Lesaka Technologies turns first profit since 2022 as earnings double estimates
South African fintech posts $0.08 EPS versus $0.04 expected, reaffirms full-year guidance for 49% adjusted EBITDA growth
Lesaka Technologies delivered its first quarterly net income since the company's creation in 2022, as the South African fintech provider reported Q2 FY2026 earnings that more than doubled analyst expectations. The company posted adjusted earnings per share of $0.08, beating consensus estimates of $0.04 by 100%, while revenue climbed to $178.7 million against Wall Street projections of $166.0 million.
The profitability milestone represents a significant turnaround for Lesaka, which trades on NASDAQ under the ticker LSAK with a market capitalization of approximately $395 million. Group Adjusted EBITDA surged 47% year-over-year to $17.8 million, reflecting operational improvements across the company's financial technology platforms serving South African consumers and businesses.
"This quarter marks an important inflection point for Lesaka as we achieve the midpoint of our profitability guidance," the company stated in its earnings release, emphasizing that the positive net income result validates its strategic transformation since formation in 2022. Lesaka's fiscal year ends in June, aligning with South African corporate reporting cycles.
Management reaffirmed full-year FY2026 guidance, projecting 49% adjusted EBITDA growth at the midpoint and sustained positive net income through the remainder of the fiscal year. The guidance consistency suggests confidence in the company's ability to maintain momentum despite ongoing macroeconomic challenges in South Africa, including elevated interest rates and currency volatility.
Shares of Lesaka, which have traded in a 52-week range of $3.39 to $5.20, currently carry an analyst target price of $8.00, implying significant upside from current levels around $4.56. The stock's forward price-to-earnings ratio stands at 17.61 times, while its price-to-sales ratio of 0.58 times suggests the market may not yet fully priced in the profitability acceleration.
Institutional investors own approximately 39.6% of Lesaka's shares, with insiders holding 24.9%, indicating relatively concentrated ownership that could support the stock as execution improves. The company's low beta of 0.46 suggests lower volatility relative to broader market indices, potentially appealing to risk-averse investors seeking exposure to African fintech growth.
Lesaka's transition to profitability comes at a time when investors have grown increasingly selective about fintech valuations, demanding clear paths to sustainable earnings rather than growth at any cost. The company's ability to deliver positive net income less than four years after formation positions it favorably relative to peers that have struggled to achieve similar milestones.
South Africa's financial services landscape presents significant opportunities for digital payment and banking solutions, given the country's relatively low banking penetration rates among underserved populations. Lesaka's technology platforms target these market segments, potentially providing a long-term growth runway as digital adoption accelerates across the continent.
Looking ahead, investors will focus on Lesaka's ability to maintain its adjusted EBITDA growth trajectory while expanding market share in South Africa's competitive fintech sector. The company's reaffirmed guidance provides near-term visibility, though execution risks remain given the challenging operating environment and potential regulatory changes affecting digital financial services in the region.