Karooooo, a Singapore-headquartered company that owns the South African fleet management and operational analytics company Cartrack, has reported a record quarterly increase in subscribers. The most significant growth was demonstrated in South Africa.
First Quarter 2027 Financial Results
Over the three months ending May 31, 2026, net subscriber growth increased by 70%, reaching a record 142,472. This allowed Cartrack's total subscriber count to exceed 2.8 million, which is 18% more than the previous year.
South Africa led among the regions. Local subscriber growth surged by 92%, and subscription revenue growth in the domestic market accelerated to 24%. During the reporting period, nearly 2.12 million subscribers were registered in South Africa, an 18% year-on-year increase.
Revenue and Profit Dynamics
Group CEO Zak Kalisto noted that the 2027 financial year started with strong and accelerated growth, driven by Cartrack's subscription revenue growth of 21% in constant currency and a record net subscriber increase of 142,472 for the quarter.
The company's total subscription revenue grew by 19%, amounting to 1.35 billion rand, and operating profit increased by 16%, reaching a record 410 million rand. Earnings per share rose by 11% to 9.53 rand.
However, the stronger rand had a negative impact on reported figures, as much of Karooooo's revenue outside of South Africa generates fewer rand with the strengthening local currency. In constant currency, Cartrack's subscription revenue grew by 21%, and annual recurring revenue, which grew by 19% in rand terms to 5.4 billion rand, increased by 32% in USD equivalent to 335 million US dollars.
Business Development Investments
The record subscriber growth required significant expenditure. Cartrack's sales and marketing expenses increased by 32%, reaching 240 million rand, as the company continued to expand distribution capabilities it began building at the start of the 2026 fiscal year. Consequently, the operating profit margin decreased from 30% the previous year to 28%.
Free cash flow sharply declined to 60 million rand compared to 338 million rand in the same quarter last year. This is because Karooooo invested 462 million rand—62% more than the previous year—in in-vehicle IoT devices and inventory for future installations to support the accelerated customer acquisition pace. The company stated that these investments are paying off, as the customer lifetime value to customer acquisition cost ratio continues to exceed nine times. It was also noted that sales and marketing expenditures typically take about six months to convert into new customers.
Forecasts and Regional Dynamics
Karooooo confirmed its full-year forecasts, expecting Cartrack's subscription revenue to be between 5.7 and 6 billion rand, implying growth of 18–24%. The earnings per share forecast is between 38.50 and 40 rand, averaging an expected growth of 21% compared to adjusted FY2026 figures. Growth in other group regions was slower, partly due to currency challenges. Subscription revenue in the Asia-Pacific and Middle East regions grew by 6% in rand terms (17% in constant currency), and in Europe by 7% (13% in constant currency). Karooooo considers Southeast Asia the most promising medium-term and long-term growth opportunity after South Africa.
Furthermore, Karooooo Logistics, a business owned by the group 81% and engaged in delivery services, increased revenue by 46% to 177 million rand due to demand from corporate clients expanding fast commercial service operations, popular in South Africa, such as Checkers Sixty60. The group announced an interim dividend of $1.50 per share, payable to JSE shareholders on July 20.
