Q1 2025 Karooooo Ltd Earnings Call Transcript
Key Points
- Karooooo Ltd (KARO) experienced strong customer acquisitions with total subscription revenue up 15% to ZAR964 million.
- Operating profits increased by 34% to ZAR300 million, and earnings per share rose by 41% to ZAR7.17.
- The company has a high customer retention rate of 95%, indicating strong customer satisfaction and loyalty.
- Karooooo Ltd (KARO) continues to invest in platform innovation and territorial expansion, particularly in Southeast Asia, which is seen as a significant growth driver.
- The company maintains a robust balance sheet with net cash on hand plus cash in bank fixed deposits standing at ZAR950 million.
- Despite the positive financial performance, Karooooo Ltd (KARO) faces rising costs in research and development, which increased to 6% of subscription revenue.
- The competitive environment in South Africa remains extremely challenging, with strong competitors having been in the market for approximately 10 years longer than Karooooo Ltd (KARO).
- The company is experiencing macroeconomic headwinds in some of the markets it operates in, which could impact future growth.
- General and administrative expenses as a percentage of subscription revenue are at 21%, indicating significant overhead costs.
- The company acknowledges that not all customers are fully utilizing the platform's capabilities, which could limit the potential value derived from their services.
Hello, and welcome to Karooooo's financial year 2025 Q1 earnings call. On behalf of Karooooo we would like to thank you for joining us today. I'm Carmen, the group's Chief Strategy and Marketing Officer and together with Hoeshin, our Group Chief Financial Officer, will be taking you through our key business updates and strong financial performance.
All investors are advised to read through the disclaimer, we will be reviewing both Cartrack and Karooooo logistics in today's webinar. After a milestone Q1 for net subscribers, we continue to profitably grow at scale and now have over 124,000 businesses choosing to power their operations every single day with our cloud.
Management believes we are on track to achieving our FY25 outlook and remain excited to continue on our over 10-year track record of strong financial growth and performance. Physical operations, bring us the food we eat and the infrastructure we rely on to call our families. They build our homes and they keep our communities healthy and clean.
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