Karooooo .(KARO)2025-01-14 21:05Subscriber Growth - Karooooo's subscribers increased 17% year-over-year to 2.22 million as of November 30, 2024[1] - Cartrack's net quarterly subscriber additions rose 15% year-over-year to 86,617[3] - Cartrack's subscriber base in South Africa increased by 16% to 1,675,473 as of November 30, 2024, with subscription revenue growth of 14%[56] - In the Asia Pacific, Middle East, and United States regions, subscribers grew by 20% to 264,342, resulting in a 21% increase in subscription revenue[59] - Cartrack's European subscriber count rose by 19% to 191,781, translating to a 14% growth in subscription revenue[61] - The number of subscribers in Africa (excluding South Africa) increased by 16% to 91,631, although subscription revenue remained stagnant due to billing suspensions in Mozambique[63] Revenue Growth - Karooooo's subscription revenue increased 14% to ZAR1,032 million compared to ZAR904 million in Q3 2024[5] - Cartrack's subscription revenue also grew 14% to ZAR1,029 million from ZAR900 million in Q3 2024[5] - Karooooo's total revenue increased 14% to ZAR3,348 million for the nine months ended November 30, 2024, compared to ZAR2,933 million in the previous year[25] - Total revenue for the three months ended November 30, 2024, was ZAR 1,159,390, compared to ZAR 1,080,143 for the same period in 2023, reflecting a growth of 7.3%[83] - Subscription revenue for the nine months ended November 30, 2024, reached ZAR 2,981,695 thousand, a 15% increase compared to ZAR 2,600,643 thousand in the previous year[102] Profitability Metrics - Adjusted EBITDA for Karooooo increased 17% to ZAR501 million, while Cartrack's Adjusted EBITDA rose 10% to ZAR491 million[21] - Operating profit for Karooooo increased 18% to ZAR325 million, with earnings per share rising 21% to ZAR7.68[18] - Adjusted EBITDA for Karooooo grew 17% to ZAR1,430 million, while Cartrack's Adjusted EBITDA rose 11% to ZAR1,397 million[37] - The profit margin for the three months ended November 30, 2024, improved to 21%, up from 18% in the same period of 2023[94] - Adjusted basic and diluted earnings per share for the nine months ended November 30, 2024, were ZAR 22.19, compared to ZAR 17.04 in the prior year, marking a 30.1% increase[96] Operating Expenses - Karooooo's operating expenses increased 15% to ZAR1,416 million, primarily driven by investments in infrastructure and headcount[30] - Cartrack's sales and marketing expenses increased 29% to ZAR453 million, reflecting a focus on customer acquisition[32] Cash Flow and Financial Position - At November 30, 2024, Karooooo reported a net cash balance of ZAR856 million, up from ZAR436 million in February 2024[49] - Total cash and cash equivalents at the end of the period were ZAR 855,926 thousand, an increase from ZAR 781,980 thousand at the end of the same period last year[91] - For the three months ended November 30, 2024, net cash flows from operating activities were ZAR 442,420 thousand, a slight decrease of 0.1% compared to ZAR 442,851 thousand in the same period of 2023[91] - Free Cash Flow for the three months ended November 30, 2024, was ZAR 187,609 thousand, representing an increase of 15.5% from ZAR 162,451 thousand in the prior year[93] Strategic Focus and Guidance - The company reaffirmed its FY25 outlook for subscribers, subscription revenue, and adjusted EPS[3] - Southeast Asia is identified as a key growth opportunity, with a strong focus on increasing sales and marketing efforts starting September 2024[60] - The company emphasizes the importance of acquiring new customers and retaining existing ones as a key growth strategy[124] - The company is focused on international expansion and the introduction of new solutions to increase sales to existing customers[124] Risks and Forward-Looking Statements - The company acknowledges risks related to geopolitical tensions, macroeconomic events, and competition from industry consolidation[124] - The company does not undertake any obligation to update forward-looking statements based on new information or future developments[125] Financial Metrics and Calculations - The company calculates the Lifetime Value (LTV) of a subscriber by multiplying the Average Revenue Per User (ARPU) with the expected contract life cycle months and the subscription revenue gross margin percentage[118] - The Cost of Acquiring a Subscriber (CAS) is calculated as the sum of sales and marketing expenses, sales commissions, and the cost of installing IoT equipment, divided by the average subscriber base for the period[118] - The Cost of Servicing a Subscriber (CSS) is determined by operating expenses excluding estimated general business expansion costs, plus costs of sales related to subscription revenue, less all costs used to calculate CAS, divided by the average subscriber balance for the period[119] - The long-term unit economics operational profit is estimated by multiplying the expected life cycle of a subscriber on the connected cloud by ARPU, minus CAS and CSS[120] Non-IFRS Measures and Market Data - Non-IFRS financial measures are included in the announcement, which may exclude significant items in understanding financial results[126] - The company relies on third-party sources for market and industry data, which may not be independently verified and are subject to uncertainty[127]