Karooooo (KARO) Q2 2027 earnings summary

Executive summary

• Q2 total revenue rose 22% to ZAR1,640m; operating profit increased 19% to a quarterly record ZAR422m.

• Subscribers grew 18% to 2.90m, while net additions rose 34% to a Q2 record of 94,516.

• Cartrack subscription revenue grew 20% reported and 23% in constant currency, accelerating from 19% in Q1 despite FX headwinds.

Financial highlights

• ARR reached ZAR5,708m, up 19%; growth was 22% in constant currency and 30% in U.S. dollars.

• Basic EPS rose 18% to ZAR9.28; adjusted EPS increased 12%.

• H1 revenue grew 22% to ZAR3,204m and operating profit rose 18% to ZAR832m.

• Q2 free cash flow was ZAR41m; H1 free cash flow was ZAR100m, reflecting higher PPE investment and receivables to support growth.

Outlook and guidance

• FY2027 guidance maintained: Cartrack subscription revenue of ZAR5,700m–ZAR6,000m, gross margin of 70%–72%, and operating margin of 27%–30%.

• EPS guidance is ZAR38.50–ZAR40.00, implying 18%–23% growth versus FY2026 adjusted EPS, which excludes secondary-offering costs.

• H2 cash flow is expected to improve after significant device investment; continued growth investment will affect cash flow.

• Priorities include sales efficiency, Video and Cartrack Tag adoption, and embedding AI across operations and the platform.