LESAKA TECHNOLOGIES INC 10-Q/A

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended June 30, 2024, and the unaudited condensed consolidated financial statements and the accompanying notes included in this Form 10-Q. U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. We discuss why we consider it useful to present these non -GAAP measures and the material risks and limitations of these measures, as well as a reconciliation of these non- GAAP measures to the most directly comparable GAAP financial measure below at “—Results of Operations—Use of Non-GAAP Measures” below. Restatement As previously described in the Explanatory Note above and in Note 1 to our unaudited condensed consolidated financial statements, we have restated our previously issued unaudited condensed consolidated financial statements and related notes as of March 31, 2025 and for the three and nine months ended March 31, 2025. As a result, the previously reported financial information as of and for the three and nine months ended March 31, 2025 in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations has been updated to reflect the relevant restatement. Refer to Note 1 in our unaudited condensed consolidated financial statements for additional information related to the restatement, including descriptions of the adjustments and the impacts on our unaudited condensed consolidated financial statements. Other than the effect of the restatement as described in Note 1 in our unaudited condensed consolidated financial statements, this section has not been otherwise modified and does not reflect any information or events occurring after May 7, 2025, the filing date of the Original Filing, or modify or update those disclosures affected by events that occurred at a later date or facts that subsequently became known to the Company, except to the extent they are otherwise required to be included and discussed herein. Forward-looking statements Some of the statements in this Form 10-Q constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, implied or inferred by these forward-looking statements. Such factors include, among other things, those listed under Item 1A.—“Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2024. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should ”, “could”, “would”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we do not know whether we can achieve positive future results, levels of activity, performance, or goals. Actual events or results may differ materially. We undertake no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform those statements to reflect the occurrence of unanticipated events, except as required by applicable law. You should read this Form 10-Q and the documents that we reference herein and the documents we have filed as exhibits hereto and thereto and which we have filed with the United States Securities and Exchange Commission (“SEC”) completely and with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Recent Developments We disclose our financial results across three distinct operating divisions: Merchant, Consumer and Enterprise. Our evolving integrated multi-product platform is organized around addressing a number of customer needs. Merchant Division The Merchant Division (“Merchant”) serves merchants and micro-merchants, combining existing Connect, Kazang and Kazang Insights (previously known as Touchsides) operations as well as the bulk of Adumo, specifically merchant acquiring and software by way of its GAAP hospitality platform. Combined, we believe the Lesaka offering is the most comprehensive in the market in meeting the needs of micro- and medium-size businesses in the region, empowering merchants and micro-merchants to transact efficiently and fulfill their potential. Our integrated multi-product range provides merchants with card acquiring, cash management, lending, software and Alternative Digital Payments (“ADP”). ADP includes our pre-paid solutions and supplier enabled payments (previously referred to as our value- added services). 55 Performance in Merchant has been driven by: Merchant acquiring Merchant acquiring includes 81,106 devices deployed under the Adumo, Card Connect and Kazang brands. Q3 2025 Q3 2024 Q3 2023 2025 vs 2024 Number of devices in deployment 81,106 50,211 42,012 62% Total Throughput for the quarter (ZAR billions) 9.9 3.9 3.2 154% ● Q3 2025 is inclusive of approximately 27,000 devices deployed under the Adumo brand with the Adumo transaction closing on October 1, 2024, the impact of which is not included in the prior period comparatives. ● Throughput increased to ZAR 9.9 billion for the quarter, driven mainly by the inclusion of Adumo in Q3 2025 and lower than historic year-on-year growth attributable to Kazang Pay. Software Our software solutions are offered through GAAP. GAAP has operations in South Africa, Botswana, Kenya and clients in a further 21 countries. It is the leading provider of integrated point-of-sales software and hardware to the hospitality industry in Southern Africa, serving clients such as KFC, McDonald’s, Pizza Hut, Nando’s and Krispy Kreme. Q3 2025 Number of GAAP sites 9,640 Approximate ARPU per site (ZAR) (1) 3,360 (1) ARPU is calculated on a revenue per site basis, as monthly figure based on a three-month rolling average for the quarter ending March 31, 2025. ● GAAP was acquired on October 1, 2024. The number of GAAP sites was 9,640 as of March 31, 2025. ● Monthly ARPU per site, which combines hardware, software and acquiring revenue, was approximately ZAR 3,360, representing a 7% year-on-year growth. Cash management Our cash management and digitalization solutions effectively “puts the bank” in 4,550 merchants’ stores enabling them to deposit their cash faster and more safely on our proprietary Cash Connect vaults. Our cash business remains a vital product in our merchant offering and is a key differentiator for us in the digitalization of cash. It is a very apt point of entry for such a cash-heavy market where many merchants deal with the burdens, costs and risks of handling large amounts of cash. We provide robust cash vaults in the merchant sector (through Cash Connect) and are building a presence in the micro-merchant sector (through Kazang Vaults) enables our merchant customer base to mitigate their operational risks pertaining to cash management and security. Q3 2025 Q3 2024 Q3 2023 2025 vs 2024 Number of devices in deployment 4,550 4,465 4,369 2% Cash settlements (throughput) for the quarter (ZAR billions) 27.5 27.0 26.2 2% Lending Our lending solutions are offered to merchants through Capital Connect and Adumo Capital. Merchant lending is an important component in enabling the merchants we serve to compete and grow. Merchants can apply online and have access to funds within 24 hours. Adumo Capital is a joint venture with Retail Capital, a division of Tyme Bank, with a 50:50 profit share. Q3 2025 Q3 2024 Q3 2023 2025 vs 2024 Total credit disbursed (ZAR millions) (1) 332 219 194 52% Total net loan book size at period end (ZAR millions) (1) 494 299 302 65% (1) Amounts reflected above includes 100% of Adumo Capital’s credit disbursed and net loan book. ● Q3 2025 is inclusive of credit disbursed under the Adumo brand with the Adumo transaction closing on October 1, 2024, the impact of which is not included in the prior period comparatives. 56 ● We experienced significant growth in credit disbursed during the third quarter of fiscal 2025, driven by Capital Connect disbursing ZAR 283 million in Q3 2025, compared with ZAR 139 million last quarter (Q2 2025) and ZAR 219 million a year ago (Q3 2024). Alternative Digital Payments ADP includes our pre-paid solutions and supplier enabled payments (previously referred to as our value-added services). Pre-paid solutions comprise airtime, electricity and gaming vouchers. Supplier enabled payments predominantly includes supplier payments, with the balance attributable to international money transfers, bill payments, satellite (digital) television offerings. Q3 2025 Q3 2024 Q3 2023 2025 vs 2024 Number of devices in deployment 92,957 80,291 71,806 16% Total throughput for the quarter (ZAR billions) 10.6 8.3 7.5 28% Pre-paid solutions throughput for the quarter (ZAR billions) 4.7 4.5 3.8 3% Supplier enabled payments throughput for the quarter (ZAR billions) 5.9 3.8 3.7 57% ● We had 92,957 devices deployed as of March 31, 2025, representing a 16% year-on-year growth compared to 80,291 devices as of March 31, 2024. Core to our device placement strategy is the decision to focus on quality business and optimizing our existing fleet, which is reflected in healthy throughput growth. ● Total throughput increased 28% to ZAR 10.6 billion year-on-year, driven by a 57% increase in supplier enabled payments. Consumer Division The Consumer Division (“Consumer”) offers a transactional account, loans and insurance. Consumer includes our EasyPay Payouts platform (previously known as Adumo Payouts) where we service consumers who are corporate employees and receive work- related benefit payments from their employers through us. We continue to deliver against our strategic focus areas underpinning our growth strategy in Consumer . Q3 2025 Q3 2024 Q3 2023 2025 vs 2024 Transactional accounts (banking) - EasyPay Everywhere ("EPE") Total active EPE transactional account base at quarter end (millions) 1.7 1.5 1.3 16% Total active EPE transactional account base at quarter end - Permanent grant recipients (millions) (1) 1.5 1.3 1.0 19% Approximate Gross EPE account activations for the quarter - Permanent grant recipients (number) 124,000 97,000 39,000 28% Approximate Net EPE account activations for the quarter - Permanent grant recipients (number) (1) 89,000 58,000 1,000 53% Lending - EasyPay Loans Approximate number of loans originated during the quarter (number) 320,000 266,000 207,000 20% Gross advances in the quarter (ZAR millions) 641 416 320 54% Loan book size, before allowances, at quarter end (ZAR millions) (2) 808 509 398 59% Insurance - EasyPay Insurance Approximate number of insurance policies written in the quarter (number) 55,000 46,000 36,000 20% Total active insurance policies on book at quarter end (number) 527,671 414,243 309,165 27% Average revenue per customer per month, as of March 31, (permanent grant beneficiaries) (ZAR) 106 90 78 18% EasyPay Payouts Approximate number of active cardholders 230,000 - - nm Approximate load value for the quarter (ZAR millions) 155 - - nm 57 (1) Source: SASSA statistical reports portal (2025) | Permanent grant customers per SASSA’s monthly Social Assistance report (March 31, 2025). (2) Gross loan book, before provisions. ● Driving customer acquisition, supported by increased focus on customer service o We achieved approximately 124,000 gross account activations in the quarter, compared to approximately 97,000 a year ago (Q3 2024) and 99,000 last quarter (Q2 2025). This result reflects continued growth at the new levels achieved for the permanent base since fiscal 2024, and the impact of operational issues experienced at the Post Bank specific to this quarter. o After accounting for churn, net active account growth ( permanent grant customers per SASSA’s monthly Social Assistance report for March 31, 2025, on the SASSA statistical reports portal) for the quarter was approximately 89,000 accounts, compared to approximately 58,000 in the third quarter of fiscal 2024, and 65 000 a quarter ago (Q2 2025). o Our total active EPE transactional account base stood at approximately 1.7 million at the end of March 2025, of which approximately 1.5 million (or approximately 90%) are permanent grant recipients ( permanent grant customers per SASSA’s monthly Social Assistance report for March 31, 2025, on the SASSA statistical reports portal). The balance comprises Social Relief of Distress (“SRD”) grant recipients, which was introduced during the COVID pandemic and extended by another year in February 2025, to continue until March 2026, in its current form. o Our priority is to grow our permanent grant recipient customers base, where we can build deeper relationships by offering products such as insurance and lending. We do not offer the same breadth of service to the SRD grant base due to the temporary nature of the grant. ● Progress on cross selling EasyPay Loans o We originated approximately 320,000 loans during the quarter, with our consumer loan book, before allowances (“gross book”), increasing 59% to ZAR 808 million as of March 31, 2025, compared to ZAR 509 million as of March 31, 2024. o We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our tailored loan product for this market, growth in EPE bank account customer base and improved cross-selling capabilities. o The loan conversion rate continues to improve following the implementation of a number of targeted Consumer lending campaigns and encouraging results from our digital channels. o The portfolio loss ratio, calculated as the loans written off over the last 12 months as a percentage of the total gross loan book at the end of the quarter, has remained stable at approximately 6% on an annualized basis, compared to quarter three fiscal 2024. EasyPay Insurance o Our insurance product sales continue to grow and is a material contributor to the improvement in our overall ARPU. We have been able to improve customer penetration to approximately 35% of our active permanent grant account base as of March 31, 2025, compared to 32% as of March 31, 2024. Approximately 55,000 new policies were written in the quarter, compared to approximately 46,000 in the comparable period in fiscal 2024. The total number of active policies has grown 27% to approximately 528,000 policies as of March 31, 2025, compared to 414,000 policies as of March 31, 2024. ARPU o ARPU for our permanent client base has increased to approximately ZAR 106 per month for the third quarter of fiscal 2025, from approximately ZAR 90 in the third quarter of fiscal 2024. EasyPay Payouts o On 1 October, 2024, the EasyPay Payouts business officially became part of the Consumer Division. o The number of active card holders was approximately 230,000 at the end of the third quarter of fiscal 2025, with a load value of approximately ZAR 155 million for quarter ended March 31, 2025. Enterprise Division Our Enterprise Division (“Enterprise”) focuses on large corporates, mobile network operators, banks, governments, municipalities, and, through Recharger, landlords utilizing Recharger’s prepaid electricity metering solution. Our offering includes our bill and utility payments platform, a new payment switch, Prism Switch, as well as Hardware Security Modules, a third-party vending and security business. Enterprise serves third party corporates, and the technology needs of our Consumer and Merchant Divisions. 58 Q3 2025 Q3 2024 2025 vs 2024 Bill Payments Total Throughput for the quarter (ZAR billions) 8 7 12% Utility Payments Approximate number of registered prepaid electricity meters deployed (number) 502,790 - nm Total Throughput for the quarter (ZAR billions) 1.8 1.7 9% Switching Approximate number of transactions (million) (1) 2.2 - nm (1) Our new payment switch, Prism Switch has been in production since June 2024 thus prior period comparatives are not applicable. ● The Recharger transaction closed on March 3, 2025. Utility payments throughput for Q3 2025 is inclusive of R116 million attributable to Recharger utility payments for the month of March 2025, the impact of which is not included in the prior period comparatives. Acquisition of Recharger On November 20, 2024, we announced the acquisition of Recharger. With closing conditions satisfied, the deal closed on March 3, 2025, demonstrating positive advancement of our strategy in the Enterprise Division. Recharger, allocated to the Enterprise operating segment, is a South African prepaid electricity submetering and payments business with a base of over 500,000 registered prepaid electricity meters. We expect the acquisition to act as an entry point for us into the South African private utilities space while augmenting the Enterprise division’s alternative payment offering. Debt refinance and new banking partner At the end of February 2025, we completed the ZAR 4.5 billion refinance of our Group’s debt facilities, including Investec Bank as a new banking partner alongside our incumbent bank, RMB. The benefits of the debt refinance include: consolidating most of the Group’s legacy senior debt facilities at the centre, reducing the Group’s overall weighted average borrowing rate by approximately 1.3% per year, reshaping the repayment profile of our senior debt, diversifying our funding sources and increasing debt facility headroom, thereby creating flexibility and capacity for organic and inorganic growth. Lesaka Employee Share Trust We successfully launched Lesaka’s Employee Share Ownership Plan (“ESOP”) in March 2025 reflecting our commitment to our people. Our ESOP is designed to create alignment with our long-term growth objectives. The Lesaka ESOP Trust will hold an effective 3% of our issued shares at the date of implementation, representing approximately ZAR 220 million at the current market price. This allocation of shares ensures that employees have a meaningful stake in our future financial success and gives them the opportunity to share in the value created by us. The Lesaka ESOP Trust advances our transformation initiatives and plays an important role in improving the company’s Broad- Based Black Economic Empowerment (“BBBEE”) rating. Our employee base is comprised of 87% designated groups for BBBEE purposes. Through the creation of a broader base of employee ownership, we are helping to promote economic inclusion and contribute to transformation in the broader South African economy. Association of South African Payment Providers (“ASAPP”) ASAPP, publicly launched (www.asapp.co.za) in January 2025, is now fully established as the main representatives of non-bank participants in the payments space. The eight original members (Altron Fintech, Hello Group Inc., iKhokha (Pty) Ltd, Lesaka Technologies (Pty) Ltd, Network International Holdings Plc, Peach Payment Services (Pty) Ltd, Shop2Shop (Pty) Ltd, Yoco Technologies (Pty) Ltd) have been joined by Flash Group, PayU GPO, Cross Switch Technology Ltd, and Paycorp Group. Key workstreams include: ● Greater inclusion of Non-Bank participation in the payment’s ecosystem including services such as settlement of funds as part of the Bank's Act. ● Calling to action a review of interchange pricing in South Africa, directly with the South African Reserve Bank (“SARB”). ● Working alongside the SARB and other regulatory stakeholders on the strategic direction of the Faster Payment System, National Treasury Financial Inclusion Forum and the Payments Industry Body Formation. 59 Critical Accounting Policies Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities. As future events and their effects cannot be determined with absolute certainty, the determination of estimates requires management’s judgment based on a variety of assumptions and other determinants such as historical experience, current and expected market conditions and certain scientific evaluation techniques. Critical accounting policies are those that reflect significant judgments or uncertainties and may potentially result in materially different results under different assumptions and conditions. We have identified the following critical accounting policies that are described in more detail in our Annual Report on Form 10-K for the year ended June 30, 2024: ● Business Combinations and the Recoverability of Goodwill; ● Intangible Assets Acquired Through Acquisitions; ● Revenue recognition – principal versus agent considerations; ● Valuation of investment in Cell C; ● Recoverability of equity securities and equity-accounted investments; ● Deferred Taxation; ● Stock-based Compensation; ● Accounts Receivable and Allowance for Doubtful Accounts Receivable; and ● Lending. Recent accounting pronouncements adopted Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of accounting pronouncements adopted, including the dates of adoption and the effects on our unaudited condensed consolidated financial statements. Recent accounting pronouncements not yet adopted as of March 31, 2025 Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of March 31, 2025, including the expected dates of adoption and effects on our financial condition, results of operations and cash flows. Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1 Three months ended Nine months ended Year ended March 31, March 31, June 30, 2025 2024 2025 2024 2024 ZAR : $ average exchange rate 18.5066 18.7313 18.1212 18.7536 18.7070 Highest ZAR : $ rate during period 19.1171 19.4568 19.1171 19.4568 19.4568 Lowest ZAR : $ rate during period 18.0985 18.2076 17.1144 17.6278 17.6278 Rate at end of period 18.3508 18.8760 18.3508 18.8760 18.1808 60 Translation exchange rates for financial reporting purposes We are required to translate our results of operations from ZAR to U.S. dollars on a monthly basis. Thus, the average rates used to translate this data for the three and nine months ended March 31, 2025 and 2024, vary slightly from the averages shown in the table above. Except as described below, the translation rates we use in presenting our results of operations are the rates shown in the following table: Three months ended Nine months ended Year ended Table 2 March 31, March 31, June 30, 2025 2024 2025 2024 2024 Income and expense items: $1 = ZAR 18.4021 18.8780 18.0393 18.7571 18.6844 Balance sheet items: $1 = ZAR 18.3508 18.8760 18.3508 18.8760 18.1808 We have translated the results of operations and operating segment information for the three and nine months ended March 31, 2025 and 2024, provided in the tables below using the actual average exchange rates per month (i.e. for each of January 2025, February 2025, and March 2025 for the third 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 year to date is not significant, however, it does result in minor differences. We believe that presentation using the average exchange rates per month compared with the average exchange rate per quarter and year to date improves the 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 The discussion of our consolidated overall results of operations is based on amounts as reflected in our unaudited condensed consolidated financial statements which are prepared in accordance with U.S. GAAP. We analyze our results of operations both in U.S. dollars, as presented in the unaudited condensed consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our results and is the currency in which the majority of our transactions are initially incurred and measured. Presentation of our reported results in ZAR is a non-GAAP measure. Due to the significant impact of currency fluctuations between the U.S. dollar and ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business. 61 Our operating segment revenue presented in “—Results of operations by operating segment” represents total revenue per operating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue, as well as the reconciliation between our segment performance measure and net loss before tax (benefits) expense, is presented in our unaudited condensed consolidated financial statements in Note 18 to those statements. Our chief operating decision maker is our Executive Chairman and he evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”) for each operating segment. We do not allocate once -off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments. We have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for the three and nine months ended March 31, 2025. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. The Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to our loss before income tax expense. Effective from fiscal 2025, all lease charges are allocated to our operating segments, whereas in fiscal 2024 we presented certain lease charges on a separate line outside of our operating segments. Prior period information has been re- presented to include the lease charges which were previously reported on a separate line in our Consumer and Merchant (and now Merchant, Consumer and Enterprise) operating segments. Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Refer also “Results of Operations—Use of Non-GAAP Measures” below. Our fiscal 2025 financial results include Adumo from October 1, 2024 and Recharger from March 3, 2025. Adumo and Recharger are not included in our financial results for fiscal 2024. We analyze our business and operations in terms of three inter-related but independent operating segments: (1) Merchant (2) Consumer and (3) Enterprise. In addition, corporate activities that are impracticable to allocate directly to the operating segments, as well as any inter-segment eliminations, are included in Group costs. Inter-segment revenue eliminations are included in Eliminations. Third quarter of fiscal 2025 compared to third quarter of fiscal 2024 The following factors had a significant impact on our results of operations during the third quarter of fiscal 2025 as compared with the same period in the prior year: ● Higher revenue in ZAR: Our revenues increased 14% in ZAR, primarily due to the inclusion of Adumo and Recharger, an increase in ADP throughput in Merchant, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset by fewer low margin prepaid airtime sales and a lower contribution from our legacy Enterprise businesses; ● Operating income increase, before transaction costs: Operating income before transaction and related costs increased primarily due to a strong performance by Consumer and the contribution from Adumo and Recharger from March 3, 2025, which was partially offset by higher costs and the increase in amortization of acquisition-related intangible assets related to the acquisition of Adumo; ● Non-cash fair value adjustment related to equity securities: We recorded a non -cash fair value loss of $20.4 million during the third quarter of fiscal 2025 related to our investment in MobiKwik; ● Higher net interest charge: Net interest charge increased to $5.1 million (ZAR 95.0 million) from $4.0 million (ZAR 74.6 million) primarily due to higher overall borrowings, which was partially offset by a small increase in interest received as a result of the inclusion of Adumo; and ● Foreign exchange movements: The U.S. dollar was 3% weaker against the ZAR during the third quarter of fiscal 2025 compared to the prior period, which positively impacted our U.S. dollar reported results. 62 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 3 In United States Dollars Three months ended March 31, 2025 2024 (As restated) (A) % change (As restated) (A) $ ’000 $ ’000 Revenue 161,450 138,194 17% Cost of goods sold, IT processing, servicing and support 117,013 107,854 8% Selling, general and administration 34,217 23,124 48% Depreciation and amortization 8,429 5,791 46% Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs 1,222 631 94% Operating income 569 794 (28%) Change in fair value of equity securities (20,421) - nm Interest income 645 628 3% Interest expense 5,777 4,581 26% Loss before income tax (benefit) expense (24,984) (3,159) 691% Income tax (benefit) expense (2,934) 931 nm Net loss before earnings from equity-accounted investments (22,050) (4,090) 439% Earnings from equity-accounted investments 12 43 (72%) Net loss (22,038) (4,047) 445% Less net income attributable to non-controlling interest 20 - nm Net loss attributable to us (22,058) (4,047) 445% (A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended March 31, 2025, have been restated and increased by $25.8 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. Table 4 In South African Rand Three months ended March 31, 2025 2024 (As restated) (A) % change (As restated) (A) ZAR ’000 ZAR ’000 Revenue 2,987,226 2,609,913 14% Cost of goods sold, IT processing, servicing and support 2,165,180 2,036,881 6% Selling, general and administration 632,841 436,746 45% Depreciation and amortization 155,919 109,379 43% Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs 22,361 11,915 88% Operating income 10,925 14,992 (27%) Change in fair value of equity securities (373,784) - nm Interest income 11,944 11,861 1% Interest expense 106,923 86,504 24% Loss before income tax (benefit) expense (457,838) (59,651) 668% Income tax (benefit) expense (53,650) 17,575 nm Net loss before earnings from equity-accounted investments (404,188) (77,226) 423% Earnings from equity-accounted investments 220 811 (73%) Net loss (403,968) (76,415) 429% Less net income attributable to non-controlling interest 369 - nm Net loss attributable to us (404,337) (76,415) 429% (A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended March 31, 2025, have been restated and increased by ZAR 477.2 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. Revenue increased by $23.3 million (ZAR 377.3 million) or 16.8% (in ZAR 14.5%). The increase was primarily due to the inclusion of Adumo, an increase in the volume of ADP provided (prepaid airtime), the impact of an increase in certain issuing fee base 63 prices year-over-year, and transaction activity in our issuing business, and an increase in insurance premiums collected and lending revenues following higher loan originations, which was partially offset by fewer low margin prepaid airtime sales. 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 $9.2 million (ZAR 128.3 million) or 8.5% (in ZAR 6.3%), primarily due to the inclusion of Adumo, higher commissions paid related to ADP revenue generated, and higher insurance-related claims and third-party transaction fees, which was partially offset by the decrease in low margin prepaid airtime sales. Selling, general and administration expenses increased by $11.1 million (ZAR 196.1 million), or 48.0% (in ZAR 44.9%). The increase was primarily due to the inclusion of Adumo; higher employee-related expenses (including the impact of annual salary increases); reorganization and retrenchment costs, an increase in the allowance for credit losses as a result of higher lending activities by both Consumer and Merchant, higher stock-based compensation charges; and the year-over-year impact of inflationary increases on certain expenses, which was partially offset by lower bonus provision expense. Depreciation and amortization expense increased by $2.6 million (ZAR 46.5 million), or 45.6% (42.5%). The increase was due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Adumo and Recharger acquisitions and an increase in depreciation expense related to additional POS devices deployed . Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs increased primarily due to the inclusion of post-combination compensation charges recognized related to the Recharger acquisition. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. Our operating income margin for the third quarter of fiscal 2025 and 2024 was 0.4% and 0.6%, respectively. We discuss the components of operating loss margin under “—Results of operations by operating segment.” The change in fair value of equity securities of $20.4 million during the third quarter 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 third quarter of fiscal 2024, or any fair value adjustments for Cell C during the third quarter of fiscal 2025 or 2024, respectively. We continue to carry our investment in Cell C at $0 (zero). Refer to Note 5 to our unaudited condensed consolidation financial statements for the methodology and inputs used in the fair value calculation for MobiKwik and Cell C. Interest on surplus cash was flat at $0.6 million (ZAR 11.9 million) from $0.6 million (ZAR 11.9 million) . Interest expense increased to $5.8 million (ZAR 106.9 million) from $4.6 million (ZAR 86.5 million). In ZAR, the increase was primarily by higher overall borrowings during the third quarter of fiscal 2025 compared with the comparable period in the prior quarter. Fiscal 2025 income tax benefit was $(2.9) million (ZAR (53.7) million) compared to an income tax expense of $0.9 million (ZAR 17.6 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, 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), the on-going losses incurred by certain of our South African businesses, a valuation allowance created related to the fair value adjustment to MobiKwik, 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 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 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 investments: Table 5 Three months ended March 31, 2025 2024 $ % $ ’000 $ ’000 change Other 12 43 (72%) Total income (loss) from equity-accounted investments 12 43 (72%) 64 Results of operations by operating segment The composition of revenue and the contributions of our business activities to operating loss are illustrated below: Table 6 In United States Dollars Three months ended March 31, (As restated) (A) % of total (As restated) (A) % change 2025 2024 (As restated) (A) % of Operating Segment $ ’000 $ ’000 total Consolidated revenue: Merchant (A) 128,781 80% 111,801 81% 15% Consumer 24,096 15% 17,904 13% 35% Enterprise 9,444 6% 11,322 8% (17%) Subtotal: Operating segments 162,321 101% 141,027 102% 15% Eliminations (871) (1%) (2,833) (2%) (69%) Total consolidated revenue (A) 161,450 100% 138,194 100% 17% Group Adjusted EBITDA: Merchant (1)(2) 8,103 63% 7,420 76% 9% Consumer (1)(2) 6,333 49% 3,757 39% 69% Enterprise (2) 133 1% 725 7% (82%) Group costs (1,772) (13%) (2,199) (22%) (19%) Group Adjusted EBITDA (non-GAAP) (3) 12,797 100% 9,703 100% 32% (A) Revenue has been restated and increased by $25.8 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. (1) Segment Adjusted EBITDA for the three months ended March 31, 2025, includes reorganization and retrenchment costs of $0.7 million for Merchant and Enterprise of $0.3 million. Segment Adjusted EBITDA Consumer includes retrenchment costs of $0.01 million for the third quarter of fiscal 2024. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant, Enterprise and Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. See also “—Results of Operations — Presentation of Merchant, Consumer and Enterprise by segment for fiscal 2025 to date and fiscal 2024”. (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. Table 7 In South African Rand Three months ended March 31, (As restated) (A) % of total (As restated) (A) % change 2025 2024 (As restated) (A) % of Operating Segment ZAR ’000 ZAR ’000 total Consolidated revenue: Merchant (A) 2,382,982 80% 2,111,386 81% 13% Consumer 445,845 15% 338,170 13% 32% Enterprise 174,565 6% 213,856 8% (18%) Subtotal: Operating segments 3,003,392 101% 2,663,412 102% 13% Eliminations (16,166) (1%) (53,499) (2%) (70%) Total consolidated revenue (A) 2,987,226 100% 2,609,913 100% 14% Group Adjusted EBITDA: Merchant (1)(2) 149,858 63% 140,091 76% 7% Consumer (1)(2) 117,144 49% 70,988 39% 65% Enterprise (2) 2,384 1% 13,716 7% (83%) Group costs (32,623) (13%) (41,529) (22%) (21%) Group Adjusted EBITDA (non-GAAP) (3) 236,763 100% 183,266 100% 29% (A) Revenue has been restated and increased by ZAR 477.2 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. (1) Segment Adjusted EBITDA Merchant and Segment Adjusted EBITDA Merchant include reorganization and retrenchment costs of ZAR 12.9 million and Enterprise of ZAR 5.4 million, respectively, for the third quarter of fiscal 2025. Segment Adjusted EBITDA for Consumer includes retrenchment costs of ZAR 0.1 million for the third quarter of fiscal 2024. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant, Enterprise and Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. 65 (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. Merchant Segment revenue primarily increased due to the inclusion of Adumo and a higher volume of ADP, which was partially offset by fewer low margin prepaid airtime sales (“Pinned airtime”). 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, including employment-related expenditures, to expand our offering, an increase in the allowance for credit losses following higher loan originations and reorganization and retrenchment costs incurred during the third quarter of fiscal 2025. We recorded a significant proportion of our airtime sales in revenue and cost of sales, while only earning a relatively small margin. This significantly depresses the Segment Adjusted EBITDA margins shown by the business. Our Segment Adjusted EBITDA margin for the third quarter of fiscal 2025 and 2024 was 6.3% and 6.6%, respectively. Consumer Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, the impact of an increase in certain issuing fee base prices year-over-year, and transaction activity in our issuing business, insurance premiums collected, lending revenues following an increase in loan originations and the inclusion of Adumo. 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 during the quarter, higher insurance-related claims, interest expense (of approximately ZAR 16.5 million) incurred to fund our lending book 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. Therefore, we have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for the third quarter of fiscal 2025 compared with the third quarter of fiscal 2024. Our Segment Adjusted EBITDA margin for the third quarter of fiscal 2025 and 2024 was 26.3% and 21.0%, respectively. Enterprise Segment revenue decreased primarily due to fewer ad hoc hardware sales as well as lower revenue generated from the sale of prepaid airtime vouchers, which was partially offset by the inclusion of Recharger. In ZAR, the significant decrease in Segment Adjusted EBITDA is primarily due to the impact of fewer sales, which was partially offset by the inclusion of Recharger. Our Segment Adjusted (loss) EBITDA margin for the third quarter of fiscal 2025 and 2024 was 1.41% and 6.4%, respectively. Group costs Our group costs primarily include employee related costs in relation to employees specifically hired for group roles and costs related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non- employee directors’ fees; legal fees; group and US-listed related audit fees; and directors’ and officers’ insurance premiums. Our group costs for fiscal 2025 decreased compared with the prior period due to lower bonus provision expense, which was partially offset by higher employee costs resulting from an increase in the number of individuals allocated to group costs and base salary adjustments, audit and consulting fees. Year to date fiscal 2025 compared to year to date fiscal 2024 The following factors had a significant impact on our results of operations during the year to date fiscal 2025 as compared with the same period in the prior year: ● Increase in Revenue: Our revenues increased 13.5% in ZAR, primarily due to the inclusion of Adumo and Recharger, an increase in value -added services activity in Merchant, higher Pinned Airtime sales, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset by a lower contribution from Enterprise; ● Operating income increase, before transaction costs: Operating income, before transaction and related costs, increased significantly primarily due to contribution from Adumo from October 1, 2024 and Recharger from March 3, 2025, which was partially offset by increased costs and the increase in amortization of acquisition-related intangible assets related to the acquisition of Adumo and Recharger; ● Non-cash fair value adjustment related to equity securities: We recorded a non -cash fair value loss of $54.2 million during the year to date fiscal 2025 related to our investment in MobiKwik; ● Higher net interest charge: Net interest charge increased to $15.0 million (ZAR 272.5 million) from $12.8 million (ZAR 239.0 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; and ● Foreign exchange movements: The U.S. dollar was 4% weaker against the ZAR during the year to date fiscal 2025 compared to the prior period, which adversely impacted our U.S. dollar reported results. 66 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 8 In United States Dollars Nine months ended March 31, 2025 2024 (As restated) (A) % change (As restated) (A) $ ’000 $ ’000 Revenue 491,234 418,176 17% Cost of goods sold, IT processing, servicing and support 366,618 329,610 11% Selling, general and administration 97,213 67,146 45% Depreciation and amortization 22,928 17,460 31% Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs 3,174 665 377% Operating income 1,301 3,295 (61%) Change in fair value of equity securities (54,152) - nm Loss on disposal of equity-accounted investments 161 - nm Reversal of allowance for EMI doubtful debt receivable - 250 nm Interest income 1,952 1,562 25% Interest expense 16,983 14,312 19% Loss before income tax (benefit) expense (68,043) (9,205) 639% Income tax (benefit) expense (9,268) 1,881 nm Net loss before income (loss) from equity-accounted investments (58,775) (11,086) 430% Income (Loss) from equity-accounted investments 89 (1,319) nm Net loss (58,686) (12,405) 373% Less net income attributable to non-controlling interest 48 - nm Net loss attributable to us (58,734) (12,405) 373% (A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended March 31, 2025, have been restated and increased by $63.2 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. Table 9 In South African Rand Nine months ended March 31, 2025 2024 (As restated) (A) % change (As restated) (A) ZAR ’000 ZAR ’000 Revenue 8,899,861 7,842,078 13% Cost of goods sold, IT processing, servicing and support 6,640,677 6,181,076 7% Selling, general and administration 1,761,823 1,259,415 40% Depreciation and amortization 415,665 327,408 27% Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs 56,809 12,550 353% Operating income 24,887 61,629 (60%) Change in fair value of equity securities (988,494) - nm Loss on disposal of equity-accounted investments 2,886 - nm Reversal of allowance for EMI doubtful debt receivable - 4,741 nm Interest income 35,347 29,309 21% Interest expense 307,831 268,262 15% Loss before income tax (benefit) expense (1,238,977) (172,583) 618% Income tax (benefit) expense (169,202) 35,245 nm Net loss before income (loss) from equity-accounted investments (1,069,775) (207,828) 415% Income (Loss) from equity-accounted investments 1,586 (25,041) nm Net loss (1,068,189) (232,869) 359% Less net income attributable to non-controlling interest 865 - nm Net loss attributable to us (1,069,054) (232,869) 359% (A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended March 31, 2025, have been restated and increased by ZAR 1.1 billion to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated 67 statement of operations. Revenue increased by $73.1 million (ZAR 1,057.8 million), or 17.5% (in ZAR, 13.5%), primarily due to the inclusion of Adumo, an increase in the volume of value-added services provided (Pinless Airtime and gaming), an increase in certain issuing fee base prices and transaction activity in our issuing business, and an increase in insurance premiums collected and lending revenues following higher loan originations, and higher Pinned Airtime sales. Cost of goods sold, IT processing, servicing and support decreased by $37.0 million (or 11.2%) and, in ZAR, decreased by ZAR 459.6 million (or 7.4%), primarily due to the decrease in Pinned Airtime cost of sales, which was partially offset by the inclusion of Adumo, higher commissions paid related to ADP revenue generated, and higher insurance-related claims and third-party transaction fees. Selling, general and administration expenses increased by $30.1 million (ZAR 502.4 million), or 44.8% (in ZAR 39.9%). The increase was primarily due to the inclusion of Adumo; higher employee-related expenses (including annual bonuses and annual salary increases); higher stock-based compensation charges, consulting fees, audit fees, and travel expenses; and the year-over-year impact of inflationary increases on certain expenses. Depreciation and amortization expense increased by $5.5 million (ZAR 88.3 million), or 31.3% (27.0%). The increase was due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Adumo and Recharger acquisitions and an increase in depreciation expense related to additional POS devices deployed. Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs includes fees paid to external service providers associated with legal and advisory services procured to close the Adumo transaction on October 1, 2024, and the Recharger transaction in March 2025, and increased primarily due to the inclusion of post-combination compensation charges recognized related to the Recharger acquisition. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. Our operating income margin for the year to date fiscal 2025 and 2025 was 0.3% and 0.8%, respectively. We discuss the components of operating loss margin under “—Results of operations by operating segment.” The change in fair value of equity securities of $54.2 million during the year to date 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 year to date fiscal 2024, or any fair value adjustments for Cell C during the year to date fiscal 2025 or 2024, respectively. We continue to 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. Refer to Note 2 to our consolidated financial statements for additional information regarding this loss. Interest on surplus cash increased to $2.0 million (ZAR 35.3 million) from $1.6 million (ZAR 29.3 million), primarily due to the inclusion of Adumo and higher overall average cash balances on deposit during the year to date fiscal 2025 compared with 2024. Interest expense increased to $17.0 million (ZAR 307.8 million) from $14.3 million (ZAR 268.3 million). In ZAR, the increase was primarily as a result of higher overall borrowings during the year to date fiscal 2025 compared with the comparable period in the prior quarter. Fiscal 2025 income tax benefit was $(9.3) million (ZAR (169.2) million) compared an income tax expense of $1.9 million (ZAR 35.2 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, 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), a valuation allowance created related to the fair value adjustment to MobiKwik, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Our effective tax rate for fiscal 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 South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. 68 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 year to date fiscal 2024. The table below presents the relative (loss) earnings from our equity-accounted investments: Table 10 Nine months ended March 31, 2025 2024 $ % $ ’000 $ ’000 change Finbond - (1,445) nm Share of net loss - (278) nm Impairment - (1,167) nm Other 89 126 (29%) 89 (1,319) nm Results of operations by operating segment The composition of revenue and the contributions of our business activities to operating loss are illustrated below: Table 11 In United States Dollars Nine months ended March 31, (As restated) (A) % of total (As restated) (A) % change 2025 2024 (As restated) (A) % of Operating Segment $ ’000 $ ’000 total Consolidated revenue: Merchant (A) 397,642 81% 341,044 82% 17% Consumer 68,097 14% 50,191 12% 36% Enterprise 30,259 6% 32,710 8% (7%) Subtotal: Operating segments 495,998 101% 423,945 102% 17% Eliminations (4,764) (1%) (5,769) (2%) (17%) Total consolidated revenue (A) 491,234 100% 418,176 100% 17% Group Adjusted EBITDA: Merchant (1)(2) 25,976 76% 21,827 82% 19% Consumer (1)(2) 15,071 44% 8,452 32% 78% Enterprise (1)(2) 464 1% 2,431 9% (81%) Group costs (7,541) (21%) (6,032) (23%) 25% Group Adjusted EBITDA (non- GAAP) (3) 33,970 100% 26,678 100% 27% (A) Revenue has been restated and increased by $63.2 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. (1) Segment Adjusted EBITDA for the nine months ended March 31, 2025, includes reorganization and retrenchment costs for Merchant of $0.7 million, Enterprise of $0.3 million, and Consumer of $0.1 million. Segment Adjusted EBITDA for Merchant includes retrenchment 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 presented on a separate line in fiscal 2024 are now included in Merchant, Consumer 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 Non- GAAP Measures”. 69 Table 12 In South African Rand Nine months ended March 31, (As restated) (A) % of total (As restated) (A) % change 2025 2024 (As restated) (A) % of Operating Segment ZAR ’000 ZAR ’000 total Consolidated revenue: Merchant (A) 7,203,583 81% 6,395,041 82% 13% Consumer 1,234,595 14% 941,566 12% 31% Enterprise 548,390 6% 613,770 8% (11%) Subtotal: Operating segments 8,986,568 101% 7,950,377 102% 13% Eliminations (86,707) (1%) (108,299) (2%) (20%) Total consolidated revenue (A) 8,899,861 100% 7,842,078 100% 13% Group Adjusted EBITDA: Merchant (1)(2) 470,476 76% 409,236 82% 15% Consumer (1)(2) 273,313 44% 158,833 32% 72% Enterprise (1)(2) 8,415 1% 45,689 9% (82%) Group costs (135,542) (21%) (113,172) (23%) 20% Group Adjusted EBITDA (non- GAAP) (3) 616,662 100% 500,586 100% 23% (A) Revenue has been restated and increased by ZAR 1.1 billion to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. (1) Segment Adjusted EBITDA for the nine months ended March 31, 2025, includes reorganization and retrenchment costs for Merchant of ZAR 12.9 million, Enterprise of ZAR 5.6 million, and Consumer of ZAR 1.5 million. Segment Adjusted EBITDA for Merchant includes retrenchment costs of ZAR 4.7 million and Consumer includes retrenchment costs of ZAR 2.9 million for year to date fiscal 2024. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant and Consumer 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 Non- GAAP Measures”. Merchant Segment revenue primarily increased due to the inclusion of Adumo, a higher volume of ADP provided (Pinless Airtime and gaming), and higher 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, including employment-related expenditures, to expand our offering, an increase in the allowance for credit losses following higher loan originations and reorganization and retrenchment costs incurred during the third quarter of fiscal 2025. Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for the year to date fiscal 2025 and 2024 was 6.5% and 6.4%, respectively. Consumer Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, an increase in certain issuing fee base prices and transaction activity in our issuing business, insurance premiums collected, lending revenues following an increase in loan originations and the inclusion of Adumo. 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 and the third quarter of fiscal 2025, higher insurance-related claims, interest expense (of approximately ZAR 45.0 million) incurred to fund our lending book, higher computer software license costs, and the year-over-year impact of inflationary increases on certain expenses. As discussed in our commentary for the second quarter of fiscal 2025, we have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for year to date fiscal 2025 compared with the year to date fiscal 2024. Our Segment Adjusted EBITDA margin for the year to date fiscal 2025 and 2024 was 22.1% and 16.8%, respectively. Enterprise Segment revenue decreased primarily due to fewer ad hoc hardware sales as well as lower revenue generated from the sale of prepaid airtime vouchers, which was partially offset by the inclusion of Recharger. In ZAR, the significant decrease in Segment Adjusted EBITDA is primarily due to the impact of few sales, which was partially offset by the inclusion of Recharger . Our Segment Adjusted EBITDA margin for the year to date fiscal 2025 and 2024 was 1.5% and 7.4%, respectively. 70 Group costs 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, higher bonus expense, travel, audit, consulting and legal fees. 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: Table 13 Fiscal 2025 (As restated) (A) In United States dollars Quarter 1 Quarter 2 Quarter 3 F2025 $ ’000 $ ’000 $ ’000 $ ’000 Revenue Merchant (A) $123,652 $145,209 $128,781 $397,642 Consumer 21,072 22,929 24,096 68,097 Enterprise 11,882 8,933 9,444 30,259 Subtotal: Operating segments $156,606 $177,071 $162,321 $495,998 Eliminations (3,038) (855) (871) (4,764) Total consolidated revenue (A) $153,568 $176,216 $161,450 $491,234 Group Adjusted EBITDA: Merchant 7,554 10,319 8,103 25,976 Consumer 4,396 4,342 6,333 15,071 Enterprise 362 (31) 133 464 Group costs (2,949) (2,820) (1,772) (7,541) Group Adjusted EBITDA (non-GAAP) 9,363 11,810 12,797 33,970 Income and expense items: $1 = ZAR 17.72 17.85 18.40 18.04 (A) Revenue for the first quarter, second quarter, third quarter and year to date of fiscal 2025 have been restated and increased by $8.0 million, $29.4 million, $25.8 million and $63.2 million, respectively, to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations. Table 14 Fiscal 2024 In United States dollars Quarter 1 Quarter 2 Quarter 3 Quarter 4 F2024 $ ’000 $ ’000 $ ’000 $ ’000 $ ’000 Revenue Merchant 112,061 117,182 111,801 118,746 459,790 Consumer 15,580 16,707 17,904 19,020 69,211 Enterprise 9,467 11,921 11,322 14,187 46,897 Subtotal: Operating segments 137,108 145,810 141,027 151,953 575,898 Eliminations (1,019) (1,917) (2,833) (5,907) (11,676) Total consolidated revenue 136,089 143,893 138,194 146,046 564,222 Group Adjusted EBITDA: Merchant 6,910 7,497 7,420 7,343 29,170 Consumer 2,120 2,575 3,757 4,227 12,679 Enterprise 815 891 725 500 2,931 Group costs (1,822) (2,011) (2,199) (1,812) (7,844) Group Adjusted EBITDA (non-GAAP) 8,023 8,952 9,703 10,258 36,936 Income and expense items: $1 = ZAR 18.71 18.71 18.88 18.47 18.68 71 Use of Non-GAAP Measures U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA is a non-GAAP measure. We provide this non-GAAP measure to enhance our evaluation and understanding of our financial performance and trends. We believe that this measure is helpful to users of our financial information understand key operating performance and trends in our business because it excludes certain non-cash expenses (including depreciation and amortization and stock-based compensation charges) and income and expenses that we consider once-off in nature. Non-GAAP Measures Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non- operational transactions (including loss on disposal of equity-accounted investments, change in fair value of equity securities), (earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items. We are working on obtaining a separate lending facility to fund a portion of our Consumer lending during the twelve months ended June 30, 2025. We expected 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 part of a broader refinancing of our facilities. Therefore, we have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for the three and nine months ended March 31, 2025. Once-off items represents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. The table below presents the reconciliation between GAAP net loss attributable to Lesaka to Group Adjusted EBITDA: Table 15 Three months ended March 31, Nine months ended March 31, 2025 2024 2025 2024 $ ’000 $ ’000 $ ’000 $ ’000 Loss attributable to Lesaka - GAAP (22,058) (4,047) (58,734) (12,405) Less net income attributable to non-controlling interest (20) - (48) - Net loss (22,038) (4,047) (58,686) (12,405) (Earnings) loss from equity accounted investments (12) (43) (89) 1,319 Net loss before (earnings) loss from equity-accounted investments (22,050) (4,090) (58,775) (11,086) Income tax (benefit) expense (2,934) 931 (9,268) 1,881 Loss before income tax expense (24,984) (3,159) (68,043) (9,205) Interest expense 5,777 4,581 16,983 14,312 Interest income (645) (628) (1,952) (1,562) Reversal of allowance for doubtful EMI loan receivable - - - (250) Net loss on disposal of equity-accounted investment - - 161 - Change in fair value of equity securities 20,421 - 54,152 - Operating income 569 794 1,301 3,295 PPA amortization (amortization of acquired intangible assets) 4,974 3,562 13,588 10,762 Depreciation and amortization 3,455 2,229 9,340 6,698 Stock-based compensation charges 2,497 2,090 7,518 5,653 Interest adjustment (890) - (2,478) - Once-off items (1) 2,306 907 4,599 169 Unrealized loss (gain) FV for currency adjustments (114) 121 102 101 Group Adjusted EBITDA - Non-GAAP 12,797 9,703 33,970 26,678 (1) The table below presents the components of once-off items for the periods presented: Table 16 Three months ended March 31, Nine months ended March 31, 2025 2024 2025 2024 $ ’000 $ ’000 $ ’000 $ ’000 Transaction costs 1,084 276 1,621 456 Transaction costs related to Adumo and Recharger acquisitions and certain compensation costs 1,222 631 3,174 665 Indirect taxes provision release - - (196) - Income recognized related to closure of legacy businesses - - - (952) Total once-off items 2,306 907 4,599 169 Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transaction costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span multiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo and Recharger over a number of quarters, and the transactions are generally non-recurring. 72 Indirect tax provision release relates to the reversal of a non-recurring indirect tax provision created in fiscal 2023 which was resolved in fiscal 2025 following settlement of the matter with the tax authority. Income recognized related to closure of legacy businesses represents (i) gains recognized related to the release of the foreign currency translation reserve on deconsolidation of a subsidiaries and (ii) costs incurred related to subsidiaries which we are in the process of deregistering/ liquidation and therefore we consider these costs non-operational and ad hoc in nature. Liquidity and Capital Resources As of March 31, 2025, our cash and cash equivalents were $71.0 million and comprised of U.S. dollar-denominated balances of $3.2 million, ZAR-denominated balances of ZAR 1.2 billion ($65.9 million), and other currency deposits, primarily Botswana pula, of $1.9 million, all amounts translated at exchange rates applicable as of March 31, 2025. The increase in our unrestricted cash balances from June 30, 2024, was primarily due to the positive contribution from our Merchant and Consumer operations and utilizing of our borrowing facilities, which was partially offset by the utilization of cash reserves to fund certain scheduled and other repayments of our borrowings, settle the cash portion of the purchase consideration related to our various acquisitions, purchase ATMs and vaults, pay annual bonuses, pay for expenses included in our group costs, and to make an investment in working capital. We generally invest any surplus cash held by our South African operations in overnight call accounts that we maintain at South African banking institutions, and any surplus cash held by our non-South African companies in U.S. dollar-denominated money market accounts. Historically, we have financed most of our operations, research and development, working capital, and capital expenditures, as well as acquisitions and strategic investments, through internally generated cash and our financing facilities. When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. Refer to Note 12 to our consolidated financial statements for the year ended June 30, 2024, as well as Note 9 to these condensed consolidated financial statements for additional information related to our borrowings. Available short-term borrowings Summarized below are our short-term facilities available and utilized as of March 31, 2025: Table 17 RMB GBF RMB Other Nedbank $ ’000 ZAR ’000 $ ’000 ZAR ’000 $ ’000 ZAR ’000 Total short-term facilities available, comprising: Total overdraft 38,195 700,901 - - - - Indirect and derivative facilities (1) - - 5,487 100,700 8,531 156,556 Total short-term facilities available 38,195 700,901 5,487 100,700 8,531 156,556 Utilized short-term facilities: Overdraft 23,550 432,156 - - - - Indirect and derivative facilities (1) - - 1,804 33,097 115 2,107 Total short-term facilities utilized 23,550 432,156 1,804 33,097 115 2,107 Interest rate, based on South African prime rate 10.50% N/A N/A (1) Other facilities include indirect and derivative facilities may only be used for guarantees, letters of credit and forward exchange contracts to support guarantees issued by RMB and Nedbank to various third parties on our behalf. In terms of a commitment provided to the lender under the CTA entered into on February 27, 2025, we have undertaken not to utilize more than ZAR 5.0 million ($0.3 million) of the Nedbank Facility. Long-term borrowings We have aggregate long-term borrowing outstanding of ZAR 3.6 billion ($194.7 million translated at exchange rates as of March 31, 2025) as described in Note 9. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 3.1 billion, which was used to refinance our previous long-term borrowings. We have utilized all of these long-term borrowings . 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 and an asset backed facility of ZAR 227.0 million which is utilized to partially fund the acquisition of POS devices and vaults. Restricted cash We have also entered into cession and pledge agreements with Nedbank related to our Nedbank indirect credit facilities and we have ceded and pledged certain bank accounts to Nedbank. The funds included in these bank accounts are restricted as they may not be withdrawn without the express permission of Nedbank. Our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows as of March 31, 2025, includes restricted cash of $0.1 million that has been ceded and pledged. 73 Arrangement with African Bank to fund our ATMs In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transit service providers to fund our ATMs. Under this arrangement, African Bank will use its cash resources to fund our ATMs and it is specifically recorded that the cash in our ATMs are African Bank’s property. Therefore, as we have not utilized a facility to obtain the cash, and do not own or control the cash for an extended period of time, we do not record cash or cash equivalents and borrowings in our consolidated statement of financial position. Cash withdrawn from our ATMs by our EPE customers and other consumers are settled through the interbank settlement system from the ATM users bank account to African Bank’s bank accounts. We pay African Bank a monthly fee for the service provided which is calculated based on the cumulative daily outstanding balance of cash utilized multiplied by the South African prime interest rate less 1%. We are exposed to the risk of cash lost while it is in our ATMs (i.e. from theft) and are required to repay African Bank for any shortages. Cash flows from operating activities Third quarter Net cash provided by operating activities during the third quarter of fiscal 2025 was $10.7 million (ZAR 196.2 million) compared to net cash utilized of $19.2 million (ZAR 362.1 million) during the third quarter of fiscal 2024. Excluding the impact of income taxes, our cash provided by operating activities during the third quarter of fiscal 2025 was positively impacted by movements within our Merchant and Enterprise businesses related to quarter-end transaction processing activities, lower inventory holdings as of March 31, 2025, and the contribution from our Merchant and Consumer businesses, which was partially offset by the impact of cash utilized for the significant net growth in our Consumer and Merchant finance loans receivable books. During the third quarter of fiscal 2025, we paid first provisional South African tax payments of $0.6 million (ZAR 10.9 million) related primarily to certain of Adumo’s subsidiaries 2025 tax year. We also paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Namibia and Botswana during the third quarter of fiscal 2025. During the third quarter of fiscal 2024, we paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Botswana. Taxes paid (refunded) during the third quarter of fiscal 2025 and 2024 were as follows: Table 18 Three months ended March 31, 2025 2024 2025 2024 $ $ ZAR ZAR ‘000 ‘000 ‘000 ‘000 First provisional payments 594 1 10,885 18 Second provisional payments - 36 - 691 Tax refund received (151) (7) (2,016) (128) Total South African taxes paid 443 30 8,869 581 Foreign taxes paid 62 58 1,148 1,072 Total tax paid 505 88 10,017 1,653 Year to date Net cash used in operating activities during the year to date of fiscal 2025 was $2.6 million (ZAR 47.6 million) compared to net cash provided by operating activities of $23.1 million (ZAR 434.0 million) during the year to date of fiscal 2024. Excluding the impact of income taxes, our cash used in operating activities during the year to date of fiscal 2025 includes cash utilized for the settlement of working capital movements within our Merchant and Enterprise businesses related to quarter-end transaction processing activities and which were settled in the following week (our fourth quarter of fiscal 2024 closed on a Sunday), and the net growth in our the significant net growth in our Consumer and Merchant finance loans receivable books, which was partially offset by was positively impacted by the contribution from Merchant and Consumer businesses. During the year to date of fiscal 2025, we paid first provisional South African tax payments of $3.7 million (ZAR 67.1 million) related to our 2025. We also paid taxes totaling $0.2 million in other tax jurisdictions, primarily in Namibia and Botswana during the year to date of fiscal 2025. 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). We also paid taxes totaling $0.2 million in other tax jurisdictions, primarily in Botswana. 74 Taxes (refunded) paid during the year to date of fiscal 2025 and 2024 were as follows: Table 19 Nine months ended March 31, 2025 2024 2025 2024 $ $ ZAR ZAR ‘000 ‘000 ‘000 ‘000 First provisional payments 3,682 2,663 67,149 49,534 Second provisional payments - 36 - 691 Taxation paid related to prior years 93 641 1,660 12,187 Tax refund received (264) (38) (4,069) (768) Total South African taxes paid 3,511 3,302 64,740 61,644 Foreign taxes paid 202 196 3,693 3,677 Total tax paid 3,713 3,498 68,433 65,321 Cash flows from investing activities Third quarter Cash used in investing activities for the third quarter of fiscal 2025 included capital expenditures of $2.8 million (ZAR 51.8 million), primarily due to the acquisition of vaults and POS devices. We also incurred expenditures of $1.7 million (ZAR 30.8 million), primarily related to the capitalization of development costs, during the third quarter of fiscal 2025. During the third quarter of fiscal 2025, we paid $6.7 million related to acquisition of certain businesses, including Recharger. Cash used in investing activities for the third quarter of fiscal 2024 included capital expenditures of $2.9 million (ZAR 55.6 million), primarily due to the acquisition of vaults and POS devices . Year to date Cash used in investing activities for the year to date of fiscal 2025 included capital expenditures of $13.1 million (ZAR 236.3 million), primarily due to the acquisition of vaults and POS devices. We also incurred expenditures of $2.3 million (ZAR 41.0 million), primarily related to the capitalization of development costs, during the third quarter of fiscal 2025. During the year to date of fiscal 2025, we paid $10.6 million related to acquisition of certain businesses, including Adumo and Recharger. Cash used in investing activities for the year to date of fiscal 2024 included capital expenditures of $8.0 million (ZAR 149.1 million), primarily due to the acquisition of vaults. During 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 disposal of our entire equity interest in Carbon. Cash flows from financing activities Third quarter During the third quarter of fiscal 2025, we utilized $21.4 million from our South African overdraft facilities to partially fund the acquisition of Recharger and for the February 2025 refinance of certain of our facilities, and repaid $50.5 million towards our refinanced facilities. We utilized $175.8 million of our long-term borrowings for the February 2025 refinance of certain of our facilities. We repaid $134.5 million of long-term borrowings towards our refinanced facilities and in accordance with our repayment schedule and paid $7.2 million to settle Adumo’s borrowings. We also paid fees of $0.5 million related the February 2025 refinance and paid dividends to the non-controlling interest of $0.1 million. During the third quarter of fiscal 2024 , we utilized $24.9 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect, and repaid $43.4 million of those facilities. We utilized $3.4 million of our long- term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements. We repaid $7.2 million of long-term borrowings in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility utilized. 75 Year to date During the year to date of fiscal 2025, we utilized $94.2 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect as well as to partially fund the acquisition of Recharger and for the February 2025 refinance of certain of our facilities. We repaid $84.9 million of those facilities, including towards our refinanced facilities. We utilized $189.5 million of our borrowings to settle a 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, for working capital requirements and for the February 2025 refinance of certain of our facilities. We repaid $130.0 million of long-term borrowings towards our refinanced facilities and in accordance with our repayment schedule, paid $7.2 million to settle Adumo’s borrowings, and settled a portion of our revolving credit facility utilized. We also paid an origination fee of $1.0 million to secure additional borrowings as well as paid dividends to the non-controlling interest of $0.4 million. During the year to date of fiscal 2024, we utilized $153.5 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect, and repaid $172.2 million of those facilities. We utilized $14.4 million of our long-term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements. We repaid $13.1 million of long-term borrowings in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility utilized. We 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. Off-Balance Sheet Arrangements We have no off -balance sheet arrangements. Capital Expenditures We expect capital spending for the fourth quarter of fiscal 2025 to primarily include spending for acquisition of POS devices, vaults, computer software, computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa. Our capital expenditures for the third quarter of fiscal 2025 and 2025 are discussed under “—Liquidity and Capital Resources—Cash flows from investing activities.” Our capital expenditures for the past three fiscal years were funded through internally generated funds, or our asset-backed borrowing arrangements. We had outstanding capital commitments as of March 31, 2025, of $0.1 million. We expect to fund these expenditures through internally generated funds and available facilities. 76