Lesaka Technologies, Inc.

Welcome to Lusaka Tech's webcast for the third quarter of fiscal 2025. As a reminder, the webcast is being recorded and the presentation can be accessed through the webcast link provided. Management will address any questions you may have at the end of the presentation. Participants, please enter your questions into the questions section of this webcast. The webcast link, as well as our press release and investor presentation, are available on our investor relations websites at ir.lasakatech.com. LASAKA filed its Form 10-Q after the U.S. market closed yesterday, which is also available on our website. During this call, we will be making forward-looking statements. I ask you to look at the cautionary language contained in our Form 10-Q regarding risks and uncertainties associated with forward-looking statements. As a domestic filer in the United States, we report our results in U.S. dollars and the U.S. gap. However, it is important to note that our operational currency is South African Rand, and as such, we analyze our performance in Rand, which is non-GAAP. This assists investors in understanding the underlying trends in our business. As you know, the company's results can be significantly affected by the currency fluctuations between the U.S. dollar and the South African Rand. I will now hand over the webcast to Dan.

Thank you, Phuong. Good morning and good afternoon to our respective shareholders in the US, South Africa, Europe, and Asia. I will start the presentation by taking you through the key developments for the quarter, followed by the group's financial performance. Steve will present the Merchant Division, Lincoln the Consumer Division, and Naeem the Enterprise Division. Ali will conclude with the outlook for the rest of our current financial year to June 2025, and will also provide guidance for our 2026 financial year. I characterize the past quarter as one of solid traction in the strategy that we are executing against. Our consumer division had a standout quarter with record EPE, transactional account enrollments, lending and insurance originations. It is pleasing to see the impact of the reorganization and rejuvenation of our consumer business that we undertook over the past three years really coming to the fore. This momentum continues into quarter four. In early March, we concluded the acquisition of Recharger with one month's performance included in our Q3 results. Recharger augments our alternative payment offering and marks a turning point in the transition of the enterprise division to contribute to our earnings. In line with the execution of our strategy, we advanced the optimization of our merchant and enterprise divisions. We are building a multi-product fintech platform. organised around our customers, with M&A being a key part of our strategy. The acquisition of Adumo in Q2 of this financial year has significantly expanded our merchant division. As we continue to scale, the integration of product and people is core to our success, and we place a great deal of importance on the optimisation, integration and augmentation of our investments. This process also includes realigning our capital allocation and efforts. towards areas where we see significant growth, but equally being pragmatic in downscaling areas in which our bets have not worked or where we deem the market opportunity not to be attractive. Whilst this comes at a cost, which was approximately 20 million for this quarter, this is a net positive for the evolution of our business. Specific details focused around the areas of impact will come through in the merchant and enterprise sections. In the past quarter, we also completed the strategic reset of our debt facilities. I will provide more on the impact of this further on in my section of the presentation. As mentioned in last quarter's presentation, our non-core investment, MobiQuik, listed on the Stock Exchange of India in December last year. MobiQuik's share price has been volatile, and we marked it to market this quarter with a net loss of R311 million. which significantly impacted our overall financial result for the quarter. We are locked up until June 2025, and we are exploring practical and sensible paths to monetization. The proceeds from this will most likely be used to primarily reduce our gearing, further strengthening our balance sheet. We are also very proud of the launch of our employee share ownership plan during the quarter. Our employees, excluding executives and senior leadership, now earn 3% of the issued share capital of Lusaka, more closely aligning their interests with the success of Lusaka. Overall, Q3 has been a continuation of our delivery of a strong and consistent performance. We delivered revenue of R2.5 billion, net revenue of R1.36 billion, and group-adjusted EBITDA of R237 million. achieving our guidance across all metrics in this quarter. Our fundamental earnings, which we believe is the most appropriate measure of our overall performance, has grown 98% year-on-year to R58 million. Our net debt to group-adjusted EBITDA ended at 2.8 times for the quarter, both well within our bank covenants and our current risk appetite. Our focus is primarily on net revenue. as this more accurately shows the true reflection of our business's top line performance. As a reminder, the difference between our revenue to net revenue is due to the accounting treatment of selling pinned airtime, which we have to recognize the principal rather than the commission as revenue. It also impacts cost of sales. There is no impact of this accounting treatment on the actual profit recognized. Net revenue increased 42% year-on-year, primarily driven by the inclusion of a DUMO this year and a 32% increase in consumer. At a group-adjusted EBITDA level, we recognized a 29% increase year-on-year. This result includes approximately R20 million of reorganization costs with the integration and strategic realignment processes underway in our merchant and enterprise divisions. Outside of these costs, a group-adjusted EBITDA would have come in towards the top end of guidance provided for the quarter. Fundamental earnings, which in management's view is the true reflection of our sustainable operating performance, grew 98% year-on-year to R58 million for the quarter. At a per-share level, this translates to 72 cents, an increase of 60%. The primary adjustment between fundamental earnings and net income is the change in the fair value of MobiQuik, as mentioned earlier in the presentation. This quarter's performance reflects the highest fundamental earnings since the formation of Lusaka in 2022. Cash generated from business operations increased to R277 million. Interest paid on bank borrowings decreased to R52 million with a R4.5 billion debt refinance concluding in February 2025. This represents two months of interest paid as we settled facilities ahead of the refinance, whereas typically it would be three months. Cash generated in working capital was R156 million, impacted by the timing of transaction processing at quarter end in our merchant and enterprise divisions, reduced inventory levels, and an enhanced focus on working capital management. Cash generated in working capital was offset by a R217 million outflow in funding the growth in our consumer and merchant loan books. This follows a strong uptake in the enhanced consumer lending proposition and a significant uptick in our merchant lending business this quarter. Bulk airtime purchases made in Q2 unwound this quarter with an inflow of R41 million. Net cash provided by operating activities increased to a pleasing R196 million. Following the group debt restructure, which I will explain in more detail shortly, our gross debt position has increased to R4 billion. This is primarily due to increased funding requirements for the recharger acquisition, as well as the growth in the consumer and merchant loan books. Cash on hand has increased from R1.1 billion to R1.3 3 billion rand. Our net debt to group adjusted EBITDA was 2.8 times for the quarter. As part of our leverage calculation, we include the market value of our MobiQuik position at the time of reporting. Whilst this cannot be monetized currently due to lock-up restrictions, the share price can affect our net debt to group adjusted EBITDA ratio. We have communicated to the market that we are looking to continue bringing our net debt to group adjusted EBITDA ratio down with a medium-term objective of two times, which we believe is comfortably serviceable and is the appropriate capital structure for the business. During the quarter, we completed the refinance of our debt facilities. The outcomes can be summarized in three net positives. Firstly, the refinance has resulted in a simpler and more cost-effective debt facility structure with more advantageous pricings. Previously, our weighted average cost of debt at current market rates was approximately 12% per annum. Whereas going forward, our cost of debt will be approximately 10.7% per annum. On gross debt of 4 billion rand, this equates to a saving of approximately 52 million rand a year. Secondly, we have enhanced our financial flexibility as we repay debt. and have established sufficient headroom to fund growth in our business. Thirdly, the debt restructure is in partnership with RMB and Investec, two of South Africa's leading commercial and investment banks. Not only has this brought a diversification in our funders, it is encouraging that our banking partners are supportive of Lusaka's growth story and improved risk profile. We spent R83 million on CapEx this quarter, primarily driven by investment in growing our business. 22 million rand of this spend relates to the rollout of our new SmartSafe product. These cash vaults are an important part of our holistic merchant offering and enables an opportunity for a greater cross-sell, given South Africa is still largely a cash-dominated economy. Our growth capex includes software development costs related to the enhancement of our payment switch in our enterprise division, which Naeem will talk to you later. We also invested 12 million Rand in POS devices in Kazang and Udumo to support growth in these businesses. I will hand over now to Steve, who will take you through the Merchant Division KPI performance in greater detail.

Thank you, Dan. Good afternoon and good morning, everyone.