Welcome to Lesaka Technologies Results Webcast for the First Quarter of fiscal 2026. As a reminder, this webcast is being recorded. Management will address any questions you have at the end of the presentation. [Operator Instructions] Press release and investor presentation are available on our Investor Relations website at ir.lesakatech.com. During this call, we will be making forward-looking statements. Please note the cautionary language regarding the risks and uncertainties associated with forward-looking statements as contained in our press release, presentation, and Form 10-Q. As a domestic filer in the United States, we report results in U.S. dollars under U.S. GAAP. 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 Dan.

Good morning, good afternoon, and welcome to Lesaka's 2026 Quarter 1 Results Presentation. We have slightly changed our results presentation this quarter. I will begin today by addressing the financial performance for the group as well as for merchant, consumer, and enterprise. Lincoln will then take you through the key performance drivers for the divisions in more detail, and we will end with Ali taking you through the progress made against our strategy, unpacking our drivers of revenue and our quarter 2 guidance. Going forward, we intend to follow this format for quarter 1 and quarter 3 results, coupled with a more comprehensive update in quarters 2 and 4. You can find more details in our usual disclosures in our 10-Q submission to the SEC. This is available on our website. I'm pleased to report that we have met our guidance for the 13th consecutive quarter. Net revenue came in at the lower end of the range for Q1 at ZAR 1.53 billion, a 45% increase over last year. Group adjusted EBITDA landed at around the midpoint of the guidance range at ZAR 271 million, representing a 61% year-on-year growth. I'm happy to say that this quarter reflects an improvement in the quality of our earnings with limited accounting anomalies and nonrecurring items. Our adjusted earnings, which we believe is the most appropriate measure of our overall financial performance, has grown by 150% to ZAR 87 million for the quarter. On a per share basis, our adjusted earnings has effectively doubled, up from ZAR 0.54 to ZAR 1.7. Our net debt to adjusted EBITDA is 2.5x, an improvement from 2.6x from this time last year, but meaningfully improved from our previous quarter of 2.9x. As a reminder, we have maintained our medium-term target of 2x or less, which we deem…

Thank you, Dan. Good morning, and good afternoon to everyone on the call. We have changed our presentation slightly this quarter. And with Dan having taken you through the financial performance of the divisions, I will focus on the operational KPIs that drove that performance. As Dan mentioned, our Merchant division is undergoing transition, integrating businesses, unifying our brand and offering, streamlining costs and infrastructure, and operating under new leadership. The year-on-year increase in net revenue and segment adjusted EBITDA is largely due to Adumo, which wasn't included in the prior year's figures. Looking at our card acquiring, our TPV has more than doubled, reflecting the scale the Adumo acquisition has contributed to our business. We processed ZAR 9.2 billion this quarter, up from ZAR 4.2 billion last year. The number of our devices has grown from 53,500 to almost 88,000 at the end of the quarter. We are seeing continued success across our multiproduct customers who hold more than one solution. We are still in the early stage of evolving into a one unified merchant offering, but the trajectory of travel is positive. Conversely, we experienced moderately higher churn from small to medium single-product merchants. This is primarily driven by price sensitivity for these merchants. However, we saw no impact to the overall TPV process, reinforcing our strategy to build deeper relationships with our clients and evolve from a single product provider to a multiproduct solution partner. Moving over to cash TPV. We continue to see a declining cash usage trend in the small to medium merchant sector. Cash primacy in the micro merchant sector, however, remains. We have increased our cash vault in the micro merchant sector to 4,600. This partly offsets the reduction in cash experienced in the small to medium sector, resulting in a modest decrease…

Good morning and good afternoon to all of those joining us. Our progression towards -- on Lesaka is not merely about brand. It is a critical step of strategic initiatives designed to simplify and organize the business to unlock bottom-line growth, as well as helping facilitate the drivers of top-line growth, which I will touch on in a minute. From a cultural and brand perspective, bringing our divisions together toward a unified Lesaka is the next necessary step of this journey. We will refresh our corporate identity to staff in November, greatly improving not just the visual representation, but also the clear articulation of what Lesaka represents. We look forward to celebrating who we are and consolidating our marketing spend to maximize the impact. Having a single unified brand and culture will help facilitate our stated objective of building relationships with our customers rather than selling products, as well as aligning this with the representation we have to the market and to our employees. This effort extends to our physical footprint. On the office consolidation front, we have identified a new Johannesburg office. Our expectation is to have all divisions housed under one building by the fourth quarter of fiscal '26. We will also be consolidating our hubs in Cape Town and Durbin and reducing our overall lease footprint from over 40 locations to approximately 20 over the coming calendar year. Over time, this will reduce our occupancy cost, but more importantly, it will create a more efficient and integrated cross-functional organization. On our strategic initiatives, the Bank Zero acquisition continues to progress well with positive momentum. While we remain subject to the regulatory process, we are on track to close the acquisition as planned. We have no change to our expected timeline of completion by the end of FY…

Thank you, Dan and Lincoln. [Operator Instructions]. Operator, please, could you open for Ross Ker from Investec Securities?

So I've got 4 questions all on the Merchant segment. Maybe I'll just ask them one by one, if that's easier. Just on the sequential performance of the revenue line. So it looks like that declined quarter-on-quarter. So I'm just keen to unpack is there some seasonality in that? Is there a mix effect? Any color you could give would be useful.

All right. There is some seasonality in that. There is also some non-core business lines that we are closing out and exiting. So yes, there's both of those.

And then maybe if I can extend that to the margin as well. I mean, I suppose there's probably a similar answer, but any comments on the change in margin -- sequential change in margin?

Yes. That has an additional component, which is we did have some nonrecurring costs within the merchant business. And we made the election that we were not going to exclude these from the group adjusted EBITDA. We want to minimize any exclusions that we're providing. I think a closer representation of the run rate can be inferred from the guidance that we're providing for the next quarter. So if you -- the Adumo transaction clearly is incorporated, as I said in the presentation in the Q2 2025 numbers, and we're guiding the market to at the midpoint of the range, group adjusted EBITDA of north of 40% year-on-year. So you can get a better idea of underlying growth through that.

Then maybe I'll just ask these 2 questions in one. So firstly, just on the rationalization of infrastructure that you talked about. I mean, it might be too early to ask, but I don't know if you thought about what the impact on the cost base will be from any of those activities? And secondly, I guess, somewhat related, but in terms of the cross-sell, so clearly, there's a consolidation going on in terms of all the acquisitions done, including most recently at Adumo. So the first question is more on the cost side of that and where you end up. And secondly, then on the actual sort of cross-sell part of that, where I think you've talked in the past about being able to do that. It's still early days, but just curious if there's any milestones you think you've reached, if there's any data points that we should know about there?

Thanks. I'll start with the cross-sell question. I'll ask Dan to talk a little bit about the infrastructure rationalization. So on the cross-sell, as we sort of alluded to in the presentation, we're going to, from the next quarter, be providing the attachment rates 1, 2, 3, 4, 5 products for the merchant business as we've been doing in the consumer business, so that you can track the quarter-on-quarter evolution of that cross-sell. However, where we are today is that the vast majority of our merchants do have an attachment rate of more than one product. The largest 2 contributors of products to our EBITDA in the merchant business is merchant acquiring and ADP. And there is a high attachment rate for customers who have merchant acquiring to a second product already, the biggest one being ADP, but software is also a relevant attachment product. From next quarter, we'll be able to talk to the specificity of those numbers, but we do expect to materially increase that cross-sell over time. In terms of the rationalization, I mean, we have already spoken about the fact that we believe that there's quite a material operating leverage associated with our business as we scale, but I'll let Dan augment.

Thanks, Ali. Ross, just around the overall costs, I mean, in effect, we're bringing together 4 businesses under the umbrella of our overall merchant division. There's a whole bunch of duplication of functions on the one hand. And there's a misalignment as the individual businesses go to market with the customer propositions. So that's the unification we speak about of our merchant business. Within those operations, there will be some reengineering of platforms as we bring them together. As I said, there will also be the removal of a whole bunch of duplications of various functions touched on a simple example around our office rationalization in our Johannesburg region, we look to be in the second half of financial year, all under one roof. And later in the year, both in our Durban and our Cape Town areas as well. That will effectively enable us to move from 40-odd offices to roughly 20 as a group as a whole. So use that as a simple example within that rationalization, of course, there's an opportunity for significant cost savings. It's probably a little bit too early to give you some specific data points as to how much, but we do expect significant savings to emerge over the next -- over the short to medium term. And also, if I may just come back to the margin question on the merchant side. Ross, I will guide you -- we disclosed margin quarter-by-quarter. There is some seasonality, of course, and there's some mix effects around that. If one just looks through the overall margin trend within the merchant business, it oscillates anywhere from 19% to 25% across different quarters. So within each quarter, there are some different mix effects. But I do encourage you to look at it at a blended or smooth rolling basis rather than individual quarter-by-quarter.

Thank you, Dan. Ross, any additional questions? Okay. I think that means that we have answered all of Ross's questions. The next question I have is on the webcast. There are 2 questions that are similar from Prashendran at 361 and Jon at all Weather. Please can you take us through the Cell C potential IPO? Happy -- are you happy for it to list and get out? And what was the rationale to put the option in place that you have?

I'll start and then hand over to Dan as well on that. I mean, yes, I mean, I think we wish the company all the best, and we are very supportive of the planned IPO. The rationale to get out is the fact that as a business, we say we are simplifying our operations is not a core part of the Lesaka strategy. And so we'd much rather allocate that capital towards our core purpose. In terms of the specificity on the structure, Dan?

Yes. Thanks,. The only thing I'd add to that is we currently have a 5% stake in an existing Cell C business. As part of preparing it for its IPO, there's a variety of restructuring steps, both including injecting assets, airtime, and restructuring of debt, which will culminate ultimately in the conversion of a lot of that into equity to give Cell C a sustainable balance sheet. That restructuring will result in the dilution of our equity percentage stake. And so the business being listed is very different to the one currently constituted in which we have a 5% holding. To echo Ali's sentiment, we are absolutely delighted with a successful Cell C listing, and we have aligned our economics very much around that. The market will adjudicate what the appropriate fair value for Cell C is, and therefore, our implied stake. And we've got some optionality around that where we've secured a minimum value of ZAR 50 million for our stake should Cell C list this year, of course, with upside if our effective holding ends up being worth more than that.

Thank you, Dan. Thank you, Ali. The next caller on the conference line is Theo O'Neill from LHR Research.

I want to follow up on your first question about the merchant business margins. I believe you said that they range from 19% to 25%. And I'm wondering, when you think about margins for the merchant business, do you think about the overall number? Or do you think about the individual product margins, trying to stay within that range?

So it's -- thanks for the question, Theo. I mean the whole evolution of the business is around trying to build relationships with customers and having multiple products associated with those customers. So I very much think about it as a collective rather than the individual margins per product, partly because the way that a customer may be paying may not be the entirety of what they're buying. And there's different aspects of that. There's an ecosystem component to our merchant business. The way that I would think about the margins in that business, I think we have, in the past, given the reference that we believe that this business is a business in an aggregate, we should be able to trend the EBITDA margin to certainly north of 30%. And I think we are through the integration process on the way towards that evolution.

I have one more question here. On the consumer side, you've successfully grown share over the years despite increased competition. And I'm wondering how long is the runway for that?

I think that we've indicated before that we still see some runway in growing our business, taking more share from the Post Bank. As we mentioned earlier, our share is 14%, yet we're taking 20% of the customers coming out of the Post Bank. And we think that with the remaining customers, as they move, a larger percentage will come to us. Secondly, if you look at our penetization rates, it gives you an indication that there's still room for us to grow in that space, both in our lending and in our insurance. Thirdly, we've indicated that on the insurance side, we have room to sell our product to non-EPE customers. That's another opportunity to grow. But if you think of the optionality that comes with the Bank Zero acquisition, when that has been approved and consummated, it gives us an opportunity to see customers that are beyond the ground space. So when we think of our consumer business, we think of our consumer business in terms of that future that includes Bank Zero. So there's much more optionality for this business going forward.

And just to add to Lincoln's comment, part of the rationale, obviously, of the transaction is we believe that there's material complementarity between our distribution and the Bank Zero platform in being able to provide a very competitive offering in the open market. So we certainly don't feel like we're out of run rate. In fact, we feel like we're expanding that run rate.

We also have James Stark from RMB Morgan Stanley on the line. While we wait for James, let's move to the next call on the webcast Q&A. This one is from Jon at All Weather. Could you provide a comment on the recent ramp-up in fintech interest in South Africa, for example, Ekoka Optasia, and by other large traditional financial players?

I mean I think it's representative and endorsing of the strategy that we're engaging with. I think that while there has been an increase in the interest, I'd still say that the interest and the scale of the fintech ecosystem in the country is massively underweight relative to other geographies. So I certainly consider this to be the beginning of the evolution rather than in a particular spike. I believe that it benefits both us and it benefits the society for there to be greater innovation in the country. And frankly, I'm delighted to see successful businesses emerging in the ecosystem.

Thank you, Ali. James, do you want to try and ask your question again? Operator, could you please try and unmute James? He says that he's struggling to unmute. Okay. That's fine. Let's go on to the next question on the webcast Q&A. This one is from Sven Thorson at Anchor Securities. Combining the midpoint of your Q2 guidance and reported Q1 adjusted EBITDA equates to about ZAR 570 million, leaving ZAR 780 million to be realized in the last 2 quarters to achieve the midpoint of your full year guidance. This implies ZAR 390 million per quarter, which is a considerable leap on Q2, which is a busy period for the group. Please elaborate on how this will be achieved. Does the base still include significant restructuring costs?

I mean, so I think your maths are right. I would also say that as a business, this is the 13th consecutive quarter of achieving our EBITDA guidance, and we are reiterating our full-year EBITDA guidance. So we have a lot of conviction associated with the growth evolution of our EBITDA. I think we did mention that there were some nonrecurring costs that are embedded. Our run rate EBITDA at this juncture is closer to ZAR 300 million if you excluded those nonrecurring costs. And from that base, we are expecting to grow organically through the strategies that we've outlined in both the consumer, merchant, and enterprise business. And we're excited that effectively, we have the engine room that can achieve those growth rates.

Okay. Thank you, Ali. Those are all the questions we have for today. James, apologies that we couldn't get your question, but we'll contact you afterwards. If there are any other questions, please reach out to me. Thank you for attending our webcast today. Thank you, Ali. Thank you, Lincoln. Thank you, Dan.