of December 31, 2024.

ARPU per site, which combines hardware, software and acquiring revenue,

was approximately ZAR 3,300 per month.

Cash management

Our cash management and digitalization

solutions effectively “puts the bank” in 4,664 merchants’

Fiscal quarter ended December 31,

Number of devices in deployment

Cash settlements (throughput)

for the quarter

(ZAR billions)

Our cash business remains a vital product in our merchant offering and is a key differentiator for us in the digitalization

We provide robust cash vaults in the merchant

sector (Cash Connect) and are building a presence in the micro-

pertaining to cash management and security.

solutions are offered to

merchants through Capital Connect

and Adumo Capital, a joint

venture with Retail Capital

(a division of Tyme Bank)

for Merchant Cash Advance (“MCA”), with a 50:50 profit share.

Fiscal quarter ended December 31,

Total credit disbursed

(ZAR millions)

Advance loan book

size at period

Capital Connect disbursed

ZAR 166 million

during Q1 2025,

compared to ZAR

173 million in

the comparable period

last year, representing

a 4% decrease, reflective of the deterioration

in financial strength of our merchants compared

have maintained our strict

credit criteria during the high

interest rate and inflationary

cycle resulting in

less merchants qualifying for new or renewals of credit lines.

more positive political

environment, the suspension

of load-shedding

and hopefully the

interest rate

more optimistic

this business

trend reflective

Connect disbursements

this quarter compared to ZAR 154 million a quarter ago (quarter four fiscal 2024.)

Total net loan book

size at period end (ZAR millions)

Amounts reflected above includes 100% of Adumo

credit disbursed and net loan book.

transaction closing

Capital Connect’s

2 unchanged sentences

enabling the merchants

Since inception, Capital Connect

has distributed more

billion of funding

to merchants and

funding of up to ZAR 5 million in under 24 hours.

Quick access to affordable and flexible opportunity capital is vital in

every stage of a merchant’s lifecycle,

enabling them to never miss an opportunity.

Kazang Pay Advance, our lending offering

in the micro-merchant sector, was suspended

in early fiscal 2024 following

the decision to discontinue the

current product, especially in the

high interest rate environment.

We continued to explore

other options

are monitoring

payment behavior

smaller loan book and applying stricter lending criteria before the official

relaunch later in fiscal 2025.

Our cash management and digitalization

solutions effectively “puts the bank” in approximately 4,480

merchants’ stores.

Fiscal quarter ended September 30,

Approximate number of devices in deployment

differentiator

digitalization of cash.

provide robust cash vaults in the SME sector (Cash Connect) and are building a presence

in the micro-merchant sector

(Kazang Vaults),

which enables our merchant

customer base to significantly

their operational risks pertaining to cash management and security.

towards digital

most significant

experienced challenges such as power outages, high price inflation and a slowdown in consumer spending, over the

past 24 months.

This impacted

the merchants we serve in

this sector and resulted in

increased bankruptcies and vault

upliftments which affected the net growth in the vault estate.

Adumo Capital, a 50:50 joint venture

with Retail Capital, enables merchants to

access working capital in exchange

a portion of future turnover at POS.

Merchants can apply online and have access to funds within 24 hours.

Alternative Digital Payments

ADP includes our pre-paid solutions and supplier enabled payments (previously

referred to as our value-added services).

predominantly

supplier payments, with the balance attributable to international money transfers, bill payments, satellite (digital) television

Fiscal quarter ended December 31,

Number of devices in deployment

Total throughput

for the quarter (ZAR billions)

Pre-paid solutions throughput for the quarter

(ZAR billions)

Supplier enabled payments throughput for the

2025 includes

5,714 devices

attributable to

the acquisition

Insights (formerly

May 1, 2024, which are not enabled for Alternative

Digital Payments.

We had 89,571 devices deployed

as of December

31, 2024, representing a

13% year-on-year growth compared

devices as of December 31, 2023.

This includes 5,714 devices in Kazang Insights

(formerly known as Touchsides)

that are not yet enabled for ADP.

placement strategy

which is reflected in a healthy throughput growth.

year-on-year,

Consumer Division

6 unchanged sentences

areas underpinning our

Progress made

active EasyPay

Everywhere (“EPE”)

account numbers;

(ii) increasing

average revenue per user (“ARPU”) through cross-selling;

optimization;

and (iv) enhancing our product and service offering,

resulted in revenue and profitability growth in the Consumer Division in the

first quarter of fiscal 2025.

Fiscal quarter ended September 30,

growth strategy.

Fiscal quarter ended December 31,

Transactional accounts

(banking) - EasyPay Everywhere ("EPE")

Total active EPE transactional account base at quarter

end (millions)

Total active EPE transactional account base at quarter

end - Permanent grant recipients (millions)

quarter -Permanent grant recipients (number)

Total active EPE transactional account base at

- Permanent grant recipients (millions)

quarter -Permanent grant recipients (number)

Approximate Net EPE account activations

for the quarter

- Permanent grant recipients (number)

Lending - EasyPay Loans

1 unchanged sentence

Gross advances in the quarter (ZAR millions)

(ZAR millions)

Loan book size,

before allowances, at

Insurance - EasyPay Insurance

Approximate number

of insurance policies

the quarter (number)

Total active insurance

policies on book at quarter end

beneficiaries)

policies written in

quarter (number)

December 31, (permanent grant beneficiaries) (ZAR)

Adumo Payouts

Approximate number of active cardholders

Approximate load value for the quarter (ZAR millions)

SASSA statistical reports portal (2024) | Permanent grant customers per SASSA’s

monthly Social Assistance report

(December 31, 2024).

Gross loan book, before

9 unchanged sentences

gross account activations

the quarter which was pleasing in a traditionally quiet

quarter for us.

This compares to a higher

than usual activation

rate in quarter one fiscal

2024 due to significant migration

away from the South African

Post Office in that

activations of

was negatively

South African

Security Agency)

digital portal for switching.

Our total active EPE transactional account base stood at approximately 1.5 million at the end of September

the quarter, compared to

approximately 137,000 in the second quarter of fiscal 2024

which was higher than normal

to operational

that quarter;

approximately

(or approximately

are permanent

grant recipients.

Social Relief of Distress

(“SRD”) grant recipients, which was

introduced during the COVID pandemic and

in calendar year 2023.

gross activations

monthly Social Assistance

December 31, 2024,

statistical reports

approximately

2024, and 33 000 in the first quarter of fiscal 2025.

Our total active EPE transactional account base stood at approximately 1.6 million at the end of December 2024, of

approximately

customers per SASSA’s

monthly Social

Assistance report

statistical reports

The balance comprises Social Relief of Distress (“SRD”) grant recipients, which was introduced during the

COVID pandemic and extended in calendar year 2024.

our permanent

8 unchanged sentences

approximately 336,000

consumer loan

(“gross book”), increasing 34% to ZAR 564 million

as of September 30, 2024, compared to ZAR 423

million as of

September 30, 2023.

before allowances

(“gross book”), increasing 41%

to ZAR 709 million as

of December 31, 2024,

compared to ZAR 503 million

December 31, 2023.

We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our

5 unchanged sentences

approximately

percentage of the total

gross loan book at the

end of the quarter,

remained stable on an

annualized basis, compared

to quarter one fiscal 2024.

percentage of

approximately 6%

annualized basis, compared to quarter two fiscal 2024.

EasyPay Insurance

2 unchanged sentences

improvement in our overall ARPU.

September 30, 2024, compared to 31% as of September 30, 2023.

Approximately 49,000 new policies

December 31, 2024, compared

to 31% as of December

Approximately

50,000 new policies were

in the quarter, compared to

2 unchanged sentences

The total number

policies has grown 30% to approximately 466,000 policies as of September 30, 2024, compared to 359,000 policies

as of September 30, 2023.

In April 2024 we launched a new benefit where existing policyholders and new clients could elect

to cover up to six

dependent family

cover ranging

benefit more than 25 00 clients have elected to cover their dependent family

ARPU for our permanent client

base has increased to

approximately ZAR 91 for the

first quarter of fiscal

approximately ZAR 83 in the first quarter of fiscal 2024.

policies has grown 29% to approximately 496,000 policies as of December 31, 2024,

compared to 384,000 policies

as of December 31, 2023.

our permanent

has increased

to approximately

second quarter

fiscal 2025, from approximately ZAR 85 in the second quarter of fiscal 2024.

Adumo Payouts

the Adumo Payouts

business officially became part

of the Consumer

We are looking forward

contribution will be reflected in our quarter two fiscal 2025 results.

Board and Leadership Changes in quarter one fiscal 2025

Leadership changes

Smith was appointed

as Group Chief

Financial Officer

taking over these

responsibilities from

continue to augment our executive capability to accommodate the growing size of the business and deliver on the opportunity in front

Merchant pillar within Lesaka’s Merchant

Board changes

Similarly, on completion of the Adumo acquisition Dean Sparrow, Group CEO of Crossfin

Technology Holdings (RF) (Pty) Ltd,

was appointed to the Board as an independent non-executive director

and joined Lesaka’s Capital Allocation Committee.

Chris Meyer and Monde Nkosi, non-executive directors, stepped

down as directors of the Board in October 2024.

Acquisition of Adumo

Adumo transaction

which enhances

our platform,

adding customers

products, as well as

The completion

of this transaction

marks the beginning

of a new chapter

in the Lesaka story.

be included in our results for the full second quarter of fiscal 2025.

Going forward Lesaka will be run in four distinct pillars

transaction is the

catalyst to approach

the market with

a more customer

-centric operating

reporting standpoint,

we will continue

to maintain the

Consumer Division

and Merchant Division

split however

we will present

KPIs and performance with a more granular breakdown.

Our Consumer segment

will remain substantially

the same however

the perimeter will

be expanded to

include the Adumo

Merchant segment,

the Adumo transaction

opportunity to

business into

three component

organized around distinct customers.

Micro-Merchant,

Merchant and Enterprise.

Micro-merchants are

typically sole

proprietors, often

address these

customers through

materially improve

a substantial

offerings available

their digital journey.

Here we have an opportunity again to expand our total addressable market through wallet growth.

offerings, the

Adumo business has

merchant acquiring and

software at point

the Lesaka offering

will be amongst

most comprehensive in the market in meeting the needs of small and medium size businesses

in the region.

Our Enterprise

segment will focus

corporates, mobile network

operators, banks,

governments and

municipalities.

solutions include a

new payment switch, Prism

Switch, our Point

Of Sale hardware

business branded Prism

POS (previously known

as NUETS), our bill payments platform EasyPay, as well as a third party vending and security business.

As well as serving third party

corporates it will also service some of the technology needs of our other pillars, Consumer,

Micro-Merchant and Merchant.

On 1 October the Adumo Payouts business officially became part

of the Consumer Division.

The number of active card

holders was approximately 200,000 at

the end of the second quarter of

fiscal 2025, with

a load value of approximately ZAR 170 million for quarter ended December

Enterprise Division

and government

organizations,

mobile network

municipalities, driving

efficiency and innovation.

Fiscal quarter ended December 31,

Bill Payments

Total Throughput

for the quarter (ZAR billions)

Utility Payments

Total Throughput

for the quarter (ZAR billions)

Hardware Security Modules

Approximate number of transactions (million)

in production

Acquisition of Recharger

On November 20,

2024, we announced

the acquisition of

Recharger (Pty) Ltd (“Recharger”),

an acquisition subject

to satisfaction

of customary closing

January 29, 2025,

all regulatory approvals,

including approval by

the Competition Commission,

have been satisfied.

transaction is expected to

close in the third quarter

of fiscal 2025, once

the remaining procedural customary

closing conditions are satisfied.

consideration of

tranches with

the first tranche

settled at closing

second tranche

a year later.

The purchase consideration

will be settled

combination of

ZAR 332 million

common stock.

price applied

issued for the equity consideration will be based on the volume-weighted average price

of our shares for the three-month period prior

exclusively to repay a loan due by Recharger to the seller.

private utilities

Enterprise division’s alternative

payment offering.

Improvement in our Broad Based Black Economic

Empowerment (“B-BBEE”) rating to level 3

strategic priority

objectives is

which establishes

independently

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 2025 we reported that our independently verified B-BBEE rating improved to a level 3 rating from a level

4 rating achieved in fiscal year 2024.

Critical Accounting Policies

30 unchanged sentences

Recent accounting pronouncements not yet adopted

as of September 30, 2024

as of December 31, 2024

pronouncements

4 unchanged sentences

Three months ended

September 30,

Six months ended

$ average exchange rate

9 unchanged sentences

Thus, the average rates used

ended September

vary slightly

to translate this

the three and

six months ended

December 31, 2024

and 2023, vary

slightly from the

averages shown

described below,

the translation rates we

use in presenting our

results of operations are

the rates shown in

following table:

Three months ended

September 30,

Six months ended

Income and expense items:

Balance sheet items:

translated the results of operations and

operating segment information for the

three months ended September 30,

the tables below

using the actual

have translated

of operations

and operating

segment information

ended December

average exchange

rates per month

and September 2024 for the

first quarter of fiscal

2025) between the USD and

ZAR in order 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 the quarter and

is not significant,

does result in

reconciliation

of information

operating decision

compared with

average rate for the

quarter and year to

date is not significant,

however, it 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.

We believe that presentation

accuracy of the 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.

Results of Operations

37 unchanged sentences

tax expense or

loss from equity-accounted investments to our reportable segments.

Once-off items represents non-recurring expense items, including

loss from equity-accounted investments

to our reportable segments.

items represent non-recurring expense items,

costs related

7 unchanged sentences

fiscal 2024 we presented certain lease

charges which were previously reported on a separate

line in our Consumer and Merchant operating segments.

operating segments.

Operations—Use of Non-GAAP Measures” below.

We analyze our business and operations in terms of two

inter-related but independent operating segments:

(1) Merchant Division

Consumer Division.

corporate activities

impracticable to

allocate directly

Our fiscal 2025 financial

results include Adumo from

October 1, 2024.

is not included in our

financial results for fiscal

inter-related

but independent

operating segments:

Enterprise and (3) Consumer.

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.

1 unchanged sentence

in Eliminations.

First quarter of fiscal 2025 compared to first quarter

Second quarter of fiscal 2025 compared to second quarter

of fiscal 2024

The following factors had a significant impact on

our results of operations during the first

quarter of fiscal 2025 as compared with

the same period in the prior year:

processing fees in Merchant,

as well as higher transaction, insurance and lending revenues in Consumer, which was partially

offset by fewer low margin prepaid airtime sales;

Adumo-related

due to an increase trading activity as noted above;

Lower net interest

charge decreased

to $4.4 million

The following factors had

a significant impact on

our results of operations

during the second quarter

of fiscal 2025 as compared

with the same period in the prior year:

Lower revenue in ZAR:

Our revenues decreased 2% in ZAR, primarily due

to fewer low margin prepaid airtime sales and a

lower contribution from Enterprise, which

was partially offset by

the inclusion of Adumo,

an increase in value-added

activity in Merchant, as well as higher transaction, insurance and lending

revenues in Consumer;

Operating income

decreased primarily

due to higher

costs and the

increase in amortization

acquisition-related

intangible assets

was partially

Adumo from October 1, 2024;

Non-cash fair value adjustment related to equity securities:

We recorded a non

-cash fair value loss of $33.7 million during

the second quarter of fiscal 2025 related to our investment in MobiKwik;

Higher net interest

Net interest charge

increased to $5.5

million (ZAR 97.7

million) from $4.3

million (ZAR 81.2

million) primarily due to higher

overall borrowings, which was partially

offset by an increase in

interest received as a result

of the inclusion of Adumo;

Foreign exchange

compared to the prior period, which positively 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,

dollars and in ZAR:

In United States Dollars

Three months ended December 31,

Cost of goods sold, IT processing, servicing and support

Selling, general and administration

Depreciation and amortization

Operating income

Change in fair value of equity securities

Loss on disposal of equity-accounted investments

Interest income

Interest expense

Loss before income tax (benefit) expense

Income tax (benefit) expense

Net loss before earnings from equity-accounted investments

Earnings from equity-accounted investments

Less net income attributable to non-controlling interest

Net loss attributable to us

In South African Rand

Three months ended December 31,

Cost of goods sold, IT processing, servicing and support

Selling, general and administration

Depreciation and amortization

Operating income

Change in fair value of equity securities

Loss on disposal of equity-accounted investments

Interest income

Interest expense

Loss before income tax (benefit) expense

Income tax (benefit) expense

Net loss before earnings from equity-accounted investments

Earnings from equity-accounted investments

Less net income attributable to non-controlling interest

Net loss attributable to us

but decreased

the decreased

airtime sales,

partially offset

volume of value-added

services provided (prepaid

airtime and gaming), an

increase in certain issuing

fee base prices and

originations.

Refer to discussion above

at “—Recent Developments” for

a description of

key trends impacting our

revenue this quarter.

IT processing,

servicing and

support decreased

was partially

higher commissions paid related to VAS

revenue generated, and higher insurance-related claims and third-party

transaction fees.

Selling, general

and administration

expenses increased

250.3 million),

employee-related

higher stock-based compensation

travel expenses;

the year-over-year impact

of inflationary increases

on certain expenses.

Depreciation and amortization

expense increased by

$2.4 million (ZAR 38.2

or 41.5% (35.1%).

increase was due

acquisition-related

acquisition and an increase in depreciation expense related to

additional POS devices deployed.

Our operating income

margin for the

second quarter of

fiscal 2025 and

2024 was 0.5%

and 1.6%, respectively.

components of operating loss margin under “—Results of operations

by operating segment.”

The change in fair value of

equity securities of $33.7 million during

the first half of fiscal 2025 represents

a non-cash fair value

adjustment loss

equity interests

second quarter of fiscal 2024, or

any fair value adjustments for

Cell C during the second quarter

of fiscal 2025 or 2024, respectively.

our investment

methodology and

calculation for MobiKwik and Cell C.

We recorded a loss of $0.2

million related to the change in

our investment in an equity security

recorded under the equity method

to consolidation during fiscal 2025.

to Note 2 to our consolidated financial statements

for additional information regarding

Interest on surplus cash increased

to $0.7 million (ZAR 12.9 million)

from $0.5 million (ZAR 9.1 million),

primarily due to the

inclusion of Adumo.

Interest expense increased

to $6.2 million (ZAR 110.6

million) from $4.8 million

(ZAR 90.3 million.

from $4.5 million

million) primarily due to lower interest rates on our borrowings, which was partially

offset by higher over borrowings;

the prior period,

which adversely

impacted our U.S.

ZAR, the increase was

overall borrowings

second quarter

2025 compared

comparable period

Fiscal 2025 tax expense

was $(6.4) million (ZAR (117.0)

million) compared to $0.7

million (ZAR 12.8 million)

in fiscal 2024.

Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equity securities,

expense recorded

profitable South

African operations,

acquisition-related intangible

asset amortization,

non-deductible expenses

(in transaction

-related expenses)

losses incurred

African businesses and

the associated valuation

allowances created related

to the deferred

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

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.

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

Three months ended December 31,

income (loss) from equity-accounted investments

Results of operations by operating segment

The composition of revenue and the contributions of our business activities to operating

loss are illustrated below:

In United States Dollars

Three months ended December 31,

Operating Segment

Consolidated revenue:

Operating segments

consolidated revenue

Group Adjusted EBITDA:

Group Adjusted EBITDA (non-GAAP)

(1) Segment Adjusted

EBITDA for the

three months ended December

31, 2024, includes

retrenchments costs for

retrenchment costs of $0.1 million for the three months ended December 31, 2023.

(2) Lease expenses which were previously presented on

a separately line in fiscal

2024 are now included in Merchant,

and Enterprise Segment

Adjusted EBITDA.

period has been

re-presented to conform

with current period presentation.

also “—Results

of Operations

Presentation of

Merchant, Consumer

and Enterprise

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

GAAP Measures”.

In South African Rand

Three months ended December 31,

Operating Segment

Consolidated revenue:

Operating segments

consolidated revenue

Group Adjusted EBITDA:

Group Adjusted EBITDA (non-GAAP)

Adjusted EBITDA

Segment Adjusted

EBITDA Consumer

include retrenchment

million, respectively,

for the second quarter

of fiscal 2025.

Adjusted EBITDA for

Merchant includes retrenchment

ZAR 0.1 million and Consumer includes retrenchment costs of ZAR 1.3 million

for the three months ended December 31, 2023.

(2) Lease expenses which were previously presented

on a separately line in

fiscal 2024 are now included in Merchant,

and Enterprise Segment Adjusted EBITDA.

The prior period has been

re-presented to conform with current period presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

GAAP Measures”.

Segment revenue primarily decreased due fewer low margin

prepaid airtime sales (“Pinned airtime”), which was partially offset

by the inclusion of Adumo,

a higher volume of value-added

services provided (prepaid airtime

the increase in

was partially

employment-related

expenditures,

a significant

further below)

of sales, while

small margin.

This significantly

depresses the

Segment Adjusted EBITDA margins

shown by the business.

From the first quarter

of fiscal 2025, we

have experienced a shift

Pinned Airtime and

distribution of pinless

prepaid airtime

(“Pinless Airtime”), and

this trend has

through to the second quarter of fiscal

2025, with the volume of Pinned Airtime sales

decreasing, which results in a lower revenue and

related cost of sales, and an overall improved margin.

Our Segment Adjusted EBITDA margin for the

second quarter of fiscal 2025 and 2024 was 8.9% and 6.4%, respectively.

account holders

revenues following an increase in loan originations and the inclusion of

This increase in revenue has translated into

profitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations in December

2024, higher insurance-related claims, interest

expense (of approximately ZAR 13.6

million) incurred to fund

our lending book,

computer software license costs, and the year-over-year impact of inflationary increases on certain expenses.

As noted during the first

quarter of fiscal 2025, we intend to obtain a separate lending facility to fund a portion of our lending during fiscal 2025.

to have this facility in place on July 1, 2024, however, we have been unable to finalize terms as the separate lending facility will form

Consumer Segment Adjusted EBITDA for the second quarter

of fiscal 2025 compared with the second quarter of fiscal 2024.

Our Segment Adjusted EBITDA margin for the

second quarter of fiscal 2025 and 2024 was 18.9%

and 15.4%, respectively.

Segment revenue

decreased primarily

sales as well

revenue generated

prepaid airtime vouchers.

significant decrease in Segment Adjusted

EBITDA is primarily due

to the impact of

Our Segment Adjusted

(loss) EBITDA margin

for the second

quarter of fiscal

2025 and 2024

was (0.35)% and

7.5%, respectively.

costs primarily

include employee

related costs

specifically hired

Sarbanes-Oxley

employee directors’ fees;

group and US-listed related audit

and directors’ and officers’ insurance premiums.

Our group costs for fiscal

2025 increased compared with the prior

period due to higher employee

costs resulting from an increase

in the number of individuals allocated to group costs and base salary adjustments,

travel, audit, consulting and legal fees.

First half of fiscal 2025 compared to first half of fiscal 2024

The following

factors had a

significant impact on

our results of

operations during

the first half

of fiscal 2025

as compared with

the same period in the prior year:

Flat revenue:

were flat and

increased 0.2% in

ZAR, primarily

inclusion of Adumo,

an increase in

value-added services activity in Merchant, as well as higher transaction, insurance and lending revenues in Consumer, which

was partially offset by fewer Pinned Airtime sales and

a lower contribution from Enterprise;

Operating income decrease, before transaction costs:

Operating income, before Adumo-related transaction costs, decreased

acquisition-related

acquisition of Adumo, which was partially offset by contribution

from Adumo from October 1, 2024;

Non-cash fair value adjustment related to equity securities:

We recorded a non

-cash fair value loss of $33.7 million during

the first half of fiscal 2025 related to our investment in MobiKwik;

Higher net interest charge:

Net interest charge increased to $9.9 million (ZAR 177.5

million) from $8.8 million (ZAR 164.3

million) primarily due to higher

overall borrowings, which was partially

offset by an increase in

interest received as a result

of the inclusion of Adumo;

Foreign exchange movements:

5% weaker against the

ZAR during the first

half of fiscal 2025

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

dollar reported

results The ZAR

was 5% stronger

dollar during

first quarter

period, which

positively impacted

reported results.

Consolidated overall results of operations

3 unchanged sentences

In United States Dollars

Three months ended September 30,

Six months ended December 31,

Cost of goods sold, IT processing, servicing and support

2 unchanged sentences

Transaction costs related to Adumo acquisition

Operating (loss) income

Operating income

Change in fair value of equity securities

Loss on disposal of equity-accounted investments

Reversal of allowance for EMI doubtful debt receivable

1 unchanged sentence

Interest expense

Loss before income tax expense

Income tax expense

Net loss before earnings (loss) from equity-accounted investments

Earnings (Loss) from equity-accounted investments

Loss before income tax (benefit) expense

Income tax (benefit) expense

Net loss before income (loss) from equity-accounted investments

Income (Loss) from equity-accounted investments

Less net income attributable to non-controlling interest

Net loss attributable to us

In South African Rand

Three months ended September 30,

Six months ended December 31,

Cost of goods sold, IT processing, servicing and support

2 unchanged sentences

Transaction costs related to Adumo acquisition

Operating (loss) income

Operating income

Change in fair value of equity securities

Loss on disposal of equity-accounted investments

Reversal of allowance for EMI doubtful debt receivable

1 unchanged sentence

Interest expense

Loss before income tax expense

Income tax expense

Net loss before earnings (loss) from equity-accounted investments

Earnings (Loss) from equity-accounted investments

Loss before income tax (benefit) expense

Income tax (benefit) expense

Net loss before income (loss) from equity-accounted investments

Income (Loss) from equity-accounted investments

Less net income attributable to non-controlling interest

Net loss attributable to us

1 unchanged sentence

$12.4 million (ZAR 12.7

78.0 million), or

6.9% (in ZAR, 3.1%

), primarily due

to an increase in

the volume of

million), or 4.4% (in

ZAR, 0.2%), primarily due

to the inclusion of

increase in the

volume of value-added

services provided (Pinless

Airtime and gaming),

an increase in certain

issuing fee base

and transaction activity

in our issuing

business, and an

1 unchanged sentence

premiums collected and

lending revenues following

originations, which was

airtime sales.

Developments”

trends impacting our revenue this quarter.

IT processing,

lending revenues following higher

loan originations, which was partially offset by fewer

Pinned Airtime sales.

Cost of goods

sold, IT processing,

servicing and

support increased

in ZAR, decreased

primarily the

prepaid airtime

was partially

insurance-related

claims and third-party transaction fees.

administration

primarily due

employee-related expenses

(including annual

support decreased

million (or 4.3%)

ZAR, decreased

336.4 million (or 8.1%), primarily due to the decrease in

Pinned Airtime sales, which was partially offset by the inclusion of

higher commissions paid related to VAS

revenue generated, and higher insurance-related claims and third-party

transaction fees.

Selling, general

and administration

expenses increased

310.1 million),

increase was primarily due to the inclusion of Adumo;

higher employee-related expenses (including annual bonuses and

annual salary

increases) and

year-over-year

increases on certain expenses.

Depreciation and amortization expense increased by $0.4 million (ZAR 3.5 million), or 7.2%

The increase was due to an

increase in depreciation expense related to additional POS devices deployed

higher stock-based

compensation charges,

consulting fees, audit

fees, and travel expenses;

and the year-over-year

of inflationary increases on certain expenses.

Depreciation and amortization

expense increased by $2.8

million (ZAR 41.7 million),

or 24.3% (19.1%).

increase was due

acquisition-related

acquisition and an increase in depreciation expense related to additional

POS devices deployed.

Transaction costs related to Adumo acquisition

3 unchanged sentences

services procured to close the transaction on October 1, 2024.

Our operating (loss) income margin

for the first quarter of fiscal 2025 and 2024

was (0.0)% and 0.2%, respectively.

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

Our operating (loss)

income margin

for the first half

of fiscal 2025

0.3% and 0.9%,

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 quarter of fiscal 2025

or 2024, respectively.

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.

cash increased

higher overall average cash balances on deposit during the first quarter

of fiscal 2025 compared with 2024.

Interest expense increased to $5.0

million from $4.9 million

and, in ZAR, decreased

to ZAR 90.3 million

from ZAR 91.4 million.

In ZAR, the decrease was primarily as a result of lower interest expense incurred

on certain of our borrowing for which we were able

to negotiate lower

rates of interest towards

calendar 2024, which

was partially offset

by higher overall

borrowings during

the first quarter of fiscal 2025 compared with comparable period

The change in fair value of

equity securities of $33.7 million during

the first half of fiscal 2025 represents

a non-cash fair value

adjustment loss related to MobiKwik.

We did not record any changes in the fair value of equity interests in MobiKwik during the first

half of fiscal

2024, or any fair

value adjustments for

Cell C during

the first half of

fiscal 2025 or

2024, respectively.

carry our investment in Cell C at $0 (zero).

We recorded a loss of $0.2

million related to the change in

our investment in an equity security

recorded under the equity method

to consolidation during fiscal 2025.

to Note 2 to our consolidated financial statements

for additional information regarding

Interest on surplus cash increased to $1.3 million (ZAR 23.4 million) from $0.9 million (ZAR 17.4 million), primarily due to the

inclusion of Adumo and higher overall average cash balances on deposit during

the first half of fiscal 2025 compared with 2024.

Interest expense

ZAR, decreased

200.9 million

In ZAR, the increase was primarily as a result of higher overall borrowings during the first half of fiscal 2025 compared with

the comparable period

in the prior quarter,

effective tax rate for fiscal 2025 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 (in transaction-related expenses),

going losses incurred by

certain of our

South African businesses

and the associated

valuation allowances created related to

tax assets recognized regarding net operating losses incurred by these entities.

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 towards the end of

calendar 2024.

Fiscal 2025 tax expense

was $(6.3) million (ZAR (115.6)

million) compared to $1.0

million (ZAR 17.7 million)

in fiscal 2024.

Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equity securities,

expense recorded

profitable South

African operations,

acquisition-related

asset amortization,

non-deductible expenses

(in transaction

-related expenses),

losses incurred

African businesses and

the associated valuation

allowances created related

to the deferred

recognized regarding net operating

losses incurred by these entities.

Our effective

9 unchanged sentences

regarding net operating losses incurred by these entities.

the Johannesburg

Stock Exchange

its six-month

results during

entire remaining

Finbond during

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

Three months ended September 30,

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 sold our entire

remaining interest in Finbond

during the first

half of fiscal 2024.

The table below

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

Six months ended December 31,

Share of net loss

income (loss) from equity-accounted investments

Results of operations by operating segment

2 unchanged sentences

In United States Dollars

Three months ended September 30,

Six months ended December 31,

Operating Segment

4 unchanged sentences

Group Adjusted EBITDA (non-GAAP)

million and $0.06 million, respectively,

for the first quarter of fiscal 2025.

Consumer Segment Adjusted EBITDA.

respectively,

retrenchment costs of $0.2 million and Consumer includes retrenchment

costs of $0.2 million for the first half of fiscal 2024.

(2) Lease expenses which were previously presented

on a separately line in

fiscal 2024 are now included in Merchant,

and Enterprise Segment Adjusted EBITDA.

The prior period has been

re-presented to conform with current

period presentation.

“—Results of Operations—

Presentation of Merchant and Consumer by segment for fiscal 2024 and 2023

including lease charges”.

re-presented to conform with current period presentation.

(3) Group Adjusted EBITDA

4 unchanged sentences

In South African Rand

Three months ended September 30,

Six months ended December 31,

Operating Segment

6 unchanged sentences

Segment Adjusted

EBITDA Consumer

EBITDA Enterprise

include retrenchment

million and ZAR 1.1 million, respectively,

for the first quarter of fiscal 2025.

respectively,

retrenchment costs of ZAR 4.7 million and Consumer includes retrenchment costs of ZAR 2.8 million for the first half of fiscal 2024.

Consumer Segment Adjusted EBITDA.

8 unchanged sentences

primarily increased

value-added services

provided (prepaid

and high transactions volumes from

our vault and cash

management operations resulting in higher

processing fees, which was

offset by fewer low margin prepaid airtime sales.

In ZAR, the modest decrease in Segment Adjusted EBITDA is primarily due higher

operating expenses incurred, especially employment-related expenditures, to expand

our offering, which was partially offset by

airtime sales

small margin.

significantly depresses

Adjusted EBITDA

the business.

first quarter

experience a shift

higher volume

of value-added

services provided

Airtime and gaming), which

was partially offset by

fewer Pinned Airtime sales.

In ZAR, the increase

in Segment Adjusted EBITDA

is primarily due to the inclusion of Adumo, which was partially offset by higher operating expenses incurred, especially employment-

related expenditures, to expand our offering.

From the first quarter of fiscal 2025,

we have experienced a shift in the mix between the

sale of Pinned

prepaid airtime

and distribution of

pinless prepaid

airtime, with the

of pinned airtime sales decreasing, which results in a lower revenue

and related cost of sales, and an overall improved margin.

Adjusted EBITDA margin

(calculated as Segment

Airtime and distribution

of Pinless Airtime, and

this trend has continued

through to the second

quarter of fiscal 2025,

with the volume of

Pinned Airtime sales decreasing,

which results in

a lower revenue and

related cost of sales,

and an overall

Adjusted EBITDA

divided by revenue)

for the first

(calculated as

Segment Adjusted

EBITDA divided

fiscal 2025 and 2024 was 7.7% and 6.3%, 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 paid

MNOs sell prepaid products directly to their customers and also indirectly

to their customers through distribution channels

(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).

account holders

increase in certain

issuing fee base

prices and transaction

activity in our

issuing business,

insurance premiums collected

revenues following

originations.

This increase

has translated

into improved

profitability,

partially offset

insurance-related

interest expenses

(of approximately

million) incurred

revenues following an increase in loan originations and the inclusion of

This increase in revenue has translated into improved

profitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations in December

2024, higher insurance-related claims, interest

expense (of approximately ZAR 28.5

million) incurred to fund

our lending book, higher

year-over-year

during fiscal

have this facility

2024, however,

have been unable

to finalize terms as

the separate lending

facility will form part

of a broader financing

Therefore, we

included an intercompany interest expense in our Consumer Segment Adjusted

EBITDA for the first quarter of fiscal 2025.

have included

an intercompany

interest expense

Adjusted EBITDA for first half of fiscal 2025 compared with the first half

of fiscal 2024.

Our Segment Adjusted EBITDA margin for the

first quarter of fiscal 2025 and 2024 was 20.9%

and 13.6%, respectively.

costs primarily

include employee

related costs

specifically hired

Sarbanes-Oxley

employee directors’ fees;

group and US-listed related audit

and directors’ and officers’ insurance premiums.

first half of fiscal 2025 and 2024 was 19.9% and 14.5%, respectively.

Segment revenue

decreased primarily

sales as well

revenue generated

prepaid airtime vouchers.

In ZAR, the significant decrease in Segment Adjusted EBITDA is primarily due

to the impact of few sales.

Our Segment Adjusted EBITDA margin for the first half

of fiscal 2025 and 2024 was 1.6% and 8.0%, respectively.

Our group costs for fiscal

2 unchanged sentences

costs resulting from an increase

in the number of

individuals allocated to group

costs and base salary

adjustments, higher bonus

expense, travel, consulting and

Presentation of Merchant and Consumer by segment for fiscal 2024 and 2023 including lease charges

The tables below present Merchant and Consumer EBITDA for fiscal 2024

and 2023, including lease charges, as well as the

dollar/ ZAR exchange rates applicable per fiscal quarter and year:

in the number of individuals allocated to group costs and base salary adjustments,

higher bonus expense, travel, audit, consulting

Presentation of Merchant, Consumer and Enterprise by segment for fiscal 2025 to date and fiscal 2024

The tables below present Merchant, Consumer and Enterprise revenue

and EBITDA for fiscal 2025

to date and fiscal 2024,

including lease charges, as well as the U.S.

dollar/ ZAR exchange

rates applicable per fiscal quarter and year:

In United States dollars

Operating segments

consolidated revenue

Group Adjusted EBITDA:

2 unchanged sentences

In United States dollars

Operating segments

consolidated revenue

Group Adjusted EBITDA:

21 unchanged sentences

Non-GAAP Measures

operational transactions (including loss on disposal

of equity-accounted investments, gain related to

fair value adjustments to currency

options), (earnings)

equity-accounted investments,

stock-based compensation

represents non-recurring income and

expense items, including

costs related to

acquisitions and transactions consummated

or ultimately

equity-accounted

(earnings) loss from equity-accounted

investments, stock-based compensation

charges and once-off

Once-off items represents

non-recurring

The table below presents the reconciliation between GAAP net loss attributable

1 unchanged sentence

Three months ended

September 30,

Six months ended

Loss attributable to Lesaka - GAAP

Less net income attributable to non-controlling interest

(Earnings) loss from equity accounted investments

Net loss before (earnings) loss from equity-accounted investments

Income tax expense

Income tax (benefit) expense

Loss before income tax expense

2 unchanged sentences

Reversal of allowance for doubtful EMI loan receivable

Operating income (loss)

Net loss on disposal of equity-accounted investment

Change in fair value of equity securities

Operating income

PPA amortization

4 unchanged sentences

Once-off items

Unrealized (gain) loss FV for currency adjustments

Unrealized loss (gain) FV for currency adjustments

Group Adjusted EBITDA - Non-GAAP

2 unchanged sentences

Three months ended

September 30,

Six months ended

Transaction costs

Transaction costs related to Adumo acquisition

Indirect taxes provision release

Income recognized related to closure of legacy businesses

Total once-off

7 unchanged sentences

number of quarters, and the transactions are generally non-recurring.

provision release

non-recurring indirect

tax provision

businesses represents

foreign currency

translation reserve

on deconsolidation

subsidiaries and

incurred related

to subsidiaries

of deregistering/

liquidation and

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

Liquidity and Capital Resources

As of September 30, 2024, our

cash and cash equivalents were $49.7

million and comprised of U.S.

As of December 31, 2024, our cash and cash

equivalents were $60.6 million and comprised of U.S.

dollar-denominated balances

8 unchanged sentences

translated at exchange

rates applicable as of

September 30, 2024.

The decrease in

our unrestricted

rates applicable as

of December 31,

decrease in our

cash balances from June 30, 2024, was

3 unchanged sentences

purchase ATMs

investment in

working capital,

which was partially

positive contribution

Consumer operations

investment in working capital, which was partially offset by

positive contribution from our Merchant and Consumer operations

invest any surplus cash held by

25 unchanged sentences

the acquisition

Refer to Note

consolidated financial

statements for

the year ended

June 30, 2024,

these condensed consolidated financial statements for additional

information related to our borrowings.

1 unchanged sentence

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

September 30, 2024:

RMB Facility E

December 31, 2024:

short-term facilities

available, comprising:

Overdraft restricted as to

Total overdraft

Indirect and derivative

facilities available

short-term facilities

Utilized short-term

Indirect and derivative

facilities available

South African prime rate

(1) Overdraft may only

be used to fund

and upon utilization is

considered restricted cash.

not utilize this facility

at the end of September 2024, and expect to cancel the facility in the second

quarter of fiscal 2025.

short-term facilities

African prime rate

(1) Indirect and derivative facilities may only be used for guarantees, letters of credit and forward

2 unchanged sentences

Long-term borrowings

September 30, 2024)

December 31, 2024)

as described in Note

These borrowings

include outstanding long-term

borrowings obtained by Lesaka

include outstanding

long-term borrowings obtained

by Lesaka SA of

ZAR 1.0 billion,

3 unchanged sentences

the acquisition of

arrangements were amended in March 2023 to

include a ZAR 200 million revolving

credit facility.

We have settled all drawn amounts

of September 30,

balance available for

utilization in the

contemplation of the

Connect transaction,

Connect obtained total facilities

of ZAR 1.3 billion,

which were utilized to

repay its existing borrowings,

portion of its capital

expenditures and

to settle obligations

million of this facility as of December 31, 2024.

In contemplation

of the Connect transaction, Connect obtained total facilities of ZAR

1.3 billion, which were

utilized to repay its existing

borrowings, to fund a

portion of its capital expenditures

and to settle obligations

transaction documents,

has subsequently

been upsized for

its operational

requirements and has

an outstanding balance

as of September 30,

2024, of ZAR 1.2

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.

On September 30, 2024, we obtained

a ZAR 665.0 million funding facility from

RMB which has been used on October 1,

to (i) settle an amount of ZAR 232.2 million due to the

Adumo sellers;

(ii) pay ZAR 207.2 million to acquire 2,601,410 shares of

operational requirements

an outstanding

balance as of December 31, 2024, 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.

On September 30, 2024,

we obtained a

ZAR 665.0 million funding

facility from RMB which

has been used

to (i) settle an

.2 million due

ZAR 207.2 million

to acquire 2,601,410

shares of our

common stock from

one of the Adumo

sellers’ indirect shareholders;

(iii) pay ZAR 147.5

million notified by

Investec Bank Limited

to Adumo and us as

a result of the acquisition,

(iv) pay an origination fee

of ZAR 7.6 million to

RMB and (v) pay ZAR

of transaction-related expenses.

one of the Adumo sellers’ indirect shareholders;

(iii) pay ZAR 147.5 million notified by Investec Bank Limited to Adumo and us as a

result of the

acquisition, (iv) pay an

origination fee of

ZAR 7.6 million to

RMB and (v) pay

ZAR 70.0 million of

transaction-related

On December 10, 2024, we obtained a ZAR 250.0 million general banking facility from RMB which is repayable in full by

the end of February 2025.

We have included

additional information regarding this general banking facility under available short-term

Restricted cash

September 30, 2024,

credit facilities

order to access

fund our ATMs in South

of this facility is included in our cash, cash equivalents

and restricted cash presented in our consolidated statement

of cash flows.

considered restricted as to use and therefore is classified as restricted cash on

our consolidated balance sheet.

also entered into cession and pledge

10 unchanged sentences

cash presented in our consolidated

statement of cash flows as of September 30, 2024, includes restricted cash of

statement of cash flows as of December 31, 2024, includes restricted cash of

$0.1 million that has been ceded and pledged.

24 unchanged sentences

Cash flows from operating activities

First quarter

Second quarter

used operating

activities during

73.3 million)

cash provided by operating activities

of $3.4 million (ZAR 63.1

million) during the first quarter

of fiscal 2024.

was $9.2 million

million) compared

net cash provided

by operating activities

of $0.6 million

(ZAR 10.9 million)

during the second

quarter of fiscal

Excluding the

of income taxes, our cash used in operating activities during the first quarter of fiscal 2025 includes cash utilized for the settlement of

settled in the following week (our fourth quarter of

fiscal 2024 closed on a Sunday), and the

net growth in our consumer and merchant

Consumer businesses.

We didn’t pay

any significant taxes during the first quarter of fiscal 2025.

During the first quarter of fiscal 2024, we paid second

provisional South

income taxes,

operating activities

second quarter

2025 includes

cash utilized

significant net

growth in our

Consumer finance

loans receivable book,

which was partially

was positively impacted

contribution from our Merchant and Consumer businesses.

During the second

quarter of fiscal

2025, we paid

first provisional South

African tax payments

1 unchanged sentence

(ZAR 56.3 million)

related to certain

Connect entities’ 2024

tax year that

yet been aligned with ours.

related to our 2025.

We also paid taxes

totaling $0.1 million in other tax

jurisdictions, primarily in Botswana during the

second quarter

of fiscal 2025.

During the second

quarter of fiscal

2024, we paid

first provisional South

African tax payments

of $2.7 million

49.5 million) related

to our 2024 tax

year and South

African tax payments

related to prior years

of $0.07 million

(ZAR 1.3 million).

We also paid taxes totaling

0.1 million in other tax jurisdictions, primarily in Botswana.

Taxes paid (refunded)

during the second quarter of fiscal 2025 and 2024 were as follows:

Three months ended December 31,

First provisional payments

Taxation paid related

to prior years

Total South African

Foreign taxes paid

tax (refund) paid

used operating

activities during

236.7 million)

cash provided by operating

activities of $4.0 million

(ZAR 74.0 million) during

the first half of

the impact of

working capital movements within our Merchant and Enterprise

businesses related to quarter-end transaction processing activities and

significant net

growth in our

Consumer finance

loans receivable book,

which was partially

was positively impacted

contribution from Merchant and Consumer businesses.

provisional South

related to our

also paid taxes

totaling $0.1 million

jurisdictions, primarily

in Botswana during

the first half

million) related

South African tax

payments related

to prior years

12.2 million).

also paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Botswana.

Taxes (refunded)

paid during the first quarter of fiscal 2025 and 2024 were as follows:

Three months ended September 30,

paid during the first half of fiscal 2025 and 2024 were as follows:

Six months ended December 31,

First provisional payments

Taxation paid related

3 unchanged sentences

Foreign taxes paid

tax (refund) paid

Cash flows from investing activities

First quarter

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

million), primarily due to the acquisition of vaults.

Second quarter

Cash used in investing activities

for the second quarter of

fiscal 2025 included capital expenditures

of $6.3 million (ZAR 112.8

million), primarily

acquisition of

second quarter of

related to acquisition of certain businesses, including Adumo.

investing activities

second quarter

of fiscal 2024

capital expenditures

million (ZAR 41.1

million), primarily due

to the acquisition of

vaults and POS devices

During the second

quarter 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

of fiscal 2025

included capital expenditures

of $6.3 million

(ZAR 112.8 million),

acquisition of certain businesses, including Adumo.

Cash used in investing activities for the

first half of fiscal 2024

included capital expenditures of $2.2 million

(ZAR 41.1 million),

primarily due to the acquisition of

During the first half of fiscal

2024, we received proceeds of $3.5

million related to the sale

$0.25 million

final) tranche

interest in Carbon.

Cash flows from financing activities

First quarter

first quarter of

fiscal 2025, we

utilized $23.9

our South African

overdraft facilities

Second quarter

During the second quarter of fiscal 2025, we utilized $48.9 million from our South

African overdraft facilities to fund our ATMs

and our cash management business through Connect, and repaid

1 unchanged sentence

We utilized $12.9 million of our long-

term borrowings to

portion of the

Adumo purchase consideration,

pay certain transaction

expenses, repay Adumo’s borrowings,

repurchase shares of our common stock, fund the acquisition of certain capital expenditures and for working capital requirements.

settle Adumo’s

an origination

additional borrowings

controlling interest of $0.3 million.

During the second quarter of fiscal 2024,

we utilized $69.0 million from our South African overdraft facilities to

fund our ATMs

and our cash management business through Connect, and repaid

$66.0 million of those facilities.

We utilized $8.6 million of our long-

term borrowings to fund

2 unchanged sentences

working capital requirements.

first quarter of

we utilized $59.6

our South African

overdraft facilities

business through

those facilities.

approximately

million of our long-term borrowings

to fund the acquisition of

certain capital expenditures and

for working capital requirements.

repaid approximately

$2.6 million of

long-term borrowings in

accordance with our

repayment schedule as

settle a portion

of our revolving credit facility utilized.

repaid $3.2 million

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 first half

of fiscal 2025, we

utilized $48.9 million from

our South African overdraft

facilities to fund our

borrowings to

purchase consideration,

transaction expenses,

repay Adumo’s

repurchase shares of our common stock, fund the acquisition of certain capital expenditures and for working capital requirements.

revolving credit

facility utilized.

an origination

additional borrowings as well as paid dividends to the non-controlling

interest of $0.3 million.

During the first half

of fiscal 2024, we

utilized $69.0 million from

our South African overdraft

facilities to fund our

management business

through Connect,

$66.0 million

utilized $8.6

term borrowings to fund

the acquisition of certain

capital expenditures and for

working capital requirements.

repaid $3.2 million

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.

Off-Balance Sheet Arrangements

2 unchanged sentences

Capital Expenditures

expect capital

spending for the

second quarter of

to primarily include

spending for acquisition

of POS devices,

capital spending

third quarter

include spending

for acquisition

computer software, computer and office equipment, as well as for

our ATM infrastructure and branch network in South Africa.

Our capital expenditures for

the first quarter of fiscal

and 2024 are discussed under

“—Liquidity and Capital Resources

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

expenditures for

are discussed

under “—Liquidity

from investing

activities.” All

capital expenditures

through internally

commitments as of December 31, 2024, of $0.5 million.

to fund these expenditures through internally generated funds and

available facilities.

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