Karooooo (KARO) 47th Annual Raymond James Institutional Investor Conference summary

Business overview and financial performance

• Operational intelligence platform for connected vehicles and mobile assets, serving 2.6 million subscribers across South Africa, Southeast Asia, and Europe.

• Annual recurring revenue (ARR) increased 28% year-over-year to $298 million, with total revenue up 22% and subscription revenue up 20% in the last quarter.

• Supports 125,000 commercial customers in 24 countries, maintaining a 95% commercial customer retention rate and a long-term LTV to CAC ratio above nine.

• Cartrack, the main operational management platform, delivered $72 million in Q3 subscription revenue (20% USD growth), while Karooooo Logistics contributed $8 million (31% growth).

• Group operating profit margin stands at 14%, with strong free cash flow generation and no stock-based compensation.

Growth drivers and strategic investments

• Significant investments in sales and marketing, up 46% in Q3, focused on expanding sales capacity in South Africa and Asia.

• Record net subscriber additions in Q3, driven by strategic sales investments and cross-selling of new telematics hardware and video solutions.

• ARR growth has accelerated over the past four quarters, reaching 22% in Q3, with subscriber growth at 16%.

• Sales capacity investments are expected to further boost subscriber growth in FY 2027.

• ARPU is currently a tailwind, with video safety products providing an uplift of 2.5x over core telematics ARPU.

Product innovation and technology

• Offers a feature-rich, vertically integrated platform with proprietary telematics and video solutions, deeply embedded in customer workflows.

• Video telematics and AI-driven safety features are expanding, with SMEs increasingly adopting these solutions for risk mitigation.

• AI strategy focuses on continuous evolution, enhancing in-cabin alerting and analytics for operational insights.

• Proprietary data asset built over 20 years across 20+ countries forms a significant competitive moat.

• Integration with customer ERP, CRM, and warehouse systems strengthens customer stickiness.