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What were the key takeaways from Karooooo's earnings call?

- **ARR Growth Acceleration**: 20% YoY to ZAR 4.8 billion, led by 27% Europe and 26% Southeast Asia expansion.
- **Profitability Strength**: 46% Cartrack EBITDA margin, 72% subscription gross margin, and 95% ARR retention.
- **AI & Sales Strategy**: Cautious AI adoption due to customer preference for human interaction; scaling sales teams to meet 10% video sales penetration target.
- **Cash Flow Resilience**: +44% YoY free cash flow to ZAR 358 million, supporting dividend payments and growth investments.

**【CEO Summary Section】**
- ARR grew 20% YoY to ZAR 4.8 billion (USD 272 million), driven by 27% Europe and 26% Southeast Asia growth.
- Subscription revenue reached ZAR 1.18 billion (98% of Cartrack revenue), with 15% subscriber growth to 2.5 million.
- LTV:CAC >9x, 95% ARR retention, and 72% subscription gross margin.
- South Africa ARPU target: +10% YoY, group-wide +6%.

**【CFO Financial Commentary】**
- Q2 operating profit rose 18% to ZAR 356 million, with Cartrack EBITDA margin 46%.
- Free cash flow increased 44% YoY to ZAR 358 million, supported by 31-day DSO.
- Net cash position ZAR 393 million, with $38.6 million dividend paid in August.

**【Q&A Key Highlights】**
- ARPU growth constrained by team capacity, with video sales at 10% of total.
- Gross margin stable at 72%, despite higher COGS for new hardware.
- AI adoption cautious due to customer preference for human interaction.
- FY26 focus: expanding sales teams, cross-selling video, and scaling Karooooo Logistics.

Karooooo Ltd. (KARO) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

KARO

KARO fundamentals

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