Karooooo (KARO) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 FY25 results with 15% subscription revenue growth, 34% increase in operating profit, and 41% rise in EPS year-over-year, serving over 124,000 businesses daily and reaching 2.1 million subscribers across 23 countries.

• Maintained a 95% commercial customer retention rate and continued profitable growth at scale despite macroeconomic headwinds.

• Management remains confident in meeting FY 2025 outlook, supported by a robust balance sheet, disciplined capital allocation, and strong cash generation.

• Southeast Asia identified as a key medium- to long-term growth driver.

Financial highlights

• Q1 FY25 subscription revenue up 15% to ZAR 964 million; total revenue up 9% to ZAR 1,082 million year-over-year.

• Operating profit increased 34% to ZAR 300 million; EPS up 41% to ZAR 7.17.

• Gross profit up 19% to ZAR 713 million; gross margin improved to 73–74%.

• Free cash flow for the quarter was ZAR 83 million; net cash and deposits at ZAR 950 million as of May 31, 2024.

• Declared a cash dividend of USD 33.4 million (USD 1.08 per share), payable in August 2024.

Outlook and guidance

• FY25 Cartrack subscribers expected between 2.2–2.4 million; subscription revenue ZAR 3.9–4.15 billion; operating profit margin 27–31%; EPS ZAR 27.5–31.

• Confident in continued growth in South Africa, Southeast Asia, and Europe, with ongoing investment in AI and platform enhancements.