Karooooo Ltd. (NASDAQ:KARO) Q2 2025 Earnings Conference Call October 15, 2024 8:00 AM ET
Company Participants
Carmen Calisto - Group Chief Strategy and Marketing Officer
Goy Hoeshin - Group CFO
Zak Calisto - Founder, CEO & Director
Carmen Calisto
Hello and welcome to Karooooo's Financial Year 2025 Q2 Earnings Call. On behalf of Karooooo, we would like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer. And together with Hoeshin, our Group Chief Financial Officer, will discuss our Q2 results and key business highlights.
Our Group CEO and founder, Zak Calisto, will be available for Q&A following our presentation. All investors are advised to read the disclaimer. During the call, we will review both of Karooooo's operating units, Cartrack and Karooooo Logistics. For those new to Karooooo, Cartrack is our operations management SaaS platform focused in Asia, Africa, and Europe. Cartrack operates at scale and has a very attractive financial profile. As of August 2024, Cartrack's annual recurring revenue was [ZAR3,990 million] (ph) or $224 million.
And Cartrack's Q2 operating profit margin was 29%. Historically, Cartrack's operating momentum has driven Karooooo’s growth and strong financial performance. Karooooo Logistics is our rapidly growing delivery as a service business that empowers large enterprises to scale their ecommerce operations and capabilities. Karooooo Logistics is a structurally lower margin business than Cartrack, and it is growing rapidly. As of August 2024, Karooooo Logistics annualized B2B delivery-as-a-service revenue was ZAR418 million or $24 million.
Given Karooooo Logistics' robust revenue growth, we are very excited about the long-term growth opportunity for the business. We are also proud that Karooooo Logistics is profitable at its current scale. In Q2, Karooooo delivered another strong quarter with total revenue of 1,107 million ZAR, an increase of 16% year-on-year, subscription revenue of ZAR986 million, an increase of 15% year-on-year, and adjusted earnings per share of ZAR7.35, an increase of 31% year-on-year. Q2 continued our track record of delivering profitable growth at scale.
In Q2, we were a rule of 60 company when adding our Q2 subscription revenue growth of 15% year-on-year, and our Q2 Cartrack adjusted EBITDA margin of 45%. For the benefit of investors in the US, we believe our quality of earnings is high, as there is no stock-based compensation in our adjusted EBITDA reconciliation, unlike many US-based technology companies. We ended Q2 with over 2.1 million subscribers, an increase of 17% year-on-year, and more than 125,000 businesses across all industries trust us to power their daily operations.