SINGAPORE - Karooooo, the parent company of Cartrack, a global provider of data analytics and business intelligence solutions, has reported significant growth in its third-quarter results, with an increase in its subscriber base and a rise in subscription revenue.
The company's total subscriber count reached 1,908,192 as of November 30, 2023, marking a 14% increase from the previous year. Net subscriber additions for the year were also up by 25%, adding 191,115 new subscribers.
In terms of financial performance, subscription revenue for the quarter grew by 17% to ZAR904 million, and annual recurring revenue (ARR) saw a 20% increase to ZAR3,711 million. Overall, Cartrack's revenue rose by 14% to ZAR919 million, with subscription revenue accounting for 98% of the total.
Karooooo's operating profit for the quarter was ZAR275 million, up from ZAR209 million in the prior year, while earnings per share surged by 35% to ZAR6.34. The company highlighted that these results were achieved despite making provisions for Carzuka, which are not expected to have a significant impact on future operating profit and earnings per share.
Cartrack itself delivered a record operating profit of ZAR295 million, a 33% increase from the previous year, with gross profit margin expanding to 73% and operating profit margin to 32%.
The company attributes its success to its Operations Cloud, which serves over 113,000 commercial customers and maintains a 95% retention rate. The platform offers route optimization, app-based digital inspections, work schedules, AI camera monitoring for driving behavior, and IoT sensors for tracking various metrics. These services aim to enhance safety, compliance, and productivity for its users.
The information in this article is based on a press release statement from Karooooo.
InvestingPro Insights
As Karooooo continues to exhibit robust growth in its subscriber base and subscription revenue, the company's financial health and market valuation are key areas of interest for investors. Notably, Karooooo has a market capitalization of $773.78 million and is trading at a P/E ratio of 23.93, which reflects its current earnings and growth expectations. Despite some analysts revising their earnings estimates downwards for the upcoming period, Karooooo's revenue growth over the last twelve months as of Q2 2024 stands at an impressive 24.39%, with a gross profit margin of 63.36%. These metrics underscore the company's profitability and efficiency in generating income from its operations.
InvestingPro Tips indicate that Karooooo pays a significant dividend to shareholders, with a current dividend yield of 13.58% and a dividend growth of 41.67%. This is a notable aspect for income-focused investors, particularly as the company's cash flows can sufficiently cover interest payments, suggesting financial stability. Moreover, with analysts predicting that the company will remain profitable this year and considering its moderate level of debt, Karooooo appears to be managing its financial leverage prudently.
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