Karooooo, the JSE and Nasdaq listed owner of Cartrack and 74.8% of Karooooo Logistics, is raising its subscriber forecast for its 2025 year after lifting year-on-year adjusted earnings a share 31% to R7.35 for the second quarter to August 31.
The company, which through its subsidiaries provides insights, real time data analytics and business intelligence predominantly on mobility assets, said yesterday that Cartrack's number of subscribers was now expected to be between 2.3 million and 2.4m, while previously the forecast was between R2.2m and R2.4m.
Cartrack's subscription revenue was expected to be between R3.95bn and R4.15bn - previously the forecast was between R3.9bn and R4.15bn.
CEO and founder Zak Calisto said in an interview they were already more than 50 000 subscribers higher than the end of August, and he was confident the targets would be reached.
Cartrack assists customers to improve workflows, manage field workers, increase efficiency, lower costs, improve safety, monitor environmental impact, assist with regulatory compliance and manage risk. There are currently about 2.18 million connected vehicles and equipment on the Cartrack cloud.
“We delivered another strong quarter of profitable growth. 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,” he said.
The building currently held some 2 000 staff but this would increase to up to 4500 as the business grew in South Africa, he said.
The company had also started to increase investment in sales and marketing in Southeast Asia, its fastest growing region in terms of subscriber numbers after Europe and South Africa, to capitalise on the growth opportunity in the region.
“We remain committed to a disciplined approach to growth, as evidenced by our continued strong unit economics,” he said.
The focus over the second half would be to continue to grow organically by further improving the platform, distribution and sales and continuing to offer customers better services, he said.
Karooooo grew subscription revenue by 15% to R986 million in the second quarter and operating profit grew by 22% to R302m.
Cartrack grew subscription revenue 15% to a record R983m. Subscription revenue equated to 98% of total revenue. Cartrack achieved 89 168 net subscriber additions in the quarter.
Karooooo Logistics increased revenue by 40% to R101m. Karooooo Logistics focuses on delivery-as-a-service 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.
Calisto said their robust and consistently profitable business model, underpinned by a strong balance sheet and healthy cash position, would enable them to continue to grow in a largely under-penetrated market.
In the quarter, Cartrack subscribers increased 17% to 2.14 million.
Karooooo's earnings a share was up by 22% to R6.85. After adjusting for a secondary public offering in July 2024, adjusted earnings per share grew by 31% to R7.35.
Cartrack delivered record operating profit of R293m, up 16%. The gross profit margin expanded to 74% from 71% in the second quarter of 2024.
Karooooo Logistics operating profit rose by 20% to R9m as it continued to scale.
Cartrack grew operating profit by 20% to a record of R580m. Karooooo Logistics grew operating profit by 78% to R22m.
At August 31, Karooooo's property, plant and equipment had increased by R218m to R2.25bn, primarily due to an increase of R138m in in-vehicle capitalised telematic devices, an increase of R15m in telematic devices available for future sales and an investment of R49m in building the South African central office.
After allocating R49m to the new South African central office and paying a dividend of R33.4m in the first half of 2025, the net cash and cash equivalents balance came to R674m at August 31, compared with R436m at February 29, 2024.
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