Q2 2025 Karooooo Ltd Earnings Call Transcript
Key Points
- Karooooo Ltd (KARO) reported a strong Q2 with total revenue of ZAR1,107 million, marking a 16% year-on-year increase.
- Cartrack's subscription revenue increased by 15% year-on-year to ZAR983 million, with a growth margin improvement of approximately 300 basis points to 74%.
- The company achieved a record net subscriber addition of over 89,000 in Q2, an 18% increase year-over-year, bringing the total to over 2.1 million subscribers.
- Karooooo Logistics demonstrated robust revenue growth with a 40% year-on-year increase, reaching ZAR101 million in Q2.
- Karooooo Ltd (KARO) maintained a strong balance sheet with net cash and cash equivalents of ZAR674 million, supporting its growth strategy.
- Karooooo Logistics showed muted quarter-on-quarter growth, with Q2 revenue matching Q1 FY25 revenue, indicating potential operational challenges.
- The company faced difficulties in executing share buybacks due to SEC rules, impacting liquidity management strategies.
- There is a potential risk of decreased LTV to CAC ratios as the company plans substantial headcount increases, which may affect short-term efficiency.
- Karooooo Ltd (KARO) experienced a drop in share price during a secondary public offering, leading to the termination of the offering.
- The company anticipates lower ARPU in Asia as Singapore's contribution decreases, potentially impacting revenue growth in the region.
(technical difficulty) will discuss our Q2 results and key business highlights. Our Group CEO and Founder, Zak Calisto will be available for Q&A following our presentation. All investors are advised to read the disclaimer. During the call, we will review both of Karooooo's operating units, Cartrack and Karooooo Logistics. For those new to Karooooo, Cartrack is our operations management SaaS platform focused in Asia, Africa and Europe. Cartrack operates at scale and has a very attractive financial profile. As of August 2024, Cartrack's annual recurring revenue was ZAR3,990 million or USD224 million and Cartrack's Q2 operating profit margin was 29%. Historically, Cartrack's operating momentum has driven Karooooo's growth and strong financial performance.
Karooooo Logistics is our rapidly growing delivery as a service business that empowers large enterprises to scale their e-commerce operations and capabilities. Karooooo Logistics is a structurally lower margin business than Cartrack and it is growing rapidly
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