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Operating Segments | 9 Months Ended
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Mar. 31, 2025
Operating Segments [Abstract] |
Operating Segments | 18. Operating segments Operating segments The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in which the entity holds material assets or reports material revenues. Change to internal reporting structure and re cast of previously reported information The Company’s chief operating decision maker is the Company’s Executive Chairman. During the second quarter of fiscal 2025, he changed the Company’s operating and internal reporting structures to present a new segment, Enterprise, separately. The chief operating decision maker has decided to analyze the Company’s operating performance primarily based on three operational lines, namely, (i) Merchant, which focuses on both formal and informal sector merchants. Formal sector merchants are generally in urban areas, have higher revenues and have access to multiple service providers. Informal sector merchants, which are often sole proprietors and usually have lower revenues compared with formal section merchants, operate in rural areas or in informal urban areas and do not always have access to a full-suite of traditional banking products; (ii) Consumer, which primarily focuses on individuals who have historically been excluded from traditional financial services and to whom we offer transactional accounts (banking), insurance, lending (short-term loans), payments solutions (digital wallet) and various value-added services; and (iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobile network operators (“MNOs”) and municipalities, and, through Recharger, landlords utilizing Recharger’s prepaid electricity metering solution. Reallocation of certain activities among operating segments in Q2 2025 The change in our operating segments during the second quarter of fiscal 2025 included the separation of Enterprise out of Merchant. The Company has also allocated the majority of Adumo’s operations to Merchant, with a smaller part of its operations focusing on the provision of physical and digital prepaid and secure payout solutions for South African businesses with large individual end-users being allocated to Consumer. Previously reported information has been recast. The Merchant segment includes revenue generated from the sale of alternative digital payments (select prepaid solutions, supplier- enabled payments, international money transfer and other) and card-acquiring services to informal sector merchants. It also includes activities related to the provision of goods and services provided to corporate and other juristic entities. The Company earns fees from processing activities performed (including card acquiring and the provision of a payment gateway services) for its customers, and rental and license fees from the provision of point of sales (“POS”) hardware and software to the hospitality industry. The Company also provides cash management and payment services to merchant customers through a digital vault which is located at the customer’s premises and through which the Company is able to provide the services which generate processing fee revenue. From July 1, 2023, the segment includes fees earned from transactions performed by customers utilizing its ATM infrastructure. 18. Operating segments (continued) Reallocation of certain activities among operating segments (continued) The Consumer segment includes activities related to the provision of financial services to customers, including a bank account, loans and insurance products. The Company charges monthly administration fees for all bank accounts. Customers that have a bank account managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant POS. The Company earns processing fees from transactions processed for these customers. The Company also earns fees on transactions performed by other banks’ customers utilizing its ATM (until June 30, 2023) or POS. The Company provides short-term loans to customers in South Africa for which it earns initiation and monthly service fees, and interest revenue from the second quarter of fiscal 2025. The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthly insurance premium. The Company also earns fees from the provision of physical and digital prepaid and secure payout solutions for South African businesses. The Enterprise segment provides its business and government-related customers with transaction processing services that involve the collection, transmittal and retrieval of all transaction data. Through Recharger, Enterprise offers landlords access to Recharger’s prepaid electricity metering solution through which Enterprise earns commission revenue from prepaid electricity voucher sales to tenants recharging prepaid meters. This segment also includes sales of hardware and licenses to customers. Hardware includes the sale of POS devices, SIM cards and other consumables which can occur on an ad hoc basis. Licenses include the right to use certain technology developed by the Company. The reconciliation of the reportable segment’s revenue to revenue from external customers for the three months ended March 31, 2025 and 2024, is as follows: Revenue Reportable Segment Inter- segment From external customers As restated (A) As restated (A) Merchant (as restated) (A) $ 128,781 $ 564 $ 128,217 Consumer 24,096 - 24,096 Enterprise 9,444 307 9,137 Total for the three months ended March 31, 2025 (as restated) (A) $ 162,321 $ 871 $ 161,450 Merchant $ 111,801 $ 954 $ 110,847 Consumer 17,904 - 17,904 Enterprise 11,322 1,879 9,443 Total for the three months ended March 31, 2024 $ 141,027 2,833 138,194 (A) Revenue during the three months ended March 31, 2025 has been restated to correct the misstatement of $ 25.8 million as discussed in Note 1. The reconciliation of the reportable segment’s revenue to revenue from external customers for the nine months ended March 31, 2025 and 2024, is as follows: Revenue Reportable Segment Inter- segment From external customers (As restated) (A) (As restated) (A) Merchant (as restated) (A) $ 397,642 $ 1,746 $ 395,896 Consumer 68,097 - 68,097 Enterprise (A) 30,259 3,018 27,241 Total for the nine months ended March 31, 2025 (as restated) $ 495,998 $ 4,764 $ 491,234 Merchant $ 341,044 $ 2,566 $ 338,478 Consumer 50,191 - 50,191 Enterprise 32,710 3,203 29,507 Total for the nine months ended March 31, 2024 $ 423,945 $ 5,769 $ 418,176 18. Operating segments (continued) (A) Revenue during the nine months ended March 31, 2025 has been restated to correct the misstatement of $ 63.2 million as discussed in Note 1. The Company 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”), the Company’s reportable segments’ measure of profit or loss. The Company is working on obtaining a separate lending facility to fund a portion of its Consumer lending during the twelve months ended June 30, 2025. The Company has included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for the three and nine months ended March 31, 2025. The Company does not allocate once-off items, 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 securities), interest income, certain interest expense, income tax expense or loss from equity-accounted investments to its reportable segments. Group costs generally include: employee related costs in relation to employees specifically hired for group roles and 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 officer’s insurance premiums. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. Unrealized loss FV for currency adjustments represents foreign currency mark-to-market adjustments on certain intercompany accounts. Interest adjustment represents the intercompany interest expense included in the Consumer Segment Adjusted EBITDA. The Stock-based compensation adjustments reflect stock-based compensation expense and are excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to the Company’s loss before income tax expense. Effective from fiscal 2025, all lease charges are allocated to the Company’s operating segments, whereas in fiscal 2024 the Company presented certain lease charges on a separate line outside of its operating segments. Prior period information has been re-presented to include the lease charges which were previously reported on a separate line in the Company’s Consumer and Merchant (now Merchant, Enterprise and Consumer) operating segments. The reconciliation of the reportable segments’ measure of profit or loss to loss before income taxes for the three and nine months ended March 31, 2025 and 2024, is as follows: Three months ended Nine months ended March 31, March 31, 2025 2024 2025 2024 Reportable segments' measure of profit or loss $ 14,569 $ 11,902 $ 41,511 $ 32,710 Operating loss: Group costs (1,772) (2,199) (7,541) (6,032) Once-off costs (2,306) (907) (4,599) (169) Interest adjustment 890 - 2,478 - Unrealized Gain (Loss) FV for currency adjustments 114 (121) (102) (101) Stock-based compensation charge adjustments (2,497) (2,090) (7,518) (5,653) Depreciation and amortization (8,429) (5,791) (22,928) (17,460) Loss on disposal of equity-accounted investments - - (161) - Change in fair value of equity securities (20,421) - (54,152) - Reversal of allowance of EMI doubtful debt - - - 250 Interest income 645 628 1,952 1,562 Interest expense (5,777) (4,581) (16,983) (14,312) Loss before income tax expense $ (24,984) $ (3,159) $ (68,043) $ (9,205) 18. Operating segments (continued) Operating segments (continued) The following tables summarize supplemental segment information for the three and nine months ended March 31, 2025 and 2024: Three months ended Nine months ended March 31, March 31, 2025 2024 2025 2024 As Restated (A) As Restated (A) Revenues Merchant (as restated) (A) $ 128,781 $ 111,801 $ 397,642 $ 341,044 Consumer 24,096 17,904 68,097 50,191 Enterprise 9,444 11,322 30,259 32,710 Total reportable segment revenue (as restated) (A) 162,321 141,027 495,998 423,945 Segment Adjusted EBITDA Merchant (1)(2) 8,103 7,420 25,976 21,827 Consumer (1)(2) 6,333 3,757 15,071 8,452 Enterprise (2) 133 725 464 2,431 Total Segment Adjusted EBITDA 14,569 11,902 41,511 32,710 Depreciation and amortization Merchant 3,111 1,957 8,365 5,861 Consumer 255 179 692 527 Enterprise 89 93 283 308 Subtotal: Operating segments 3,455 2,229 9,340 6,696 Group costs 4,974 3,562 13,588 10,764 Total 8,429 5,791 22,928 17,460 Expenditures for long-lived assets Merchant 2,686 2,802 12,355 7,538 Consumer 120 146 688 312 Enterprise 11 (5) 57 100 Subtotal: Operating segments 2,817 2,943 13,100 7,950 Group costs - - - - Total $ 2,817 $ 2,943 $ 13,100 $ 7,950 (A) Revenue during the three and nine months ended March 31, 2025, have been restated by $ 25.8 million and $ 63.2 million, respectively, to correct the misstatements discussed in Note 1. (1) Segment Adjusted EBITDA for the three months ended March 31, 2025, includes retrenchment and reorganization costs for Merchant of $ 0.7 million (ZAR 12.9 million) and Enterprise of $ 0.3 million (ZAR 5.4 million). Segment Adjusted EBITDA for Consumer includes retrenchment costs of $ 0.01 million (ZAR 0.1 million) for the three months ended March 31, 2024. (2) Segment Adjusted EBITDA for the nine months ended March 31, 2025, includes retrenchment and reorganization costs for Merchant of $ 0.7 million (ZAR 12.9 million), Consumer of $ 0.1 million (ZAR 1.5 million) and Enterprise of $ 0.3 million (ZAR 5.6 million). Segment Adjusted EBITDA for Merchant includes retrenchment costs of $ 0.2 million (ZAR 4.7 million) and Consumer includes retrenchment costs of $ 0.2 million (ZAR 2.9 million) for the nine months ended March 31, 2024. The segment information as reviewed by the chief operating decision maker does not include a measure of segment assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does not have dedicated assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented.

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- Definition The entire disclosure for reporting segments including data and tables. 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