Income Taxes |
12 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes | 18. Income tax expense The table below presents the 2025 and 2024: 2026 2025 2024 Domestic: South Africa (A) $ 11,233 $ (35,554) $ (5,480) Foreign: (7,507) (71,629) (8,393) United States (11,993) (12,322) (8,705) Other (1) 4,486 (59,307) 312 Income (Loss) before income tax expense (benefit) (A) $ 3,726 $ (107,183) $ (13,873) (A) Income 2025 1.2 1.1 consolidated statement of operations. (1) Amount Note 6 related to MobiKwik. Presented below and 2024: 2026 2025 2024 Current tax expense $ 10,880 $ 5,757 $ 5,766 Domestic: South Africa 8,412 5,582 5,634 Foreign: 2,468 175 132 Other 2,468 175 132 Deferred tax (benefit) expense (A) (9,451) (21,739) (2,712) Domestic: South Africa (A) (9,483) (11,601) (2,716) Foreign: 32 (10,138) 4 United States - (10,120) - Other 32 (18) 4 Foreign tax credits generated - United States - - 309 Income tax expense (benefit) $ 1,429 $ (15,982) $ 3,363 (A) Deferred tax expense (benefit) and South Africa for the year ended June 2.2 of the correction discussed in Note 1. There were no jurisdiction in 30, 2026, was higher than the previous year ended June with the year ended June during the year ended June 30, 2026. The Company’s deferred tax benefit for the year ended June 30, 2026, was lower compared with the to the releases of valuations allowances in due to (i) the higher deferred tax benefit recorded during the year ended June 30, 2026, related to the amortization of intangible assets recognized due assets which operating losses in $ 12.3 Company’s generated of $ 3.9 2026 the Company $ 9.9 t ax assets would not be realized in future years. 18. Income tax expense (continued) The Company’s due MobiKwik, intangible assets recognized due to the acquisition of 12.8 allowances change 11.4 achieved sustainable $ 6.8 valuation 6.0 considering both positive and negative evidence, that the operating During the years African wholly-owned valuation incurred during the year ended existing businesses and higher operating costs incurred, but overall associated valuation allowance created during the year ended June 30, 2026, were lower than in previous periods because the Company believes it is more likely than not that certain of these losses will be utilized 2025, were lower than in previous periods due to the improvement in operating Adoption of new accounting guidance impacting presentation of the Following provide additional regarding income taxes paid. The Company adopted the guidance On majority voting interest in Lesaka. and was retain a majority interest in a accounted for as a the consolidated company for the Company has used the South African income 27 % for purposes of its income tax rate reconciliation and South Africa for other income tax disclosures. 18. Incomes taxes rate reconciliation A reconciliation of income taxes, for the year ended June 30, 2026, is as follows: 2026 Income taxes at the South African statutory income tax rate 1,007 27.00 % Foreign Tax Effects United States Statutory income tax rate difference between the United States federal and South Africa rates 720 19.32 % Non-taxable other (95) (2.55) % Non-deductible other expenses 308 8.26 % Changes in valuation allowances (5,847) (156.92) % Prior years under provision 281 7.54 % Prior year global intangible low-taxed income ("GILTI") 3,565 95.68 % Current year GILTI 4,306 115.57 % Botswana Statutory income tax rate difference between Botswana and South Africa (94) (2.52) % Namibia Statutory income tax rate difference between Namibia and South Africa 60 1.61 % Withholding taxes 124 3.33 % Zambia Withholding taxes 189 5.07 % Germany Statutory tax rate difference between other jurisdictions and South Africa (27) (0.72) % Non-taxable: Other (156) (4.19) % Prior years (over) under provision (242) (6.49) % Netherlands Non-taxable income related to an allowance for doubtful loans receivable reversed (479) (12.86) % Other jurisdictions Other 6 0.16 % Changes in Valuation Allowances: South Africa 21,878 587.17 % Nontaxable or Nondeductible Items: South Africa Non-deductible goodwill impairment 103 2.76 % Non-deductible interest expense paid on borrowings 924 24.80 % Non-deductible consulting fees 135 3.62 % Non-deductible penalties 54 1.45 % Non-deductible interest expense paid to taxing authorities 83 2.23 % Non-deductible other expenses 143 3.84 % Non-deductible rebrand costs 304 8.16 % Non-deductible loss on disposal of business 204 5.48 % Non-taxable gain on consolidation (286) (7.68) % Non-taxable other income (320) (8.59) % Deferred tax asset related to capital loss generated (25,026) (671.66) % Other: South Africa Prior years (over) under provision (545) (14.63) % Withholding taxes 280 7.51 % Other (128) (3.44) % Income tax expense / Effective tax rate 1,429 38.33 % 18. Income tax rate reconciliation (continued) For reconciling items rate to income (loss) before income tax expense (benefit), additional qualitative ● Foreign tax losses from allowance against these taxes, and (iv) non-deductible expenses. ● Foreign tax the (i) effect including Botswana, Namibia in inclusion of prior period tax entries in the current year. ● Changes performance by certain of management assessment of the utilization of deferred tax assets in South Africa. ● Nontaxable or purposes under applicable tax laws, including (i) related to goodwill impaired, (ii) interest expense incurred on certain of the Company’s interest incurred related to capital loss generated on disposal of Cell C (the Company has created a full valuation As previously disclosed, tax rate to the Company’s effective 2025 2024 Income taxes at South African income tax rates 27.00 % 27.00 % Non-deductible interest expense (1.29) % (24.55) % Movement in valuation allowance (A) 3.55 % (22.15) % Non-deductible transaction costs (4.19) % (5.91) % Goodwill impairment (4.22) % - Capital gains tax rate differential - 1.62 % Prior year adjustments 0.22 % (1.37) % Non-deductible items (A) (3.42) % 0.93 % Foreign tax credits 0.03 % 0.19 % Foreign tax rate differential (2.77) % - Effective tax rate 14.91 % (24.24) % (A) Movement 5.62 % to 3.55 %, and 3.23 %) to ( 3.42 %) as a result of the correction discussed in Note 1. Percentages included in the 2024 impacted by the loss incurred income tax expense of $ 3.4 24.24 %) multiplied by the loss before tax (benefit) expense of $( 13,873 ). Movement in created following improved and sustained profitability generated by certain of the Company’s ended purposes. Movement operating loss carryforwards generated during the year. costs and interest expense incurred which the Company cannot deduct for income 18. Income tax paid The Company the amount paid of refunds received, to the jurisdictions that met the threshold for the year ended 2026 Jurisdiction Domestic: South Africa $ 9,332 Foreign: 1,100 Namibia 780 All other 320 Total income $ 10,432 Deferred tax assets and liabilities Deferred liabilities and primary components of the temporary differences and carryforwards that gave rise to the Company’s deferred tax assets and liabilities as of June 30, and their classification, were as follows: June 30, June 30, 2026 2025 Total Net operating loss carryforwards $ 57,083 $ 63,740 Capital loss carryforwards 32,104 7,094 Provisions and accruals 8,630 6,648 Equity investments 5,567 29,475 Operating lease liability 6,010 - Foreign tax credit carryforwards - 12,300 Other 4,642 4,604 Total 114,036 123,861 Valuation (A) (92,143) (109,468) Total 21,893 14,393 Total Intangible assets 31,215 36,403 Operating lease right-of-use 4,735 - Other 1,852 1,573 Total 37,802 37,976 Reported as Long-term deferred tax assets, net 12,470 10,338 Long-term deferred tax liabilities, net 28,379 33,921 Net deferred tax liabilities $ 15,909 $ 23,583 (A) Valuation 2.2 Decrease in total net deferred tax liabilities Net operating loss carryforwards Net operating year, which was partially offset of the Company’s subsidiaries. Rand against the United subsidiary 1.5 allowance of $ 1.5 loss deferred tax asset. 18. Deferred tax assets and liabilities (continued) Decrease in total net deferred tax liabilities (continued) Capital loss carryforwards Capital loss resulted in the generation of capital loss carryforwards 138.0 States of 10.9 which resulted 17.7 United States of 15.5 States currency changes between the South African Rand against the United States dollar. Equity investments Equity investments paid for CPS 0.0 as of June 2017 and the financial 0.0 amount paid 0.0 change in Equity investments relates to the derecognition of Cell C following the disposal of the investment loss carryforward – refer above) and the impact of currency changes between the South African Rand against the Operating lease liability Operating lease liability as of June 30, 2026, has liabilities during the year ended June 30, 2026 (refer to Note 8 for Foreign tax credit There are no foreign tax year ended June 30, 2026. During the year ended June 30, 2025, 20.2 Intangibles assets Intangible assets have decreased due to the amortization of the intangible Operating lease right-of-use Operating lease right-of-use as of lease right-of-use assets during the year ended June 30, 2026 (refer to Decrease in valuation allowance At June 30, 21.9 14.4 Management believes, will realize amount of the deferred tax asset considered realizable could be adjusted 18. Deferred tax assets and liabilities (continued) Decrease in valuation allowance At June 92.1 109.5 assets to the estimated realizable value. The is presented below: Total Equity investments Capital loss carry- forwards Net operating loss carry- forwards Foreign tax credit carry- forwards Other July 1, 2023 $ 109,120 $ 27,782 $ 8,485 $ 38,381 $ 32,599 $ 1,873 Charged to statement of operations 5,061 - 665 3,163 - 1,233 Reversed to statement of operations (1,865) - - (1,793) (72) - Foreign currency adjustment 2,371 1,004 103 1,215 - 49 Net change in the valuation allowance 5,567 1,004 768 2,585 (72) 1,282 July 1, 2024 $ 114,687 $ 28,786 $ 9,253 $ 40,966 $ 32,527 $ 3,155 Charged to statement of operations 6,241 - 977 4,063 - 1,201 Reversed to statement of operations (A) (10,630) - - (8,469) - (2,161) Utilized (25,528) - (3,226) (2,002) (20,227) (73) Acquired in business combinations 22,976 - - 20,354 - 2,622 Foreign currency adjustment 1,722 690 90 887 - 55 Net change in the valuation allowance (5,219) 690 (2,159) 14,833 (20,227) 1,644 June 30, 2025 109,468 29,476 7,094 55,799 12,300 4,799 Charged to statement of operations 28,374 - 25,026 1,645 - 1,703 Reversed to statement of operations (12,340) (631) - (11,361) - (348) Utilized (40,243) (25,026) (977) (1,537) (12,300) (403) Foreign currency adjustment 6,884 1,748 961 3,850 - 325 Net change in the valuation allowance (17,325) (23,909) 25,010 (7,403) (12,300) 1,277 June 30, 2026 $ 92,143 $ 5,567 $ 32,104 $ 48,396 $ - $ 6,076 (A) Reversed 2.2 correction discussed in Note 1. Net operating loss carryforwards and foreign tax credit carryforwards South Africa Net operating loss 211.4 but the loss carryforward that may be used against future taxable income is limited to 80% of taxable income before the net operating loss deduction. United States Net operating may be used against future taxable income is limited to 80% of taxable income before the net operating loss deduction. The Company had utilized all of its net operating loss carryforwards as of June 30, 2026. likely than not to be realized as of June 30, 2026 and 2025, respectively. Unrecognized tax benefits As of June 30, 2026 and 2025, the Company had no South Africa, are no longer is subject to s tatement of cash flows, or results of operations. |