For most of the last decade, SA JSE- and NASDAQ-listed FinTech Lesaka Technologies (formerly Net1) has been in turnaround mode. Not the flashy kind. The slow, uncomfortable kind where businesses are sold, strategies are reset and credibility has to be rebuilt piece by piece.

That process reached a real milestone when Lesaka reported positive net income for the first time since its 2022 relaunch (and while it’s still negotiating the Bank Zero purchase), closing the second quarter of its 2026 financial year with a R61 million profit after years of losses.

That didn’t happen because of a sudden growth spurt. It happened because the company stopped doing the things that never made sense in the first place.

Lesaka’s current form only makes sense if you understand where it came from.

The business emerged from Net1, a payments and services group that grew quickly by combining fintech software with hardware-heavy distribution: POS devices, SIM cards, airtime and physical servicing networks. That model scaled revenue, but it was expensive, margin-thin, and operationally messy.

When Lincoln Mali took over, the priority wasn’t growth. It was survival and simplification.

Over the past few years, Lesaka steadily exited or wound down: hardware sales, SIM card distribution and POS repair and logistics-heavy operations.

Those businesses created revenue, but very little profit. Worse, they consumed management attention and working capital.

In this quarter’s results, revenue declined by about 3% to R3.06 billion. On paper, that looks like stagnation.

Underneath, the picture changed completely: Net revenue increased 16%, operating income tripled to R37 million and cash burn stopped.

This is the classic trade-off between scale for appearance and margin for sustainability. Lesaka chose margin.

By stripping out low-quality revenue, the remaining business finally began to behave like a fintech platform rather than a distribution conglomerate.

While much of the public conversation focuses on merchant payments, Lesaka’s consumer division is doing the heavy lifting.

Revenue in this segment grew 38%, with EBITDA up more than 100%. Lesaka now serves over 2 million active consumers, mainly grant beneficiaries and underserved users, with market share rising to 14.3%.

That puts it firmly behind only Capitec in this niche.

The key shift is cross-selling. Lesaka is no longer just processing payments. It’s layering: accounts, short-term lending and insurance for end-users.

Lending originations crossed R1 billion in a single quarter for the first time. These are customers that traditional banks still struggle to score or serve efficiently.

The merchant division tells a different story.

Revenue fell 13% year-on-year, largely due to margin compression in airtime and acquisitions. Volumes are growing, but pricing power isn’t. This is where the Adumo acquisition comes in. Lesaka now has multiple legacy merchant brands (Kazang, Connect, Adumo) being consolidated under a single operating model.

Management has been clear: this phase will take time. Expect flat performance before improvement. The work here is integration, not acceleration.

The most important move is still pending.

Lesaka is waiting on final approval to acquire Bank Zero. This isn’t about branding or product expansion. It’s about the cost of capital.

Today, Lesaka funds lending by borrowing from commercial banks. That’s expensive. Owning a bank allows it to fund loans using materially cheaper customer deposits.

That single change widens lending margins across both the consumer and merchant books without raising prices. It’s vertical integration that improves unit economics immediately.

Lesaka didn’t find a clever growth hack. It did three unglamorous things well: It exited businesses that looked big but performed badly, focused on customers it already understood deeply and improved margins before chasing scale.

Fourteen consecutive quarters of meeting guidance isn’t exciting. But in fintech, consistency is usually the precursor to scale.