Karooooo (KARO) Q2 2025 earnings summary

Executive summary

• Total revenue for Q2 FY25 reached ZAR 1,107 million, up 16% year-on-year, with subscription revenue at ZAR 986 million, up 15% year-on-year.

• Subscriber base grew 17% year-on-year to 2.14 million, with record net subscriber additions of 89,168 in the quarter.

• Adjusted earnings per share rose 31% year-on-year to ZAR 7.35, driven by strong subscription revenue and higher gross margins.

• Cartrack remains the primary growth driver, with a 29% operating profit margin and 45% adjusted EBITDA margin in Q2.

• Karooooo Logistics delivered Q2 revenue of ZAR 101 million, up 40% year-on-year, and remains profitable at its current scale.

Financial highlights

• Cartrack subscription revenue increased 15% year-on-year to ZAR 983 million, with gross margin improving by 300 basis points to 74%.

• Cartrack operating profit was ZAR 293 million, up 22% year-on-year.

• Free cash flow for Q2 was ZAR 166 million; net cash and cash equivalents stood at ZAR 674 million.

• Dividend of USD 33.4 million paid in August 2024, a 27% increase per share year-on-year.

• Adjusted EBITDA for Q2 was ZAR 463 million, with a margin of 42%.

Outlook and guidance

• FY25 guidance midpoint for Cartrack subscribers raised to 2.3–2.4 million (from 2.2–2.4 million), and Cartrack subscription revenue to ZAR 3.95–4.15 billion.

• Cartrack operating profit margin outlook remains 27%–31%; EPS outlook unchanged at ZAR 27.5–31.

• Southeast Asia expected to be the largest growth driver over the medium to long term.