Karooooo's growth bet pays off with record subscriber haul - Zak Calisto — Karooooo CEO Zak Calisto

Singapore-headquartered Karooooo, the parent of South African fleet management and operational intelligence company Cartrack, has reported record quarterly subscriber growth, with South Africa leading the charge.

Net subscriber additions jumped 70% to a record 142 472 in the three months to 31 May 2026, the first quarter of the group’s 2027 financial year, taking Cartrack’s total subscriber base past 2.8 million – 18% higher than a year ago.

South Africa was the standout performer. Net subscriber additions locally surged 92%, with Cartrack’s home-market subscription revenue growth accelerating to 24%. The company ended the quarter with nearly 2.12 million subscribers in South Africa, up 18% year on year.

“FY2027 has commenced with strong, accelerated growth, underpinned by Cartrack constant currency subscription revenue growth of 21% and a record 142 472 net subscriber additions in the quarter,” said group CEO Zak Calisto.

Group subscription revenue climbed 19% to R1.35-billion, while operating profit rose 16% to a record R410-million. Earnings per share increased 11% to R9.53.

The stronger rand weighed on the reported numbers, however, since most of Karooooo’s revenue outside South Africa translates into fewer rand when the local currency strengthens. In constant currency, Cartrack’s subscription revenue grew 21%, and annualised recurring revenue – up 19% in rand terms to R5.4-billion – climbed 32% in US dollar terms to $335-million.

“Despite the strengthening ZAR, which negatively impacts contributions from most of the countries in which we operate, subscription revenue and ARR each accelerated to 19%,” Calisto said.

Growth investment

The record subscriber growth came at a cost. Cartrack’s sales and marketing expenses rose 32% to R240-million as the company continued scaling the distribution capacity it began building in early FY2026, and its operating profit margin narrowed to 28% from 30% a year ago.

Free cash flow fell sharply to R60-million, from R338-million in the same quarter last year, as Karooooo ploughed R462-million – 62% more than a year ago – into in-vehicle IoT devices and stock for future installations to support the accelerated pace of customer acquisition.

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The company said the investment is paying off, with its ratio of customer lifetime value to acquisition cost continuing to exceed nine times. It said spending on sales and marketing typically takes about six months to translate into new customers.

Karooooo reaffirmed its full-year guidance, forecasting Cartrack subscription revenue of R5.7-billion to R6-billion – implying growth of 18-24% – and group earnings per share of R38.50 to R40, which at the midpoint implies growth of 21% over FY2026’s adjusted number.

Growth was slower in the group’s other regions, in part due to currency headwinds. Subscription revenue in Asia-Pacific and the Middle East grew 6% in rand terms (17% in constant currency), while Europe managed 7% (13% in constant currency). Karooooo said Southeast Asia remains its most compelling medium- to long-term growth opportunity after South Africa.

Karooooo Logistics, the group’s 81%-held delivery-as-a-service business, grew revenue 46% to R177-million on the back of demand from enterprise customers scaling their quick-commerce operations – the ultra-fast delivery model popularised in South Africa by the likes of Checkers Sixty60.