LESAKA TECHNOLOGIES INC 10-Q

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, 2025, 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. 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, 2025. 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 This item generally discusses our results for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025. Group On February 6, 2026, Lesaka acquired 100% of the shares in MobileMart, a South African distributor of ADP, specifically prepaid solutions. Leveraging MobileMart’s existing direct integrations into multiple mobile network operators and suppliers, aims to enhance the unit economics of Merchant and Enterprise’s ADP product offering. On March 27, 2026, Lesaka amended its Working Capital Facility agreement, increasing the size of its general banking facility by ZAR 400 million to approximately ZAR 1.1 billion. The amended agreement also includes additional operating subsidiaries as borrowers, enabling those entities to access the facility directly and better aligning the financing structure with the Group’s current operating structure. The increased facility provides additional liquidity and financial flexibility to support the Group’s operations and growth initiatives. During the quarter, the Merchant division exited its ancillary ATM business to better align resources with the core cash management offering and merchant lending ecosystem. The ATM segment was determined to be non-core due to its limited financial contribution and lack of operational synergy with the Merchant division’s primary product suite. This strategic wind-down allows for the reallocation of capital toward high-growth, data-driven merchant services. 51 Merchant Division We manage our Merchant operations through two distinct channels: Community, which focuses on local, high-growth businesses acquired through direct, face-to-face sales and rapid conversion cycles; and Corporate, which serves large -scale organizations and franchises requiring customized, multi-product solutions through a strategic, long-term sales process. In the second quarter of fiscal 2026, we introduced a refined reporting framework for the Merchant division to better represent the primary drivers of our revenue and performance. Developed through a comprehensive review of our operational analytics, this framework aligns our Merchant metrics, specifically active merchant count and blended ARPU with our Consumer division to provide a holistic view of our ecosystem. We are treating this updated approach as a baseline for future comparisons to ensure consistent reporting across our channels; as such, this transition may result in non-material inconsistencies with certain legacy metrics. Our definition of an active merchant is any merchant that has made a voluntary transaction (debit and/or credit) within the last 90 days. Previously, we reported on a point of presence basis, which was more focused on our device estate. This updated methodology of an active merchant reflects the revenue generating engagement of our entire Merchant base and more accurately tracks our current and future monetization strategy for the division. Average Revenue Per User excludes once-off and non-recurring revenue such as hardware and installation costs as well as revenue from international subsidiaries. The underlying drivers of ARPU performance are based on cross-sell product penetration and the individual product related KPI’s are shown below. Q3 2026 Q3 2025 Q3 2026 vs Q3 2025 Merchant Division Active Merchants 132,003 124,522 6% Merchant ARPU (1) (ZAR per month) 1,760 1,901 (7%) Product Penetration Rate: 2 or more products 46% 46% 1% Product Penetration Rate: 3 or more products 7% 10% (25%) Merchant Division: Merchant Acquiring Active Merchants 73,863 67,652 9% Total Payment Volume (“TPV”) (ZAR billions) 10.6 9.9 7% Merchant Division: Software Active Merchants 10,044 9,738 3% Merchant Division: Cash Management Active Merchants 4,881 4,844 1% Total Payment Volume (“TPV”) (ZAR billions) 27.9 27.5 2% Merchant Division: Lending Lending Origination (ZAR millions) 227 291 (22%) Net Lending Portfolio Outstanding (ZAR millions) 427 412 4% Merchant Division: Alternative Digital Products Active Merchants 102,019 96,213 6% Total Payment Volume (“TPV”) (ZAR billions) 13.7 10.6 30% Total Payment Volume (“TPV”) - Prepaid Solutions (ZAR billions) 5.8 5.3 10% Total Payment Volume (“TPV”) - Supplier Enabled Payments (ZAR billions) 7.9 5.3 49% Notes: (1) ARPU is calculated on a revenue per active merchant basis based on a 3-month rolling average for the quarter ended March 31, 2026. Notable developments within Merchant Division: Within Merchant Acquiring: TPV attributable to Community segment increased to ZAR 3.8 billion for the third quarter of fiscal 2026 and 18% year-on-year growth. Within Cash: Our business is experiencing differing secular trends in its two distinct markets. At the Corporate level, cash continues to experience a downward trend of growth as digital payment adoption progressively increases in this sector. At the Community segment, we continue to see growth for our cash management solutions, with cash TPV growth totalling to 52% year-on- year. The Community segment now accounts for 20% of all processed cash TPV processed. This signals rapid growth among m erchants within this segment aiming to digitize their cash holdings. 52 Within ADP: Core to our device placement strategy is the decision to focus on quality business and optimizing our existing fleet. This can be seen through the TPV growth which is primarily driven by our Supplier Enabled Payment product, delivering 49% year- on-year growth. This enables Community Merchants to digitize their required payments to suppliers at competitive pricing and introduces them to the Lesaka Merchant ecosystem. Within the Prepaid Solutions product TPV processed delivered -1% year-on-year growth. We continue to see sustained margin pressures from wholesale providers of airtime, resulting in a contraction of Prepaid Solutions TPV processed. Overall, our ADP TPV continues to grow above 20% on a year-on-year basis. Within Software: Continued focus on deploying Unity, our cloud-based point-of-sale (POS) software offering to existing and new merchants. Unity has a lower monthly cost than on-premises solutions, the increase in client numbers was offset by a decrease in average revenue per user, resulting in core revenue remaining flat. Migration to Unity enables easier integration of our Software and Acquiring propositions into one holistic bundle. Approximately 17% of our Software base currently use the Unity offering. Within Lending: Lending originations decreased 22% year-over-year, primarily reflecting exceptionally high activity in the prior year period which were driven by concentrated short-term sales initiatives that did not recur in the current period. Consumer Division Our consumer base includes South African grant beneficiaries and other EasyPay Payouts cardholders. Our grant beneficiary base includes both permanent and non-permanent grant beneficiaries. As the division has evolved, both sub-categories of consumers are revenue generating and hence the combined consumer base metrics shown below are most appropriate to measure the performance of the division financially and operationally. Although historically we have shown these metrics separately, it is maintained that approximately 90% of the active consumer base are permanent grant beneficiaries. Our definition of an active consumer is any EPE consumer that has made a voluntary transaction (debit and/or credit) within the last 90 days. Consumers who may be charged a monthly banking fee but have not made a voluntary transaction in the last 90 days would not be considered an active consumer. The definition of an active consumer reflects the revenue generating engagement of our entire consumer base and more accurately tracks our current and future monetization strategy for the division. We will continue to show the EasyPay Payouts separately given this follows a different monetization model. The underlying drivers of ARPU performance are based on cross-sell product penetration and the individual product related KPI’s are shown below. Q3 2026 Q3 2025 Q3 2026 vs Q3 2025 Consumer Division Active Consumers (millions) 2.04 1.72 19% ARPU (1) (ZAR per month) 99 83 19% Product Penetration Rate: 2 or more products 50% 47% 8% Product Penetration Rate: 3 products 20% 17% 18% Consumer Division: Transactional Accounts Active Consumers (millions) 2.04 1.72 19% Net Activations (thousands) 39 68 (42%) Consumer Division: Lending Number of Loans Originated (thousands) 349 316 10% Lending Origination (ZAR millions) 856 641 33% Lending Portfolio Outstanding (ZAR millions) (2) 1,399 808 73% Consumer Division: Insurance Number of Insurance Policies Written (thousands) 75 55 37% Active Insurance Policies (thousands) 704 527 34% Gross Written Premium (ZAR millions) 146 105 38% Consumer Division: EasyPay Payouts Approximate number of active cardholders (thousands) 251 232 8% Approximate load value for the period (ZAR millions) 183 154 19% 53 Notes: (1) ARPU is calculated on a revenue per active consumer basis whereby an active consumer can be both a permanent and non- permanent grant. ARPU is a monthly figure based on a 3-month rolling average for the quarter ended March 31, 2026. (2) Gross loan book, before provisions. Notable developments within Consumer Division: Within Transactional Accounts: Growth in active consumers driven primarily by continued product and technology innovation, including but not withstanding to Bonngwe (our proprietary CRM engine). These improvements to sales consultant and consumer experiences have driven higher cross-sell penetration for both existing and new consumer onboards. We also continue to reassess our distribution footprint and have progressed well in expanding both our branches and community service centers to further enhance growth of our active consumer base. Within Lending: We have continued to see strong growth for our lending products with our credit loss ratios performance tracking below risk expectations. As we continue to scale the product, we have maintained our provisioning policy at 6.5% of the outstanding lending portfolio and catered for the changes that have been implemented in the lending product offering. This provisioning level is currently under review and we expect to implement a change in provisioning levels towards the end of this fiscal year. Within Insurance: Our insurance product delivered the highest gross written premium in a single quarter, since launching the business at ZAR 146 million. Growth has been driven by continued adoption of our Bonngwe engine, enabling sales consultants to cross-sell an insurance policy in an efficient manner. We have recently launched a new funeral insurance product offering to grant beneficiary recipients outside of the Lesaka consumer base. We continue to perform research and development on our insurance offerings to further develop our open-market insurance strategy. Enterprise Division Our Enterprise Division primarily consists of our ADP offering (which includes prepaid solutions and bill payments) through channels such as retailer distribution networks and digital banking apps. Following the acquisition of Recharger on March 3, 2025, we now report on the performance under the Utilities product. The underlying drivers of performance are primarily based on TPV processed. Individual product related KPI’s are shown below. Q3 2026 Q3 2025 Q3 2026 vs Q3 2025 Enterprise Division: ADP Total Payment Volume (“TPV”) (ZAR billions) 11.8 9.8 19% Enterprise Division: Utilities Active Meters (thousands) 368 332 11% Total Payment Volume (“TPV”) (ZAR millions) (1) 477 404 18% Notes: (1) Utilities TPV combines historical performance of the Recharger business pre-acquisition. Recharger was acquired on March 3, 2025. Notable developments within Enterprise Division: Within ADP: We continue to see increased TPV for bill payments driven from increased usage from our existing bank channel partners, which grew primarily from targeted marketing campaigns. Through the MobileMart transaction, we are able to secure direct integrations into four primary mobile network operators (“MNO”) in South Africa providing access to preferential rates and supplier availability. Additionally, we continue to see product expansion into our “4All” product, a multi-store of value voucher which can be redeemed at 40+ partners. Although in early development, we are seeing growth in both volumes and average transaction values for this product within ADP. Within Utilities: Through the consolidation of product procurement to ADP, the bulk of Merchant electricity volumes are now being processed via the Enterprise division reducing reliance on third-party providers. We expect to migrate all other subproducts of ADP volume offered in Merchant via the Enterprise division by the end of this fiscal year. 54 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, 2025: ● Recoverability of Goodwill; ● Intangible Assets Acquired Through Acquisitions; ● Revenue recognition – principal versus agent considerations; and ● Finance Loans Receivable and Allowance for Credit Losses. 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, 2026 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, 2026, including the expected dates of adoption and effects on our financial condition, results of operations and cash flows. 55 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, 2026 2025 2026 2025 2025 ZAR : $ average exchange rate 16.3674 18.5066 17.0463 18.1212 18.1644 Highest ZAR : $ rate during period 17.1588 19.1171 18.1650 19.1171 19.6350 Lowest ZAR : $ rate during period 15.7392 18.0985 15.7392 17.1144 17.1144 Rate at end of period 17.0568 18.3508 17.0568 18.3508 17.7554 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, 2026 and 2025, 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, 2026 2025 2026 2025 2025 Income and expense items: $1 = ZAR 16.7685 18.4021 17.1282 18.0393 17.9031 Balance sheet items: $1 = ZAR 17.0568 18.3508 17.0568 18.3508 17.7554 We have translated the results of operations and operating segment information for the three and nine months ended March 31, 2026 and 2025, provided in the tables below using the actual average exchange rates per month (i.e. for each of January 2026, February 2026, and March 2026 for the third quarter of fiscal 2026) 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. 56 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. 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 audited 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 securi ties, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments. For fiscal 2025, we included an intercompany interest expense in our Consumer Segment Adjusted EBITDA. 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. Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Refer also “Results of Operations—Use of Non-GAAP Measures” below. In fiscal 2026 we closed the acquisitions of Mobilemart and Atom and have integrated their businesses into ours. In fiscal 2025 we closed the acquisitions of Adumo and Recharger and have integrated their businesses into ours. Our fiscal 2025 financial results for the three and nine months ended March 31, 2025, includes Adumo from October 1, 2024, and Recharger from March 3, 2025. 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 2026 compared to third quarter of fiscal 2025 The following factors had a significant impact on our results of operations during the third quarter of fiscal 2026 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased 13.4% in U.S. dollars and increased by 0.2% in ZAR, primarily due to the inclusion of Recharger and Mobilemart, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset by lower prepaid airtime revenue; ● Operating income increase: Operating income increased primarily due to strong performance by Consumer and the contribution from Recharger in Enterprise, which was partially offset by an increase in amortization of acquisition-related intangible assets; ● Lower net interest charge: Net interest charge decreased to $3.3 million (ZAR 54.2 million) from $5.2 million (ZAR 96.7 million) primarily due to a lower interest expense following lower interest rates and the exclusion of interest expense incurred under our borrowing arrangements related to our Consumer lending book in the third quarter of fiscal 2026 compared with 2025. On a comparable basis the equivalent interest expense related to the Consumer lending book for the third quarter of fiscal 2025 was included in interest expense; and ● Foreign exchange movements: The U.S. dollar was 9% weaker against the ZAR during the third quarter of fiscal 2026 compared to the prior period, which positively impacted our U.S. dollar reported results. 57 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, 2026 2025 % $ ’000 $ ’000 change Revenue 183,051 161,450 13% Cost of goods sold, IT processing, servicing and support (A) 123,924 117,163 6% Selling, general and administration (A)(1) 41,751 34,270 22% Depreciation and amortization 10,543 8,429 25% Impairment loss 2,604 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 144 1,222 (88%) Operating income 4,085 366 1,016% Change in fair value of equity securities (378) (20,421) (98%) Reversal of allowance for doubtful loan receivable 1,500 - nm Interest income 1,154 645 79% Interest expense (A) 4,477 5,869 (24%) Income (Loss) before income tax expense (benefit) 1,884 (25,279) nm Income tax expense (benefit) 1,503 (2,934) nm Net Income (loss) before earnings from equity-accounted investments 381 (22,345) nm Earnings from equity-accounted investments 56 12 367% Net Income (loss) 437 (22,333) nm (Add) Less net (loss) income attributable to non-controlling interest (115) 20 nm Net Income (loss) attributable to us 552 (22,353) nm (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Cost of goods sold, IT processing, servicing and support increased by $0.2 million, Selling, general and administration expense increased by $0.05 million, Operating income decreased by $0.2 million, Interest expense increased by $0.09 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net income (loss) attributable to Lesaka decreased by $0.3 million for the three months ended March 31, 2025. (1) Selling, general and administration includes allowance for credit losses. 58 Table 4 In South African Rand Three months ended March 31, 2026 2025 % ZAR ’000 ZAR ’000 change Revenue 2,994,536 2,987,226 0% Cost of goods sold, IT processing, servicing and support (A) 2,027,838 2,167,948 (6%) Selling, general and administration (A)(1) 683,095 633,810 8% Depreciation and amortization 172,553 155,919 11% Impairment loss 43,636 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 2,401 22,361 (89%) Operating income 65,013 7,188 804% Change in fair value of equity securities (6,043) (373,784) (98%) Reversal of allowance for doubtful loan receivable 25,132 - nm Interest income 19,086 11,944 60% Interest expense (A) 73,288 108,639 (33%) Income (Loss) before income tax expense (benefit) 29,900 (463,291) nm Income tax expense (benefit) 24,310 (53,650) nm Net Income (loss) before earnings from equity-accounted investments 5,590 (409,641) nm Earnings from equity-accounted investments 938 220 326% Net Income (loss) 6,528 (409,421) nm (Add) Less net (loss) income attributable to non-controlling interest (1,855) 369 nm Net Income (loss) attributable to us 8,383 (409,790) nm (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Cost of goods sold, IT processing, servicing and support increased by ZAR 2.8 million, Selling, general and administration expense increased by ZAR 1.0 million, Operating income decreased by ZAR 3.7 million, Interest expense increased by ZAR 1.7 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net income (loss) attributable to Lesaka decreased by ZAR 5.5 million for the three months ended March 31, 2025. (1) Selling, general and administration includes allowance for credit losses. Revenue increased by $21.6 million (ZAR 7.3 million), or 13.4% (0.2%). The increase was primarily due to the inclusion of Recharger and Mobilemart , the impact of an increase in certain issuing fee base prices year-over-year, and transaction activity in our issuing business, and an increase in insurance premiums collected and lending revenues (including interest) following higher loan originations, which was partially offset by the decrease in the volume of prepaid airtime sold. 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 $6.8 million or 5.8% in U.S. dollars and decreased by ZAR140.1 million or 6.5% in ZAR. The decrease in ZAR is primarily due to the decrease in the prepaid airtime costs, which was partially offset by an increase in lending related expenditures (including interest expense), higher insurance-related claims and third- party transaction fees and the inclusion of Recharger and Mobilemart. Selling, general and administration expenses increased by $7.5 million (ZAR 49.3 million), or 21.8% (in ZAR 7.8%). The increase was primarily due to the inclusion of Recharger; higher marketing costs related to the Lesaka rebrand, an increase in the allowance for credit losses as a result of higher lending activities by Consumer and Merchant, higher consulting fees, and the year- over-year impact of inflationary increases on certain expenses, which was partially offset by lower stock-based compensation charges. Depreciation and amortization expense increased by $2.1 million (ZAR 16.6 million), or 25.1% (10.7%). The increase was due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Recharger acquisition. Impairment loss for the third quarter of fiscal 2026 includes an impairment loss of $1.5 million (ZAR 25.6 million) related to right-of-use assets recorded in property, plant and equipment for our existing operating lease arrangements as certain of our leased facilities will no longer be utilized as originally intended as a result of the planned transition to our new corporate head office, an impairment loss of $0.7 million (ZAR 11.5 million) related to ATMs recorded in property, plant and equipment as a result of the exit of the ATM business, and an impairment loss of $0.4 million (ZAR 6.5 million) related to goodwill allocated to our Switchpay reporting unit within the Merchant segment. Refer to Notes 7 and 17 to our unaudited condensed consolidation financial statements for additional information. 59 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs includes costs incurred related to the Recharger and Bank Zero acquisitions, and post-combination compensation charges recognized related to the Recharger acquisition. We did not incur significant transaction costs during the third quarter of fiscal 2026. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. Our operating income margin for the third quarter of fiscal 2026 and 2025 was 2.2% and 0.2%, respectively. We discuss the components of operating income margin under “—Results of operations by operating segment.” We recorded a non-cash change in fair value of equity securities of $0.4 million during the third quarter of fiscal 2026, compared to $20.4 million during the third quarter of fiscal 2025 related to a fair value adjustment loss related to MobiKwik. Refer to Note 6 to our unaudited condensed consolidation financial statements for additional information. Interest on surplus cash was $1.2 million (ZAR 19.1 million) compared with $0.6 million (ZAR 11.9 million) during the third quarter of fiscal 2025, due to increased cash balances. Interest expense decreased to $4.5 million (ZAR 73.3 million) from $5.9 million (ZAR 108.6 million). In ZAR, the decrease was primarily due to lower interest rates and the exclusion of interest expense incurred under our borrowing arrangements related to our Consumer lending book in the third quarter of fiscal 2026 compared with 2025. On a comparable basis the equivalent interest expense related to the Consumer lending book for the third quarter of fiscal 2025 was included in interest expense. Third quarter of fiscal 2026 income tax expense was $1.5 million (ZAR 24.3 million) compared to income tax benefit of $(2.9) million (ZAR (53.7) million) in fiscal 2026. Our effective tax rate for fiscal 2026 was impacted by the tax expense recorded by our profitable South African operations and non-deductible expenses (including transaction-related expenditures and the impairment of goodwill). 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. Results of operations by operating segment The composition of revenue and the contributions of our business activities to operating loss are illustrated below: Table 5 In United States Dollars Three months ended March 31, 2026 2025 $ ’000 % of total $ ’000 % of total % change Operating Segment Consolidated revenue: Merchant 127,078 69% 128,781 80% (1%) Consumer 38,323 21% 24,096 15% 59% Enterprise 18,978 10% 9,444 6% 101% Subtotal: Operating segments 184,379 100% 162,321 101% 14% Eliminations (1,328) - (871) (1%) 52% Total consolidated revenue 183,051 100% 161,450 100% 13% Group Adjusted EBITDA: Merchant (A)(1) 9,228 45% 7,900 63% 17% Consumer (1) 13,015 63% 6,333 50% 106% Enterprise (1) 2,125 10% 133 1% 1,498% Group costs (3,756) (18%) (1,772) (14%) 112% Group Adjusted EBITDA (non-GAAP) (A)(2) 20,612 100% 12,594 100% 64% (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by $0.2 million for the three months ended March 31, 2025. (1) Segment Adjusted EBITDA for the three months ended March 31, 2026, includes retrenchment costs of $0.3 million for Merchant, $0.02 million for Consumer, and $0.1 million for Enterprise for the third quarter of fiscal 2026. 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. (2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. 60 Table 6 In South African Rand Three months ended March 31, 2026 2025 Operating Segment ZAR ’000 % of total ZAR ’000 % of total % change Consolidated revenue: Merchant 2,079,232 69% 2,382,982 80% (13%) Consumer 626,514 21% 445,845 15% 41% Enterprise 310,481 10% 174,565 6% 78% Subtotal: Operating segments 3,016,227 100% 3,003,392 101% 0% Eliminations (21,691) - (16,166) (1%) 34% Total consolidated revenue 2,994,536 100% 2,987,226 100% 0% Group Adjusted EBITDA: Merchant (A)(1) 151,116 45% 146,121 63% 3% Consumer (1) 212,537 63% 117,144 50% 81% Enterprise (1) 35,047 10% 2,384 1% 1,370% Group costs (61,629) (18%) (32,623) (14%) 89% Group Adjusted EBITDA (non-GAAP) (A)(2) 337,071 100% 233,026 100% 45% (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by ZAR 3.7 million for the three months ended March 31, 2025. (1) Segment Adjusted EBITDA for the three months ended March 31, 2026, includes retrenchment costs of ZAR 5.0 million for Merchant, ZAR 0.3 million for Consumer, and ZAR 1.1 million for Enterprise for the third quarter of fiscal 2026. 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. (2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Merchant Segment revenue decreased primarily due to lower ADP revenue earned, including from lower prepaid airtime volumes sold. While overall ADP volumes increased, prepaid airtime revenue contributes a significant portion of our overall ADP revenue, and therefore a drop in the volume of the prepaid airtime revenue impacts our reported revenue generated. The increase in Segment Adjusted EBITDA primarily related to a lower employment -related expenditures, lower IT processing, servicing and support costs, and lower allowance for credit losses. Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for the third quarter of fiscal 2026 and 2025 was 7.3% and 6.1%, 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. 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 24.1 million; Q3 2025: ZAR 16.5 million ) incurred to fund our lending book and the year-over-year impact of inflationary increases on certain expenses. Our Segment Adjusted EBITDA margin for the third quarter of fiscal 2026 and 2025 was 34.0% and 26.3%, respectively. Enterprise Segment revenue and Segment Adjusted EBITDA increased primarily due to the inclusion of Recharger. Our Segment Adjusted (loss) EBITDA margin for the third quarter of fiscal 2026 and 2025 was 11.2% and 1.4%, 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 the third quarter of fiscal 2026 increased compared with the prior period due to higher employee related costs, consulting fees and compliance related expenditure. 61 Year to date fiscal 2026 compared to year to date fiscal 2025 The following factors had a significant impact on our results of operations during year to date fiscal 2026 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased by 8.5% in U.S. dollars and increased by 2.0% in ZAR, primarily due to the inclusion of Adumo, Recharger and Mobilemart, 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 lower prepaid airtime revenue; ● Operating income increase: Operating income increased primarily due to a strong performance by Consumer, the contribution from Adumo for the entire period in fiscal 2026 compared with six months in fiscal 2025 and from the contribution from Recharger, which was partially offset by an increase in amortization of acquisition-related intangible assets related to change of useful lives of certain brand intangibles assets. ● Non-cash fair value adjustment related to equity securities in fiscal 2025: We recorded a non-cash fair value loss of $54.2 million during the year to date fiscal 2025 related to MobiKwik; ● Lower net interest charge: Net interest charge decreased to $11.9 million (ZAR 203.0 million) from $15.3 million (ZAR 277.4 million) primarily due to a lower interest expense following lower interest rates and the exclusion of interest expense incurred under our borrowing arrangements related to our Consumer lending book in year to date fiscal 2026 compared with 2025. On a comparable basis the equivalent interest expense related to the Consumer lending book for the year to date fiscal 2025 was included in interest expense; and ● Foreign exchange movements: The U.S. dollar was 5% weaker against the ZAR during year to date fiscal 2026 compared to the prior period, which positively impacted our U.S. dollar reported results. 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 7 In United States Dollars Nine months ended March 31, 2026 2025 % $ ’000 $ ’000 change Revenue 533,233 491,234 9% Cost of goods sold, IT processing, servicing and support (A) 365,238 367,104 (1%) Selling, general and administration (A)(1) 121,729 97,384 25% Depreciation and amortization 37,005 22,928 61% Impairment loss 2,604 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 285 3,174 (91%) Operating income 6,372 644 889% Change in fair value of equity securities 2,593 (54,152) nm Other income 3,883 - nm Loss on impairment or disposal of equity-accounted investment 584 161 263% Reversal of allowance for doubtful loan receivable 1,500 - nm Loss on disposal of equity securities 730 - nm Interest income 2,201 1,952 13% Interest expense (A) 14,081 17,251 (18%) Income (Loss) before income tax expense (benefit) 1,154 (68,968) nm Income tax expense (benefit) 2,027 (9,268) nm Net loss before earnings from equity-accounted investments (873) (59,700) (99%) Earnings from equity-accounted investments 166 89 87% Net loss (707) (59,611) (99%) (Add) Less net (loss) income attributable to non-controlling interest (246) 48 nm Net loss attributable to us (461) (59,659) (99%) (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Cost of goods sold, IT processing, servicing and support increased by $0.5 million, Selling, general and administration expense increased by $0.2 million, Operating income decreased by $0.7 million, Interest expense increased by $0.3 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net loss attributable to Lesaka decreased by $0.9 million for the nine months ended March 31, 2025. 62 Cost of goods sold, IT processing, servicing and support increased by $0.2 million, Selling, general and administration expense increased by $0.06 million, Operating income decreased by $0.2 million, Interest expense increased by $0.1 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net loss attributable to Lesaka decreased by $0.4 million for the nine months ended March 31, 2026, to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations as a result of the correction to amounts reported for the three months ended September 30, 2025. (1) Selling, general and administration includes allowance for credit losses. Table 8 In South African Rand Nine months ended March 31, 2026 2025 % ZAR ’000 ZAR ’000 change Revenue 9,076,273 8,899,861 2% Cost of goods sold, IT processing, servicing and support (A) 6,219,138 6,649,460 (6%) Selling, general and administration (A)(1) 2,072,014 1,764,897 17% Depreciation and amortization 632,092 415,665 52% Impairment loss 43,636 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 4,968 56,809 (91%) Operating income 104,425 13,030 701% Change in fair value of equity securities 43,957 (988,494) nm Other income 65,353 - nm Loss on impairment or disposal of equity-accounted investment 10,342 2,886 258% Reversal of allowance for doubtful loan receivable 25,132 - nm Loss on disposal of equity securities 12,286 - nm Interest income 37,278 35,347 5% Interest expense (A) 240,274 312,720 (23%) Income (Loss) before income tax expense (benefit) 13,243 (1,255,723) nm Income tax expense (benefit) 33,244 (169,202) nm Net loss before earnings from equity-accounted investments (20,001) (1,086,521) (98%) Earnings from equity-accounted investments 2,789 1,586 76% Net loss (17,212) (1,084,935) (98%) (Add) Less net (loss) income attributable to non-controlling interest (4,155) 865 nm Net loss attributable to us (13,057) (1,085,800) (99%) (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Cost of goods sold, IT processing, servicing and support increased by ZAR 8.8 million, Selling, general and administration expense increased by ZAR 3.1 million, Operating income decreased by ZAR 11.9 million, Interest expense increased by ZAR 4.9 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net loss attributable to Lesaka decreased by ZAR 16.7 million for the three months ended March 31, 2025. (A) Cost of goods sold, IT processing, servicing and support increased by ZAR 3.2 million, Selling, general and administration expense increased by ZAR 1.1 million, Operating income decreased by ZAR 4.4 million, Interest expense increased by ZAR 2.0 million, and the subtotal captions from Income (Loss) before income tax expense (benefit) to Net loss attributable to Lesaka decreased by ZAR 6.4 million for the nine months ended March 31, 2026, to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations as a result of the correction to amounts reported for the three months ended September 30, 2025. (1) Selling, general and administration includes allowance for credit losses. Revenue increased by $42.0 million (ZAR 176.4 million), or 8.5% (in ZAR, 2.0%), primarily due to the inclusion of Adumo, Recharger, and Mobilemart, 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, which was partially offset by fewer Pinned Airtime sales. Cost of goods sold, IT processing, servicing and support decreased by $1.9 million (ZAR 430.3 million) or 0.5% (in ZAR 6.5%), primarily due to the decrease in Pinned Airtime 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 $24.3 million (ZAR 307.1 million), or 25.0% (in ZAR 17.4%). The increase was primarily due to the inclusion of Adumo and Recharger, higher marketing costs related to the Lesaka rebrand, higher employee-related expenses (including annual bonuses and annual salary increases), consulting fees, audit fees, and travel expenses, and the year-over-year impact of inflationary increases on certain expenses, which was partially offset by lower stock-based compensation charges. 63 Depreciation and amortization expense increased by $14.1 million (ZAR 216.4 million), or 61.4% (52.1%). The increase was due to the change to a shorter useful life for certain of our brand and trademark intangible assets (refer to Note 7), 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. Impairment loss for year to date fiscal 2026 includes an impairment loss of $1.5 million (ZAR 25.6 million) related to right-of- use assets recorded in property, plant and equipment for our existing operating lease arrangements as certain of our leased facilities will no longer be utilized as originally intended as a result of the planned transition to our new corporate head office, an impairment loss of $0.7 million (ZAR 11.5 million) related to ATMs recorded in property, plant and equipment as a result of the exit of the ATM business, and an impairment loss of $0.4 million (ZAR 6.5 million) related to goodwill allocated to our Switchpay reporting unit within the Merchant segment. Refer to Notes 7 and 17 to our unaudited condensed consolidation financial statements for additional information. Transaction costs related to Adumo, Recharger and Bank Zero 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, the Recharger transaction in March 2025, and ongoing transaction fees related to our proposed acquisition of Bank Zero. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. Our operating income margin for year to date fiscal 2026 and 2025 was 1.2% and 0.1%, respectively. We discuss the components of operating loss margin under “—Results of operations by operating segment.” We recorded an increase in the fair value of Cell C of $3.0 million (ZAR 50 million) during year to date fiscal 2026 (refer to Note 5 for additional information), partially offset by a non-cash change in fair value of equity securities of $0.4 million. We recorded a non-cash change in fair value of equity securities of $54.2 million during year to date fiscal 2025 related to a fair value adjustment loss related to MobiKwik. There were no changes in the fair value of Cell C during the year to date fiscal 2025. In December 2025, we determined that the liquidation of CPS is at an advanced stage and released an accrual raised at the time of deconsolidation of $3.9 million (ZAR 65.4 million) to Other income. Interest on surplus cash increased to $2.2 million (ZAR 37.3 million) from $2.0 million (ZAR 35.3 million), due to the inclusion of Adumo and increased cash balances, which was partially offset by lower interest rates. Interest expense decreased to $14.1 million (ZAR 240.3 million) from $17.3 million (ZAR 312.7 million). The decrease was primarily due to lower interest rates and the exclusion of interest expense incurred under our borrowing arrangements related to our Consumer lending book in year to date fiscal 2026 compared with 2025. On a comparable basis the equivalent interest expense related to the Consumer lending book for the year to date fiscal 2025 was included in interest expense. Fiscal 2026 income tax expense was $2.0 million (ZAR 33.2 million) compared to an income tax benefit of $(9.3) million (ZAR (169.2) million) in fiscal 2025. Our effective tax rate for fiscal 2026 was impacted by the tax expense recorded by our profitable South African operations, non-taxable income (primarily related to the disposal of Cell C and other income) and non-deductible expenses (including transaction-related expenditures and the goodwill impairment). The income tax expense was also impacted by a higher deferred tax benefit as a result of the reduction in the useful lives of certain of our brand and trademark intangible assets which has resulted in an increase in amortization expense during fiscal 2026. 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. 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 9 In United States Dollars Nine months ended March 31, 2026 2025 Operating Segment $ ’000 % of total $ ’000 % of total % change Consolidated revenue: Merchant 385,947 73% 397,642 81% (3%) Consumer 102,017 19% 68,097 14% 50% Enterprise 48,627 9% 30,259 6% 61% Subtotal: Operating segments 536,591 101% 495,998 101% 8% Eliminations (3,358) (1%) (4,764) (1%) (30%) Total consolidated revenue 533,233 100% 491,234 100% 9% Group Adjusted EBITDA: Merchant (A)(1) 28,112 53% 25,319 76% 11% Consumer (1) 30,818 58% 15,071 45% 104% Enterprise (1) 4,817 9% 464 1% 938% Group costs (10,263) (20%) (7,541) (22%) 36% Group Adjusted EBITDA (non- GAAP) (A)(2) 53,484 100% 33,313 100% 61% (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by $0.7 million for the nine months ended March 31, 2025. Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by $0.2 million for the nine months ended March 31, 2026, to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations as a result of the correction to amounts reported for the three months ended September 30, 2025. (1) Segment Adjusted EBITDA for the nine months ended March 31, 2026, includes retrenchment costs for Merchant of $0.7 million, for Consumer of $0.2 million, and for Enterprise of $0.03 million. 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. (2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Table 10 In South African Rand Nine months ended March 31, 2026 2025 Operating Segment ZAR ’000 % of total ZAR ’000 % of total % change Consolidated revenue: Merchant 6,575,270 73% 7,203,565 81% (9%) Consumer 1,732,255 19% 1,234,595 14% 40% Enterprise 825,612 9% 548,408 6% 51% Subtotal: Operating segments 9,133,137 101% 8,986,568 101% 2% Eliminations (56,864) (1%) (86,707) (1%) (34%) Total consolidated revenue 9,076,273 100% 8,899,861 100% 2% Group Adjusted EBITDA: Merchant (A)(1) 479,169 53% 458,619 76% 4% Consumer (1) 521,689 57% 273,313 45% 91% Enterprise (1) 81,770 9% 8,415 1% 872% Group costs (174,895) (19%) (135,542) (22%) 29% Group Adjusted EBITDA (non- GAAP) (A)(2) 907,733 100% 604,805 100% 50% (A) In order to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations, Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by ZAR 11.9 million for the nine months ended March 31, 2025. Merchant Segment Adjusted EBITDA and Group Adjusted EBITDA decreased by ZAR 4.4 million for the nine months ended March 31, 2026, to correct the error discussed in Note 1 to the unaudited condensed consolidated statement of operations as a result of the correction to amounts reported for the three months ended September 30, 2025. (1) Segment Adjusted EBITDA for the nine months ended March 31, 2026, includes retrenchment costs for Merchant of ZAR 12.4 million, for Consumer of ZAR 2.9 million, and for Enterprise of ZAR 0.3 million. Segment Adjusted EBITDA for the nine months ended March 31, 2025, i ncludes reorganization and retrenchment costs for Merchant of ZAR 12.9 million, Enterprise of ZAR 5.6 million, and Consumer of ZAR 1.5 million. 65 (2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Merchant Segment revenue primarily decreased due to fewer prepaid airtime sales which was partially offset by the inclusion of Adumo, a higher volume of ADP provided (Pinless Airtime and gaming). In ZAR, the increase in Segment Adjusted EBITDA is primarily due to the inclusion of Adumo for the entire period compared with the prior period, which was partially offset by higher operating expenses incurred. Our Segment Adjusted EBITDA margin for year to date fiscal 2026 and 2025 was 7.3% 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, and lending revenues following an increase in loan originations. 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 March 2025, higher insurance- related claims, interest expense (of approximately ZAR 65.1 million; F2025: ZAR 45.0 million) incurred to fund our lending book, and the year-over-year impact of inflationary increases on certain expenses. Our Segment Adjusted EBITDA margin for year to date fiscal 2026 and 2025 was 30.2% and 22.1%, respectively. Enterprise Segment revenue increased primarily due to the inclusion of Recharger and Mobilemart. In ZAR, the significant increase in Segment Adjusted EBITDA is primarily due to the inclusion of Recharger . Our Segment Adjusted EBITDA margin for year to date fiscal 2026 and 2025 was 9.9% and 1.5%, respectively. Group costs Our group costs for fiscal 2026 increased compared with the prior period due to higher consulting fees, higher employee related costs, and higher compliance related expenditure. 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 U.S. 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 impairment/ 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 included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for three and nine months ended March 31, 202 5. Once- off items represents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. 66 The table below presents the reconciliation between U.S. GAAP net income (loss) attributable to Lesaka to Group Adjusted EBITDA: Table 11 Three months ended March 31, Nine months ended March 31, 2026 2025 2026 2025 $ ’000 $ ’000 $ ’000 $ ’000 Income (Loss) attributable to Lesaka - GAAP 552 (22,353) (461) (59,659) (Add) Less net (loss) income attributable to non-controlling interest 115 (20) 246 (48) Net Income (loss) 437 (22,333) (707) (59,611) Earnings from equity accounted investments (56) (12) (166) (89) Net Income (loss) before earnings from equity-accounted investments 381 (22,345) (873) (59,700) Income tax expense (benefit) 1,503 (2,934) 2,027 (9,268) Income (Loss) before income tax expense 1,884 (25,279) 1,154 (68,968) Interest expense (A) 4,477 5,869 14,081 17,251 Interest income (1,154) (645) (2,201) (1,952) Reversal of allowance for doubtful loan receivable (1,500) - (1,500) - Loss on disposal of equity securities - - 730 - Other income - - (3,883) - Net loss on impairment/ disposal of equity-accounted investment - - 584 161 Change in fair value of equity securities 378 20,421 (2,593) 54,152 Operating income 4,085 366 6,372 644 PPA amortization (amortization of acquired intangible assets) 6,044 4,974 24,659 13,588 Depreciation and amortization 4,499 3,455 12,346 9,340 Impairments (1) 1,916 - 1,916 - Stock-based compensation charges 1,334 2,497 5,140 7,518 Interest adjustment - (890) - (2,478) Once-off items 2,553 2,306 3,067 4,599 Unrealized gain (loss) FV for currency adjustments 181 (114) (16) 102 Group Adjusted EBITDA - Non-GAAP (A) 20,612 12,594 53,484 33,313 (A) Loss attributable to Lesaka – GAAP and all subtotal captions to Loss before income tax expense for the three and nine months ended March 31, 2025 have been decreased by $0.3 million and $0.9 million, respectively, as a result of the correction discussed in Note 1. Interest expense for the three and nine months ended March 31, 2025 has been increased by $0.09 million and $0.3 million, respectively, as a result of the correction discussed in Note 1. Operating income and Group Adjusted EBITDA - Non-GAAP for the three and nine months ended March 31, 2025 have been decreased by $0.2 million and $0.7 million, respectively, as a result of the correction discussed in Note 1. Loss attributable to Lesaka – GAAP and all subtotal captions to Loss before income tax expense for the nine months ended March 31, 2026 have been decreased by $0.4 million and, as a result of the correction, as discussed in Note 1, to the amount included in the caption Interest expense for the three months ended September 30, 2025. Interest expense for the nine months ended March 31, 2026 has been increased by $0.1 million as a result of the correction, as discussed in Note 1, to the amount included in the caption Interest expense for the three months ended September 30, 2025. Operating income and Group Adjusted EBITDA - Non-GAAP for the nine months ended March 31, 2026 have been decreased by $0.2 million, as a result of the correction, as discussed in Note 1, to the amount included in the caption Interest expense for the three months ended September 30, 2025. (1) Impairments excludes an amount of $0.7 million which is included in the caption exit of ATM business in the table below. (2) The table below presents the components of once-off items for the periods presented: Table 12 Three months ended March 31, Nine months ended March 31, 2026 2025 2026 2025 $ ’000 $ ’000 $ ’000 $ ’000 Exit of ATM business 1,599 - 1,599 - Lesaka brand refresh 984 - 984 - Transaction costs 466 1,084 839 1,621 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions 144 1,222 285 3,174 Indirect taxes provision release (61) - (61) (196) Income recognized related to closure of legacy businesses (579) - (579) - Total once-off items 2,553 2,306 3,067 4,599 67 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 transaction costs related to the acquisition of Recharger over a number of quarters, and the transactions are generally non-recurring. Exit of ATM business includes expenses incurred to exit our ATM business and the impairment of ATMs recorded in property, plant and equipment (refer to Note 7 to our unaudited condensed consolidated financial statements for additional information). Rebrand relates to costs incurred related to Lesaka’s new brand launched in November 2025, we expect that it will take the remainder of the 2026 calendar year to roll out the refreshed brand throughout the organization. These are non-recurring costs incurred as a necessary step in a set of strategic initiatives designed to create a “One Lesaka” identity for our customers and our employees. 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 subsidiary 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. 68 Liquidity and Capital Resources As of March 31, 2026, our cash and cash equivalents were $90.6 million and comprised of U.S. dollar-denominated balances of $3.3 million, ZAR-denominated balances of ZAR 1.5 billion ($85.4 million), and other currency deposits, primarily Botswana pula, of $1.8 million, all amounts translated at exchange rates applicable as of March 31, 2026. The increase in our unrestricted cash balances from June 30, 2025, was primarily due to positive contribution from our operating segments, and the utilization of our general banking facilities to partially fund the growth in our Consumer lending book, which was partially offset by the application of the proceeds received from the disposal of MobiKwik to reduce our general banking facilities utilized, the utilization of cash reserves to fund certain scheduled repayments of our borrowings, acquisition of property, plant and equipment and intangible assets, to fund the increase in our Consumer lending book and to settle amounts due to the sellers of Recharger and other entities acquired during the year to date. 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, 2025, as well as Note 9 to these condensed consolidated financial statements for additional information related to our borrowings. Our ability to make payments on our indebtedness and to fund our operations may be dependent upon the operating income and the distribution of funds from our subsidiaries. However, as local laws and regulations and/or the terms of our indebtedness restrict certain of our subsidiaries from paying dividends and transferring assets to us, there is no assurance that our subsidiaries will be permitted to provide us with sufficient dividends, distributions or loans when necessary. We are required to make a scheduled debt repayment of ZAR 200 million ($11.7 million) in March 2027. We expect to pay ZAR 100.0 million ($6.0 million) payment on closing of the Bank Zero transaction. All amounts translated at exchange rates as of March 31, 2026. Available short-term borrowings Summarized below are our short-term facilities available and utilized as of March 31, 2026: Table 13 RMB GBF RMB Other Nedbank $ ’000 ZAR ’000 $ ’000 ZAR ’000 $ ’000 ZAR ’000 Total short-term facilities available, comprising: Total overdraft 67,064 1,143,901 - - - - Indirect and derivative facilities (1) - - 3,383 57,700 9,179 156,556 Total short-term facilities available 67,064 1,143,901 3,383 57,700 9,179 156,556 Utilized short-term facilities: Overdraft 35,825 611,055 - - - - Indirect and derivative facilities (1) - - 1,864 31,786 124 2,112 Total short-term facilities utilized 35,825 611,055 1,864 31,786 124 2,112 Interest rate, based on South African prime rate 9.75% 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. The facilities under the Restated GBF Agreement were available for utilization from March 30, 2026, and are subject to annual review by RMB. 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. 69 Long-term borrowings We have aggregate long-term borrowings outstanding of ZAR 3.4 billion ($201.6 million translated at exchange rates as of March 31, 2026) as described in Note 9. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 2.8 billion, which were used to refinance our previous long-term borrowings. We have utilized all of these long-term borrowings. As of March 31, 2026, we also have a revolving credit facility, of ZAR 400.0 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, 2026, includes restricted cash of $0.1 million that has been ceded and pledged. 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. We intend to cancel this arrangement as part of the process of winding down our ATM business. Cash flows from operating activities Third quarter Net cash provided by operating activities during the third quarter of fiscal 2026 was $37.6 million (ZAR 630.0 million) compared to $10.7 million (ZAR 196.2 million) during the third quarter of fiscal 2025. Excluding the impact of income taxes, our cash provided by operating activities during the third quarter of fiscal 2026 was positively impacted by the positive contribution from our operating segments and positive working capital changes including a decrease in accounts receivables and inventory, and an increase in trade and other payables. During the third quarter of fiscal 2026, we paid first provisional South African tax payments of $0.2 million (ZAR 3.2 million) related primarily to certain of Adumo’s subsidiaries 2026 tax year. We paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Botswana during the third quarter of fiscal 2026. 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. During the third quarter of fiscal 2025, we paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Namibia and Botswana. Taxes paid (refunded) during the third quarter of fiscal 2026 and 2025 were as follows: Table 14 Three months ended March 31, 2026 2025 2026 2025 $ $ ZAR ZAR ’000 ’000 ’000 ’000 First provisional payments 192 594 3,180 10,885 Second provisional payments 147 - 2,464 - Taxation paid related to prior years 17 - 296 - Tax refund received (6) (151) (101) (2,016) Dividend withholding tax 91 - 1,526 - Total South African taxes paid 441 443 7,365 8,869 Foreign taxes paid 81 62 1,349 1,148 Total tax paid 522 505 8,714 10,017 Year to date 70 Net cash provided by operating activities during year to date fiscal 2026 was $35.6 million (ZAR 609.4 million) compared to net cash used in operating activities of $2.6 million (ZAR 47.6 million) during the year to date fiscal 2025. Excluding the impact of income taxes, our cash provided by operating activities during year to date fiscal 2026 was positively impacted by the positive contribution from our operating segments and positive working capital movements , which was partially offset by cash utilized for the significant net growth in our Consumer finance loans receivable. During year to date fiscal 2026, we paid first provisional South African tax payments of $4.5 million (ZAR 75.2 million) related to our 2026 tax year. We also paid second provisional South African tax payments of $0.4 million (ZAR 7.4 million) primarily related to certain of our recently acquired subsidiaries that have not yet aligned their tax year to our June 30 tax year end. We also paid taxes related to prior tax years in South Africa of $0.5 million (ZAR 8.7 million). We paid taxes totaling $0.2 million in other tax jurisdictions, primarily in Namibia and Botswana during year to date fiscal 2026. During the year to date fiscal 2025, we paid first provisional South African tax payments of $3.7 million (ZAR 67.1 million) related to our 2025 tax year. We also paid taxes totaling $0.2 million in other tax jurisdictions, primarily in Namibia and Botswana during the year to date fiscal 2025. Taxes paid (refunded) during year to date fiscal 2026 and 2025 were as follows: Table 15 Nine months ended March 31, 2026 2025 2026 2025 $ $ ZAR ZAR ‘000 ‘000 ‘000 ‘000 First provisional payments 4,470 3,682 75,220 67,149 Second provisional payments 431 - 7,400 - Taxation paid related to prior years 501 93 8,722 1,660 Tax refund received (58) (264) (1,010) (4,069) Dividend withholding tax 91 - 1,526 - Total South African taxes paid 5,435 3,511 91,858 64,740 Foreign taxes paid 225 202 3,856 3,693 Total tax paid 5,660 3,713 95,714 68,433 Cash flows from investing activities Third quarter Cash used in investing activities for the third quarter of fiscal 2026 included capital expenditures of $3.4 million (ZAR 57.0 million), primarily due to the acquisition of vaults and POS devices. We also incurred expenditures of $1.2 million (ZAR 20.2 million), primarily related to the capitalization of development costs, during the third quarter of fiscal 2026. During the third quarter of fiscal 2026, we paid we paid $10.8 million related to acquisition of certain businesses, including $10.4 million for the final tranche of the Recharger acquisition, and $0.3 million for Mobilemart. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. 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. Year to date Cash used in investing activities for year to date fiscal 2026 included capital expenditures of $11.3 million (ZAR 193.5 million), primarily due to the acquisition of vaults and POS devices. We also incurred expenditures of $3.4 million (ZAR 57.4 million), primarily related to the capitalization of development costs, during year to date fiscal 2026. We also received $3.0 million from the disposal of Cell C. During year to date fiscal 2026, we paid $11.1 million related to acquisition of certain businesses, including $10.4 million for the final tranche of the Recharger acquisition, $0.3 million for Mobilemart and $0.3 million for Atom. Refer to Note 2 to our unaudited condensed consolidation financial statements for additional information. Cash used in investing activities for the year to date fiscal 2025 included capital expenditures of $13.1 million (ZAR 236.3 million), primarily due to the acquisition of vaults. We also incurred expenditures of $2.3 million (ZAR 41.0 million), primarily related to the capitalization of development costs, during the year to date fiscal 2025. During the year to date fiscal 2025, we paid $10.6 m illion related to acquisition of certain businesses, including Adumo and Recharger. 71 Cash flows from financing activities Third quarter During the third quarter of fiscal 2026, we utilized $44.9 million from our South African general banking facilities to partially fund the growth of our Consumer lending book, and repaid $29.4 million. We utilized $0.7 million of our long-term borrowings to finance the acquisition of POS devices and vehicles to fund our Merchant lending book. We repaid $10.2 million of long-term borrowings and in accordance with our repayment schedule under Facility B and our asset-based facilities. We also paid $3.5 million to purchase Lesaka Hospitality non-controlling interests. 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. Year to date During year to date fiscal 2026, we utilized $93.4 million from our South African general banking facilities to partially fund the growth of our Consumer lending book, and repaid $82.5 million. We utilized $4.7 million of our long-term borrowings to finance the acquisition of POS devices and vehicles to fund our Merchant lending book. We repaid $12.6 million of long-term borrowings and in accordance with our repayment schedule under our asset-based facilities. We paid fees of $0.03 million related to the September 2025 refinance of our facility to fund the growth of Merchant lending book. We paid $3.5 million to purchase Lesaka Hospitality non- controlling interests. We also paid $0.3 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock. During the year to date 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 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. Off-Balance Sheet Arrangements We have no off -balance sheet arrangements. Capital Expenditures We expect capital spending for the fourth quarter of fiscal 2026 to primarily include spending for acquisition of POS devices, vaults, computer software, computer and office equipment, as well as for our branch network in South Africa. Our capital expenditures for the third quarter of fiscal 2026 and 2026 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, 2026, of $0.5 million. We expect to fund these e xpenditures through internally generated funds and available facilities. 72