Lesaka Technologies has quietly emerged as one of the JSE’s more compelling mid-cap growth stories. After years of repositioning itself from the legacy Net1 structure to a focused fintech platform, the group closed the 2025 financial year with results that gave the market a glimpse of what its transformation could deliver.
Net revenue rose 38% for the year to R5.3bn; adjusted earnings before interest, tax, depreciation and amortisation (ebitda) climbed 33% to R922m; and adjusted earnings per share (EPS) increased almost threefold to 229c. But while the historical numbers were solid, management made clear that the real story lies ahead. For 2026, Lesaka is guiding to more than 460c a share in adjusted earnings, at least 36% growth in ebitda and its first year of positive net income.
The leap in profitability is the consequence of a deliberate multiyear buildout. Today the merchant division accounts for more than half of group revenue, strengthened by the acquisitions of Connect, Adumo and Recharger. Together, these deals have created a broad footprint across the informal and SME sector, from spaza shops and township taverns to independent retailers and hospitality businesses.
Integration is continuing, with duplicated systems and brands being consolidated under the Lesaka name. Early signs are promising, as margins in the merchant division improved from 19% in the third quarter of 2025 to 23% in the most recent quarter.
The strategy is to give merchants a full package of services. These range from card machines that let them accept payments to software that helps run their businesses, loans for working capital, cash-handling solutions like smart safes — and even prepaid products such as airtime, electricity and gaming vouchers that they can resell to their customers. These would make Lesaka a one-stop partner rather than just a single-service provider. That stickiness improves unit economics, and the early signs of merchants taking up bundled products point to growing cross-sell momentum.
The consumer division has been the other engine of growth, with revenue up 35% and ebitda surging 83% to R435m. Here the pivot away from the old grant distribution model toward a holistic financial services proposition is bearing fruit. Amid Postbank’s troubles, Lesaka has picked up about 20% of migrating customers, lifting its share of permanent grant beneficiaries to 13.6%, up from 9% two years ago.
With about 90% of its 1.9-million customers still in the grant segment, Lesaka has ample scope for cross-selling. Already, 40% hold a lending product and 34% have insurance, and average revenue per user has climbed 23% in three years to R85 a month. The new loan product — larger ticket sizes and longer terms but under the same credit criteria — has pushed the lending book to just under R1bn, with stable loss ratios of about 6%, while insurance premiums grew 38%.
Integration is continuing, with duplicated systems and brands being consolidated under the Lesaka name
Distribution is also expanding, with 15 new branches and 50 branded service points planned. For investors, the stability of the grant base, combined with rising monetisation, provides visibility and resilience in what is often a volatile local credit environment.
The enterprise division is smaller but has been rebuilt into a focused growth platform. Revenue declined during 2025 as legacy units were shut down, but the fourth quarter already showed the benefits of the Recharger acquisition and new partnerships with banks and retailers. On a run-rate basis, management expects ebitda of more than R30m per quarter, which would take enterprise’s contribution north of 10% of group profits in 2026.
By linking more than 620 companies and service providers — or “billers” — to its digital payments platform, and expanding its utilities business through prepaid electricity meters, this arm of Lesaka is positioned to scale meaningfully. Importantly, the enterprise division offers high-margin, recurring revenue streams.
The biggest potential game-changer, however, is the pending acquisition of Bank Zero, a fully digital bank co-founded by former FNB executives, including Michael Jordaan and Yatin Narsai. The deal, largely settled in Lesaka shares and expected to close before June 2026, will let the group bring merchant and consumer balances onto its own books instead of paying steep sponsorship fees to partner banks. Tapping customer deposits will cut funding costs and free as much as R1bn to reduce gross debt.
The bank licence also opens the door for offering integrated banking services to merchants and consumers, deepening cross-sell potential and improving retention. Bank Zero’s modern, low-cost tech stack should further reduce friction and accelerate product innovation. The founders are staying on and joining Lesaka’s leadership team, reinforcing the strategic alignment and shared vision.
Lesaka still carries net debt of about R2.6bn, or 2.9 times trailing ebitda, but on an annualised fourth-quarter run rate the ratio is closer to 2.2, already near its medium-term target of two.
The company’s forecast of more than 460c a share in adjusted EPS for 2026 — double this year’s result and implying a forward earnings multiple of 16 — sets a demanding benchmark. But management’s confidence is underpinned by 12 consecutive quarters of meeting guidance. Still, execution risks remain, from integrating multiple acquisitions to scaling lending books prudently in a weak economy, while also navigating regulatory approvals for the Bank Zero acquisition.
For investors prepared to stomach some execution risk, Lesaka offers a high-beta play on the fast-moving digitalisation of South African commerce, spanning everything from township spaza shops to formal SMEs.
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