Karooooo, the company that owns Cartrack and Karooooo Logistics, has reported growth in its third-quarter results, with Cartrack driving the group’s substantial performance.
The vehicle tracking and fleet management company’s subscribers increased by 16%, reaching 2, 568 467 customers. The company added a record 111, 478 new subscribers during the quarter, well above the 86, 617 added a year earlier.
Based on its performance so far, Karooooo revised its outlook for the 2026 financial year. It expects Cartrack’s subscription revenue to be between R4.7-billion and R4.9-billion, representing growth of between 18% and 21%.
New subscribers boost growth
Karooooo CEO and founder Zak Calisto said the third-quarter performance reflected commitment to steadily growing the business. He noted the growth in subscription revenue and new subscriptions.
“Cartrack’s quarterly subscription revenue increased 20% to R1.2-billion and ARR increased 22% to R5.1-billion. This is representing a significant acceleration in growth compared to Q3 (third quarter) of the previous year, where subscription revenue and annual recurring revenue (ARR) each increased 14%.
“Importantly, our Q3 ARR growth of 22% also accelerated compared to 20% in the previous quarter. And our ARR increased 28% to $298-million (R4.8-billion). Q3 also delivered record net subscriber additions, supported by our accelerated growth strategy,” said Calisto.
Cartrack’s operating profit margin is expected to be between 27% and 30%. Karooooo also expects adjusted earnings per share to be between R32.50 and R35.50.
Karooooo Logistics, which makes up a smaller part of the group, reported modest growth. Its operating profit increased by 7% to R10-million, while its operating profit margin was 7%.
Main driver of company growth
The logistics business remains a smaller contributor compared with Cartrack, which continues to be the main driver of Karooooo’s growth.
Karooooo’s total subscription revenue rose by 20% to R1.2-billion. Cartrack made up the majority of this amount.
Across the whole group, Karooooo’s operating profit rose by 14% to R369-million. Earnings per share increased by 11% to R8.55, while adjusted earnings per share rose to R8.54.
“While accelerated growth creates timing differences between up-front growth-related expenses — such as sales and marketing expenses — and their realisation of future revenue, we believe that accelerating growth, when executed efficiently and supported by strong unit economics and our healthy balance sheet, is the appropriate strategy to drive long-term shareholder value.
“We expect our ongoing investment in distribution capacity to create durable advantages that extend beyond the current financial year. Finally, we remain firmly committed to disciplined capital allocation, strong unit economics and our vertically integrated and open operating culture,” said Calisto.
