LESAKA TECHNOLOGIES INCLSAK
LESAKA TECHNOLOGIES INC Goodwill & Intangibles Disclosure
10. GOODWILL AND INTANGIBLE ASSETS, net
Goodwill
Summarized below is the movement in the carrying value of goodwill for the years ended June 30, 2025, 2024 and 2023:
Gross value
Accumulated
impairment
Carrying value
Balance as of July 1, 2022
$
175,476
$
(12,819)
$
162,657
Impairment loss
-
(7,039)
(7,039)
Foreign currency adjustment
(1)
(22,857)
982
(21,875)
Balance as of June 30, 2023
152,619
(18,876)
133,743
Foreign currency adjustment
(1)
5,280
(472)
4,808
Balance as of June 30, 2024
157,899
(19,348)
138,551
Impairment loss
-
(17,041)
(17,041)
Acquisitions (Note 3)
(2)
76,114
-
76,114
Foreign currency adjustment
(1)
2,096
(325)
1,771
Balance as of June 30, 2025
$
236,109
$
(36,714)
$
199,395
(1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand against the U.S.
dollar on the carrying value.
(2) – Represents goodwill arising from the acquisition of Adumo, Recharger, IVAS Namibia and Master Fuel and translated at
the foreign exchange rates applicable on the date the transactions became effective. This goodwill has been allocated to the Merchant
(a portion Adumo, IVAS Namibia and Master Fuel), Consumer (a portion of Adumo) and Enterprise (Recharger) reportable operating
segments.
Goodwill associated with the acquisitions represents the excess of cost over the fair value of net assets acquired. Goodwill arising
from these acquisitions is not deductible for tax purposes. See Note 3 for the allocation of the purchase price to the fair value of
acquired net assets.
10. GOODWILL AND INTANGIBLE ASSETS, net (continued)
Goodwill (continued)
Impairment loss
The Company assesses the carrying value of goodwill for impairment annually, or more frequently, whenever events occur and
circumstances change indicating potential impairment. The Company performs its annual impairment test as at June 30 of each year.
The Company did not perform a qualitative assessment during the years ended June 30, 2025, 2024 or 2023, respectively. Except as
discussed below, no goodwill has been impaired during the years ended June 30, 2025, 2024 and 2023, respectively.
In order to determine the amount of the goodwill impairments, the estimated fair value of our reporting units’ business assets and
liabilities were compared to the carrying value of their assets and liabilities. The Company used a discounted cash flow model in order
to determine the fair value of the businesses (this is a Level-3 fair value measurement). Based on this analysis, the Company determined
that the carrying value of the reporting units’ business assets and liabilities exceeded their fair value at the reporting date.
In determining the fair value of the reporting units, the Company considered key judgements related to the reporting units’
revenue growth rates, weighted-average cost of capital (“WACC”) applicable to peer and industry comparables of the reporting units,
and the forecast periods used. The Company may record an impairment loss in future if actual growth rates are lower than those
included in the Company’s discounted cash flow model. Furthermore, use of a higher weighted-average cost of capital may also result
in an impairment loss in the future.
Year ended June 30, 2025 goodwill impairment loss
The Company recognized an impairment loss of $
17.0
allocated to its Connect Cash and Adumo Technologies reporting units within its Merchant segment, its Adumo Payouts reporting unit
within Consumer segment and its EasyPay reporting unit within its Enterprise segment. The impairments are included within the
caption impairment loss in the consolidated statement of operations for the year ended June 30, 2025.
At June 30, 2024, the fair value of the Connect Cash reporting unit exceeded its carrying value by
11
%.The impairment loss in
the Connect Cash reporting unit resulted from a reassessment of the business’ growth prospects in the context of its strategic market
positioning, optimized capital expenditures and increase WACC over prior years.
The impairment loss in the Adumo Technologies reporting unit resulted from a reassessment of the business’ growth prospects,
a strategic decision to exit low return and sub-optimal merchants’ contracts.
The impairment loss in the Adumo Payouts reporting unit resulted from a reassessment of the business’ growth prospects of the
reporting unit with lower revenue and therefore lower free cash flow generation expected compared to when performing the purchase
price allocation.
Easypay was acquired in fiscal 2006. At June 30, 2024, the fair value of the EasyPay reporting unit exceeded is carrying value
by
318
%. The impairment loss in the EasyPay reporting unit during the year ended June 30, 2025, resulted from a reassessment of the
business’ growth and the expected impact on its future cash flows as a result the cash outflows expected from initiatives to modernize
its existing technology platform to retain and expand its product offering and customer base.
The fair value of the ISV and Humble reporting unit s (both allocated to Merchant) included in the Company’s acquisition of
Adumo did not substantially exceed the carrying value of their respective reporting unit. The fair value of the ISV reporting unit
exceeded the carrying value by
2.4
% and Humble exceeded the carrying value by
1
%. As of June 30, 2025, carrying value of goodwill
allocated to ISV and Humble was $
34.0
1.5
carrying value of the reporting unit by at least
28
%.
10. GOODWILL AND INTANGIBLE ASSETS, net (continued)
Goodwill (continued)
Impairment loss (continued)
Year ended June 30, 2025 goodwill impairment loss (continued)
The table below presents the impairment per reporting unit for the year ended June 30, 2025 and the revenue growth rates, WACC
and forecast period for reporting units used in the discounted cash flow models for the June 30, 2025 and June 30, 2024, and for entities
acquiring during the current fiscal year, the information used in the purchase price allocation:
Segments and reporting units
with impairments
Impairment
Remaining
goodwill
Range of
revenue
growth rates
(%)
Terminal
revenue
growth rates
(%)
WACC (%)
Forecast
period
(years)
Merchant
$
9,268
$
22,283
Connect Cash
5,688
22,283
Used at June 30, 2025
3.2
23
6.0
15.6
5
Used at June 30, 2024
10
13.9
5.0
14.7
5
Adumo Technologies
3,580
-
Used at June 30, 2025
(
10
) -
37
(10.0)
18.5
5
Used at acquisition
6.7
14.9
N/A
18.9
Consumer
2,197
6,027
Adumo Payouts
2,197
6,027
Used at June 30, 2025
7.5
40.2
6.0
18.2
5
Used at acquisition
11.8
26.6
N/A
18.9
4
Enterprise
5,576
3,533
EasyPay
5,576
3,533
Used at June 30, 2025
6
65.6
6.0
22.5
10
Used at June 30, 2024
(
21.7
) -
6.9
6.0
14.7
5
Total
$
17,041
$
31,843
Merchant
Consumer
Enterprise
Carrying value
Balance as of July 1, 2022
$
137,640
$
-
$
25,017
$
162,657
Impairment loss
-
-
(7,039)
(7,039)
Foreign currency adjustment
(1)
(18,523)
-
(3,352)
(21,875)
Balance as of June 30, 2023
119,117
-
14,626
133,743
Foreign currency adjustment
(1)
4,279
-
529
4,808
Balance as of June 30, 2024
123,396
-
15,155
138,551
Impairment loss
(9,268)
(2,197)
(5,576)
(17,041)
Acquisitions (Note 3)
63,808
8,423
3,883
76,114
Foreign currency adjustment
(1)
1,698
(199)
272
1,771
Balance as of June 30, 2025
$
179,634
$
6,027
$
13,734
$
199,395
(1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand, against the U.S.
dollar on the carrying value.
10. GOODWILL AND INTANGIBLE ASSETS, net
Intangible assets
Intangible assets acquired
Summarized below is the fair value of intangible assets acquired, translated at the exchange rate applicable as of the relevant
acquisition dates, and the weighted-average amortization period:
Fair value as of
acquisition date
Weighted-average
amortization
period (in years)
Finite-lived intangible asset:
Acquired during the year ended June 30, 2025:
Adumo – technology assets
$
13,998
3
7
Adumo – customer relationships
11,185
5
10
Adumo – brands
3,623
10
15
Recharger – technology assets
1,161
4
Recharger – customer relationships
15,010
5
Genisus Risk – technology assets
$
69
0.1
On acquisition of these businesses, the Company recognized an aggregate deferred tax liability of approximately $
12.2
related to the acquisition of intangible assets during the year ended June 30, 2025.
Change in useful lives for certain brand and trademark intangible assets
During early calendar 2025, the Company’s executive considered the unification of the Company’s merchant segments operations
and the realignment of the Company’s brands under the master brand “Lesaka”. The Company’s Board of Directors approved the
realignment of certain of the Company’s brands to the master brand in May 2025. The Company has identified the steps and timing to
realign the affected brands under the master brand and expects to have complete alignment by February 2027, with certain brands
expected to be aligned by December 2025. The change in brands has resulted in a change in the useful lives of certain of the Company’s
brand and trademark intangible assets which has resulted in an increase in amortization expense of $
2.6
June 30, 2025. The change in the useful lives resulted in a $
1.9
for the year ended June 30, 2025, and did not have a significant impact on loss per share. The change did not impact prior periods.
10. GOODWILL AND INTANGIBLE ASSETS, net (continued)
Intangible assets (continued)
Impairment loss
The Company assesses the carrying value of intangible assets for impairment whenever events occur or circumstances change
indicating that the carrying amount of the intangible asset may not be recoverable.
No
years ended June 30, 2025, 2024 and 2023, respectively, except for intangible assets of $
1.8
which were fully impaired during the year ended June 30, 2025. The impairment was identified during the Company’s annual goodwill
impairment testing. The method for determining fair value is discussed above under Goodwill—Impairment loss. The impairment loss
related to the impairment of the intangible assets is included in the caption Impairment loss in the consolidated statements of operations.
Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2025, and June 30,
2024:
As of June 30, 2025
As of June 30, 2024
Gross
carrying
value
Accumulated
amortization
and
impairment
Net
carrying
value
Gross
carrying
value
Accumulated
amortization
Net
carrying
value
Finite-lived intangible assets:
Software, integrated
platform and unpatented
technology
(1)
$
137,099
$
(41,925)
$
95,174
$
115,213
$
(25,763)
$
89,450
Customer relationships
(1)
53,369
(18,568)
34,801
25,880
(14,030)
11,850
FTS patent
2,158
(2,158)
-
2,107
(2,107)
-
Brands and trademarks
(1)
18,233
(8,993)
9,240
14,353
(4,300)
10,053
Total finite-lived
intangible assets
$
210,859
$
(71,644)
$
139,215
$
157,553
$
(46,200)
$
111,353
(1) June 30, 2025 balances include the intangible assets acquired as part of the Adumo acquisition in October 2024, and the
Recharger and Genisus Risk acquisitions in March 2025.
Aggregate amortization expense on the finite-lived intangible assets for the years ended June 30, 2025, 2024 and 2023, was
approximately $
22.0
14.4
15.0
Future estimated annual amortization expense for the next five fiscal years and thereafter, using the exchange rates that prevailed
on June 30, 2025, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a
result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors.
Fiscal 2026
$
30,204
Fiscal 2027
20,576
Fiscal 2028
20,080
Fiscal 2029
19,389
Fiscal 2030
17,986
Thereafter
30,980
Total future estimated annual amortization expense
$
139,215
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 29, 2025 | Showing above |
| 2024 | Sep 11, 2024 | |
| 2023 | Sep 12, 2023 | |
| 2022 | Sep 9, 2022 | |
| 2021 | Sep 13, 2021 | |
| 2020 | Sep 10, 2020 | |
| 2019 | Oct 25, 2019 | |
| 2018 | Sep 12, 2018 | |
| 2017 | Aug 24, 2017 | |
| 2016 | Aug 25, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.