Sales Hiring vs. Productivity: Contradictions in 2026Q1 Earnings Call

Subscription Revenue Growth and Market Expansion:
- Karooooo reported total subscription revenue of ZAR 1.141 million, an increase of 18%, with Cartrack's subscription revenue growing by 19%.
- Growth was driven by accelerating subscription revenue across all regions, including a significant acceleration in Southeast Asia.

Strong Financial Performance and Profitability:
- The company delivered earnings per share of ZAR 8.55, an increase of 19%, and a Cartrack adjusted EBITDA margin of 46%.
- This was supported by disciplined expense management, modest ARPU growth, and efficient customer acquisition.

SaaS ARR and ARPU Growth:
- Q1 SaaS ARR accelerated to 18%, with a U.S. dollar basis increase of 24%, and average revenue per user (ARPU) increased by 2% in ZAR or 6% on a U.S. dollar basis.
- The growth was attributed to strategic investments in sales capacity and execution of growth initiatives.

Regional Performance and Market Opportunity:
- Southeast Asia and the Middle East subscription revenue growth accelerated to 30%, with subscriber growth reaching 22%.
- This region is identified as a vast and underpenetrated market, presenting a significant growth opportunity for the company.

Disciplined Capital Allocation and Strategic M&A:
- Karooooo is committed to prioritizing organic growth and innovation, along with returning capital to shareholders when possible.
- M&A is viewed as a tool to accelerate time to market or expand the product portfolio, with potential acquisitions being subject to stringent criteria.