Cartrack, the vehicle-tracking brand most South Africans know from the little box fitted in their car, just posted its strongest quarter yet. Its owner, Karooooo, added a record 142,472 net subscribers in the three months to the end of May, lifting Cartrack's total base 18% past 2.8 million. That was 70% more additions than the same quarter a year earlier.
Home did the heavy lifting
The standout came from South Africa, where net new sign-ups jumped 92%. It is a notable result given the backdrop: a stronger rand was trimming the value of earnings Karooooo makes in its other markets. Even so, Cartrack's subscription revenue rose 19% to R1.35 billion, and grew 21% stripping out currency swings. Annualised recurring revenue — the run-rate of its subscription income — reached R5.43 billion, up 32% in US-dollar terms. Group operating profit climbed 16% to a record R410 million despite the currency drag, though Cartrack's operating margin eased to 28% from 30% a year earlier. Adjusted earnings per share rose 11% to R9.53. “FY2027 has commenced with strong, accelerated growth,” said group chief executive and founder Zak Calisto, whose group owns all of Cartrack and 81% of its logistics arm.
Spending now to grow later
There was one softer number. Free cash flow — the cash left after running costs and investment — fell to R60 million from R338 million a year earlier, as the group poured money into the in-vehicle devices it needs to sign customers up faster. It is a familiar trade for a subscription business: spend upfront to lock in years of recurring revenue. Karooooo Logistics, the group's delivery arm, added its own momentum, with revenue up 46% to R177 million on strong quick-commerce demand. The group ended May with R755 million in net cash, and cash from operations before working-capital moves rose 21% to R690 million. Karooooo reaffirmed its full-year outlook, guiding to Cartrack subscription-revenue growth of 18% to 24% and earnings per share of R38.50 to R40. The question for the rest of the year is whether all that upfront spending keeps converting into subscribers as quickly as it did this quarter.
