Karooooo (KARO) Q4 2025 earnings summary

Executive summary

• Achieved record revenue, operating profit, and EPS for Q4 and FY2025, with subscription revenue up 16% in Q4 and 15% for the year, and adjusted EPS up 39% in Q4 and 33% for FY2025.

• Subscriber base grew 17% year-over-year to 2.3 million, with net subscriber additions up 25% in Q4 and 30% for FY2025.

• Maintained robust operating profit margins of 34% in Q4 and 31% for FY2025, supported by efficient unit economics and a 95% commercial customer retention rate.

• Strong balance sheet with net cash and cash equivalents of ZAR838 million as of February 28, 2025; paid a USD33.4 million dividend in August 2024.

• Operates in a large, underpenetrated market across Africa, Southeast Asia, and Europe, with demand driven by digital transformation and operational efficiency.

Financial highlights

• FY2025 subscription revenue rose 15% to ZAR4,068 million (19% in USD); operating profit up 26% to ZAR1,312 million; adjusted EPS up 33% to ZAR31.67.

• Q4 2025 subscription revenue increased 16% to ZAR1,086 million; operating profit up 30% to ZAR385 million; adjusted EPS up 39% to ZAR9.48.

• Karooooo Logistics revenue grew 33% to ZAR420 million in FY2025, with a 9% operating profit margin.

• Adjusted free cash flow for FY2025 was ZAR425 million, reflecting increased investment in IoT devices.

• Southeast Asia Q4 constant currency subscription revenue growth 31%; Europe 19%; South Africa 15%.

Outlook and guidance

• FY2026 Cartrack subscription revenue expected between ZAR4,700–4,900 million (16–21% growth); operating profit margin 26–31%; EPS ZAR32.50–35.50.

• Upfront investment in sales and marketing in FY2026 expected to moderate EPS growth.

• Focus on expanding distribution, driving platform adoption, and capitalizing on demand for video and AI solutions, especially in Asia and Europe.