Lesaka Technologies, Inc.

Welcome to LISACA Technologies results webcast for the fourth quarter and full year of fiscal 2026. As a reminder, this webcast is being recorded. Management will address any questions you have at the end of the presentation. To ask a question live, participants are requested to join the chorus call line by registering by the link provided. Alternatively, please enter your questions into the question tab of this webcast. Our press release and investor presentation are available on our investor relations website at ir.lesarkertech.com. During this call, we will be making forward-looking statements, and I ask you to look at the cautionary language contained in our press release, presentation, and Form 10-K, available on our website. As a domestic filer in the United States, we report results in U.S. dollars under U.S. GAAP. However, it is important to note that our operational currency is South African Rand, and as such, we analyze our performance in South African Rand, which is non-GAAP. This assists investors in understanding the underlying trends in our business. I will now turn the webcast over to Ali.

Good morning, good afternoon, and thank you for joining us for LASAKA's results for the fourth quarter and full year of fiscal 2026. FY26 was another excellent year for LASAKA, delivering on all our guidance measures, which we will come to shortly. But before reviewing the year, I want to briefly reflect on LASAKA's evolution. LASAKA was launched in May 2022, following the merger with the Connect Group. We had set out on a journey through organic and inorganic growth to build the leading independent fintech platform in Southern Africa. As I sit here today, I'm extremely proud to reflect on what we have built. The platform, the people, and the performance. Challenges set and challenges met, fostering a culture of accomplishment and belief. A team whose depth, breadth, diversity, resilience, and ability are fitting representatives of the extraordinary country in which they live. Yet until a few months ago, that team was spread across a disparate office network, operating under multiple brands. The name Lissaka was barely heard or known by our most important stakeholders, our customers. While the financial milestones we will turn to later are significant achievements, one of the biggest reasons for celebration this year is in the coming together of one Lissaka. The coming together in our wonderful new Johannesburg office in July 2026, which will be followed in the coming couple of months with our new offices in Cape Town and Durban, creates the environment to foster the cross-pollination between teams that will be one of our core competitive advantages. We are LASAKA. We are Accraal. It is very difficult to be so when not together. This change from where we work has been accompanied by the change in the brand unveiled in Q2 FY26 and a month ago, the public launch of that brand. Today, I'm delighted to say that our customers now say our name, and I'm delighted that they are embracing our brand as enthusiastically as our circa 4,000 employees. It is difficult to convey the palpable energy and enthusiasm that has come with the brand launch, the street parades, the music, the crystallization of an identity. This is a new commitment we make, a commitment to show up where our customers are, whether they be mothers or pensioners, spaza shop owners or companies, whether they be in the city centers of the Heifelt or the rural villages of the interior, the mountains of the Drakensberg or by the beaches and valleys of the Cape, where you are, we are. A pledge to be present, with empathy, with commitment, to serve with dignity, with humility and with authenticity. Those are the silent, subtle tones now ringing loudly across our country, with a voice that is gathering momentum every week, proclaiming Lusaka, where you are. And so, to where we are as of June 2026. For the year, net revenue grew 20% to 6.33 billion rand. Group-adjusted EBITDA grew 41% to 1.27 billion rand. and adjusted earnings per share grew 210% to R6.51. It's a performance that reflects delivery on our promises. On the right are the guidance measures we gave for FY26 across net revenue, group adjusted EBITDA, adjusted EPS and positive GARP net income. I'm pleased to say we delivered across all four measures, including turning GARP net income positive for the full year for the first time since 2022. In addition, our net debt to Group Adjusted EBITDA fell to 1.9 times below the two times we had set as our goal. Underneath the group numbers, our three divisions had different years, reflecting their different stages of evolution, and I want to spend a few minutes on the revenue drivers of each. Merchant had a challenging year as various businesses were brought together. It grew net revenue by 3% to 3.1 billion rand and core net revenue, which strips out hardware sales and residual products, by 6% to 2.8 billion rand. Significantly, no single one of the five products that constitute the core of the business dominates contribution. Over the course of FY2026, acquiring grew by 21% to R777 million and software grew by 34% to R391 million, while ADP, cash, and lending each declined by single-digit percentages. At the primary level of revenue drivers, we grew our average active merchant base by 12% to R132,000, while our weighted average ARPU declined by 5%. Across our three largest products, we saw volume growth. Acquiring TPV grew 27% to R44 billion, ADP TPV grew 31% to R55 billion, and cash TPV grew 4% to R119 billion. Merchants are transacting more with us. but on individual products there has been a decline in take rate. ADP take rates declined 25% mainly due to the reset in commissions for airtime set by the mobile networks over the year. We also experienced a mix effect where our fastest growing volumes are in lower margin supplier payments. A combination of mix effect and competitive pressure also led to the cash and acquiring take rate decline. In lending, where we feel we have a great opportunity, we under-indexed on our expectations during the year, with a 3% decline in core net revenue. The demand from our merchants is there, and they are overwhelmingly underserved. But we are still evolving the offering, which will allow us to scale the product with the appropriate capability, risk appetite, and controls. Consumer has had an outstanding year. Net revenue grew by 38% to 2.4 billion rand with all three products growing well. Transactional accounts grew by 24% to 855 million rand on strong customer acquisition. Lending grew 49% and insurance grew 42%, both driven by cross-selling into our account base. Our blended transactional fees rose by just 3%, so growth came primarily from customer acquisition, not pricing. In a largely flat market with many competitors, we grew our customer base by 19%, more than any competitor. This demonstrates a best-in-class proposition, built to serve customers with technology and humanity where they are. Enterprise had a strong year as well, growing net revenue to 913 million rand, with core net revenue growing 45%. Pleasingly, the growth was across both volumes and take rates for both the two main products, ADP and utilities. A year ago, we told you FY25 was a year of build for Enterprise and that it would become a meaningful contributor in FY26. It has done exactly that. We now have three meaningful divisions on which to build our future, combining into a unique South African fintech platform. Dan will now take you through the broader financial performance, focusing on the quarter.

Thank you, Ali. Good morning and good afternoon to everyone joining us today. Ali has described the platform we have built and the performance drivers of each division. I will explain what that progress means financially before taking you through the fourth quarter's results. FY26 was a year of financial inflection for Lusaka. We delivered group-adjusted EBITDA within our latest guidance, exceeded the top end of our adjusted earnings per share range, and achieved positive full-year gap profitability of approximately R40 million. We are clearly seeing the improvement in our financial performance translate into stronger cash generation, with net cash from operating activities at R864 million for the year. After a capital expenditure of R421 million, this leaves R443 million of positive cash generation. This is a significant improvement over the prior year and reflects the growing cash generating capacity of our business. Our balance sheet has also strengthened. As a reminder, our medium-term leverage target has been two times or lower. We closed the year at 1.9 times, compared with 2.9 times a year ago, and reduced gross debt by approximately R200 million. We have achieved this ahead of the Bank Zero acquisition. Pleasingly, we have seen a significant reduction in our non-operational and once-off charges. As shown on the slide, non-operational charges reduced from approximately R1.7 billion to R35 million. During the course of FY26, we made good progress in exiting our remaining non-core investments and businesses, the overall financial impact of which was quite limited compared to the previous year. In addition, once-off charges reduced from R322 million to 91 million rand. Taken together, these milestones reflect improved cash generation and quality of earnings as we continue to scale our platform. A significant amount of the noise and complexity has been eliminated in our numbers going forward. Turning to the fourth quarter's performance, net revenue increased 8% to R1.62 billion, with Group Adjusted EBITDA increasing 22% to R367 million, demonstrating increased operating leverage. Our adjusted earnings, which we regard as a key measure of our underlying performance, increased to R199 million. On a per share basis, adjusting earnings increased from 90 cents to 2 rand 40. Our leverage ratio closed at 1.9 times. Our consumer division delivered another strong quarter, with net revenue increasing 31% to 669 million rand. This reflects growth in our active customer base and the continued success of our cross-sell initiatives. Enterprise Net Revenue increased 34% to R255 million, reflecting the contribution from recharger and growth across ADP and utilities. We are pleased to see the division making a growing contribution as its platforms scale. Merchant Net Revenue declined 10% to R729 million. As Ali outlined, the division faces pressure on revenue compression despite growth in transaction volumes. It is a key area of focus for us. Lincoln will take you through the operational drivers. At a group level, adjusted EBITDA of $367 million was an all-time quarterly high for Lusaka, representing growth of 22%. Our margin increased to nearly 23%, compared with 20% a year ago. Consumer segment adjusted EBITDA increased 56% to R253 million, while Enterprise delivered R54 million, an increase of 255%. These are positive contributions and reflect the growing scale of both divisions. Merchant segment adjusted EBITDA declined 33% to R122 million. This reflects the soft operational performance and the ongoing integration and rationalization of the division. Group costs were R63 million for the quarter and R238 million for the year. The quarterly figure is broadly in line with the run rate discussed at our third quarter results. Looking ahead, as we are prepared to bring Bank Zero into our platform and further scale our operations, we expect a reset in our annual group cost run rate to approximately 350 million Rand in FY27. This increase represents an investment in group enabling functions, including data and information systems, people and risk and compliance capabilities. We remain focused on ensuring that it supports growth and improves efficiencies across the business and expect the spend to stabilize at this level in the medium term, with positive operating leverage emerging. Turning to cash flow and our balance sheet, cash generated from business operations was R384 million for the quarter, compared with R379 million a year ago. As a reminder, this measure is before working capital movements, loan book funding, bulk ADP purchases, tax and interest. After these movements, net cash generated from operating activities was R279 million, compared to cash utilization of R113 million a year ago. For the full year, net operating cash flow was R864 million, Working capital releases contributed to this result. We also continue to reinvest cash in growing our lending books, with the funding requirement varying through the year, particularly around the December festive season. Our earnings growth and cash generation have supported the reduction in our net debt to Group Adjusted EBITDAO ratio to 1.9 times. This reflects both higher EBITDA and a reduction in gross debt from approximately 4 billion to 3.8 billion Rand. We have also experienced the benefit of reduced leverage with a decrease in effective borrowing rates from our lenders. As mentioned earlier, we have achieved our leverage target before the acquisition of Bank Zero. Subject to completion and the planned migration of lending book funding, we anticipate further benefits to our funding costs and external debt requirements. Steve will unpack the timing and assumptions in more detail. Capital expenditure was R171 million in the fourth quarter, above our recent run rate, taking our full year spend to R421 million. This is above the R400 million annual guidance previously communicated and partially due to timing of operational investment and fit-out costs relating to our one Lusaka office consolidation program. In the fourth quarter, approximately 42% or R72 million relate to point-of-sale devices and cash vaults, supporting the growth of our merchant base. A further 30% related to non-operational capex for the fit-out of our new offices. Looking ahead to FY27, we expect total operational capex to be around R450 million as we invest in the growth of our business, particularly merchant. We also expect non-recurring leasehold improvement capex of approximately R100 million as we consolidate our offices in Cape Town and Durban. We remain focused on capital discipline and the returns on investment. In recent quarters, the benefits of the platform we are building have become increasingly evident. A group adjusted EBITDA margin increased to 22.6% this quarter, compared with 20.1% a year ago, reflecting improved operational leverage at a group level. On the last 12 months basis, CapEx as a percentage of Group Adjusted EBITDA reduced from 42% to 33%. Given the investment plan for FY27, the near-term ratio will be elevated, but trend down to below 30% in the medium term. Combined with an improved quality of earnings, these trends highlight the strengthening financial fundamentals of LASACA. We remain focused on improving merchant performance and generating improved returns as we continue to evolve and scale our platform. Thank you. I will now hand over to Lincoln to take you through our divisional performance.