Karooooo (KARO) UBS’s 2025 Global Technology and AI Conference summary

Business overview and market position

• Operates a SaaS platform focused on telematics, fleet management, AI, vision, and logistics, with 2.5 million subscribers in 24 countries.

• South Africa generates over 70% of revenue and has a 40% market share, with 1.9 million subscribers out of a 13 million vehicle pool.

• Competes with Geotab, Powerfleet, Netstar, and Ctrack in South Africa; faces smaller, less feature-rich competitors in Asia and local players in Europe.

• Fully vertically integrated, unlike many competitors who outsource parts of their business.

• Asia is the fastest-growing segment, with a focus on expanding sales headcount and platform sophistication.

Growth strategy and regional performance

• South Africa still offers significant growth runway, with new products like Cartrack-Tag and AI video driving upsell opportunities.

• Subscriber growth in South Africa was 15% and revenue growth 18% in the last quarter; focus remains on cementing leadership and expanding sales teams.

• Asia sales headcount targeted to increase by 70% year-over-year, aiming for mid- to high-20% subscription revenue growth.

• Europe continues to build sales capacity, with ongoing investments to drive adoption and profitability.

• No macro headwinds observed; subscription revenue growth guidance for FY 2026 is 16%-21%, with 20% achieved in Q2.

Product innovation and cross-sell initiatives

• Cartrack-Tag is an asset tracking device for non-vehicle equipment, addressing customer needs in construction and logistics.

• Cross-selling Tag and video solutions to existing customers is a strategic focus, with low single-digit penetration rates and significant runway for growth.

• Video solutions offer a 2x-4x ARPU uplift at similar operating profit margins to the core business.

• Cross-sell initiatives are prioritized to maintain competitive advantage and drive long-term business health.

• New features are typically included in existing pricing tiers to drive retention, with hardware products requiring a dedicated sales process.