Karooooo (KARO) Q4 2026 earnings summary

Executive summary

• FY 2026 saw accelerated subscription revenue growth of 19% (up from 15% in FY 2025), with ARR up 18% to ZAR 5,179 million and 38% in USD, despite FX headwinds from a strengthening ZAR.

• South Africa, the most mature market, exited the year with 23% ARR growth and 16% subscriber growth, reinforcing market leadership.

• Adjusted free cash flow surged 90% to ZAR 809 million, and a $1.50 dividend per share (+20%) was declared, payable July 2026.

• Subscriber base reached 2.7 million, with record Q4 net additions of 94,000 and strong growth in Asia (23% YoY).

• FY 2027 outlook targets 18–24% subscription revenue growth and 21% EPS growth at midpoint, with focus on salesforce efficiency, AI adoption, and slower hiring.

Financial highlights

• Total revenue increased 20% to ZAR 5,479 million; subscription revenue rose 19% to ZAR 4,844 million.

• Operating profit grew 8% to ZAR 1,415 million; adjusted EPS was ZAR 32.55, up 3% YoY.

• Adjusted free cash flow surged 90% to ZAR 809 million, reflecting improved collections and capital management.

• Q4 subscription revenue up 18% to ZAR 1,278 million; Q4 operating profit ZAR 324 million.

• Net cash and equivalents at year-end: ZAR 746 million.

Outlook and guidance

• FY 2027 Cartrack subscription revenue guidance: ZAR 5,700–6,000 million (18–24% growth); EPS guidance: ZAR 38.5–40, implying 21% growth at midpoint.

• Cartrack gross profit margin expected at 70–72%; operating profit margin at 27–30%.

• Focus on sales force efficiency, AI adoption, and slower hiring in FY 2027.