Karooooo, the JSE and New York-listed owner of vehicle telematics and fleet management company Cartrak, accelerated its growth in the three months to November 30 even as it continued to build distribution capacity, CEO and founder Zak Calisto said yesterday.
Cartrack’s quarterly subscription revenue increased 20% to R1.24bn and ARR (annual recurring revenue) increased 22% to R5.11bn, representing a significant acceleration in growth, compared to the 2024 third quarter, where subscription revenue and ARR each increased 14%.
There were record Cartrack subscriber additions of 111 478, versus 86 617 in the third quarter of 2024. Third quarter ARR growth of 22% also accelerated compared to 20% in the previous quarter, and ARR increased 28% in US dollars to $298 million.
“This growth, and growth in earnings, came even though we have been building muscle to invest in our distribution, so that we can continue to gain market shares in our regional markets,” Calisto said in an interview.
Karooooo’s adjusted third quarter earnings per share increased 11% year-on-year to R8.55. Cartrack subscribers increased 16% to 2 568 467. Karooooo’s operating profit increased 14% to R369m. Cartrack’s operating profit increased 14% to R359m, and Cartrack’s operating profit margin was 28% versus 30% in the third quarter of the 2025 financial year.
Cartrack’s operating profit incorporated investment in sales capacity and acquisition-related expenses, to support accelerated growth.
Calisto said their staff complement had increased to about 7 500 by the end of the third quarter after taking on about 350 mostly sales related staff through the period. He said their investment in additional staff would continue and may even reach over 10 000 people through the next financial year.
In South Africa, the group strategy to cement market leadership through new subscriptions was driven also by selling two new telemetry devices, Video and Cartrack Tag, to existing customers.
Cartrack’s sales and marketing expenses increased 47% to R229m in the third quarter. The fact that the average life cycle of the subscription contracts exceeds 60 months, combined with strong customer retention, created a timing mismatch between when acquisition costs were expensed and when the related revenue was realized.
Innovation through AI platform and technological enhancements and improved customer experience, was a continual process in the group, said Calisto.
“Although these growth-oriented investments weigh on short-term operating profitability, we believe that pursuing accelerated growth – when executed efficiently and supported by strong unit economics – is the appropriate strategy to drive long-term shareholder value,” he said.
Karooooo Logistics’ operating profit increased 7% to R10m. Karooooo Logistics’ operating profit margin was 7% (8%).
“We operate in an expanding and largely underpenetrated market, fueled by robust and sustained customer demand. This demand is driven by a heightened focus on digitalization, the need to improve operational efficiency and reduce costs, and increasing attention to safety in physical operations,” he said.
The balance sheet remained strong and the cash position was healthy, providing “multiple levers for expansion,” he said.
“We are confident that our investments in sales capacity this year positions us well to drive subscriber growth moving forward,” said Calisto.
BUSINESS REPORT
