Karooooo Increases Earnings by 31% Driven by Strong Subscription Revenue Growth and Higher Gross Margins

Rhea-AI Summary

Karooooo reported strong Q2 2025 and HY 2025 results, ending August 31, 2024. Key highlights include:

• 17% Y/Y increase in subscribers to 2.14 million
• 18% Y/Y increase in Cartrack net subscriber additions to 89,168
• 300bps Y/Y improvement in Cartrack gross margin to 74%
• 31% Y/Y increase in adjusted earnings per share to ZAR7.35

Karooooo grew subscription revenue by 15% to ZAR986 million, with operating profit up 22% to ZAR302 million. Cartrack's subscription revenue grew 15% to ZAR983 million, representing 98% of total revenue. Karooooo Logistics saw a 40% revenue increase to ZAR101 million. The company has raised its FY25 outlook for subscribers and Cartrack subscription revenue.

Positive

• 17% year-over-year increase in subscribers to 2.14 million
• 18% year-over-year increase in Cartrack net subscriber additions to 89,168
• 300 basis points year-over-year improvement in Cartrack gross margin to 74%
• 31% year-over-year increase in adjusted earnings per share to ZAR7.35
• 15% growth in subscription revenue to ZAR986 million
• 22% increase in operating profit to ZAR302 million
• 40% revenue growth in Karooooo Logistics to ZAR101 million
• Raised FY25 outlook for subscribers and Cartrack subscription revenue

Negative

• None.

Insights

Financial Analyst

Karooooo's Q2 2025 results demonstrate robust growth and improved profitability. The 17% Y/Y increase in subscribers to 2.14 million and 18% Y/Y growth in Cartrack net subscriber additions to 89,168 indicate strong market demand. The 300bps improvement in Cartrack gross margin to 74% shows effective cost management. The 31% Y/Y increase in adjusted EPS to ZAR7.35 is particularly impressive, reflecting enhanced operational efficiency. With subscription revenue growing 15% to ZAR986 million and representing 98% of total revenue, Karooooo exhibits a stable, recurring revenue model. The company's raised FY25 outlook suggests confidence in continued growth. The investment in a new central office and increased marketing efforts in Southeast Asia position Karooooo for further expansion, albeit with a disciplined approach to maintain strong unit economics.

Market Research Analyst

Karooooo's performance indicates a growing market for telematics and fleet management solutions. The company's success in South Africa and expansion plans in Southeast Asia highlight the global potential of this sector. The 40% revenue growth in Karooooo Logistics to ZAR101 million demonstrates the increasing demand for delivery-as-a-service (DaaS) solutions, particularly in e-commerce. This aligns with broader trends of digital transformation in logistics and supply chain management. The company's focus on connecting large enterprises with third-party delivery drivers without requiring asset investments is a scalable model that addresses current market needs. The consistent profitability and strong balance sheet position Karooooo well to capitalize on the underpenetrated market, suggesting potential for long-term growth and market share expansion in the telematics and logistics technology sectors.

SINGAPORE--(BUSINESS WIRE)-- Karooooo Limited (“Karooooo”) reported strong results and a positive outlook in the second quarter (“Q2 2025”) and Half-Year (“HY 2025”) ended August 31, 2024. Karooooo owns 100% of Cartrack and 74.8% of Karooooo Logistics, (collectively, “the group”).

Financial and operational highlights include:

• Karooooo subscribers increased 17% Y/Y to 2.14 million
• Cartrack net subscriber additions increased 18% Y/Y to a record 89,168
• Cartrack gross margin improved approximately 300bps Y/Y to 74%
• Karooooo adjusted earnings per share increased 31% Y/Y to a record ZAR7.35
• Raising FY25 outlook for subscribers and Cartrack subscription revenue at midpoint

Zak Calisto, CEO and Founder:

“We delivered another strong quarter of profitable growth in the second quarter. Importantly, we recently completed the move to our newly built central office in South Africa, which positions us to support higher organic growth in the region. In addition, we started to increase our investment in sales and marketing in Southeast Asia to capitalize on the compelling growth opportunity for the group in the region. Despite increased capital allocation to growth in Southeast Asia, we remain committed to a disciplined approach to growth as evidenced by our continued strong unit economics.”

Karooooo grew subscription revenue by 15% to ZAR986 million (Q2 2024: ZAR860 million) in Q2 2025, and operating profit grew by 22% to ZAR302 million (Q2 2024: ZAR247 million).

Cartrack grew subscription revenue by 15% to a record ZAR983 million in Q2 2025 (Q2 2024: ZAR858 million). Subscription revenue equated to 98% of total revenue. Cartrack achieved 89,168 net subscriber additions in the quarter, building on its solid track record of growing at scale.

Karooooo Logistics grew revenue by 40% to ZAR101 million (Q2 2024: ZAR72 million). Karooooo Logistics focuses on delivery-as-a-service (“DaaS”) for large enterprise customers wishing to scale and digitalise their e-commerce operations without investing unnecessarily in additional assets by connecting them into an elastic fleet of third-party delivery drivers.

Our proven, robust and consistently profitable business model, underpinned by a strong balance sheet and healthy cash position, positions us to capitalize on a growing and largely underpenetrated market.

For the full earnings, visit: www.karooooo.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20241014203395/en/

ir@karooooo.com

Source: Karooooo Limited

FAQ

What was Karooooo's (KARO) subscriber growth in Q2 2025?

Karooooo's subscribers increased by 17% year-over-year to 2.14 million in Q2 2025.

How much did Karooooo's (KARO) adjusted earnings per share grow in Q2 2025?

Karooooo's adjusted earnings per share increased by 31% year-over-year to a record ZAR7.35 in Q2 2025.

What was Cartrack's subscription revenue growth for Karooooo (KARO) in Q2 2025?

Cartrack's subscription revenue grew by 15% to a record ZAR983 million in Q2 2025, representing 98% of total revenue.

How many net subscriber additions did Cartrack achieve for Karooooo (KARO) in Q2 2025?

Cartrack achieved 89,168 net subscriber additions in Q2 2025, an 18% increase year-over-year.