Welcome to Lesaka Technologies' results webcast for the second quarter of fiscal 2026. As a reminder, this webcast is being recorded. [Operator Instructions] Our 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. And I ask you to look at the cautionary language contained in our press release, presentation, and Form 10-Q available on our website. As a domestic filer in the United States, we report results in U.S. dollars and under U.S. GAAP. However, 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 a non-GAAP measure. This assists investors in understanding the underlying trends in our business. I will now turn the webcast over to Ali.

Good morning and good afternoon. Thank you for joining us for Lesaka's Q2 and half year results presentation. The first half of the year represents meaningful progress in executing our strategy in building the leading independent fintech in Southern Africa. Dan will address our financial performance shortly. In addition to the numbers, 2 strategic milestones during Q2 are worth calling out. First, we received Competition Tribunal approval for the combination with Bank Zero. This is a significant step forward. We continue to engage with South Africa's Prudential Authority regarding their approval process. Second, we announced and commenced the consolidation of all our operating brands under a single One Lesaka. Lesaka is a fintech business, but human connection is at the center of what we do. We operate where our customers work, live and trade. We design solutions alongside them, not at a distance. That philosophy is captured in our promise, where you are, we are. The launch of One Lesaka marks a new chapter for the group. It moves us beyond the collection of individual brands to a single strong challenger brand, combining digital capabilities with physical presence by reaching consumers and merchants where others do not. Our new visual identity reflects this. It embodies the essence of a company built on connection, movement and progress. The logo is inspired by a footprint, symbolizing presence, partnership and purpose. It represents a business that is human, grounded, African and leading its mark. This is a material evolution in how we position, operate and scale the business. And I'd like to show a new brand video that represents this. [Presentation]

Our purpose is clear: to provide financial services and software to underserved consumers and merchants across Southern Africa. This is more than a rebrand and is embodied in a representative set of values we launched to our employees last month, integrity, collective wisdom, entrepreneurial drive, ownership, bias to action, resilience, empathy, customer first, efficiency and meritocracy. One Lesaka is a commitment, one platform, one brand and one shared mission, expanding financial access through technology delivered with a human touch. Aligned with our One Lesaka strategy, in June, we will consolidate multiple Gauteng offices into a single location in Johannesburg. This will deliver cost efficiencies over time, but more importantly, cultural efficiencies, enabling closer collaboration, faster decision-making and stronger integration across teams. We are also making progress consolidating our offices in Cape Town and Durban. Lesaka employs approximately 3,750 people across Southern Africa. Technology underpins our platform. Within the markets we serve, distribution is a key differentiator. Close to half our workforce are focused on growing Lesaka's footprint through sales and marketing. A further 23% focused on servicing and operations, engaging directly with customers and merchants every day. Last mile reach matters. And our teams operate daily at our clients' workplaces in townships and rural communities, delivering financial services on the ground to the underserved. At the same time, continued innovation is essential. Around 20% of our employees are in technical roles, building platforms, developing products and supporting our frontline teams. We also benefit from a young, energetic workforce with roughly 60% under the age of 40 with a demographic and gender mix reflective of our society. We continue to simplify the group and ensure capital is deployed where it delivers the greatest return. During the period, we exited our Cell C stake, receiving ZAR 50 million. We also successfully concluded…

Thank you, Ali. Good morning, and good afternoon to everyone joining us today. I'm pleased to report that we have delivered on our guidance for the 14th consecutive quarter, underscoring the consistency of our operational execution and the resilience of our diversified business model. Net revenue for Q2 was within our guidance range, reaching ZAR 1.6 billion, a 16% year-on-year increase. Group adjusted EBITDA came in at ZAR 304 million, landing at just above the midpoint of our guidance and reflecting a robust 47% year-on-year increase. Our earnings profile is now approaching like-for-like comparability with the contribution from our Recharger acquisition being the only item not reflected in last year's base. Adjusted earnings, which we regard as the most appropriate indicator of our underlying performance, grew more than sixfold to ZAR 111 million for the quarter. Similarly, on a per share basis, our adjusted earnings has grown from ZAR 0.21 to ZAR 1.34, a very pleasing result that demonstrates the accretive impact of our acquisitions over time and ability to integrate and improve operational performance. Our leverage ratio stands at 2.5x, flat on last quarter and significantly down from the 2.9x at year-end. As a reminder, our medium-term target remains 2x or lower, which we believe is appropriate given our current structure. You will also see that we have received Competition Tribunal approval for the Bank Zero transaction, which will deliver meaningful funding and balance sheet benefits once integrated into the group. Net revenue as a whole came in at ZAR 1.6 billion, up 16% on the previous year. Our Merchant division net revenue pulled back 2%, primarily due to our refocusing of the merchant distribution force on clients with a high potential for cross-sell and integration as well as ongoing pricing pressure in the market. As mentioned in previous…

Thank you, Dan. Good morning, and good afternoon, everyone, on the call. I'll begin with the Merchant division. As Dan mentioned, the division is in the midst of a significant transformation. We are integrating our businesses, unifying our brand and offering, streamlining cost and infrastructure and operating under a new leadership team. While this is a period of meaningful change, I'm encouraged by the energy across our teams and by the early benefits we're seeing from the restructure. Before turning to performance, there are 2 terminology updates to note. What we previously referred to as micro merchants, largely serviced through Kazang in the informal market are now called Community Merchants. In the future, Community Merchants will also include sole proprietors and micro merchants such as hairdressers, food vans and other owner-operated establishments. The formal sector historically serviced by Adumo, GAAP, and Connect is now referred to as corporate merchants and will be geared to serving medium and large businesses with a focus on hospitality, fuel and retail. This more closely aligns to customer needs in terms of product and distribution focus. This quarter also marks the first like-for-like comparison for the Merchant division in several quarters. As Ali mentioned, we have standardized how we present merchants. We now show a single overall active merchant base, a single aggregated ARPU and a single product penetration metric. This reflects how the division is managed operationally, particularly as we evolve into One Lesaka, as Ali referred to in his opening remarks. Active merchants increased 8% year-on-year to just over 130,000 merchants. We have moved away from reporting points of presence and now focus on active merchants, which better reflect revenue generation engagements and our monetization strategy. For clarity, an active merchant is defined as a merchant who has made at least one customer-initiated…

Thank you, Lincoln. Turning to our third quarter guidance. For net revenue, we are providing a range of ZAR 1.65 billion to ZAR 1.8 billion, the midpoint implying a growth rate of circa 27%. Group adjusted EBITDA is expected to be between ZAR 300 million and ZAR 340 million, with the midpoint implying growth of circa 37%. For the full year guidance, we are pleased to reaffirm our net revenue range of ZAR 6.4 billion to ZAR 6.9 billion and ZAR 1.25 billion to ZAR 1.45 billion for group adjusted EBITDA. As a reminder, these exclude any impact from Bank Zero should the acquisition complete in this financial year. Group adjusted EBITDA includes all costs associated with office moves, but excludes potential once-off marketing costs associated with the new brand launch. These imply growth rates of 21% to 30% in net revenue and 36% to 57% in group adjusted EBITDA. We are excited about the second half of the year and the earnings momentum we expect to take into FY 2027. Thank you for attending our earnings presentation. We will now address any questions you have for the team.

Thank you, Ali, Dan and Lincoln. Chorus Call, please could you open the line for Theodore O'Neill from Litchfield Hills Research.

Theodore O'Neill's line is now open.

I have a question about the Consumer segment. In the 10-Q, you cited an increase in transaction fees, insurance premiums and lending revenue for the year-over-year growth. Is the increase in transaction fees an annual event? And on the insurance and lending, I want to understand the growth there. Is this an underserved market or do you have to take share from competitors?

I think Lincoln, I'll let you answer that.

Thanks, Theo. Yes, we do review our transaction fees on an annual basis and some of those increases are there given on an annual basis. But I think what's important to understand is that on the transaction side, we are taking market share from an existing competitor, largely the PostBank and from other banks. We are growing net additions customers more than our competitors, and that gives us the edge. When it comes to loans and insurance, these customers are underserved. Many of them do not have any formal institutions that are able to provide them with loans or provide them with insurance. On the loan side, many of these customers are being given loans by unscrupulous and unregulated micro lenders. We are able then to give them loans that are fair, transparent and they're able to afford and hence, the growth in that loan portfolio. Insurance, there are other competitors, but I think that they are not as penetrated in this market as we've got now.

Chorus Call, please, can you open the line for Ross Krige from Investec.

Ross, your line is now open.

I have 5 questions. I'll just ask the 3 on Merchant first and then pause for you to answer. So just on Merchant, the decline in ARPU, if you could just -- I think Lincoln mentioned a few of the drivers. Just in terms of the run rate going forward, how much of the impact is still going to come through there? Like how do you see ARPU trending, I guess, over the next 6 to 12 months? Then, in terms of the cross-sell in Merchant and the decline over the last year in product penetration. Just wondering, is that a timing issue? When do you expect that to start moving the other direction? And then thirdly, on Merchant, just the acquiring cross-sell, which pretty show the impact on ARPU. Just wondering, is that sort of a key opportunity in the short term? And I wonder if you would comment on where you see that penetration going across the different parts of the business.

Thanks a lot, Ross. Okay. So firstly, on the ARPU, the principal driver is ADP, and as Lincoln said, airtime within that dynamic. How do we see it? I think that we expect that ARPU to stabilize and then ultimately increase over the coming 12 months. And the driver of that increase is not individual product's ARPU, because remember, that ARPU is a composite of the 5. It's effectively as a consequence of the collective. In terms of cross-sell. So the product penetration rate is a percentage. So the number of customers who have more than one product or more than 2 products has not declined year-on-year. It's increased marginally. But the main driver of active merchant growth has been through the ADP product in the community segment. And there, the strategy is a land and expand one. We hope to ultimately be cross-selling additional products into that base, notably, as you mentioned, acquiring. And yes, acquiring is a core cross-sell offering in both the community and the corporate segment. The most common attachment rate is ADP and acquiring in community and software and acquiring in the corporate segment. It's one of the sort of principal areas of focus in that respect and one where we believe we have a moat that enables the ARPU to be sustained. Does that answer those questions?

On the -- sorry, 2 more, just one on Consumer, one on general. On Consumer, the lending growth or originations is obviously picking up quite a bit. If you could just maybe talk to some of the drivers behind that. And then again, if we think about the outlook over the next year, is that a lever that you expect to continue or an opportunity that you expect to continue to execute on? Like what sort of growth rates and originations should we think of going forward? And then on the marketing costs related to one brand that you mentioned would be excluded from adjusted EBITDA. I don't know if you could talk -- give us an idea on the level of that.

Sure. So on Consumer lending, I'll go to Lincoln.

I think one of the important things that we highlighted a couple of quarters back was we had made a change in the loan sizes that we were given to our clients based on the certain engagements with the clients. So we increased the loan size from ZAR 2,000 to ZAR 4,000. And we also increased the tenure from 6 months to 9 months. That we call the medium-term loan. That has been so well received by the market to a point where 40% of the originations that we've got in this quarter come from this medium-term loan. And we see opportunities for more growth in this medium-term loan. The second thing that is also interesting is the investment we made in our digital channel, the USSD channels that enables people not to come to a branch, but be able in the comfort of their home or workplace to make a loan application. 8% of our new loans in this quarter are originated from that USSD channel. We see that as another potential for growth. When we look at the quality of the book and the quality of the lending that we're doing, we must remember that 78% of the originations are to repeat borrowers. These are customers that we know and understand. And 80% of those clients have been with us for over 2 years. And that gives us a very good insight from a credit risk perspective and also gives us better understanding of the repayment capabilities and behavior of the clients. So we do see opportunities for these clients to grow with us and then new clients that we are taking on board as we grow our customer base on the EPE side to also take on lending with us.

And then maybe on the marketing question, Dan, do you want to go first?

Yes. So specifically rebrand costs, we estimate them for the next 2 quarters, somewhere between ZAR 50 million and ZAR 75 million.

Lincoln, thanks for that explanation. Just if I can follow up on the rate of growth going forward, what should we expect?

I think that I would see the same level of growth because we are still at an early stage of the evolution of this loan product. As I say, 40% are taking up this. We think that the larger group will take that in the near term. So there's more upside going forward. And as the book also is well managed and the book is behaving well, we think that there's good prospects for more lending in this market in the future.

I'm going to move to the questions from the webcast now. What is the rand amount of deposits estimated to be transferred to Bank Zero in terms of current Lesaka customers once the merger is complete?

Thanks. I'm not sure where the question was from...

From [ Johan Baes ].

Okay. Thanks, Johan, for your question. So we stated that we expect as a consequence of the Bank Zero acquisition that we would be reducing the gross debt of the business by north of ZAR 1 billion. I would say that, that is the lower bound of that. As a consequence of that, you should expect, obviously, that the deposit base in the business would be substantively more. I wouldn't wish to provide a specific number at this stage, though.

Thank you, Ali, Lincoln and Dan. Thank you, everyone. We are going to wrap it up here. As a reminder, there will be a replay of the webcast on the Lesaka investor website. The IR team will reach out to anyone with unanswered questions. Thank you, everyone, for your participation.