Karooooo fights off COVID-19 impact in Q3
JSE-listed global software company Karooooo shrugged off the negative impact of the COVID-19 pandemic, maintaining a strong growth momentum of subscribers in the third quarter (Q3) of its 2022 financial year.
Karooooo, which owns 100% of Cartrack Holdings, today reported its financial results for Q3. It says despite ongoing disruption from the effects of COVID-19, its business model drove new customer additions, delivering growth in the total number of subscribers.
In the current reporting period, the Singapore-headquartered firm’s subscribers were up 18% to 1 470 385, compared to Q3 2021, when it had 1 246 089 subscribers.
Further, Karooooo says it recorded 164 385 net subscriber additions for the nine months ended 30 November 2021, up 37%. In the previous comparable period it had 119 574.
“We believe we are in an early stage of a large and long-term opportunity, and we remain very excited about Karooooo’s growth trajectory,” says Zak Calisto, Karooooo CEO and founder.
“Globally, we see a growing demand by small to large enterprises wanting to digitally transform their businesses to remain competitive. Being in a pandemic, we are constantly evaluating the trade-off between our unit economics and our intended accelerated investment for growth.”
Calisto also notes Karooooo’s growth expectation ranges for full year 2022 compared to full year 2021 remain unchanged.
The company says it expects the number of subscribers to be between 1 500 000 and 1 600 000 at the end of the 2022 financial year, and subscription revenue to between R2.5 billion and R2.7 billion.
Turning to the company’s other financial metrics for the period under review, Karooooo says it achieved revenue growth of 22% and subscription revenue growth of 17% in the third quarter of 2022.
In the nine months, the group delivered operating profit of R205 million for the period (Q3 2021: R198 million), 3% higher than the third quarter of 2021.
The profit generated by Karooooo for the quarter increased 12% to R148 million (Q3 2021: R133 million), which it says was partly impacted by the lower effective tax rate of 27% in the third quarter of 2022, compared to 33% in 2021.
Earnings per share increased 10% to R4.72 in the third quarter compared to R4.30 in Q3 of 2021.
Looking ahead, Karooooo, which debuted on the local bourse in April 2021, says it is well-positioned for further growth, as it is operating in a growing and largely underpenetrated market, and with the tailwind of customers seeking software solutions to successfully digitalise their businesses and improve their operations.