Karooooo (KARO) Raymond James TMT and Consumer Conference summary

Business overview and market position

• Operates a SaaS platform in telematics, fleet management, AI video, and logistics, with 2.4 million subscribers across 24 regions.

• South Africa is the largest market, generating nearly 70% of revenue and holding a 40% market share despite entering the market later than competitors.

• Asia is the fastest-growing region, with a next-generation platform and smaller, less advanced competitors.

• Competes in Europe with established telematics providers and tire manufacturers that have acquired local players.

Differentiation and strategy

• Fully vertically integrated, owning the entire tech stack and customer value chain, which enhances customer retention and satisfaction.

• Focuses on sustained growth and capital allocation, maintaining strong free cash flow and profitability.

• New products like Cartrack Tag and Video are being cross-sold to existing customers, especially in South Africa.

Growth drivers and hiring

• FY25 subscription revenue growth was 15%, with guidance of 16%-21% for FY26; Q2 saw 20% growth and a 500 basis point acceleration year over year.

• Aggressive hiring strategy, targeting 70% sales headcount growth in Asia (38% achieved by Q2), aiming to drive revenue growth into the mid- to high-20% range.

• Sales hiring is the main growth constraint, with a focus on quality and productivity of new hires.