Karooooo Ltd. Earnings Recaps
Q4 2026
May 16, 2026
Karooooo's shares declined 3.0% following earnings as investors focused on the cautious outlook, notably the guidance for gross profit margin contraction in FY '27 despite solid ARR growth and free cash flow improvements.
Key takeaways
- Annual Recurring Revenue (ARR) increased 18% to ZAR 5,179 million (38% in USD terms), with subscription revenue growth accelerating to 19% despite foreign exchange headwinds.
- Adjusted free cash flow nearly doubled, rising 90% to ZAR 809 million, highlighting scalable cash generation.
- Cartrack segment continued as the primary growth driver, with a 19% subscription revenue increase and a healthy 28% operating profit margin.
- Karooooo Logistics showed strong momentum with 29% revenue growth, reflecting potential in the delivery-as-a-service segment.
- Management signaled margin pressure ahead, forecasting a contracting gross profit margin for FY '27 alongside EPS growth, suggesting cost pressures and a cautious outlook that tempered enthusiasm.
Q3 2026
Jan 21, 2026
Karooooo achieved strong Q3 FY 2026 results, marked by a 28% increase in ARR to USD 298 million and robust subscriber growth, reflecting effective investments in sales and marketing.
Key takeaways
- ARR growth accelerated to 22% in local currency and 28% in USD, nearing USD 300 million.
- Subscription revenue accounted for 97% of total revenue, demonstrating strong operational profitability with an operating profit margin of 28%.
- Total subscribers rose 16% to approximately 2.6 million, with a 95% commercial customer retention rate.
- Karooooo Logistics experienced a notable 24% revenue growth, reinforcing its strategic importance in driving enterprise e-commerce and logistics.
- The company maintained a Rule of 60 status, highlighting its commitment to disciplined, profitable growth within the competitive SaaS landscape.