Accelerating constant currency subscription revenue growth (23% in Q2 vs 21% in Q1) and maintained guidance suggest strong execution. Watch for H2 free cash flow normalization as capex normalization and memory price headwinds to moderate. The ZAR752 million dividend paid in July 2026 and subsequent cash drawdown warrant monitoring of working capital and leverage.
Price Chart
Executive Summary
Karooooo reported strong Q2 FY2027 results with subscription revenue up 20% YoY to ZAR1,418 million and record operating profit of ZAR422 million (+19% YoY). EPS grew 18% to ZAR9.28. The company maintained its FY2027 guidance, with Cartrack constant currency subscription revenue growth accelerating to 23% in Q2, in the upper band of the 18%-24% outlook. Free cash flow was temporarily depressed by capex for IoT devices and inventory buffer against memory price increases.
Key Facts
- Q2 subscription revenue +20% YoY to ZAR1,418 million (USD88 million, +31%)
- Record Q2 operating profit of ZAR422 million, +19% YoY
- EPS +18% YoY to ZAR9.28; adjusted EPS +12% to ZAR9.28
- Cartrack subscribers +18% to 2.9 million; record net additions of 94,516 in Q2
- Cartrack constant currency subscription revenue growth accelerated to 23% (Q1: 21%)
- FY2027 guidance maintained: Cartrack subscription revenue ZAR5.7B-ZAR6.0B (18%-24% growth); EPS ZAR38.50-ZAR40.00 (18%-23% growth)
- Free cash flow Q2 ZAR41 million (Q2 2026: ZAR20 million); H1 ZAR100 million (H1 2026: ZAR358 million) due to capex for growth and memory price buffer
- Cash and equivalents ZAR649 million (Feb 2026: ZAR1,154 million); decrease driven by ZAR752 million dividend paid in July 2026
- Bank overdraft reclassified to financing; group has ZAR900 million in undrawn facilities
Financial Impact
Q2 subscription revenue ZAR1,418 million (+20% YoY); operating profit ZAR422 million (+19% YoY); EPS ZAR9.28 (+18% YoY). FY2027 guidance implies EPS of ZAR38.50-ZAR40.00 (18%-23% growth).
Risk Factors
- Free cash flow declined sharply H1 to ZAR100 million from ZAR358 million due to elevated capex for IoT devices and memory price buffer; normalization uncertain
- Cash and equivalents fell from ZAR1,154 million to ZAR649 million after dividend; bank overdraft reclassified to financing, increasing leverage
- Cartrack gross profit margin slipped from 72% to 70% Q2 (subscription 71% vs 72%); expected credit losses jumped to ZAR41 million from ZAR15 million
- FX headwinds from strengthening ZAR continue to depress reported ZAR-reported growth vs constant currency growth (20% vs 23%)
- Karooooo Logistics operating profit -4% YoY and margin 6% vs 8%; margin pressure from driver availability and network expansion costs
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001213900-26-110687 |
| Document: ea0309002-6k_karooooo.htm | 0001213900-26-110687 |
| Document: 0001213900-26-110687-index-headers.html | 0001213900-26-110687 |
| Document: 0001213900-26-110687-index.html | 0001213900-26-110687 |
| Document: 0001213900-26-110687.txt | 0001213900-26-110687 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 19, 2026 7d ago | 6-K | $62.65 $61.47 | ▼ −1.88% | ▼ −2.41% | $64.73 (+3.32%) |
Oct 5, 2026 21d ago | 6-K | $61.00 $61.60 | ▲ +0.98% | ▲ +0.43% | $64.73 (+6.11%) |
Jul 28, 2026 12w ago | 6-K | $63.96 $64.46 | ▲ +0.78% | ▲ +2.32% | $64.73 (+1.20%) |
Jul 23, 2026 13w ago | 6-K | $61.19 $63.34 | ▲ +3.51% | ▲ +3.41% | $64.73 (+5.79%) |
Jul 15, 2026 14w ago | 6-K | $65.16 $62.69 | ▼ −3.79% | ▼ −2.80% | $64.73 (−0.66%) |
Jul 9, 2026 15w ago | 6-K | $58.09 $57.73 | ▼ −0.62% | ▼ −1.05% | $64.73 (+11.43%) |
Jul 8, 2026 15w ago | 6-K | $57.73 $58.09 | ▲ +0.62% | ▼ −0.22% | $64.73 (+12.13%) |
Jul 2, 2026 16w ago | 6-K | $53.87 $56.32 | ▲ +4.55% | ▲ +3.68% | $64.73 (+20.16%) |
May 5, 2026 24w ago | 6-K | $50.32 $49.90 | ▼ −0.83% | ▼ −2.22% | $64.73 (+28.64%) |
US Market Status
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