Loading...
01/11 16:22
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlighted strong financial performance, with significant revenue and EPS growth, stable profit margins, and increased subscriber numbers. The Q&A revealed positive sentiment towards growth in Southeast Asia and cross-selling initiatives, despite minor concerns about meeting ARPU targets. The company's strategic focus on innovation and expansion, along with strong cash flow, suggests a positive outlook. However, the lack of clarity on tax rates and potential ARPU target misses slightly temper the optimism. Overall, the stock price is likely to see a positive movement, within the 2% to 8% range.
Annual Recurring Revenue (ARR) Increased 18% to ZAR 4.57 million, and on a U.S. dollar basis, ARR increased 24% to USD 254 million. This growth is attributed to strong demand and strategic investments in sales capacity.
Subscription Revenue (Cartrack) Generated ZAR 1.1 billion, an increase of 19% or 24% on a U.S. dollar basis. Growth was driven by accelerating subscription revenue across all regions and strategic investments in sales capacity.
Karooooo Logistics Revenue Reached ZAR 121 million, an increase of 20% or 26% on a U.S. dollar basis. Growth was driven by the expansion of e-commerce and logistics operations through a capital-light model.
Total Revenue Delivered ZAR 1.277 million, an increase of 18%. Growth was underpinned by subscription revenue and strong customer retention.
Earnings Per Share (EPS) Increased 19% to ZAR 8.55. Growth was supported by subscription revenue growth and disciplined expense management.
Operating Profit Margin (Cartrack) Maintained at 30%, despite increased investment in sales capacity and infrastructure to drive growth.
Total Subscribers Increased 17% to approximately 2.4 million. Growth was driven by stable growth in South Africa and accelerated growth in Southeast Asia.
Average Revenue Per User (ARPU) Increased 2% in ZAR or 6% on a U.S. dollar basis. Growth was driven by initiatives to increase ARPU in South Africa, including video solutions and Cartrack tag sales.
Free Cash Flow Generated ZAR 338 million, supported by disciplined working capital management.
Net Cash and Cash Equivalents Ended the quarter with ZAR 1.103 million, reflecting strong cash generation and disciplined capital allocation.
Cartrack SaaS platform: Supports over 2.4 million subscribers across 125,000 businesses in various industries. Subscription revenue grew by 19% in ZAR and 24% in USD.
Karooooo Logistics: Delivery-as-a-Service revenue increased by 20% in ZAR and 26% in USD, with an 8% operating profit margin.
South Africa: Subscriber base grew by 16%, contributing 70% of total subscription revenue. Subscription revenue growth accelerated to 16%.
Southeast Asia and Middle East: Subscriber base grew by 22%, contributing 17% of total subscription revenue. Subscription revenue growth accelerated to 30%.
Europe: Subscriber base grew by 20%, contributing 10% of total subscription revenue. Subscription revenue growth accelerated to 22%.
ARR Growth: Annual Recurring Revenue (ARR) increased by 18% in ZAR and 24% in USD.
ARPU Growth: Average Revenue Per User (ARPU) increased by 2% in ZAR and 6% in USD.
Customer Retention: Commercial customer ARR retention rate remained at 95%.
Sales Expansion: Plans to increase sales headcount by 70% in Southeast Asia by February 2026.
AI Video Solutions: Focus on driving demand for AI video capabilities globally.
Capital Allocation: Prioritizing organic growth, innovation, and disciplined capital allocation.
Regulatory Compliance: The company faces challenges in ensuring compliance with evolving legislation and enforcement, particularly in Europe. This could impact operations and customer satisfaction if not managed effectively.
ARPU Growth in South Africa: Efforts to increase ARPU in South Africa are facing challenges, with slower-than-expected progress towards the 10% growth target for FY '26. This could delay revenue growth in the region.
Sales and Marketing Investments: Significant upfront customer acquisition costs are being incurred, which may not immediately translate into revenue. This creates a timing mismatch between expenses and revenue recognition, potentially impacting short-term profitability.
Dependence on South Africa: South Africa accounts for 70% of total subscription revenue. Heavy reliance on this market exposes the company to regional economic and operational risks.
Expansion in Southeast Asia and Europe: While these regions present growth opportunities, the company faces challenges in scaling operations and expanding its distribution footprint effectively.
Customer Retention and Acquisition Costs: Although the LTV to CAC ratio is strong, high customer acquisition costs could strain financial resources if growth slows or retention rates decline.
Macroeconomic Conditions: The company operates in varying macroeconomic conditions, which could impact customer acquisition and subscription revenue growth.
FY 2026 Growth Ambitions: Karooooo aims to accelerate Cartrack subscription revenue growth by expanding distribution footprint in existing markets, driving broader platform adoption, and capitalizing on growing demand for AI video solutions.
FY 2026 Outlook: The company reaffirms its previously provided FY 2026 outlook, detailing a range of growth and margin outcomes as it aims to accelerate growth this year.
Sales Headcount Expansion: Karooooo plans to increase its sales headcount by 70% by February 2026 compared to February 2025, particularly in Southeast Asia.
Southeast Asia Growth Opportunity: Southeast Asia is identified as the fastest-growing region and presents the largest growth opportunity over the medium to long term. The company aims to leverage its SaaS platform, brand equity, and regional macro trends to drive growth.
European Market Expansion: Karooooo expects partnerships with leading OEMs and demand for compliance technology to contribute to results in the medium to long term. The company is accelerating organic growth and increasing subscription sales in the region.
South Africa ARPU Growth: The company aims to grow ARPU in South Africa by 10% in FY 2026, though achieving this target may take longer than initially expected. Long-term potential for ARPU growth is significantly higher than 10%.
Karooooo Logistics Growth: Karooooo Logistics is expected to continue scaling profitably, driven by large businesses seeking to optimize e-commerce and logistics capabilities through a capital-light model.
Capital Allocation Strategy: The company prioritizes organic growth and innovation, returning capital to shareholders through dividends, and strategic M&A to accelerate time to market, expand product portfolio, or strengthen competitive position.
Non-Growth Scenario Margin Potential: In a hypothetical non-growth scenario, operating profit margins could potentially increase to approximately 38% by significantly reducing sales and marketing expenditure.
Dividend Payment: Karooooo Ltd. announced a total cash dividend of approximately $38.6 million to be paid to shareholders in August 2025. This equates to a dividend of $1.25 per share.
The earnings call summary shows strong financial performance with significant revenue and subscriber growth across key regions. Despite some bottlenecks in team building and onboarding, the company's strategic investments and disciplined expense management are yielding positive results. The Q&A section highlights ongoing challenges but also reveals optimism in overcoming these through AI and team expansion. The reaffirmation of FY 2026 outlook and strategic growth plans further support a positive sentiment. However, the lack of guidance on market penetration and ongoing elevated expenses suggest a cautious optimism, leading to a 'Positive' rating for stock price movement.
The earnings call highlighted strong financial performance, with significant revenue and EPS growth, stable profit margins, and increased subscriber numbers. The Q&A revealed positive sentiment towards growth in Southeast Asia and cross-selling initiatives, despite minor concerns about meeting ARPU targets. The company's strategic focus on innovation and expansion, along with strong cash flow, suggests a positive outlook. However, the lack of clarity on tax rates and potential ARPU target misses slightly temper the optimism. Overall, the stock price is likely to see a positive movement, within the 2% to 8% range.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
