The revenue and profitability of Araxi (formerly Capital Appreciation) have been negatively affected by national and global economic challenges, including a worldwide shortage of microchips that delayed the timely delivery of terminals.
This, as the rapid growth of artificial intelligence (AI), high-performance computing and data centre infrastructure created strong demand for advanced chips, particularly those used in AI accelerators and graphics processing units.
This emerged when the JSE-listed fintech group today announced its annual financial results for the year ended 31 March.
The company’s revenue declined 6.8% year-on-year to R1.166 billion from R1.251 billion. On a comparable basis, revenue was down 3.6% to R1.174 billion from R1.218 billion.
Profitability also came under pressure, as earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 16.4% to R279.3 million from R333.9 million, while operating profit decreased 20.7% to R226.4 million from R285.4 million.
The EBITDA margin narrowed by 270 basis points to 24%, compared with 26.7% a year earlier. On a comparable basis, however, EBITDA increased 5.9% to R283.2 million and operating profit rose 5.3% to R230.3 million, with the comparable EBITDA margin improving by 220 basis points to 24.1%.
The group maintained its dividend at 12 cents per ordinary share, unchanged from the prior period, despite lower reported earnings. Cash available for reinvestment decreased 18.6% to R327.6 million from R402.3 million.
Mixed performance
In a statement, the company says its full-year operational performance was strong, while its financial performance was mixed.
According to the firm, the payments and software divisions both exit FY26 and enter FY27 on a sound footing.
On the challenges, Araxi notes that several one-time items also had a noticeable impact on the reported figures.
To provide a clearer picture of the inherent operational performance, the company shared “underlying” metrics, which confirmed sound results.
These include recurring terminal licence fees in payments, which grew by 31%, and software’s underlying EBITDA, which increased by 77% following efforts to position the business for a challenging economic environment. Both metrics indicate a significantly more positive outlook for FY27, it says.
Araxi points out that group operating expenses were well-managed, ending 7.1% lower than the prior year at R341.1 million.
It adds that solid execution against the group’s strategic objectives positions the group well going forward – actions included rebranding the group to Araxi Limited; restructuring the software division, which reset the business on a healthy base; and the acquisition of Pay@ Group, a provider of B2B integrated payments solutions.
According to the firm, the number of point-of-sale terminals in customers' hands increased by 5.4% to 447 000 at year-end, generating annuity income and scale efficiencies.
It explains that the compelling growth in terminal licence fees (31%) and related services reinforces the payments division’s longer-term strategic emphasis on annuity-based recurring revenues.
The division’s payments software-as-a-service strategy of developing hardware-agnostic software solutions significantly increases the total addressable market for its services and improves the visibility of its future earnings, says the fintech group.
Encouraging developments
Halo Dot has been a critical enabler, as an Apple Gateway Service Provider (GPS), for the launch of Apple’s tap-to-pay on iPhone in South Africa, in partnership with a major retailer and Paycorp in May 2026, it adds.
In addition, Halo Dot has been approved as an Apple GSP to enable the launch of tap-to-pay on iPhone solutions in other markets.
The company explains that the team has progressed multiple acquirer and processor integrations in South Africa, elsewhere in Africa, the UK, across Europe, the US, Latin America, Mexico, and most recently the Caribbean, with a number of customers across regions nearing go-live in FY27. It believes this will generate recurring monthly licensing and support revenue.
The software division generated over R384 million in contracted sales with major clients in FY26, including several large banks and a premier insurance company. Araxi notes that this figure includes multiple multi-year agreements expected to support future annuity revenue.
“We are encouraged by the recent pipeline developments and the momentum achieved in the group’s initiatives to diversify revenue streams across new products, sectors and regions,” says Araxi CEO Bradley Sacks.
“We are particularly pleased with the rebranding to Araxi and how that has been received in the market, as well as galvanized our teams around a single corporate purpose. We are excited about the prospects that arise from the acquisition of Pay@ and remain cautiously optimistic that these trends and opportunities will support the group’s growth trajectory in FY27 and beyond.”
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