Karooooo Q4 2025 Earnings Report

Karooooo EPS Results

• Actual EPS: $0.44
• Consensus EPS: $0.37
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $6.81

Karooooo Revenue Results

• Actual Revenue: $65.12 million
• Expected Revenue: $1.18 billion
• Beat/Miss: Missed by -$1.12 billion
• YoY Revenue Growth: N/A

Karooooo Announcement Details

• Quarter: Q4 2025
• Date: 5/14/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 15, 2025
• Conference Call Time: 8:00AM ET

Karooooo (NASDAQ:KARO) Ltd is a global provider of telematics software-as-a-service solutions for vehicle and fleet management. Through its flagship platform, the company delivers real-time GPS tracking, stolen vehicle recovery and driver behaviour analytics, enabling commercial fleets and automotive insurers to optimise operations, increase safety and reduce costs.

Karooooo’s SaaS platform integrates proprietary hardware devices with cloud-based analytics and mobile applications. Customers gain access to live vehicle location data, engine diagnostics, route planning tools and customizable reporting dashboards. Additional features such as geo-fencing, maintenance alerts and integration with third-party systems support asset tracking, workforce management and insurance telematics programmes.

Originally founded as a vehicle tracking provider in South Africa, the company reorganised under the Karooooo holding structure in 2021. Today, it serves a diverse customer base across Africa, Europe, Asia Pacific and Latin America, operating through regional offices and partnerships. With a subscription-based model, Karooooo continues to invest in platform enhancements and international expansion within the connected mobility and insurance technology markets.

Karooooo Q4 2025 Earnings Call Transcript

Key Takeaways

• Rule of 60 status maintained as FY25 CarTrak subscription revenue rose 15% year-over-year (19% in USD) to R4.1 bn with a 31% operating profit margin, and Q4 revenue grew 16% with a 34% operating profit margin.
• Total subscribers increased 17% in Q4 (200 bps acceleration versus FY24) with net additions up 25% in Q4 and 30% for FY25, driving ARR growth to 17%.
• CarTrack Tag launched in South Africa with strong initial uptake and is set for expansion into Asia, enhancing the platform’s total addressable market.
• International markets showed accelerating growth, with Southeast Asia constant-currency subscription revenue up 31% in Q4 (from 26% in Q3) and Europe up 20%, underscoring broad-based regional momentum.
• FY26 guidance targets CarTrak subscription revenue growth of 16–21% to R4.7–4.9 bn, operating profit margins of 26–31%, and EPS of R32.5–35.5, reflecting planned upfront investments in sales and marketing.

Presentation

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

Hello and welcome to Karooooo's fourth quarter and full year fiscal 2025 financial results presentation. On behalf of Karooooo, we would like to thank you for joining us today. I'm Paul Bieber, VP of Investor Relations and Strategic Finance. We are joined today by Zak Calisto, Founder and Group CEO, Hoosain Govender, Chief Financial Officer, and Carmen Calisto, Chief Strategy and Marketing Officer. I would like to remind everyone that some of the statements that we make today regarding our business, operations, and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions. They are subject to several risks and uncertainties. Our actual results could differ materially. Please refer to the Safe Harbor statement in our Form 20F, including the risk factors and the 6K that we filed yesterday. We undertake no obligation to update any forward-looking statements.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in the 6K that we filed with the SEC yesterday. Our comments will refer to year-over-year comparisons unless stated otherwise. Before handing the call over to Carmen, we'd like to present a six-minute video of our SaaS platform to illustrate the depth and breadth of our platform's capabilities.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

Cartrack's all-in-one IoT platform simplifies decision-making. From conquering fuel and maintenance to empowering a safety-first culture and setting teams up for success, our platform gives businesses visibility and control of their entire operation in a single place. Low visibility and manual checks leave companies struggling with fuel theft, fuel card fraud, claim validations, and inefficient driving behavior challenges. Our platform validates fuel transactions with telematics data to ensure that vehicles were at the right station and that all fuel actually entered the right tank. Transactions are assessed from low to high risk, automatically notifying managers and enabling quick verification of fuel claims. Hundreds of fuel transactions are verified in minutes. All transactions are audited, and time and money are saved. Fuel-wasting habits like idling are conquered with in-vehicle buzzers, management alerts, and comparative dashboards that benchmark drivers and businesses against others in their industry.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

This empowered a top food and beverage company to save more than $200,000 in fuel costs in a year. When managing deliveries or field jobs across a fleet, keeping track of where everyone is and what's getting done is no small feat. Drivers need clear instructions. Dispatch and collections teams need estimated times of arrival to prepare. Clients want real-time updates. In such competitive industries, even minor delays and a few bad days can affect brand and customer loyalty. Our workforce management solution allows businesses to transform their workflow by digitally creating, assigning, and monitoring each task. They simply indicate daily jobs to complete, driver availability, and any special requirements such as cold storage or skills to landscape bonsais. Our platform automatically generates job cards for every worker that optimize the workflow of the entire business, minimizing total travel distance and costs.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

Workers get everything to complete their tasks via mobile app, and customers get real-time updates with live tracking and proof of job completion. Our tool enabled a medical lab to quickly expand its blood collection operations from 15 clinics to more than 400, tenfolding productivity and decreasing sample collection times. Businesses sharing vehicles and assets struggle with double bookings, cumbersome booking processes, frustrating key management, and license renewal slip-ups, resulting in unnecessary team friction, fleet increases, and wasted costs. Our software allows businesses to seamlessly combine vehicles and centralize fleets. Managers set up driver permissions, vehicle requirements, and an approval matrix. Workers request bookings via our app, and vehicles are automatically allocated to evenly distribute asset usage and maximize acceptance rates. Drivers digitally lock and unlock vehicles, and requirements for inspections are automated into one workflow with full reporting.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

Our tool empowers businesses to reduce fleet sizes, increase utilization, and improve user experience while eliminating unnecessary admin headaches and costs. Globally, businesses and governments have growing road safety concerns. Our AI vision technology scans and monitors hundreds of data points every second, detecting high-risk driving behaviors the moment they happen. When high-risk driving is spotted, an immediate in-cabin audible alert gives drivers the chance to correct their actions and prevent an accident. The goal is not to be reactive. Managers gain unmatched visibility into the driver's seat so they can coach drivers before bad habits turn into real risks, setting a new proactive standard for safer driving. Every day off the road costs a fleet. Preventative maintenance is key. Our platform sends managers custom reminders using real-time data when it is time for a service, tire swap, oil change, and more.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

They assign the vehicle out for maintenance, and once it's back, drivers confirm that everything is in order. If drivers spot something out of the ordinary, they simply report an ad hoc defect or highlight this in customized digital inspection forms. Everything gets logged. Assets get repaired quickly, maintenance costs decrease, and fleets run reliably. Sometimes every second counts. Businesses need a control room that keeps an eye on all events and takes action right away. Whether that means live streaming what's happening on the ground, dialing into the cabin and speaking to drivers directly, or using real-time sensor data, teams can react instantly, investigate appropriately, and mark incidents as resolved with full audit trails. From fuel to maintenance to fines and taxes, businesses enter all their expenses to understand their full cost of ownership and how that translates to outputs and profits.

[Paul Bieber, VP of Investor Relations and Strategic Finance at Karooooo]

We integrate with tons of partners and bring all fleet data into one place with contextualized data points, tailored reporting, and one single source of truth for their operation. Businesses easily pinpoint leakages, make the right decisions faster, and better deliver on their missions. Simplify decision-making with Cartrack today.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Welcome to Karooooo's Q4 and full year fiscal 2025 financial results presentation. We hope you enjoyed the demonstration of our SaaS platform. For those new to Karooooo, we operate a SaaS platform for connected vehicles and mobile assets that enables businesses to enhance operational efficiency, reduce costs, improve safety, and ensure compliance. We help businesses across industries simplify decision-making to optimize their physical operations. We serve a large, underpenetrated market with strong, sustained demand driven by digital transformation, a constant need to improve operational efficiency, and an increasing focus on safety and compliance. As a founder-led business, we have a strong financial profile, a proven track record of execution excellence, and a cultural focus on disciplined capital allocation.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Our platform supports more than 2.3 million subscribers across more than 125,000 businesses in South Africa, Southeast Asia, and Europe, spanning industries such as logistics, mining, agriculture, construction, retail, and the public sector. Our financial model is anchored by high-margin subscription revenue and robust customer retention. We continue to scale our proprietary data asset, now generating over 200 billion data points monthly, which we leverage to drive actionable insights for our customers and long-term customer value. During our presentation, we will review both of Karooooo's operating segments, CARTRACK and Karooooo Logistics. CARTRACK is our operations management SaaS platform. CARTRACK operates at scale and has a very attractive financial profile. CARTRACK's operating momentum has primarily driven Karooooo's growth and strong financial performance. CARTRACK's momentum continued in FY2025.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

In FY2025, CARTRACK generated ZAR 4.1 billion in subscription revenue, an increase of 15% or 19% on a U.S. dollar basis, and CARTRACK's operating profit margin was a healthy 31%. Karooooo Logistics is our rapidly growing delivery-as-a-service business that empowers large enterprise customers to scale their e-commerce and logistics operations. Karooooo Logistics is a structurally lower-margin business than CARTRACK, showing strong growth momentum. Karooooo Logistics is strategically important to us as it empowers our customers to scale their e-commerce and logistics operations through a capital-light model while driving high CARTRACK's customer retention. We continue to profitably scale the Karooooo Logistics business in FY2025. In FY2025, Karooooo Logistics' delivery-as-a-service revenue reached ZAR 420 million, an increase of 33% or 37% on a U.S. dollar basis. Given Karooooo Logistics' robust revenue growth, we are very excited about the long-term growth opportunity for the business.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Karooooo exited FY25 with growing momentum despite a fluid macro backdrop. In Q4, ZAR 120 million, an increase of 16%, subscription revenue of ZAR 1,086 million, an increase of 16%, and adjusted earnings per share of ZAR 9.48, an increase of 39%, delivering profitable growth at scale. In Q4, we were a rule-of-60 company when adding our Q4 subscription revenue growth of 16% and our Q4 CARTRACK-adjusted EBITDA margin of 48%. Operating profit margin exceeding 17% and operating profit margin of 34% remained robust in Q4 and underpins our stellar financial performance. It's noteworthy that the Q4 CARTRACK subscriber growth rate of 17% was consistent throughout FY25 and represented a 200 basis point acceleration versus FY24. Also, CARTRACK's FY25 operating profit margin expanded modestly while FY25 subscriber growth accelerated.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Before detailing our Q4 business and operational accomplishments, we want to take a moment to underscore our distinctive financial profile, something that is exceptionally rare in the public markets, particularly among small-cap companies. We believe we are among a select few SaaS companies operating at a rule-of-50 plus based on 2025 GAAP Street estimates. Notably, within a SaaS universe of approximately 160 companies, we believe we are the only small-cap company operating at this level. Being part of this elite group reflects our unwavering commitment to disciplined and profitable growth. In Q4, CARTRACK's total subscribers increased 17%, highlighted by stable growth in South Africa and a 100 basis point quarter-on-quarter acceleration in Europe. Net subscriber additions were strong and increased 25% and 30% in Q4 and FY2025, respectively.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

With ongoing investments in sales, marketing, and infrastructure to support future growth, we believe we have ample runway to accelerate our organic growth while maintaining strong, robust earnings. Annualized recurring revenue, or ARR, accelerated 300 basis points quarter-on-quarter to 17%, and ARR increased 21% in U.S. dollars. We delivered healthy subscriber additions in Q4 while maintaining strong unit economics. Our results reflect our ability to grow at scale with discipline. Our Q4 financial highlights included: CARTRACK subscription revenue accelerated 200 basis points quarter-on-quarter to 16%. CARTRACK subscription revenue increased 20% on a U.S.dollar basis. Southeast Asia constant currency revenue growth accelerated to 31% compared to 26% in Q3. CARTRACK ',operating profit margin was a robust 34%. We remained a rule-of-60 company, and Karooooo's adjusted earnings per share increased 39% to ZAR 9.48.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Our balance sheet remained strong and unleveraged, and we ended the quarter with net cash and cash equivalents of ZAR 838 million. Our healthy subscription gross margin, efficient customer acquisition, and attractive commercial retention rates continued to drive our healthy unit economics. In Q4, our subscription gross margin was 76%, our LTV to CAC ratio remained above 9, and our commercial retention rate was 95%. It's noteworthy that we accelerated our subscriber growth by 200 basis points in FY2025 while maintaining healthy unit economics. We are excited about our massive TAM and remain committed to profitable growth as we pursue the expansive growth opportunity ahead of us. We ended FY2025 with more than 1.7 million subscribers in South Africa, representing 75% of our global subscriber base.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Our recent investment in a newly built central office supports our long-term growth strategy in the region by enabling us to scale operations, enhance customer service, and drive deeper platform penetration within our existing customer base. We are optimistic about the future of our business in South Africa, driven by ongoing digital transformation, rising demand for video solutions, and the market-expanding impact of Cartrack TAG. With a trusted brand and an experienced team, we're well-positioned for continued success in South Africa. We are encouraged by the strong momentum that we are building to accelerate our organic growth in the region. We ended FY2025 with more than 274,000 subscribers in Southeast Asia and the Middle East, with most of the subscribers in Southeast Asia. Southeast Asia and the Middle East comprise 12% of total subscribers.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

In Q4, our constant currency subscription revenue growth in the region reached an impressive 31%, an acceleration compared to 26% in Q3. As the second-largest contributor to group revenue, Southeast Asia continues to present the most compelling growth opportunity for the group in the medium to long term. In September 2024, we started a strong yet prudent drive to increase sales and marketing in Southeast Asia and believe that we will begin to see results in FY26. We aim to increase our sales headcount by 70% in FY26 in the region. Our differentiated SaaS platform, growing brand equity built on superior customer service, service delivery and distribution, and attractive regional macro trends provide us with a solid foundation to drive continued growth and expansion in the region for years to come. We ended FY25 with more than 200,000 subscribers in Europe, which comprised 9% of our total subscribers.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Our subscriber growth in the region accelerated 100 basis points quarter-on-quarter to 20% in Q4. We remain focused on increasing our presence in the region, especially through OEM partnerships. We have partnered with leading OEMs to provide easy access to our platform, seamlessly integrating their connected vehicle data into our platform through APIs. We expect these partnerships to contribute to our results in the medium term. In addition, we are experiencing encouraging demand for our proprietary compliance technology in the region as customers seek to simplify compliance with evolving legislation and enforcement. In FY2025, Karooooo Logistics continued to build scale and delivered revenue of ZAR 420 million, an increase of 33%, and a 9% operating profit margin, immersing our platform into large customers' operations, contributing to strong customer retention. Karooooo Logistics also enables us to learn about the operational and logistics challenges confronting our large customers.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

We see a large opportunity for Karooooo Logistics going forward as large businesses seek to increase their e-commerce offerings and optimize their logistics capabilities through a capital-light model. Our platform simplifies decision-making by seamlessly unifying and contextualizing data from a wide range of sources, including OEM devices and proprietary devices, as well as open APIs. By consolidating business operations into a single, centralized hub, we enable our customers to overcome complex operational challenges related to safety, compliance, productivity, service delivery, cost control, fuel management, maintenance, routing, resource allocation, and workforce retention. Powered by our extensive data asset, advanced AI, and robust analytics, our platform delivers actionable insights that drive meaningful improvements to our customers' physical operations. We are deeply committed to continuous innovation, ensuring our platform remains intuitive, fast, and adaptable to the ever-evolving business needs of our customers.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Simplicity is at the core of our solution, from implementation to daily use, helping customers make smarter decisions faster while driving ROI. The Cartrack Operations Cloud is an end-to-end SaaS platform that delivers significantly more than traditional telematics. By unifying mission-critical capabilities into one intelligent solution, we help customers enhance safety, boost productivity, and reduce operating costs, driving measurable ROI. Key platform capabilities include real-time telematics, fleet management and asset optimization, video and AI-powered safety monitoring, field service and workforce management, risk management and compliance, last-mile delivery and logistics management, seamless integration via open APIs, and analytics and reporting. By delivering a unified, feature-rich platform, we empower our customers to scale efficiently, improve operational and financial performance, and drive long-term growth. We remain deeply committed to investing in product innovation, and Cartrack TAG exemplifies our commitment to innovation and expanding the power of our platform.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

In Q4, we launched Cartrack TAG, a next-generation wireless asset tag that extends our platform to any mobile asset in South Africa, delivering secure, near-real-time visibility even in areas with limited or no cellular coverage. Built for demanding commercial environments, Cartrack TAG helps businesses locate misplaced or stolen assets, reduce operating costs, and simplify asset management. Powered by our proprietary RF network and cloud integration, Cartrack TAG offers tamper-resistant protection. When paired with a Cartrack IoT device, it can detect signal interference and instantly alert both the asset owner and our 24/7 surveillance team, enabling rapid response and recovery. We're excited about Cartrack TAG's potential to deliver unparalleled asset protection, advanced risk management, and expanded operational oversight. Its easy installation on a wide range of mobile assets, such as trailers, generators, compressors, heavy machinery, and large tools, reduces friction to adoption and supports our committed TAM expansion across industries.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Our customers choose us because we deliver tangible ROI by reducing costs, boosting productivity, and enhancing safety through a user-friendly platform backed by a best-in-class service team. The value proposition of our platform is significant, with a proven ability to create meaningful business impact. FY2025 was a year of strong execution, impactful innovation, and significant progress. We accelerated customer acquisition, enhanced our platform with more advanced AI video capabilities and other features, and successfully launched the Cartrack TAG. We also continue to invest in strategic headcount expansion, ensuring we are very well-positioned for durable, long-term growth. Our solid financial performance and robust balance sheet underscore the strength of our operating model. We remain confident in our competitive positioning across regions and believe we are exceptionally well-positioned to accelerate our growth in FY2026.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Looking ahead, our key strategic priorities for FY26 are as follows: cement our leadership position in the countries we have achieved scale, expand our distribution footprint in Asia and Europe, broaden platform adoption by driving deeper customer engagement with our platform, and capturing growing demand for video capabilities, including AI video. Capital allocation is a fundamental part of our culture, and we aim to remain disciplined with our capital allocation strategy, rooted in a 20-year culture of profitable growth and prudent financial management, key drivers of long-term shareholder value. Our capital allocation framework is unchanged and prioritizes organic growth and innovation. Our paramount priority is investing in organic growth and product innovation, given our strong unit economics, sustained profitability, and large market opportunity. Returning capital to shareholders at current growth rates, our business generates significant excess cash.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

With our strong balance sheet and net cash position, we aim to return surplus capital to shareholders when we cannot efficiently invest it for growth, primarily through an annual dividend. As to avoid doubt, management prioritizes growth over dividends. Strategic M&A: We take a prudent and strategic approach to M&A. We view M&A as a tool to accelerate time to market in key geographies, expand our product portfolio, or strengthen our competitive position. However, given our compelling organic growth profile, customer-centric culture, and attractive unit economics, we set a high bar for any potential acquisitions. M&A opportunities must offer clear strategic value or optionality to meet our criteria. Ultimately, we see it as our responsibility to allocate capital thoughtfully, always with the goal of maximizing long-term shareholder returns.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

I will now hand it over to Hoosain, who will discuss our Q4 and full year FY25 financial performance, as well as our outlook for FY26. Thank you, Carmen. I will now discuss Karooooo's financial performance for Q4 FY25 and the full year FY25. Please note my comments will refer to year-over-year comparisons unless we state otherwise. Our proven and profitable SaaS business model continued to deliver strong results in Q4. Karooooo's total subscription revenue increased 16% to ZAR 1,086 million. On a US dollar basis, Karooooo's subscription revenue increased 20%. Operating profit increased 30% to ZAR 385 million, and adjusted earnings per share increased 39% to ZAR 9.48. For FY25, Karooooo's total subscription revenue increased 15% to ZAR 4,068 million. On a US dollar basis, Karooooo's subscription revenue increased 19%. Operating profit increased 26% to ZAR 1,312 million. Adjusted earnings per share increased 33% to ZAR 31.67.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

We will now focus on Cartrack's financial performance, which is fueled by SaaS revenue momentum. In Q4, Cartrack's subscription revenue increased 16% to ZAR 1,084 million and comprised 98% of Cartrack's total revenue. On a US dollar basis, Cartrack's subscription revenue increased 20%. For FY2025, Cartrack's subscription revenue increased 15% to ZAR 4,055 million and comprised 98% of Cartrack's total revenue. On a US dollar basis, Cartrack's subscription revenue increased 19%. In Q4, ARR increased 17% and 21% in ZAR and US dollar, respectively. As you can see from the trend of the charts, Cartrack has a proven track record of scaling in varying macroeconomic conditions, given our consistent executions, resilient subscription revenue model, and attractive historical retention rates. In Q4, Cartrack experienced healthy customer acquisitions, and Q4 subscriber increased 17% to 2.3 million. Subscription revenue increased 16% to ZAR 1,084 million and operating profit increased 30% to a record ZAR 377 million.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

Cartrack experienced solid customer acquisition in Q4 with net subscriber additions of about 79,000, an increase of 25%. For FY2025, net subscriber additions exceeded 330,000, an increase of 30%. Cartrack continues to grow its subscription revenue across geographies. Most notably, in Q4, our Asia and Europe constant currency subscription revenue growth was 31% and 19%, respectively, and we are encouraged by our momentum in both regions. South Africa's subscription revenue growth was 15% in Q4, and we remain excited about the opportunity in this region. Cartrack continues to grow its subscription revenue across geographies. Most notably, in Q4, our Asia and Europe constant currency subscription revenue growth was 31% and 19%, respectively, and we are encouraged by our momentum in both regions. South Africa's subscription revenue growth was 15% in Q4, and we remain excited about the opportunity in this region.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

We are proud of the momentum in our business highlighted by the underlying acceleration in FY2025. Most notably, Cartrack's subscriber growth accelerated 200 basis points in FY2025 to 17%, reflecting strong execution, investment in sales and marketing, and a broader distribution footprint. SaaS ARR also accelerated 100 basis points to 17% in FY2025. Karooooo's adjusted earnings per share increased 39% to RM 9.48 in Q4, driven by higher subscription revenue, expanding gross margins, and disciplined expense management. For FY2025, Karooooo's adjusted earnings per share increased 33% to RM 31.67. In Q4, Cartrack's adjusted earnings per share increased 42% to RM 9.28, and Karooooo Logistics earnings per share increased 54% to RM 0.20. For FY2025, Cartrack's adjusted earnings per share increased 25% to RM 30.90, and Karooooo Logistics earnings per share increased 60% to RM 0.77. In FY2025, we continued to generate significant free cash flow. Adjusted free cash flow was RM 425 million.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

In Q4, we proactively scaled up our IoT device investment to meet anticipated demand. We also made additional growth-oriented investment that impacted working capital and other property, plant and equipment, further influencing adjusted free cash flow in Q4. Importantly, we experienced an acceleration in subscriber growth. This performance underscores the soundness of our strategy and reflects disciplined execution. As our growth accelerates, it's natural that capital expenditure and strategic investment temporarily increase as a percentage of revenue to support the planned growth. When we stabilize at a higher growth rate, we also expect adjusted free cash flow to normalize at higher levels. To be clear, the recent decline in quarterly adjusted free cash flow does not indicate a structural issue with our ability to generate strong free cash flow.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

The decline is a result of deliberate investment made to support growth, as evidenced by our growth in Q4 and our outlook for accelerating Cartrack's subscription revenue growth. The adjusted free cash flow generated is in line with Karooooo's disciplined capital allocation strategy and supports our future growth. Our balance sheet reflects our track record of growth at scale, profitability, and cash generation. Our net cash on hand plus cash in bank fixed deposits was ZAR 838 million. We expect our disciplined approach to capital allocation, coupled with our earnings and free cash flow growth, to continue to bolster our strong balance sheet. Debtors' collection days remain extremely healthy and within our historical norms at 32 days. Last August, we paid a cash dividend of $33.4 million or $1.08 per share to our shareholders. The dividend per share increased 27%.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

We have strong unit economics, robust operating margins, an unleveraged balance sheet, and attractive cash conversions. We remain confident that our track record of consistent execution and success, especially our ability to generate healthy cash flow, is sustainable. We are proud of our execution in financial year 2025, as we comfortably met our outlook. Moving on to our outlook for financial year 2026. Over the last several years, COVID and the challenges associated with the post-COVID labor market negatively impacted our growth. In financial year 2025, we accelerated the pace of our Cartrack subscriber growth. In financial year 2026, we aim to continue to accelerate Cartrack's subscription revenue growth by expanding our distribution footprint in existing markets, driving broader platform adoptions, and capitalizing on growing demand for our solutions.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

With that said, our guidance for financial year 2026 is as follows: Cartrack's subscription revenue between ZAR 4,700 million-ZAR 4,900 million, which implies Cartrack's subscription revenue growth between 16%-21%. Cartrack's operating profit margin between 26%-31%, and Karooooo's earnings per share between ZAR 32.50-ZAR 35.50. As we expand our distribution footprint in existing markets, we expect lower earnings per share growth in financial year 2026, given our planned upfront investment in sales and marketing for the year. Our strong and proven track record of disciplined execution, sustained growth at scale, and highly profitable business model is supported by a solid balance sheet and a healthy cash position. We believe our ongoing investment in AI, platform innovation, and customer experience will continue to drive durable growth and robust results. We are excited about the year ahead.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

With that, I will turn the presentation over to Zak Calisto for Q&A.

[Zak Calisto, Founder and CEO at Karoo]

Hello, good morning, good afternoon, good evening. Thank you, everybody, for joining us today. I will go through the questions. I'll start off with the first question from Dylan from William Blair. I team handful of questions below. Question one: Cartrack TAG launch, use cases you've seen, receptivity of the product, and are you looking and thinking about the opportunity to drive incremental adoption of this product within the core subscription base? Dylan, we've only put up the infrastructure in Southern Africa, so that infrastructure goes all the way from Cape Town up to about Kenya. We've started very successfully providing the product to our customers. It's been taken up really well by both businesses and by consumers in South Africa, and I believe it's got traction. It's very robust.

[Zak Calisto, Founder and CEO at Karoo]

We now feel very comfortable that we are already reaching quite a substantial amount of scale. We feel very comfortable it was the right decision that we took, and that once it's working well, we can then decide which is the next region that we can do the same. It will probably be Asia. Drivers for acceleration for 2026 are via ROI offering, but now we do think about components growth algorithm between subscriber count from new logos, incremental product, upsell, and AI cameras, camera tag, and asset to existing customers and rollout incremental assets. We have planned that in FY2026, we haven't given an outlook on subscribers because we've decided that this year, specifically in Southern Africa, we're going to be very much focused on the tag. We're going to be focused on the video.

[Zak Calisto, Founder and CEO at Karoo]

We're going to focus on a lot of other sales to existing customers because we need to, we've got to footprint into the customers, so we need to now enhance the customer offering. That is going to be our primary focus in FY2026, and we believe that will lead definitely to higher RPU. We're expecting an increase in RPU by year-end of about 10%. How are you thinking about the opportunity for added capacity here, and where are you in the ramp maturation of existing Salesforce across regions as they look increasingly on the entire customer footprint? I think as we continue to hire, we now have got more than 5,000 employees.

[Zak Calisto, Founder and CEO at Karoo]

I think this is an ongoing challenge because if you want to grow and you want to accelerate your growth, you know, if you, for instance, typically the mathematics behind it would be if you increase, for instance, in Asia 70% of your Salesforce in a perfect world, that should give you about 70% net adds. 70% net adds is probably to definitely increase the subscriber growth, but that just can, you can sort of see the compounding effect. This year, last year, we increased our staff by about 1,000 people. We expect in this year we could do as much as 1,500 people. It is an ongoing exercise, but I certainly believe that we started to get really good traction in the last six months, and I believe in FY2026 we will continue that good traction.

[Zak Calisto, Founder and CEO at Karoo]

Regions continue strength in South Africa, acceleration in Europe, strong momentum in Southeast Asia. Anything to call out relative to each of the core markers in enabling sustained broad-based success? You know, we focus on all the regions. I think all our regions offer a huge opportunity for growth. You know, over the long term, we believe Asia has got the best, you know, it's the biggest market with the highest growth opportunity, but I believe we'll get good growth in FY2026 from all the regions.

[Operator]

Next question from Alexandra Scar. Calling for an impressive acceleration growth out of FY2026. What is giving you the confidence on being able to execute on the sales hiring plans?

[Zak Calisto, Founder and CEO at Karoo]

Alex, the reality is we saw good momentum in the last six months, and we really believe that we're going to get even accelerated momentum during FY2026.

[Zak Calisto, Founder and CEO at Karoo]

I think the work-from-home culture that we saw globally, I think most companies have realized that, you know, that doesn't actually work. That plays exactly into the way we operate our business. We've never had a culture of work-from-home, and, you know, now that I believe it's normalizing to pre-COVID, I believe that we'll have less headwinds in hiring people.

[Operator]

Second question. How would you think about potential blended RPU growth in camera class?

[Operator]

As I said before, we're expecting about a 10% increase in our RPU during FY2026.

[Alexandria scar, Manager at Karooooo]

Rudy Fanucak, you ended the period with net cash of ZAR 840 million and no dividend declared. What is your thinking about the net cash balance?

[Zak Calisto, Founder and CEO at Karoo]

Really, we remain very much focused that, you know, it's all about how quickly can we allocate this capital for shareholders because our return on investment is very high, and we will deploy as much capital as we can to customer acquisition. Failing which, we will, you know, return any excess cash that we believe the board will look at and to shareholders. Typically, we look at this at the end of Q1, and we typically have in the past decided whether we pay a dividend or not in Q2, and we pay the dividend also in Q2. Typically, this is how we've done it in the past. As a follow-up question from Rudy, what is your current view on share buybacks? I think share buybacks, you know, it's very difficult for with the low liquidity.

[Zak Calisto, Founder and CEO at Karoo]

We've tried to do it earlier on with little success, so I think we must put our focus into other things at this point in time. We weren't very successful given the low liquidity.

[Operator]

Another question from Alex.

[Operator]

Total APAC net subscribers adding FY2024 are slightly down versus FY2023 levels. Is there anything you'd call out in the market, and how do you feel about the existing sales productivity in those markets that embark on great hiring? I think the sales productivity in Asia was strong, and we certainly believe as we hire more people that the sales productivity will probably take a little bit of a dip until typically these salespeople have been with us for over six months. I believe we'll get productivity even in the sales that, you know, salespeople that we'll hire.

[Carmen Calisto, Chief Strategy and Marketing Officer at Karooooo]

In the first two months of the year, we've done very good progress already in the first two months. Alex, with 10% RPU growth outlook, is there any like-for-like pricing increases for the core bundle plan or just camera tag attached growth? It's mostly on the back of camera and the tag growth. You know, to get a 10% increase, you obviously can only sell to a small percentage of your base. And it's, you know, we expect a small percentage of our base to take up the products in year one and year two, and as we progress, that should increase further.

[Operator]

I think that's all the questions for today. Thank you very much, everybody that's joined us. Thank you. Bye-bye.

Participants

Executives

• Paul Bieber, VP of Investor Relations and Strategic Finance
• Alexandria scar, Manager
• Carmen Calisto, Chief Strategy and Marketing Officer

Analysts

• Zak Calisto, Founder and CEO at Karoo
• Video Narrator