NASDAQ:KARO Karooooo Q2 2024 Earnings Report $42.47 -0.34 (-0.79%) As of 03:07 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Karooooo EPS ResultsActual EPS$0.30Consensus EPS $0.29Beat/MissBeat by +$0.01One Year Ago EPSN/AKarooooo Revenue ResultsActual Revenue$56.06 millionExpected Revenue$56.57 millionBeat/MissMissed by -$510.00 thousandYoY Revenue GrowthN/AKarooooo Announcement DetailsQuarterQ2 2024Date10/11/2023TimeN/AConference Call DateThursday, October 12, 2023Conference Call Time8:00AM ETUpcoming EarningsKarooooo's Q4 2025 earnings is scheduled for Tuesday, May 13, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Karooooo Q2 2024 Earnings Call TranscriptProvided by QuartrOctober 12, 2023 ShareLink copied to clipboard.There are 3 speakers on the call. Operator00:00:03Hello, and welcome to Karoo's Financial Year 2024 Q2 Earnings Call. On behalf of Kuru, we'd like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer and together with Hu Xin, our Group Chief Financial Officer, will be taking you through our strong business updates and financials. All investors are advised to read through the disclaimer. We will be reviewing all 3 of Karoo's business units today's webinar, namely Kartrak, Kazuka and Karoo Logistics. Operator00:00:41Karoo continues to believe in our mission be the leading operations cloud, and we see how we are helping to set the path for tomorrow for operational businesses with our platform. Industry leading customers consult with us on how to improve their operations and tackle their day to day challenges, and our ability to Think beyond connected vehicles and equipment has been pivotal in delivering a cloud that connects an entire operation in one place to achieve real business impact. Despite the varying macroeconomic environments we encountered, digitalization, ESG and compliance continue to be strong drivers for demand of our platform. Our platform offers the flexibility customers need to digitalize their operation at their own pace and in a way that makes sense for them, whether it is digital forms that facilitate workers and drivers to complete their workflows effectively via mobile app, coaching solutions that generate success and provide accountability, risk management tools that enable quick resolutions and full audit trails, Automated carbon emission reporting and progress tracking or detailed productivity reporting for optimized operations, Our platform fits into an operation for success. Additionally, customers can integrate with their existing tools such as fuel card providers and ERPs to further curate insights that suit their needs. Operator00:02:08By partnering with our customers to understand their operation and helped tackle their challenges, we get deep insider knowledge to continue adding innovative features to our platform to further increase the value customers get and the importance we play in optimizing their operation. Our platform brings both operational and non operational teams together and helps companies remain compliant, competitive in their industries and most importantly, forward thinking. To illustrate how our platform impacts a customer's operation, we can take a look into an existing customer, A large furniture manufacturer that delivers their own goods needed a way to alleviate their administrative burden whilst improving their operations. With delivery fees often impacting a customer's decision to buy, offering competitive rates was critical to their operation. After 10 days of implementing our delivery management tool, our customers saw returns at large. Operator00:03:06With our easy to use solution that optimizes all jobs across drivers and provides optimal routes as well as a practical mobile app for drivers to receive everything they need to excel at their job. Our customers successfully saved 4 liters of diesel per vehicle per day. With this reduction, they are on track to exceeding their sustainability goals and reducing their carbon emissions by over 2,800 kilograms per vehicle per year. The payback period of our solution is under 3 days and the ROI is over 700% and this is purely looking at the fuel cost savings. If we were to account for the manpower cost saved on dispatching and managing drivers as well as communicating with customers payment after delivery with our electronic proof of delivery, ROI would further increase. Operator00:03:58This goes to highlight Karoo's strong value proposition and the impact our cloud platform has in streamlining operations, lowering environmental impact and helping businesses thrive in a more robust and competitive business landscape. The same way reaching for a phone has become second nature to society, many drivers are unaware of their actions as well as the risks these actions have on their safety. What feels like half a second of screen time is actually 5 or a harmless yawn is actually the first sign of falling asleep at the wheel. Beyond harsh driving behavior detected by telemetry, AI cameras have given a new dimension to both managers and drivers to overcome high risk driving behavior. Real time audible alerts have proven critical in enabling drivers to correct their behavior in real time to avoid collisions and accidents. Operator00:04:52Whilst with total visibility of events that previously went undetected, managers are now equipped to establish effective training programs and monitor the progress of drivers towards a safety first working environment. AI cameras allow for a preventative and proactive approach to safety. A customer that transports fuel has seen a 46% decrease in high risk driver events detected by our AI after 3 calendar months of implementation. These events include fatigue, mobile phone usage, other distracted driving and tailgating. An accident with Carrying such sensitive cargo is not only detrimental to drivers' lives, but also can cause vast negative public relations that can have long lasting negative effects on our business. Operator00:05:42Avoiding these high risk events reduces accidents and implementing this technology has enhanced our customers' for strong service delivery, which has led to increased business growth. The benefits of increased safety are far reaching. Not only does this lead to safer communities and better working environments, but it reduces costs substantially through reduced accident repairs, maintenance fees and insurance premiums. Drivers feel more loyal to companies as they feel the fruits of the investment and end customers feel more confident in the ability of our customers to exceed expectations. We encourage companies to work with their drivers by investing in their coaching and education. Operator00:06:25And as the benefits and success of these solutions gain traction, we believe we will continue to see increased government mandates around the implementation of this technology as a means to increase safety for communities. Our robust customer growth across industries is testament to our proven business model, competitive and strong financial position and we continue to see no customer or industry concentration risk. With over a decade of insights into operations and how our customers work, we are able to pinpoint what will drive business and are incorporating AI and machine learning into our platform to enhance our solution. From accident and fuel fraud detection to industry insights and benchmarks. Our customers are reaping the benefits from our vast data scale and network effects, and we will continuously enhance our platform to further increase these benefits. Operator00:07:22Our progress remains aligned with our ethos and long term strategy to drive unparalleled value to the day to day operations of our customers, there is ample runway for growth and our team is motivated to deliver on it. The investor community at large has continued to ask many questions around our culture in teams. We understand that running an operation the way we do is no small feat, and we believe that our culture which empowers us to deliver on key market differentiators that are difficult to replicate. We are open and transparent and we 0 in on execution, not politics. Our solution orientated mindset continuously focuses on better solving customer pain points. Operator00:08:07We attract top talent that does not step away from a challenge and is not afraid to try something new, people that believe in hard work, less frills and more action. It is not easy to take ownership of work, but for our entrepreneurial and customer centric teams, This is a key result of the innovation and creativity they continuously demonstrate. As with most things, talking is easy, but our teams lead by example. We have had team members work their way from infield technicians to key decision makers, from analysts to leading country managers. Not only does this show our teams the progression and reward they can achieve in their career, but it also creates a team with a diverse set of experience, skill and knowledge that is able to empathize with the challenges faced by our diverse customers to solve them. Operator00:09:00We have a loyal team with the deep business and industry understanding required to build scalable tools that unleash the potential of operational businesses. Our culture is not for everybody, But the people that fit our DNA are resourceful, ingenious and have a strong desire and ability to solve complex problems efficiently. They collaborate and combine their knowledge from diverse industries and geographies to deliver on easy to use solutions in a quick and efficient way. Our staff are motivated by the success we see in our customers and this places us in the privileged position of working with a team that has a long term mindset that is designed to win. I will now hand over to Hu Xun, who will take us through our financial performance. Speaker 100:09:52Thank you, Carmen. I will now talk through Karoo's financial performance For quarter 2 FY 'twenty four, please note that all comparisons are against quarter 2 FY 'twenty three unless otherwise stated. Our quarter 2 performance has gained momentum, building from our solid start of the year and demonstrating growth across various financial metrics. As expected, after substantial investment for future growth, in quarter 2, Karoo's total subscription revenue increased by 17% to RMB860 1,000,000. Operating profit increased by 13% to RMB247 1,000,000 And earnings per share increased 14% to RMB5.61. Speaker 100:10:40Our profitable SaaS business model Continue to bolster our cash flow generation ability. Net cash from operating activity increased by 26% to RMB304 1,000,000. This healthy cash generation will continue to support our future cash outflow required for investment and future growth. All segments continue to see strong traction with the benefits of our strategic investment beginning to show. Our consistent results extend our track record of growth at scale, profitability and cash generation ability. Speaker 100:11:18After paying a dividend of US26.3 million dollars and investing US87 million dollars in the development of the South African Central Our net cash on hand stood at RMB651 1,000,000. Debt does turnover stays improving to 29 days alongside with prudent provisioning to weather off strong economic headwinds in some of the markets we are operating. We have strong unit economics, robust operating margins, unleveraged balance sheet and a strong cash conversion. We remain confident that our track record of success, especially our ability to generate healthy cash flow, is sustainable. Our earnings per share increased by 14% to RMB5.61. Speaker 100:12:08The increase is the result of positive revenue growth and improved profitability despite our prudent and strategic investment for growth. We will now focus on Kartrak, the underlying assets to Karoo's success. Kartrak's continued to prove its ability to scale in varying macroeconomic conditions and consistently beaten the rule of 40. Overall, subscriber grew at scale by 14% to over 1,830,000. And in this quarter, subscription revenue grew at 17% to RMB858 1,000,000, while operating profit stood at RMB252 RMB2 1,000,000. Speaker 100:12:52Our solid start in quarter 1 continued as we gained momentum in quarter 2 with a record net subscriber additions of over 75,000 in this quarter. This was largely supported by the increasing demand of small to large enterprise, emphasizing the necessity to enhance compliance functions and digitally transform their businesses to become more efficient and competitive. Kartrak's continued to build on its solid track record of growing at scale and experienced strong customer acquisition in this quarter. Kartrak's total subscription revenue grew 17% to RMB858 1,000,000 and represent 97% of total revenue, which is in line with our SaaS business model. Total revenue grew 17% to RMB884 1,000,000. Speaker 100:13:46Our assessed ARR grew 17% to RMB3475 million. Kartrak's operating profit grew 13% to RMB252 1,000,000 and adjusted EBITDA grew 9% to RMB417 1,000,000. Over the years, Kartrak has maintained a steady ARPU and average up cost of acquiring a subscriber. ARPU for the quarter was RMB159. Kartrak's average lifetime revenue per subscriber in this quarter stood at RMB9556. Speaker 100:14:26The average upfront cost of adding a subscriber to our cloud in this quarter was RMB2293. This cost mainly relates to sales commission and telematic device, which are capitalized and sales and marketing expense that are expense of. The headroom derived from the average lifetime revenue per subscriber, After subtracting the average upfront cost of adding a subscriber was RMB7263 per subscriber. From the RMB7263, we incurred a cost to service a subscriber over the contract life cycle of 60 months. The cost to service a subscriber decreased as we grow our subscriber base. Speaker 100:15:11Our unit economics has been steady, allowing us strong operating profits. Cars have continued to grow its subscriber base and ARR to The South African economy remains under pressure as a result of continuing strain on the national power grid. Despite the challenging trading conditions, our subscriber grew by 14%. In Asia, the Middle East and USA, Subscriber grew by 26% as the traction in Southeast Asia has been encouraging. Southeast Asia remained as the 2nd largest contributor to the group's Revenue, and we believe our value proposition will continue to find favor in this region and present the most compelling growth opportunity and deliver increasing and sustainable income to the group in medium to long term. Speaker 100:16:06Europe saw a healthy growth of 14% And we are in a region we are focusing our resources on. With our recent partnership with leading OEMs, we are poised to leverage our extensive offering to further develop The connected vehicle ecosystem and expect this partnership to contribute to our results in medium term. In addition, We are experiencing encouraging demand for our proprietary compliance technology in the region. Africa Others maintains its growth with 8% increase in subscriber. At the end of quarter 2, our ARR increased 17% to RMB3475 million. Speaker 100:16:47This is at a good trending as we continue to see the momentum of growth in our Car tracks continue to have robust operating margins And our trends are in line with the long term financial goals set upon our listing in 2021. In this quarter, Our subscription revenue gross profit margin stood at 72%, which is consistent with our expectation. Research and development expense as a percentage of subscription revenue are 6% as we focus on driving Our planned investment in improving and reaching and expanding our operation cloud and internal management system is to enhance our value proposition to our customer. Sales and marketing expense as a percentage of subscription revenue increased to 14%. We believe The strategic investment for customer acquisition position us well for continued growth, and we expect to see future benefit from this investment. Speaker 100:17:55General and admin expenses as a percentage of subscription revenue are at 22%. This plan increase reflects management commitment to build a strong support infrastructure to meet our future growth plan. Operating profit as a percentage of subscription revenue are 29%, and our adjusted EBITDA as a percentage of subscription revenue is at 49%. We have had a solid start, and we are happy with the progress we have made in quarter 2. Our guidance for Kartrak's outlook remain unchanged with number of subscriber between 1,900,000 to 2,100,000, Kartrak subscription revenue between RMB3.4 million to RMB3.6 million and Kartrak's operating profit margin between 28% to 31%. Speaker 100:18:48Kazuka delivered R85 1,000,000 in revenue in this quarter and an operating loss of R13 1,000,000. Subsequent to the quarter 2 end, despite the growth experienced by Kazuko in South Africa, a decision was made to cease buying secondhand vehicles in South Africa. This decision follows considerable interaction with motor dealership over the last 12 months. Over the years, Kartrak has been partnering with dealership as part of its customer acquisition strategy to acquire customer through the introduction of this dealership. However, some dealership has perceived the Kazuka business interest to be conflicting with their business interest in buying vehicles from customers. Speaker 100:19:33We maintain that the Kazuka business model is robust, but we do not want to risk the long standing strategic relationship that Kartrak has forged with motor dealerships across South Africa. Karoo Logistics delivered significant growth, generating RMB72 1,000,000 in revenue and an encouraging operating profit of RMB8 1,000,000 in this quarter. Its focus on delivery as a service through selected third party crowd sourced drivers and logistic companies has been highly scalable and is delivering substantial growth. While it continue to integrate into Cartrack's platform to extend its customer base, The Karoo Logistics stack is expected to deliver a long term revenue stream to the group. We believe the benefits of Our strategic investment in this segment are beginning to show. Speaker 100:20:26I would like to thank everybody for joining us today, And we will now open the floor to Q and A with our Group CEO and Founder, Mr. Zack Callisto. Speaker 200:20:39Hi. Good morning, good afternoon, good evening to be anywhere you are. Thanks very much for joining the presentation. I'll open up your questions. And the first question comes from Maers Ferry. Speaker 200:20:52When will Carjack start monetizing data as a service? What percentage of Kartraks' annual revenues will come from Data as a Service in 3 years' time? Miles, Sometimes these words are a bit of jargon. So data as a service is currently what we do, do the way I understand it. And we basically take raw data, push the data through the IoT devices into our cloud. Speaker 200:21:21We obviously then work with data and give intelligent business reports to our customers. So in our opinion, a great portion of our subscription revenue model is already data as a service, Which we obviously offer it as a software as a service. And so I think either I'm not understanding your question or That's my answer. The next question comes from Sebastian Quakambus. I'm not certain if I'm pronouncing the surname correctly, so apologies, Sebastian, if that's wrong. Speaker 200:21:59Can you explain further on the decision should shut down Kozhikode in South Africa? Will there be any costs associated to closing this division? So basically, we have one lease That it comes to closure during this financial year. So there is no real material costs. We've got in Kartrak, at this Point in time, about 500 vacancies open. Speaker 200:22:26And the majority of the Kazucca staff, we will transition into Car Track. So there is no major costs. Clearly, these costs could have a slight impact on Car Track initially, but that's been planned and it will be phased. I think by the time we get to FY 'twenty five, These costs won't be weighing us down. So I think the reality is we've been losing losses operating losses of Approximately ZAR50 1,000,000 a year and we see this loss disappearing and it will reflect positively in our earnings next year. Speaker 200:23:07Although I do believe that had we spent enough effort in the last 12 months to really put our Shoulders behind Kozhikode, we would have been much further. But we've been in long discussions with our partners, which is basically the motor dealers, Where a few of them are saying that we've got conflict of interests with them, and we've decided to save these Longstanding relationships and rather continue keeping our relationships with the motor dealers healthy. The next question comes from Matthew from Confluence Impact Fund. It's Matthew from Confluence Impact Fund. Thank you for the presentation. Speaker 200:23:50Congratulations on progressing these results. Despite the growth experienced by Cosi Kenseth, our decision remains to cease buying secondhand vehicles. What does this mean for Cosi? Will you be buying, selling vehicles and say And what different source are the dealers? So we have got the platform. Speaker 200:24:07We have developed the software for Carzika. We will still utilize the software for the benefit of our dealers. So currently, quite a lot of our dealers advertise their secondhand vehicles On the Corsica platform, we then assist them in them selling the pre owned vehicles. And we don't see this in any way conflicting. So we will still be able to anyone that wants to advertise in our platform. Speaker 200:24:34They're more than willing to do it, but we will not be taking inventory and buying and selling secondhand vehicles, but we will certainly allow Our partners, the dealerships, to still get the benefit that they've reaped until now. Alex Skalla, Kartrak operating margin is up nicely this quarter. Can you talk about operating margin expectations Given you are a job in Kozhikode and Kozhikode employees, it It would certainly have a negative impact on contract, but it's really a planned impact that we would have Done anyway because we need to employ the staff. But I don't believe this impact is material. The staff Moving over to contract is strategic. Speaker 200:25:31We know the people, so we already know the strengths and weaknesses and where to Put them into which departments. So it's all really just helping us for about 500 vacancies that we currently have at the moment. Matthew from William Blair. Has the net subscriber in the Q2 continue into the Q3? Matthew, yes, it has. Speaker 200:25:54So in the 1st 40 days of Q3, our net subscriber additions were actually 40,000. So we are expecting to probably be over 80,000 net subscribers during Q3. That is our expectation for Q3 given that we're halfway through Q3. Another question from Matthew from William Blair. Can you provide an update on the OEM relationships? Speaker 200:26:22When could you start to contribute to subscriber additions? We have done a lot of integrations already with the European OEMs. We should be able to start seeing Matthew from conference. Please can you comment on the proposed merger between Next Telemax and PowerFleet? Which geographies do you overlap in? Speaker 200:26:53I must say, Matthew, I'm not very familiar with TAO fleet. NICS, I'm relatively familiar with them. So My understanding is correct. Our fluidity is very much American based. But so I prefer not to comment because I don't really know. Speaker 200:27:09I haven't I'll take this information. I don't know. Do you focus on different customers or routes to market? If we compare ourselves to mix, I do not believe that we focus on different customers or different reach to market. What differentiates your offer from mix and power fleet? Speaker 200:27:28I think there's multiple vendors with our types of solutions. I think our route to market, although at the high level, it looks similar, But fundamentally, when you get into the detail, we're quite different. Mix operates in about 100 Geographies, we only operate in 23. We are a great believer that we need to have staff on the ground in all the countries. We do not Distributing countries where we don't have presence, physical presence. Speaker 200:28:05And I think that makes Quite a big difference. And then obviously, we're very much focused on owning the customer. And that could also be a little bit of a difference between us And mix potentially, but I'm speaking under correction. Next question from Sandeli Magogula. Kartrak's EBITDA margin is 47%. Speaker 200:28:29What have we reached apart from at this level? Can you allow margin to trend below 40 Mark, we've traditionally added our EBITDA margins between about 45% or 44% and about 52%. We believe that will continue it depends how much capital we've allocated into back Sales and it's a timing thing. We envisage that we'll remain in these sort of margins for quite a few years to come. Secondly, in terms of South Africa subscriber base, at which level do you expect growth rates in subscribers to peak given that 30% growth achieved in In South Africa, we've got about 1,400,000 vehicles on our cloud. Speaker 200:29:18We believe we can drive that to about 3,000,000 vehicles. Obviously, we are trying to do that as quickly as possible. Currently, we're going we're starting to see better momentum in growth In Q2 compared to Q1 and Q3, we continue that momentum. Thirdly, the plan is to What is the estimated impact on introduction? I think I've covered that. Speaker 200:29:444th question, where do you see Cartwright return on common Equity peaking over the coming years. Well, there's many ways of calculating that. So we've got quite a lot of cash. So if you Give out the cash as a dividend, then obviously, you'll be in a situation that your return on equity spikes. You're certainly making better returns for us than any other your earnings in a form of dividends. Speaker 200:30:10At what phase of growth cycle of the business Would it make sense for you to buffer with the dividend given that the naturally high cash flow version has special investments in organic growth and peak? I'd rather stay away from that question simply because we're quite pragmatic in the way we run the business. We've got sufficient cash to accelerate growth, and we intend keeping a solid cash base On our balance sheet like we've been doing, and we're generating quite a lot of free cash flow. And at this point in time, we can't deploy as much cash As we actually generate, Sandy. Next question from Masfuri. Speaker 200:30:54Why does Kourou regards Southeast Asia as the group's most compelling growth opportunity in the medium to long term and when is it the TAM as Europe and contract have partnered with the OEMs in Europe? Well, we certainly believe Southeast Asia is the largest. It certainly is. In terms of the economy growth, Southeast Asia is probably one of the most fastest growing economies in the world, in the region. It's also a huge large addressable market. Speaker 200:31:24We've come in as outsiders. We're making good progress. We're starting to get good momentum. And I think we've still got a very long way to go before we reach The full TAM. And I've answered the OEMs as well. Speaker 200:31:48If Saudi contract have doubled the number of subscribers every 4 years, Do you see this continue at this pace or faster pace? Currently, we're growing slightly slower than we did In those years, I think, when COVID came and then the 1 year post COVID, it sort of cramped our style. But we certainly are getting momentum, and our intention is to grow to more than double our subscriber base in less than 4 years. So it's just a question of us getting our momentum back, which we certainly are getting in post COVID. Alexander, Can you talk about the linearity of subscriber growth from June through to September? Speaker 200:32:29Did you see improvements every month? Or was it Clearly, that's a bit more. Any change in vehicles per customer in terms of what you added this quarter? So our customer base in terms of our SMEs, large enterprise customers and consumers remains quite constant over the years. Yes. Speaker 200:32:49And then our growth has been quite it's been quite consistent on a daily basis. We really measure our growth On working days, Alex, so quite frankly, as we've got very steady growth, we can see it. We measure that growth on a daily basis. And the more working days we have, the better we do. And we certainly are picking up momentum. Speaker 200:33:16Adding to that, Alex, typically, our Q3 is normally our best quarter given that there's less holidays in Q3. Suael Thalmann, what will the financial impact of season costs against South Africa? What percentage Coming from refurbishing. So I think I'll answer that to how. Andrew Ng, do you compete to a Descartes group? Speaker 200:33:46Andrew, I apologize, but I do know the I do not know the Descartes Group. And then Chris Logan, well done on strengthening momentum. Sensory is seeing a lot of strength in non vehicle applications, What they call equipment monitoring, is this an AE you see serious potentially? That's fundamentally crisp. And we're doing a lot of And there's a lot of demand from our customers as well for just IoT devices for equipment. Speaker 200:34:21So It depends what you call equipment, but we've got a lot of the yellow machineries forklifts. We deal with a lot of machinery already. So when we say subscribers, some of it includes that type of equipment that's been used in warehouses. And so my answer to that is clearly, as long as it's an IT device and we can collect raw data And push that back into our cloud and help our customers run their businesses, that's what we do. Then a final question from Secunati. Speaker 200:35:04Kozhika will be closing down altogether. We have got the technology, so the company will remain open, But we will not be buying and selling vehicles and owning inventory. I want to thank everybody for This is Paul. I have one more question that just came through. East Georgia, ARPU has been stable for Given all the inflation around the world, what is the reason you haven't increased prices? Speaker 200:35:33Ishmael, Our ARPU today is the same that it was 15 years ago, and we've got great operating profit margins, EBITDA margins, great gross Profit margins. We continue to grow our customer base. And quite frankly, the way we've always beaten inflation is Just to Economies of Skow. And as we feel these expenses, clearly, we feel them over the years. And but we've always been able to beat it through Economiesysco. Speaker 200:36:05And I want to thank everybody for joining us today and look forward to talking to you again in 3 months' time. Okay. Bye bye.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallKarooooo Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Karooooo Earnings HeadlinesKarooooo: An Underestimated Company With A Rare Financial ProfileApril 16, 2025 | seekingalpha.comWith EPS Growth And More, Karooooo (NASDAQ:KARO) Makes An Interesting CaseApril 10, 2025 | finance.yahoo.comNow I look stupid. Real stupid... I thought what happened 25 years ago was a once- in-a-lifetime event… but how wrong I was. Because here we are, a quarter of a century later, almost to the exact day, and it’s happening again. April 25, 2025 | Porter & Company (Ad)3 Undiscovered Gems In The US Market To Enhance Your PortfolioMarch 24, 2025 | finance.yahoo.comIs Karooooo Ltd. (NASDAQ:KARO) Worth US$42.9 Based On Its Intrinsic Value?March 8, 2025 | finance.yahoo.comKarooooo to Present at The Raymond James 26th Annual Institutional Investors ConferenceFebruary 24, 2025 | businesswire.comSee More Karooooo Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Karooooo? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Karooooo and other key companies, straight to your email. Email Address About KaroooooKarooooo (NASDAQ:KARO) provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States. The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics. It provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles. In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products. It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices. Karooooo Ltd. was founded in 2001 and is headquartered in Singapore.View Karooooo ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 3 speakers on the call. Operator00:00:03Hello, and welcome to Karoo's Financial Year 2024 Q2 Earnings Call. On behalf of Kuru, we'd like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer and together with Hu Xin, our Group Chief Financial Officer, will be taking you through our strong business updates and financials. All investors are advised to read through the disclaimer. We will be reviewing all 3 of Karoo's business units today's webinar, namely Kartrak, Kazuka and Karoo Logistics. Operator00:00:41Karoo continues to believe in our mission be the leading operations cloud, and we see how we are helping to set the path for tomorrow for operational businesses with our platform. Industry leading customers consult with us on how to improve their operations and tackle their day to day challenges, and our ability to Think beyond connected vehicles and equipment has been pivotal in delivering a cloud that connects an entire operation in one place to achieve real business impact. Despite the varying macroeconomic environments we encountered, digitalization, ESG and compliance continue to be strong drivers for demand of our platform. Our platform offers the flexibility customers need to digitalize their operation at their own pace and in a way that makes sense for them, whether it is digital forms that facilitate workers and drivers to complete their workflows effectively via mobile app, coaching solutions that generate success and provide accountability, risk management tools that enable quick resolutions and full audit trails, Automated carbon emission reporting and progress tracking or detailed productivity reporting for optimized operations, Our platform fits into an operation for success. Additionally, customers can integrate with their existing tools such as fuel card providers and ERPs to further curate insights that suit their needs. Operator00:02:08By partnering with our customers to understand their operation and helped tackle their challenges, we get deep insider knowledge to continue adding innovative features to our platform to further increase the value customers get and the importance we play in optimizing their operation. Our platform brings both operational and non operational teams together and helps companies remain compliant, competitive in their industries and most importantly, forward thinking. To illustrate how our platform impacts a customer's operation, we can take a look into an existing customer, A large furniture manufacturer that delivers their own goods needed a way to alleviate their administrative burden whilst improving their operations. With delivery fees often impacting a customer's decision to buy, offering competitive rates was critical to their operation. After 10 days of implementing our delivery management tool, our customers saw returns at large. Operator00:03:06With our easy to use solution that optimizes all jobs across drivers and provides optimal routes as well as a practical mobile app for drivers to receive everything they need to excel at their job. Our customers successfully saved 4 liters of diesel per vehicle per day. With this reduction, they are on track to exceeding their sustainability goals and reducing their carbon emissions by over 2,800 kilograms per vehicle per year. The payback period of our solution is under 3 days and the ROI is over 700% and this is purely looking at the fuel cost savings. If we were to account for the manpower cost saved on dispatching and managing drivers as well as communicating with customers payment after delivery with our electronic proof of delivery, ROI would further increase. Operator00:03:58This goes to highlight Karoo's strong value proposition and the impact our cloud platform has in streamlining operations, lowering environmental impact and helping businesses thrive in a more robust and competitive business landscape. The same way reaching for a phone has become second nature to society, many drivers are unaware of their actions as well as the risks these actions have on their safety. What feels like half a second of screen time is actually 5 or a harmless yawn is actually the first sign of falling asleep at the wheel. Beyond harsh driving behavior detected by telemetry, AI cameras have given a new dimension to both managers and drivers to overcome high risk driving behavior. Real time audible alerts have proven critical in enabling drivers to correct their behavior in real time to avoid collisions and accidents. Operator00:04:52Whilst with total visibility of events that previously went undetected, managers are now equipped to establish effective training programs and monitor the progress of drivers towards a safety first working environment. AI cameras allow for a preventative and proactive approach to safety. A customer that transports fuel has seen a 46% decrease in high risk driver events detected by our AI after 3 calendar months of implementation. These events include fatigue, mobile phone usage, other distracted driving and tailgating. An accident with Carrying such sensitive cargo is not only detrimental to drivers' lives, but also can cause vast negative public relations that can have long lasting negative effects on our business. Operator00:05:42Avoiding these high risk events reduces accidents and implementing this technology has enhanced our customers' for strong service delivery, which has led to increased business growth. The benefits of increased safety are far reaching. Not only does this lead to safer communities and better working environments, but it reduces costs substantially through reduced accident repairs, maintenance fees and insurance premiums. Drivers feel more loyal to companies as they feel the fruits of the investment and end customers feel more confident in the ability of our customers to exceed expectations. We encourage companies to work with their drivers by investing in their coaching and education. Operator00:06:25And as the benefits and success of these solutions gain traction, we believe we will continue to see increased government mandates around the implementation of this technology as a means to increase safety for communities. Our robust customer growth across industries is testament to our proven business model, competitive and strong financial position and we continue to see no customer or industry concentration risk. With over a decade of insights into operations and how our customers work, we are able to pinpoint what will drive business and are incorporating AI and machine learning into our platform to enhance our solution. From accident and fuel fraud detection to industry insights and benchmarks. Our customers are reaping the benefits from our vast data scale and network effects, and we will continuously enhance our platform to further increase these benefits. Operator00:07:22Our progress remains aligned with our ethos and long term strategy to drive unparalleled value to the day to day operations of our customers, there is ample runway for growth and our team is motivated to deliver on it. The investor community at large has continued to ask many questions around our culture in teams. We understand that running an operation the way we do is no small feat, and we believe that our culture which empowers us to deliver on key market differentiators that are difficult to replicate. We are open and transparent and we 0 in on execution, not politics. Our solution orientated mindset continuously focuses on better solving customer pain points. Operator00:08:07We attract top talent that does not step away from a challenge and is not afraid to try something new, people that believe in hard work, less frills and more action. It is not easy to take ownership of work, but for our entrepreneurial and customer centric teams, This is a key result of the innovation and creativity they continuously demonstrate. As with most things, talking is easy, but our teams lead by example. We have had team members work their way from infield technicians to key decision makers, from analysts to leading country managers. Not only does this show our teams the progression and reward they can achieve in their career, but it also creates a team with a diverse set of experience, skill and knowledge that is able to empathize with the challenges faced by our diverse customers to solve them. Operator00:09:00We have a loyal team with the deep business and industry understanding required to build scalable tools that unleash the potential of operational businesses. Our culture is not for everybody, But the people that fit our DNA are resourceful, ingenious and have a strong desire and ability to solve complex problems efficiently. They collaborate and combine their knowledge from diverse industries and geographies to deliver on easy to use solutions in a quick and efficient way. Our staff are motivated by the success we see in our customers and this places us in the privileged position of working with a team that has a long term mindset that is designed to win. I will now hand over to Hu Xun, who will take us through our financial performance. Speaker 100:09:52Thank you, Carmen. I will now talk through Karoo's financial performance For quarter 2 FY 'twenty four, please note that all comparisons are against quarter 2 FY 'twenty three unless otherwise stated. Our quarter 2 performance has gained momentum, building from our solid start of the year and demonstrating growth across various financial metrics. As expected, after substantial investment for future growth, in quarter 2, Karoo's total subscription revenue increased by 17% to RMB860 1,000,000. Operating profit increased by 13% to RMB247 1,000,000 And earnings per share increased 14% to RMB5.61. Speaker 100:10:40Our profitable SaaS business model Continue to bolster our cash flow generation ability. Net cash from operating activity increased by 26% to RMB304 1,000,000. This healthy cash generation will continue to support our future cash outflow required for investment and future growth. All segments continue to see strong traction with the benefits of our strategic investment beginning to show. Our consistent results extend our track record of growth at scale, profitability and cash generation ability. Speaker 100:11:18After paying a dividend of US26.3 million dollars and investing US87 million dollars in the development of the South African Central Our net cash on hand stood at RMB651 1,000,000. Debt does turnover stays improving to 29 days alongside with prudent provisioning to weather off strong economic headwinds in some of the markets we are operating. We have strong unit economics, robust operating margins, unleveraged balance sheet and a strong cash conversion. We remain confident that our track record of success, especially our ability to generate healthy cash flow, is sustainable. Our earnings per share increased by 14% to RMB5.61. Speaker 100:12:08The increase is the result of positive revenue growth and improved profitability despite our prudent and strategic investment for growth. We will now focus on Kartrak, the underlying assets to Karoo's success. Kartrak's continued to prove its ability to scale in varying macroeconomic conditions and consistently beaten the rule of 40. Overall, subscriber grew at scale by 14% to over 1,830,000. And in this quarter, subscription revenue grew at 17% to RMB858 1,000,000, while operating profit stood at RMB252 RMB2 1,000,000. Speaker 100:12:52Our solid start in quarter 1 continued as we gained momentum in quarter 2 with a record net subscriber additions of over 75,000 in this quarter. This was largely supported by the increasing demand of small to large enterprise, emphasizing the necessity to enhance compliance functions and digitally transform their businesses to become more efficient and competitive. Kartrak's continued to build on its solid track record of growing at scale and experienced strong customer acquisition in this quarter. Kartrak's total subscription revenue grew 17% to RMB858 1,000,000 and represent 97% of total revenue, which is in line with our SaaS business model. Total revenue grew 17% to RMB884 1,000,000. Speaker 100:13:46Our assessed ARR grew 17% to RMB3475 million. Kartrak's operating profit grew 13% to RMB252 1,000,000 and adjusted EBITDA grew 9% to RMB417 1,000,000. Over the years, Kartrak has maintained a steady ARPU and average up cost of acquiring a subscriber. ARPU for the quarter was RMB159. Kartrak's average lifetime revenue per subscriber in this quarter stood at RMB9556. Speaker 100:14:26The average upfront cost of adding a subscriber to our cloud in this quarter was RMB2293. This cost mainly relates to sales commission and telematic device, which are capitalized and sales and marketing expense that are expense of. The headroom derived from the average lifetime revenue per subscriber, After subtracting the average upfront cost of adding a subscriber was RMB7263 per subscriber. From the RMB7263, we incurred a cost to service a subscriber over the contract life cycle of 60 months. The cost to service a subscriber decreased as we grow our subscriber base. Speaker 100:15:11Our unit economics has been steady, allowing us strong operating profits. Cars have continued to grow its subscriber base and ARR to The South African economy remains under pressure as a result of continuing strain on the national power grid. Despite the challenging trading conditions, our subscriber grew by 14%. In Asia, the Middle East and USA, Subscriber grew by 26% as the traction in Southeast Asia has been encouraging. Southeast Asia remained as the 2nd largest contributor to the group's Revenue, and we believe our value proposition will continue to find favor in this region and present the most compelling growth opportunity and deliver increasing and sustainable income to the group in medium to long term. Speaker 100:16:06Europe saw a healthy growth of 14% And we are in a region we are focusing our resources on. With our recent partnership with leading OEMs, we are poised to leverage our extensive offering to further develop The connected vehicle ecosystem and expect this partnership to contribute to our results in medium term. In addition, We are experiencing encouraging demand for our proprietary compliance technology in the region. Africa Others maintains its growth with 8% increase in subscriber. At the end of quarter 2, our ARR increased 17% to RMB3475 million. Speaker 100:16:47This is at a good trending as we continue to see the momentum of growth in our Car tracks continue to have robust operating margins And our trends are in line with the long term financial goals set upon our listing in 2021. In this quarter, Our subscription revenue gross profit margin stood at 72%, which is consistent with our expectation. Research and development expense as a percentage of subscription revenue are 6% as we focus on driving Our planned investment in improving and reaching and expanding our operation cloud and internal management system is to enhance our value proposition to our customer. Sales and marketing expense as a percentage of subscription revenue increased to 14%. We believe The strategic investment for customer acquisition position us well for continued growth, and we expect to see future benefit from this investment. Speaker 100:17:55General and admin expenses as a percentage of subscription revenue are at 22%. This plan increase reflects management commitment to build a strong support infrastructure to meet our future growth plan. Operating profit as a percentage of subscription revenue are 29%, and our adjusted EBITDA as a percentage of subscription revenue is at 49%. We have had a solid start, and we are happy with the progress we have made in quarter 2. Our guidance for Kartrak's outlook remain unchanged with number of subscriber between 1,900,000 to 2,100,000, Kartrak subscription revenue between RMB3.4 million to RMB3.6 million and Kartrak's operating profit margin between 28% to 31%. Speaker 100:18:48Kazuka delivered R85 1,000,000 in revenue in this quarter and an operating loss of R13 1,000,000. Subsequent to the quarter 2 end, despite the growth experienced by Kazuko in South Africa, a decision was made to cease buying secondhand vehicles in South Africa. This decision follows considerable interaction with motor dealership over the last 12 months. Over the years, Kartrak has been partnering with dealership as part of its customer acquisition strategy to acquire customer through the introduction of this dealership. However, some dealership has perceived the Kazuka business interest to be conflicting with their business interest in buying vehicles from customers. Speaker 100:19:33We maintain that the Kazuka business model is robust, but we do not want to risk the long standing strategic relationship that Kartrak has forged with motor dealerships across South Africa. Karoo Logistics delivered significant growth, generating RMB72 1,000,000 in revenue and an encouraging operating profit of RMB8 1,000,000 in this quarter. Its focus on delivery as a service through selected third party crowd sourced drivers and logistic companies has been highly scalable and is delivering substantial growth. While it continue to integrate into Cartrack's platform to extend its customer base, The Karoo Logistics stack is expected to deliver a long term revenue stream to the group. We believe the benefits of Our strategic investment in this segment are beginning to show. Speaker 100:20:26I would like to thank everybody for joining us today, And we will now open the floor to Q and A with our Group CEO and Founder, Mr. Zack Callisto. Speaker 200:20:39Hi. Good morning, good afternoon, good evening to be anywhere you are. Thanks very much for joining the presentation. I'll open up your questions. And the first question comes from Maers Ferry. Speaker 200:20:52When will Carjack start monetizing data as a service? What percentage of Kartraks' annual revenues will come from Data as a Service in 3 years' time? Miles, Sometimes these words are a bit of jargon. So data as a service is currently what we do, do the way I understand it. And we basically take raw data, push the data through the IoT devices into our cloud. Speaker 200:21:21We obviously then work with data and give intelligent business reports to our customers. So in our opinion, a great portion of our subscription revenue model is already data as a service, Which we obviously offer it as a software as a service. And so I think either I'm not understanding your question or That's my answer. The next question comes from Sebastian Quakambus. I'm not certain if I'm pronouncing the surname correctly, so apologies, Sebastian, if that's wrong. Speaker 200:21:59Can you explain further on the decision should shut down Kozhikode in South Africa? Will there be any costs associated to closing this division? So basically, we have one lease That it comes to closure during this financial year. So there is no real material costs. We've got in Kartrak, at this Point in time, about 500 vacancies open. Speaker 200:22:26And the majority of the Kazucca staff, we will transition into Car Track. So there is no major costs. Clearly, these costs could have a slight impact on Car Track initially, but that's been planned and it will be phased. I think by the time we get to FY 'twenty five, These costs won't be weighing us down. So I think the reality is we've been losing losses operating losses of Approximately ZAR50 1,000,000 a year and we see this loss disappearing and it will reflect positively in our earnings next year. Speaker 200:23:07Although I do believe that had we spent enough effort in the last 12 months to really put our Shoulders behind Kozhikode, we would have been much further. But we've been in long discussions with our partners, which is basically the motor dealers, Where a few of them are saying that we've got conflict of interests with them, and we've decided to save these Longstanding relationships and rather continue keeping our relationships with the motor dealers healthy. The next question comes from Matthew from Confluence Impact Fund. It's Matthew from Confluence Impact Fund. Thank you for the presentation. Speaker 200:23:50Congratulations on progressing these results. Despite the growth experienced by Cosi Kenseth, our decision remains to cease buying secondhand vehicles. What does this mean for Cosi? Will you be buying, selling vehicles and say And what different source are the dealers? So we have got the platform. Speaker 200:24:07We have developed the software for Carzika. We will still utilize the software for the benefit of our dealers. So currently, quite a lot of our dealers advertise their secondhand vehicles On the Corsica platform, we then assist them in them selling the pre owned vehicles. And we don't see this in any way conflicting. So we will still be able to anyone that wants to advertise in our platform. Speaker 200:24:34They're more than willing to do it, but we will not be taking inventory and buying and selling secondhand vehicles, but we will certainly allow Our partners, the dealerships, to still get the benefit that they've reaped until now. Alex Skalla, Kartrak operating margin is up nicely this quarter. Can you talk about operating margin expectations Given you are a job in Kozhikode and Kozhikode employees, it It would certainly have a negative impact on contract, but it's really a planned impact that we would have Done anyway because we need to employ the staff. But I don't believe this impact is material. The staff Moving over to contract is strategic. Speaker 200:25:31We know the people, so we already know the strengths and weaknesses and where to Put them into which departments. So it's all really just helping us for about 500 vacancies that we currently have at the moment. Matthew from William Blair. Has the net subscriber in the Q2 continue into the Q3? Matthew, yes, it has. Speaker 200:25:54So in the 1st 40 days of Q3, our net subscriber additions were actually 40,000. So we are expecting to probably be over 80,000 net subscribers during Q3. That is our expectation for Q3 given that we're halfway through Q3. Another question from Matthew from William Blair. Can you provide an update on the OEM relationships? Speaker 200:26:22When could you start to contribute to subscriber additions? We have done a lot of integrations already with the European OEMs. We should be able to start seeing Matthew from conference. Please can you comment on the proposed merger between Next Telemax and PowerFleet? Which geographies do you overlap in? Speaker 200:26:53I must say, Matthew, I'm not very familiar with TAO fleet. NICS, I'm relatively familiar with them. So My understanding is correct. Our fluidity is very much American based. But so I prefer not to comment because I don't really know. Speaker 200:27:09I haven't I'll take this information. I don't know. Do you focus on different customers or routes to market? If we compare ourselves to mix, I do not believe that we focus on different customers or different reach to market. What differentiates your offer from mix and power fleet? Speaker 200:27:28I think there's multiple vendors with our types of solutions. I think our route to market, although at the high level, it looks similar, But fundamentally, when you get into the detail, we're quite different. Mix operates in about 100 Geographies, we only operate in 23. We are a great believer that we need to have staff on the ground in all the countries. We do not Distributing countries where we don't have presence, physical presence. Speaker 200:28:05And I think that makes Quite a big difference. And then obviously, we're very much focused on owning the customer. And that could also be a little bit of a difference between us And mix potentially, but I'm speaking under correction. Next question from Sandeli Magogula. Kartrak's EBITDA margin is 47%. Speaker 200:28:29What have we reached apart from at this level? Can you allow margin to trend below 40 Mark, we've traditionally added our EBITDA margins between about 45% or 44% and about 52%. We believe that will continue it depends how much capital we've allocated into back Sales and it's a timing thing. We envisage that we'll remain in these sort of margins for quite a few years to come. Secondly, in terms of South Africa subscriber base, at which level do you expect growth rates in subscribers to peak given that 30% growth achieved in In South Africa, we've got about 1,400,000 vehicles on our cloud. Speaker 200:29:18We believe we can drive that to about 3,000,000 vehicles. Obviously, we are trying to do that as quickly as possible. Currently, we're going we're starting to see better momentum in growth In Q2 compared to Q1 and Q3, we continue that momentum. Thirdly, the plan is to What is the estimated impact on introduction? I think I've covered that. Speaker 200:29:444th question, where do you see Cartwright return on common Equity peaking over the coming years. Well, there's many ways of calculating that. So we've got quite a lot of cash. So if you Give out the cash as a dividend, then obviously, you'll be in a situation that your return on equity spikes. You're certainly making better returns for us than any other your earnings in a form of dividends. Speaker 200:30:10At what phase of growth cycle of the business Would it make sense for you to buffer with the dividend given that the naturally high cash flow version has special investments in organic growth and peak? I'd rather stay away from that question simply because we're quite pragmatic in the way we run the business. We've got sufficient cash to accelerate growth, and we intend keeping a solid cash base On our balance sheet like we've been doing, and we're generating quite a lot of free cash flow. And at this point in time, we can't deploy as much cash As we actually generate, Sandy. Next question from Masfuri. Speaker 200:30:54Why does Kourou regards Southeast Asia as the group's most compelling growth opportunity in the medium to long term and when is it the TAM as Europe and contract have partnered with the OEMs in Europe? Well, we certainly believe Southeast Asia is the largest. It certainly is. In terms of the economy growth, Southeast Asia is probably one of the most fastest growing economies in the world, in the region. It's also a huge large addressable market. Speaker 200:31:24We've come in as outsiders. We're making good progress. We're starting to get good momentum. And I think we've still got a very long way to go before we reach The full TAM. And I've answered the OEMs as well. Speaker 200:31:48If Saudi contract have doubled the number of subscribers every 4 years, Do you see this continue at this pace or faster pace? Currently, we're growing slightly slower than we did In those years, I think, when COVID came and then the 1 year post COVID, it sort of cramped our style. But we certainly are getting momentum, and our intention is to grow to more than double our subscriber base in less than 4 years. So it's just a question of us getting our momentum back, which we certainly are getting in post COVID. Alexander, Can you talk about the linearity of subscriber growth from June through to September? Speaker 200:32:29Did you see improvements every month? Or was it Clearly, that's a bit more. Any change in vehicles per customer in terms of what you added this quarter? So our customer base in terms of our SMEs, large enterprise customers and consumers remains quite constant over the years. Yes. Speaker 200:32:49And then our growth has been quite it's been quite consistent on a daily basis. We really measure our growth On working days, Alex, so quite frankly, as we've got very steady growth, we can see it. We measure that growth on a daily basis. And the more working days we have, the better we do. And we certainly are picking up momentum. Speaker 200:33:16Adding to that, Alex, typically, our Q3 is normally our best quarter given that there's less holidays in Q3. Suael Thalmann, what will the financial impact of season costs against South Africa? What percentage Coming from refurbishing. So I think I'll answer that to how. Andrew Ng, do you compete to a Descartes group? Speaker 200:33:46Andrew, I apologize, but I do know the I do not know the Descartes Group. And then Chris Logan, well done on strengthening momentum. Sensory is seeing a lot of strength in non vehicle applications, What they call equipment monitoring, is this an AE you see serious potentially? That's fundamentally crisp. And we're doing a lot of And there's a lot of demand from our customers as well for just IoT devices for equipment. Speaker 200:34:21So It depends what you call equipment, but we've got a lot of the yellow machineries forklifts. We deal with a lot of machinery already. So when we say subscribers, some of it includes that type of equipment that's been used in warehouses. And so my answer to that is clearly, as long as it's an IT device and we can collect raw data And push that back into our cloud and help our customers run their businesses, that's what we do. Then a final question from Secunati. Speaker 200:35:04Kozhika will be closing down altogether. We have got the technology, so the company will remain open, But we will not be buying and selling vehicles and owning inventory. I want to thank everybody for This is Paul. I have one more question that just came through. East Georgia, ARPU has been stable for Given all the inflation around the world, what is the reason you haven't increased prices? Speaker 200:35:33Ishmael, Our ARPU today is the same that it was 15 years ago, and we've got great operating profit margins, EBITDA margins, great gross Profit margins. We continue to grow our customer base. And quite frankly, the way we've always beaten inflation is Just to Economies of Skow. And as we feel these expenses, clearly, we feel them over the years. And but we've always been able to beat it through Economiesysco. Speaker 200:36:05And I want to thank everybody for joining us today and look forward to talking to you again in 3 months' time. Okay. Bye bye.Read morePowered by