Karooooo Q2 FY2027: Revenue +20%, Record ZAR422M Operating Profit, FY Guidance Maintained
KARO sits 51% above its 52-week low of $41.25.
Summary
Karooooo's Q2 FY2027 showed 20% subscription revenue growth, a record ZAR422 million operating profit and maintained FY guidance, but free cash flow fell sharply on a large IoT and memory-chip inventory build.
Key Events · Earnings and Guidance · KARO
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Q2 Growth Accelerates, Guidance Held
Cartrack subscription revenue rose 20% to ZAR1,415 million (23% in constant currency, up from 21% in Q1), and FY2027 guidance was maintained at ZAR5,700-6,000 million revenue and ZAR38.50-40.00 EPS.
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Record Operating Profit and EPS
Operating profit hit a record ZAR422 million (+19% Y/Y) and EPS rose 18% to ZAR9.28; adjusted EPS was up 12% to ZAR9.28 after prior-year offering costs.
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Subscriber Base Reaches 2.9 Million
Cartrack subscribers grew 18% to 2,899,210, with record Q2 net additions of 94,516 versus 70,740 a year earlier.
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Free Cash Flow Collapses on Inventory Build
Q2 free cash flow was ZAR41 million and HY ZAR100 million versus ZAR358 million a year ago, as capex rose to ZAR995 million for the half to pre-buy IoT devices and memory chips.
Analysis · KARO · Technology
Growth accelerated and a record quarterly operating profit of ZAR422 million (+19% Y/Y) was delivered despite a stronger rand that cut reported figures. Constant-currency subscription revenue growth rose to 23% from 21% in Q1, at the top of the 18-24% FY2027 outlook, and management kept full-year guidance unchanged. The blemish is cash: free cash flow collapsed to ZAR41 million in Q2 and ZAR100 million for the half versus ZAR358 million a year ago, as the company pre-bought IoT devices and memory chips ahead of price increases. That pushed the bank overdraft to ZAR715 million and cash down to ZAR649 million after a ZAR752 million dividend. Growth is intact, but the working-capital build is the number to track next quarter.
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At the time of this filing, KARO was trading at $62.10 on NASDAQ in the Technology sector, with a market capitalization of approximately $1.9B. The 52-week trading range was $41.25 to $68.80. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.