Singapore-headquartered Karooooo has reported a record second-quarter operating profit and accelerated subscriber growth. Strong demand for subsidiary Cartrack’s fleet management and operational intelligence platform helped offset the impact of a stronger South African rand on reported earnings.
The group, which owns 100% of Cartrack and 91.5% of Karooooo Logistics, said operating profit for the three months ended August 31, 2026, rose 19% year-on-year to R422-million, while earnings per share increased 18% to R9.28. Subscription revenue climbed 20% to R1.42-billion.
Cartrack, the group’s main operating business, increased its subscriber base by 18% to 2.9-million users and added a record 94,516 net subscribers during the quarter. Annualised recurring revenue grew 19% to R5.71 billion.
Growth momentum across regions
Chief executive Isaias (Zak) Calisto said the company saw accelerating growth across all operating regions. Constant-currency subscription revenue growth reached 23% in the quarter, up from 21% in the previous quarter, placing performance at the upper end of the company’s full-year target range.
“We are pleased to report another quarter of acceleration,” Calisto said, adding that the company remained focused on customer acquisition, cross-selling opportunities and the broader adoption of artificial intelligence across the business.
The stronger rand continued to weigh on the translation of foreign earnings into South African currency. Nevertheless, Cartrack’s subscription revenue increased 20% to R1.42-billion, while revenue measured in US dollars rose 31% to US$88 million.
Strong revenue growth from logistics division
Karooooo Logistics, the group’s delivery-as-a-service business, posted revenue growth of 36% to R189-million, supported by demand for quick-commerce deliveries.
However, operating profit declined 4% to R11-million due to higher costs related to driver availability and network expansion.
READ MORE: Cartrack drives group’s performance with 16% subscriber growth
For the first half of the financial year, group subscription revenue rose 19% to R2.77-billion and operating profit increased 18% to R832-million. Net subscriber additions accelerated 53% to a record 236,988.
Guidance maintained despite investment demands
Management maintained its full-year guidance, forecasting Cartrack subscription revenue of between R5.7-billion and R6-billion, implying growth of 18% to 24%. The company also reiterated expectations for Cartrack operating margins of 27% to 30% and full-year earnings per share of between R38.50 and R40.
Investors will be watching whether Karooooo can sustain its growth trajectory while managing higher capital expenditure requirements.
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The company said free cash flow was temporarily affected by increased investment in telematics devices and inventory to support growth and mitigate rising memory and RAM costs.
Cash and cash equivalents stood at R649-million at the end of August, down from R1.15-billion six months earlier, largely due to a R752-million dividend payment and investment in growth initiatives.
- Karooooo’s operating profit for Q2 ending August 31, 2026, rose 19% year-on-year to R422-million, with earnings per share up 18% to R9.28.
- Cartrack’s subscriber base increased 18% to 2.9 million, adding a record 94,516 net subscribers in the quarter.
- Subscription revenue rose 20% to R1.42-billion, with constant-currency subscription revenue growth of 23%.
- Karooooo Logistics' revenue grew 36% to R189-million, but its operating profit declined 4% to R11-million due to higher costs.
- The group maintained full-year guidance for Cartrack subscription revenue between R5.7-billion and R6-billion, with expected operating margins of 27% to 30% and earnings per share between R38.50 and R40.
