Karooooo Reports Strong Customer Acquisition With Annual EPS up 24% and Q4 EPS up by 45%

Rhea-AI Summary

Karooooo, the parent company of Cartrack, reported strong Q4 2024 and FY 2024 results, showing notable growth in customer acquisition and financial performance. Year-over-year, Cartrack subscribers rose by 15% to 1.97 million, with net subscriber additions up 65%. The company's Q4 operating profit increased by 25% to ZAR296 million, and earnings per share surged 45% to ZAR6.81. For the full year, EPS climbed 24% to ZAR23.85. Annual Recurring Revenue grew by 17% to ZAR3,769 million.

Cartrack's revenue and subscription revenue both grew by 17%, reaching ZAR3,614 million and ZAR3,523 million, respectively. Subscription revenue comprised 97% of the total revenue. Operating profit for the year also rose by 17% to ZAR1,069 million. Additionally, Cartrack logged a record EBITDA of ZAR1,710 million with an EBITDA margin of 47%. Karooooo Logistics saw a 77% increase in revenue to ZAR317 million, driven by its scalable delivery-as-a-service model.

Karooooo's Operations Cloud supports the digital transformation of over 121,000 commercial clients, boasting a 95% retention rate. The CEO highlighted the company's strong market position, robust balance sheet, and healthy cash position as key growth drivers.

Positive

• Cartrack subscribers increased by 15% to 1.97 million.
• Net subscriber additions rose by 65% to 63,340.
• Q4 operating profit grew by 25% to ZAR296 million.
• Q4 EPS surged by 45% to ZAR6.81.
• Full-year EPS increased by 24% to ZAR23.85.
• Annual Recurring Revenue (ARR) increased by 17% to ZAR3,769 million.
• Cartrack's revenue grew by 17% to ZAR3,614 million.
• Subscription revenue rose by 17% to ZAR3,523 million.
• Subscription revenue made up 97% of total revenue.
• Operating profit for the year increased by 17% to ZAR1,069 million.
• Record EBITDA of ZAR1,710 million with a 47% EBITDA margin.
• Karooooo Logistics revenue grew by 77% to ZAR317 million.
• Operations Cloud supports 121,000 commercial clients with a 95% retention rate.

Negative

• None.

Insights

Financial Analyst

Karooooo's strong financial performance in Q4 2024 is noteworthy. The 45% surge in quarterly EPS and the 24% increase in annual EPS highlight robust growth. The company’s 17% growth in Annual Recurring Revenue (ARR) to ZAR3,769 million indicates a stable and predictable revenue stream, which is attractive to investors. Additionally, the consistent EBITDA margin of 47% reflects efficient cost management and scalability.

However, investors should also consider potential risks. While growth is impressive, it is essential to monitor how the company manages its scalable business model in the logistics sector, which grew revenue by 77%. High growth rates may lead to operational challenges if not managed well. Furthermore, currency fluctuations could impact future profitability as the company operates in multiple regions.

Lastly, the company's focus on digital transformation and high customer retention rate of 95% are positive indicators of future stability. Overall, the financial growth and strategic initiatives position Karooooo favorably in the market.

Market Research Analyst

From a market perspective, Karooooo's continued expansion in the data analytics and business operational intelligence sector is promising. The 15% increase in Cartrack subscribers to over 2 million suggests strong demand for their services. This growth in subscriber base is important as it demonstrates the company's ability to attract and retain customers in a competitive market.

The 97% of total revenue coming from subscription services is significant. This ensures a steady stream of income, reducing dependence on one-time sales and aligns with industry trends where businesses prefer predictable, recurring revenue models. The high customer retention rate (95%) further solidifies this model, indicating customer satisfaction and loyalty.

Moreover, the company’s investment in AI products and platform enhancements is forward-thinking. As industries increasingly seek digital solutions to differentiate themselves, Karooooo’s offerings are well-positioned to meet these needs. The growing market for AI and digital transformation solutions could drive sustained demand for Karooooo’s services in the long term.

SINGAPORE--(BUSINESS WIRE)-- Karooooo, that owns 100% of Cartrack, a leading provider of data analytics and business operational intelligence, reported strong results for the fourth quarter and full year ended February 29, 2024 (“Q4 2024” and “FY 2024”).

Zak Calisto, CEO and Founder:

“We believe Karooooo is well positioned to continue to grow at scale across diverse industries. We operate in a growing and largely underpenetrated market, with strong demand coming from customers needing to differentiate and digitalise themselves.

Our proven, robust and strong track record of execution, compounding growth at scale and profitable business model is underpinned by a solid balance sheet and healthy cash position. We expect our continuous investment in our AI products, platform and customer experience to continue to generate robust results in the future.”

Cartrack subscribers increased 15% to 1,971,532 at February 29, 2024 (Q4 2023: 1,717,077), with net subscriber additions having increased by 65% to 63,340 (Q4 2023: 38,471). At the time of this press release, Cartrack had exceeded 2 million subscribers.

Karooooo’s operating profit grew by 25% to ZAR296 million (Q4 2023: ZAR237 million), and earnings per share for the quarter surged by 45% to ZAR6.81 (Q4 2023: ZAR4.70). Full year earnings per share is up 24% to ZAR23.85 (FY 2023: ZAR19.29).

Annual Recurring Revenue (ARR) rose by 17% to ZAR3,769 million (FY 2023: ZAR3,235 million).

Cartrack grew revenue by 17% to ZAR3,614 million (FY 2023: ZAR3,077 million) and subscription revenue by 17% to a record of ZAR3,523 million in FY 2024 (FY 2023: ZAR3,004 million). Cartrack’s subscription revenue equated to 97% of its total revenue.

Cartrack grew operating profit by 17% to a record of ZAR1,069 million (FY 2023: ZAR915 million). Further, Cartrack delivered a record EBITDA of ZAR1,710 million, up 17%, in FY 2024 (FY 2023: ZAR1,456 million) with EBITDA margin of 47% (FY 2023: 47%).

Karooooo Logistics grew revenue by 77% to ZAR317 million (FY 2023: ZAR180 million). The company focuses on delivery-as-a-service (“DaaS”) through third-party drivers and logistics companies. This scalable business model is now delivering healthy operating profits.

Karooooo's leading Operations Cloud drives the digital transformation of over 121,000 commercial clients. The company consistently demonstrates high implementation success and maintains a 95% commercial customer retention rate across businesses of various sizes, industries and geographic locations.

Full earnings: www.karooooo.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515316657/en/

ir@karooooo.com

Source: Karooooo

FAQ

What were Karooooo's Q4 2024 earnings per share (EPS) results?

Karooooo's Q4 2024 EPS surged by 45% to ZAR6.81 compared to ZAR4.70 in Q4 2023.

How much did Karooooo's full-year earnings per share grow in FY 2024?

Karooooo's full-year EPS increased by 24% to ZAR23.85 in FY 2024 from ZAR19.29 in FY 2023.

What was the percentage increase in Karooooo's Annual Recurring Revenue (ARR) in FY 2024?

Karooooo's Annual Recurring Revenue (ARR) increased by 17% to ZAR3,769 million in FY 2024.

How many Cartrack subscribers did Karooooo have at the end of Q4 2024?

Karooooo had 1,971,532 Cartrack subscribers at the end of Q4 2024, a 15% increase from 1,717,077 in Q4 2023.

What was Karooooo's record EBITDA for FY 2024?

Karooooo recorded an EBITDA of ZAR1,710 million in FY 2024, a 17% increase from FY 2023.

How much did Karooooo Logistics' revenue grow in FY 2024?

Karooooo Logistics' revenue grew by 77% to ZAR317 million in FY 2024.