Operating Segments

6 Months Ended

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

Merchant

$

115,811

$

594

$

115,217

Consumer

22,929

-

22,929

Enterprise

8,933

261

8,672

Total for the three months ended December 31, 2024

$

147,673

$

855

$

146,818

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

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

Merchant

$

231,441

$

1,182

$

230,259

Consumer

44,001

-

44,001

Enterprise

20,815

2,711

18,104

Total for the six months ended December 31, 2024

$

296,257

$

3,893

$

292,364

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

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

Revenues

Merchant

$

115,811

$

117,182

$

231,441

$

229,243

Enterprise

8,933

11,921

20,815

21,388

Consumer

22,929

16,707

44,001

32,287

Total reportable segment revenue

147,673

145,810

296,257

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

(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.