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Operating Segments | 6 Months Ended
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Dec. 31, 2024
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. 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. Reallocation of certain activities among operating segments 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 prepaid airtime, and fees earned from the provision of value- added services (“VAS”) 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. 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 December 31, 2024 and 2023, is as follows: Revenue Reportable Segment Inter- segment From external customers (As restated) (A) (As restated) (A) Merchant (as restated) (A) $ 145,209 $ 594 $ 144,615 Consumer 22,929 - 22,929 Enterprise 8,933 261 8,672 Total for the three months ended December 31, 2024 (as restated) (A) $ 177,071 $ 855 $ 176,216 Merchant $ 117,182 $ 914 $ 116,268 Consumer 16,707 - 16,707 Enterprise 11,921 1,003 10,918 Total for the three months ended December 31, 2023 $ 145,810 1,917 143,893 (A) Revenue has been restated for the three months ended December 31, 2024 to correct the misstatement of $ 29.4 million as discussed in Note 1. The reconciliation of the reportable segment’s revenue to revenue from external customers for the six months ended December 31, 2024 and 2023, is as follows: Revenue Reportable Segment Inter- segment From external customers (As restated) (A) (As restated) (A) Merchant (as restated) (A) $ 268,861 $ 1,182 $ 267,679 Consumer 44,001 - 44,001 Enterprise 20,815 2,711 18,104 Total for the six months ended December 31, 2024 (as restated) (A) $ 333,677 $ 3,893 $ 329,784 Merchant $ 229,243 $ 1,612 $ 227,631 Consumer 32,287 - 32,287 Enterprise 21,388 1,324 20,064 Total for the six months ended December 31, 2023 $ 282,918 $ 2,936 $ 279,982 ( A) Revenue has been restated for the six months ended December 31, 2024 to correct the misstatement of $ 37.4 million as discussed in Note 1. 18. Operating segments (continued) 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 expected to have this facility in place on July 1, 2024, however, the Company has been unable to finalize terms as the separate lending facility will form part of a broader refinancing of the Company’s facilities. Therefore, the Company has included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for the three and six months ended December 31, 2024. 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 six months ended December 31, 2024 and 2023, is as follows: Three months ended Six months ended December 31, December 31, 2024 2023 2024 2023 Reportable segments' measure of profit or loss $ 14,630 $ 10,963 $ 26,942 $ 20,808 Operating loss: Group costs (2,820) (2,011) (5,769) (3,833) Once-off costs (488) 816 (2,293) 738 Interest adjustment 757 - 1,588 - Unrealized Loss FV for currency adjustments (435) 122 (216) 20 Stock-based compensation charge adjustments (2,644) (1,804) (5,021) (3,563) Depreciation and amortization (8,223) (5,813) (14,499) (11,669) Loss on disposal of equity-accounted investments (161) - (161) - Change in fair value of equity securities (33,731) - (33,731) - Reversal of allowance of EMI doubtful debt - - - 250 Interest income 721 485 1,307 934 Interest expense (6,174) (4,822) (11,206) (9,731) Loss before income tax expense $ (38,568) $ (2,064) $ (43,059) $ (6,046) 18. Operating segments (continued) Operating segments (continued) The following tables summarize supplemental segment information for the three and six months ended December 31, 2024 and 2023: Three months ended Six months ended December 31, December 31, 2024 2023 2024 2023 (As restated) (A) (As restated) (A) Revenues Merchant (as restated) (A) $ 145,209 $ 117,182 $ 268,861 $ 229,243 Enterprise 8,933 11,921 20,815 21,388 Consumer 22,929 16,707 44,001 32,287 Total reportable segment revenue (as restated) (A) 177,071 145,810 333,677 282,918 Segment Adjusted EBITDA Merchant (1)(2) 10,319 7,497 17,873 14,407 Enterprise (2) (31) 891 331 1,706 Consumer (1)(2) 4,342 2,575 8,738 4,695 Total Segment Adjusted EBITDA 14,630 10,963 26,942 20,808 Depreciation and amortization Merchant 3,027 1,944 5,254 3,904 Enterprise 94 97 194 215 Consumer 235 179 437 348 Subtotal: Operating segments 3,356 2,220 5,885 4,467 Group costs 4,867 3,593 8,614 7,202 Total 8,223 5,813 14,499 11,669 Expenditures for long-lived assets Merchant 5,783 2,052 9,669 4,736 Enterprise 24 26 46 105 Consumer 511 120 568 166 Subtotal: Operating segments 6,318 2,198 10,283 5,007 Group costs - - - - Total $ 6,318 $ 2,198 $ 10,283 $ 5,007 (A) Revenue during the three and six months ended December 31, 2024, have been restated by $ 29.4 million and $ 37.4 million, respectively, to correct the misstatements discussed in Note 1. (1) Segment Adjusted EBITDA for the three months ended December 31, 2024, includes retrenchments costs for Consumer of $ 0.01 million (ZAR 0.1 million). Segment Adjusted EBITDA for Merchant includes retrenchment costs of $ 0.01 million (ZAR 0.1 million) and Consumer includes retrenchment costs of $ 0.1 million (ZAR 1.3 million) for the three months ended December 31, 2023. (2) Segment Adjusted EBITDA for the six months ended December 31, 2024, includes retrenchments costs for Consumer of $ 0.1 million (ZAR 1.2 million) and Enterprise of $ 0.0 million (ZAR 0.2 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 2.8 million) for the six months ended December 31, 2023. 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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