NASDAQ:KARO Karooooo Q2 2025 Earnings Report $42.46 -0.35 (-0.82%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$42.41 -0.05 (-0.12%) As of 04/25/2025 06:15 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Karooooo EPS ResultsActual EPS$0.40Consensus EPS $0.38Beat/MissBeat by +$0.02One Year Ago EPSN/AKarooooo Revenue ResultsActual Revenue$60.70 millionExpected Revenue$60.26 millionBeat/MissBeat by +$440.00 thousandYoY Revenue GrowthN/AKarooooo Announcement DetailsQuarterQ2 2025Date10/15/2024TimeN/AConference Call DateTuesday, October 15, 2024Conference 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 2025 Earnings Call TranscriptProvided by QuartrOctober 15, 2024 ShareLink copied to clipboard.There are 3 speakers on the call. Operator00:00:00Hello and welcome to Karoo's Financial Year 2025 Q2 Earnings Call. On behalf of Karoo, we would like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer. And together with Hu Shin, our Group Chief Financial Officer, will discuss our Q2 results and key business highlights. Our Group CEO and Founder, Zach Callisto, will be available for Q and A following our presentation. Operator00:00:29All investors are advised to read the disclaimer. During the call, we will review both of Karoo's operating units, Kartrak and Karoo Logistics. For those new to Karoo, Kartrak is our operations management SaaS platform focused in Asia, Africa and Europe. Kartrak operates at scale and has a very attractive financial profile. As of August 2024, Kartrak's annual recurring revenue was 3,990,000,000 or 2.24 million dollars And Kartrak's Q2 operating profit margin was 29%. Operator00:01:08Historically, Kartrak's operating momentum has driven Karoo's growth and strong financial performance. Karoo Logistics is our rapidly growing delivery as a service business that empowers large enterprises to scale their e commerce operations and capabilities. Karoo Logistics is a structurally lower margin business than Kartrak and it is growing rapidly. As of August 2024, Karoo Logistics annualized B2B Delivery as a Service revenue was $418,000,000 or $24,000,000 Given Karoo Logistics' robust revenue growth, we are very excited about the long term growth opportunity for the business. We are also proud that Karoo Logistics is profitable at its current scale. Operator00:01:58In Q2, Karoo delivered another strong quarter with total revenue of ZAR1107 million, 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 Kartrak adjusted EBITA margin of 45%. For the benefit of investors in the U. S, we believe our quality of earnings is high as there is no stock based compensation in our adjusted EBITDA reconciliation unlike many U. Operator00:02:50S.-based technology companies. We ended Q2 with over 2,100,000 subscribers, an increase of 17% year on year and more than 125,000 businesses across all industries trust us to power their daily operations. We continue to build upon our strong data pool and our platform now generates over 180,000,000,000 valuable data points monthly, strengthening our position to capitalize on our strong network effects and continue driving enhanced insights for our customers. In Q2, we started to move to our newly built central office in South Africa, which positions us to support higher organic growth in South Africa. Not only does this office ensure that we can continue to grow our headcount, but it also provides a layout that ensures we continue to foster the Kartrak DNA and our strong culture as we scale. Operator00:03:44We completed the move in September and are already seeing the positive improvement. We also increased our sales and marketing investment in Southeast Asia beginning in August to capitalize on the attractive and sizable opportunity in the region. We continue to see Southeast Asia as the most compelling growth opportunity for the group over the medium to long term. Finally, Kartrak delivered record net subscriber additions in Q2 whilst maintaining strong unit economics with an LTV to CAC ratio greater than 9. Our commercial customer retention rate remains at 95%, and we continue to grow the business at scale with strong discipline. Operator00:04:25Our Q2 financial highlights included: Kartrak subscription revenue increased 15% year on year to $983,000,000 XAR. Kartrak's growth margin improved approximately 300 basis points year on year to 74%. Kartrak subscribers increased 17% year on year to 2,140,000. Karoo's adjusted earnings per share increased 31% year on year to ZAR7.35 Our balance sheet remains strong and unleveraged and we ended the quarter with net cash and cash equivalents of ZAR674,000,000. Additionally, given our strong Q2 financial performance and operating momentum, we are increasing the midpoint of our guidance ranges for our FY 'twenty five outlook for subscribers and Kartrak subscription revenue. Operator00:05:18We believe that we are very well positioned to drive profitable and durable growth given our efficient unit economics and have a proven track record and culture of operating with financial and capital allocation discipline. We offer an easy to use and differentiated enterprise SaaS platform that leverages our vast and proprietary data assets. We have a strong track record of compelling financials and our rule of 60 company with a strong and unlevered balance sheet. Finally, we are founder led with a unique winning culture and operate in a very large TAM with a massive runway ahead of us. Karoo simplifies the lives of operators to help them maximize the scale and efficiency of their operations. Operator00:06:04Our innovative platform goes far beyond connected vehicles and equipment. We simplify the decision making of physical operations. Our platform transforms decision making by unifying and contextualizing the data and information we collect from OEM devices, proprietary devices as well as open APIs. It centralizes the operations of businesses across diverse industries into a single place and helps customers conquer complex challenges around safety, compliance, productivity, service delivery, cost management, fuel, maintenance, routing, resource allocation, driver and worker retention, and more. Our platform leverages our large data scale, AI and data analytics to offer customers pragmatic and impactful insights that are easy to execute on. Operator00:06:57Given Karoo's vertical integration and long track record of strong capital allocation and efficiencies, we have a real edge in knowing what data actually matters to physical operations and how to provide that data in a way that is easy to implement and will drive real impact. We constantly innovate to ensure our platform keeps decision making simple, fast and agile. Our platform is easy to use and it's pragmatic. From start to finish, our entire solution focuses on simplifying complex decisions to ensure huge ROI for our customers. Our customers choose us because we deliver ROI by reducing costs, increasing productivity and improving safety with a user friendly platform supported by a best in class service team. Operator00:07:47The value proposition of our platform is massive. If you think about your day to day, the toughest part really is around decision making. Let's say for example your business is suffering from high fuel costs. Well firstly we'll benchmark you to others in your industry so you can understand how much of a problem this really is. Then there are 3 key things that could cause this. Operator00:08:09You're paying for fuel your vehicles aren't using, spending too much fuel per mile traveled, or traveling more miles than you need to to achieve the same result. Our platform takes customers through each of these, highlighting where the Janeages are and more importantly, offering solutions for each. By simplifying these decisions, we empower our customers to spend their time, energy and resources, overcoming their challenges and improving their businesses. We have some businesses saving over US300000 dollars purely on idling in a year, and we have others who have managed to scale their business twelvefold as a result of the control, visibility and digitalization our platform provides. We remain committed to investing in product innovation that leverages AI to deliver ROI to our customers From fatigue driving to unscheduled stopping and detecting fuel fraud to end user risk profiles, our platform harnesses AI to deliver insights around areas that negatively impact operational performance. Operator00:09:15In doing so, we believe we are using AI to help our customers mitigate risk, improve their service delivery, save money and likely save lives. For example, our AI powered cameras alongside our fully digitalized coaching platform and actionable analytics helped a South African customer reduce fatigue driving by 32% and mobile phone usage by 13% whilst improving their seat belt compliance, all of which are key contributors to eliminating fatalities on the road. During Q2, momentum for our camera business was strong, and we are excited about customer interest in our vision solutions. As businesses look to increase their e commerce offerings, many are also looking to move away from online marketplaces as they see a risk in losing control of their customers. This has been a continued driver for Karoo Logistics, which continues to gain adoption by our large enterprise customers seeking to scale their e commerce capabilities under their own terms. Operator00:10:21During Q2, Karoo Logistics delivered revenue of 101,000,000 ZAR, an increase of 40% year on year and an operating profit of 9,000,000. We see a large opportunity for Karoo Logistics and continue to maintain a positive outlook on this business unit. Our commitment to product innovation and a disciplined approach to profitable growth positions us to capitalize on the large and growing market opportunity. We believe we have ample runway for growth as businesses across industries seek to leverage technology to optimize their physical operations. As we continue to execute and scale, we believe we are only getting started. Operator00:11:05We believe there is ample opportunity for growth and we plan to increase subscription sales to existing customers, expand our customer base, expand the scope of our operations in newer geographies and expand our operations platform and services. We will continue to invest in all geographies to expand our sales and support infrastructures to achieve growth and maintain our customer centricity and expect Southeast Asia will be our largest driver of growth over the medium to long term. Our balance sheet and strong cash generation put us in a good position to accelerate our customer acquisition strategy whilst remaining highly profitable. Our founder led culture and vertically integrated business model have created an entrepreneurial environment with high customer centricity. This alongside our open APIs, innovative platform that is easy to use and continuous investment in proprietary internal systems ensures we offer customers an unparalleled offering and is why we win. Operator00:12:09In Q2, we maintained our leading unit economics with an LTV to CAC ratio of over 9. Our strong discipline in capital allocation, high platform ROI, customer centricity and tight efficiencies at scale lead to our low cost of acquiring a customer, high customer lifetime value and retention rate, as well as strong benefits from economies of scale. Our Q2 gross profit margin was 75% and our Q2 commercial customer retention rate was 95%. We are excited about our massive TAM and remain committed to profitable growth as we pursue the expansive growth opportunity ahead of us. I will now hand over to Hu Shen who will discuss our Q2 financial performance. Speaker 100:12:59Thank you, Carmen. I will now discuss Karoo's financial performance for Q2 FY 'twenty five. Please note that all comparisons are against Q2 FY 'twenty four unless otherwise stated. Our proven and profitable SaaS business model continued to deliver strong results in Q2. Karoo's total subscription revenue increased 15% to R986 million. Speaker 100:13:26Operating profit increased 22 percent to R302 million and adjusted earnings per share increased 31% to R7.35 dollars In this quarter, Kartrak experienced strong customer acquisition and quarter 2 subscriber increased 17% to 2,136,000 subscribers. Subscription revenue increased 15% to R983 million and operating profit was R293 million. Kartrak continues to prove its ability to scale in varying macroeconomic conditions and was a rule of 60 company when adding our 2nd quarter subscription revenue growth of 15% and our 2nd quarter adjusted EBITDA margins of 45%. Our solid start in Q1 continued as we gained momentum in Q2 with a record net subscriber addition of over 89,000 in this quarter, an increase of 18% year over year. We operate in a massive addressable market. Speaker 100:14:33In August this year, we accelerated our capital allocation to sales and marketing and we are comfortable that we can continue to grow our subscriber base profitably at scale. TaskRx continues to grow its subscriber base across geographies. In Q2, South African subscriber increased 16% represents 76% of total subscriber. We believe the economic environment in South Africa continues to improve and we are confident that our move to our newly built central office in September 2024 position us to support strong organic growth as it will allow us to expand our customer base and increase subscription sales to existing customers. Asia, the Middle East and USA subscribers increased 21% with strong momentum in Southeast Asia. Speaker 100:15:27This region made up of 12% of our total subscribers. Southeast Asia remains the 2nd largest contributors to the group's revenue representing the most compelling growth opportunity over the medium to long term. As such, in September, we started to prudently invest in sales and marketing in Southeast Asia to drive incremental growth. Europe subscriber increased 17% and comprised 8% of total subscriber. We remain focused on increasing our presence in the region especially through OEM partnership with our proprietary compliance technology. Speaker 100:16:06Africa excluding South African subscriber increased 15% and comprised 4% of total subscribers. With the strong tractions, we believe we are well positioned for geographical expansion. Karoo's quarter 2 adjusted earnings per share increased 31% to R7.35¢ mainly driven by highly subscription revenue and expanding gross margin. Carsrex earnings per share increased 22% to R7.17 dollars and Karoo Logistics earnings per share increased 29% to R0.18 dollars As Karoo continues to scale, grow and increase its earnings per share, we are confident in our FY 'twenty five earnings per share outlook. In Q2, we continue to demonstrate high cash conversions as our earnings increased. Speaker 100:17:00Free cash flow was R166 1,000,000. We invested R49 1,000,000 in the development of our South African central office bringing the total investment in our new office to R316 1,000,000. We believe our strong track record of disciplined capital allocations, earnings and free cash flow will continue to bolster our balance sheet. Our consistent result extend our track record of growth at scale, profitability and cash generation ability. In this quarter our net cash on hand plus cash in bank fixed deposit stood at R674,000,000. Speaker 100:17:41Debt test turnover days was 27 days which includes prudent provisioning given strong economic headwinds in some of the markets we are operating. In August we paid a cash dividend of $1.08 per share, a total of $33,400,000 to our shareholders an increase of 27% per share year over year. We have strong unit economics, robust operating margin and unleveraged balance sheet and strong cash conversion. Our robust business model are geared for growth with massive opportunities ahead of us. This was backed by a strong and clean balance sheet and we remain confident that our track record of success especially our ability to generate healthy cash flow is sustainable. Speaker 100:18:32Given our strong quarter two results and operating momentum we are raising our outlook for FY25 subscriber and Kartrak subscription revenue at the midpoint. We are now expecting Kartrak subscriber to be between R2.3 million to R2.4 million compared to R2.2 million to R2.4 million previously. Kartrak subscription revenue to be between R3.95 billion to R4.15 billion as compared to R3.9 billion to R4.15 billion previously. Kartrak operating profit margin outlook of between 27% to 31% and Karoo's earnings per share outlook of between R27.5 billion to R31 remains unchanged. In closing, we are excited about the operating momentum in the business and our strong first half result highlighted by our improved outlook for FY25. Speaker 100:19:26Looking forward, we believe our attractive SaaS business model, strong cash generation and strong balance sheet position us to capitalize on the expensive growth opportunity in front of us. I would like to thank everybody for joining us today and we'll now open the floor to Q and A with our Group CEO and Founder, Mr. Zack Callisto. Speaker 200:19:50Thank you, Yuxin. I've got a few questions. So I'll start with the first question from Adi Al. Peru Logistics reported revenue of DKK101 1,000,000 for Q2 FY 'twenty five, which, while demonstrating a strong 40% year on year growth, shows muted quarter on quarter growth as it matches the Q1 FY 'twenty five revenue. This appears to be the first time we've seen muted Q on Q growth for Koori Logistics. Speaker 200:20:20Could you comment on the factors contributing to the stagnation? Additionally, do you anticipate logistics will achieve double digit annual revenue growth over the next few years? And if so, are the key drivers expected to support this growth? So in Q1, we really stagnated quite a lot because we needed to basically increase our driver capacity. And we needed to onboard more drivers to be able to deal with the increased demand. Speaker 200:20:53And further, we also needed to increase our operational capabilities. So, we did stagnate intentionally. You will see in Q3, you'll already see a much better performance compared to Q2. And we certainly believe that we can continue delivering double digit growth. A question from Alex Scala. Speaker 200:21:19Zach, can you talk about the mix of the record subscriber adds this quarter? Any change in commercial mix or larger enterprise net adds? It was very much a situation where most of our drive of our growth was still SME Business. Clearly, we did get some large enterprise customers. We got 1 or 2 customers with more than 2,000 trucks. Speaker 200:21:44But fundamentally, it was driven by SME being still primarily the most the biggest contributor to our growth. Another question from Alex. Zach, Oisin, implied contract gross margin, ex logistics looks like a new record this quarter. Can you talk about the drivers there? How sustainable is this higher gross margin level? Speaker 200:22:13A lot of it comes from operational efficiencies. But as you've seen over the past years, our margins tend to go up and down in a very tight band. So we did see a very good increase in gross profit. I think we not our business model is not to try and keep it at 74%. But frankly, if it goes down to 72%, it's still great margins. Speaker 200:22:41And we look at the full margins of the business. I do not believe that we can get much better margins if we still want growth. While we're growing, I think these margins will fluctuate but in a very narrow band. Jack Sun. I'm Jack from Telangui Research. Speaker 200:23:14What is the major driving force for ARPU this quarter? Could you give some color on the ARPU for the next few quarters? Given our new products, I believe that the ARPU will have a tendency to increase, although in Asia as Singapore becomes a smaller part of the business, the ARPU in Asia will probably decrease because the ARPUs we experience in most Asian countries are very much in keeping with the South African ARPU. So our drive in revenue is really just through customer acquisition. And it's been our model for since day 1, which is 20 years ago. Speaker 200:23:52We've continuously driven subscription revenue through customer acquisition. Question from Roy Campbell from Morgan Stanley. As the company participated in further share buyback over the last quarter, Roy, we haven't participated. What we experienced in the ability for our ability to buy shares, it's quite difficult. Now the SEC rules make it very difficult in a way we can buy shares. Speaker 200:24:29And at the moment, we are picking up liquidity. And I think we need to support the growth in our liquidity. We've also bought on Paul Beaver as either by internal relations. So we will be doing a lot more activity on the investor side to build up liquidity. And I don't believe a share buyback that we're getting considering that we're now starting to get momentum, we'll send the right message. Speaker 200:24:57A question from Sethi from Ashmore. How is subs growth in Asia Pacific, the Middle East, failing versus management's base case? And what would constitute a good outcome in terms of numbers and subs, say, in 3 years versus the current 250,000. And we started now in September a huge drive to get our sales headcount to a level that we really wanted. I think we've sorted out a lot of our ability to recruit and to build a team. Speaker 200:25:32And I believe that we would certainly like to start growing at the 30% year on year. And I believe we can do that starting FY 'twenty 6. A question from Gokul Raj. Could you update on the secondary public offering of your shielding? And also, what should be the long term float in the stock that we should expect? Speaker 200:26:01In July this year, we basically did an offering to the market, a 2nd offering to the market, where it was me selling down secondary shares, my shares. And I've made it public that over time, I will sell about 6,000,000 of my shares over the next 5 or 6 years. I'll do it in a responsible way. So this is public knowledge. There's documentation out there. Speaker 200:26:27So the first block build that we did, we wanted to sell 75,000,000 shares. We were well oversubscribed already in the 1st day. And then, for reasons that I don't really understand, our share price dropped from $35 to $28.80. And then, if I remember correctly, we've had we had we had the book build of $150,000,000 for the $75,000,000 offering, but I wasn't willing to sell it $28.80. And for that matter, we terminated the secondary offering. Speaker 200:27:07So over time, we do expect as I sell into the market or if we happen to do M and A, we will expect higher liquidity, and we're certainly working towards that. If Karoo doesn't make transformational acquisitions, why isn't the balance sheet leveraged? I don't think that's really our DNA. I mean, we want to get into very clever financial engineering where you start, but I don't believe we need to do that. And I'm quite prudent. Speaker 200:27:46If you look, we've been we've been a public company as Cartrack before and JSC. We've always run a very clean balance sheet. I believe you only get debt if it's absolutely necessary. And we might have a few rainy days. And we want to be well positioned. Speaker 200:28:04You know, when COVID came, we continued growing. We weren't worried about the balance sheet. So we never know what's around the corner. And we don't want to be where, when the banks knock at our door, we start panicking. We'd rather be in we're very comfortable to remain in a net cash position as opposed to in a debt position. Speaker 200:28:26However, we're not scared of debt if it makes absolute sense. But I don't think we need to do it just to leverage our balance sheet so that we can engineer our balance sheet. A question from Prashant Premkumar. Is the LTV to cap much higher in Southeast Asia versus company average of 9? As this metric for South Australia has changed much in the past few years. Speaker 200:28:57And I don't, Prashant, I don't have the LTV to CAC for each geography. And then LTV to CAC to 9 is for the whole of Car Track. But fundamentally, we've got very high LTV to CACs in all our geographies. We are now going to go into quite a substantial increase in headcount, And we normally find these headcounts don't normally deliver results in the 1st 6 months. That could obviously have a negative impact on our LTV to CAC. Speaker 200:29:32But we believe that we should be still be able to keep it over 9. And if it drops below 9, it's also fine. Our LTV to CAC of 9 is very high. If it goes to 8, if it goes to 7, and if we believe we're going to get the results, and if we believe the way we're allocating capital, we're on the right path. We don't mind dropping to RTV to CAC of 7 for that matter. Speaker 200:30:01Thank you for showcasing the AI capabilities of the company. Approximately, what percentage of staff use Quadric AI based benefits as opposed to just vehicle tracking? How fast is the base of AI usage customers growing? The answer to that, AI is, in my opinion, it's just the latest fashionable word. So for me to answer that, I would just like to give a bit of color of what I believe AI is. Speaker 200:30:30And AI is really just ability, in our case, is to have a substantial amount of data, the ability to process the data, the ability of algorithms, and the ability to give instant information to our customers to better improve their businesses. And that's really AI. Then, you know, the terminology is a new it's a new terminology. It's loosely used. But, you know, we've been doing this for many years. Speaker 200:31:00Over time, obviously, we get better and better with our predictions, our data, amount of data. We've got our algorithms better get better, but we've been doing this. So I would say that all our business customers have got some form of AI in real time and access to it. It just depends what exactly are we talking about. So when it comes to the video, that's very much something that we've introduced in the last year. Speaker 200:31:26But I mean, when it comes to the business intelligence reports, the live alerts, all of that is part and parcel of a broader definition of AI. A question from Faith Rumer from William Blair. Can you provide some color on the S and M investment across each region as growth seems to be broad based? How are you thinking about sustainable efficiency across these investments? So we've got a capital allocation team that is run by Hong Yap. Speaker 200:32:02And in this capital allocation team, they actually look at each country. And not at each country, they also look at each go to market strategy within each country. And on that basis, we always continuously measuring our return on investment. So it's something that we do as a full time job, and we don't do it just across, you know, the company. We do it quite granular. Speaker 200:32:30And we we've been doing this for many years, and we do it, in my opinion, really well. I think, like, our lead is that we perhaps have been too prudent in the way we allocate capital. So there is we definitely are going to see less yield in the short term as we grow our sales force. But over time, we will go back to very high returns on our sales force. Nsiki Mutukwaka from Oshkom. Speaker 200:33:10Any guidance about sales market as a percentage of such revenue as Kartra going forward? That is currently increasing at this point in time. We will obviously do this, you know, in keeping with our track record, which is, you know, in a very disciplined way. But the intention is definitely to increase that as a percentage of subscription revenue to increase the spend on sales and marketing. A question from Alex, scholar. Speaker 200:33:41Can you elaborate on your headcount growth targets over the next 12 months? How much are you planning to grow sales and marketing headcount in the next 12 months? Alex, we actually quite we're actually busy most of the day to day with these budgets for the next year. And, my gut feel is, at this point in time, we're probably gonna grow the the sales headcount. In in terms of Asia that will be substantial. Speaker 200:34:10But in South Africa, it will probably about 25%. And in Europe, it will be about 25%. But in Asia, we expect to go that we'll be able to do about a 70% increase in headcount, about 70%. The questions for today.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallKarooooo Q2 202500:00 / 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.comFrom Social Security to Social Prosperity?In less than a decade, Social Security could be out of money. But a surprising plan from Trump’s inner circle may not just save the system — it could unlock a major opportunity for savvy investors. Financial insider Jim Rickards calls it “Social Prosperity,” and says those who act now could see the biggest gains.April 26, 2025 | Paradigm Press (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 Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?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 Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (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. Operator00:00:00Hello and welcome to Karoo's Financial Year 2025 Q2 Earnings Call. On behalf of Karoo, we would like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer. And together with Hu Shin, our Group Chief Financial Officer, will discuss our Q2 results and key business highlights. Our Group CEO and Founder, Zach Callisto, will be available for Q and A following our presentation. Operator00:00:29All investors are advised to read the disclaimer. During the call, we will review both of Karoo's operating units, Kartrak and Karoo Logistics. For those new to Karoo, Kartrak is our operations management SaaS platform focused in Asia, Africa and Europe. Kartrak operates at scale and has a very attractive financial profile. As of August 2024, Kartrak's annual recurring revenue was 3,990,000,000 or 2.24 million dollars And Kartrak's Q2 operating profit margin was 29%. Operator00:01:08Historically, Kartrak's operating momentum has driven Karoo's growth and strong financial performance. Karoo Logistics is our rapidly growing delivery as a service business that empowers large enterprises to scale their e commerce operations and capabilities. Karoo Logistics is a structurally lower margin business than Kartrak and it is growing rapidly. As of August 2024, Karoo Logistics annualized B2B Delivery as a Service revenue was $418,000,000 or $24,000,000 Given Karoo Logistics' robust revenue growth, we are very excited about the long term growth opportunity for the business. We are also proud that Karoo Logistics is profitable at its current scale. Operator00:01:58In Q2, Karoo delivered another strong quarter with total revenue of ZAR1107 million, 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 Kartrak adjusted EBITA margin of 45%. For the benefit of investors in the U. S, we believe our quality of earnings is high as there is no stock based compensation in our adjusted EBITDA reconciliation unlike many U. Operator00:02:50S.-based technology companies. We ended Q2 with over 2,100,000 subscribers, an increase of 17% year on year and more than 125,000 businesses across all industries trust us to power their daily operations. We continue to build upon our strong data pool and our platform now generates over 180,000,000,000 valuable data points monthly, strengthening our position to capitalize on our strong network effects and continue driving enhanced insights for our customers. In Q2, we started to move to our newly built central office in South Africa, which positions us to support higher organic growth in South Africa. Not only does this office ensure that we can continue to grow our headcount, but it also provides a layout that ensures we continue to foster the Kartrak DNA and our strong culture as we scale. Operator00:03:44We completed the move in September and are already seeing the positive improvement. We also increased our sales and marketing investment in Southeast Asia beginning in August to capitalize on the attractive and sizable opportunity in the region. We continue to see Southeast Asia as the most compelling growth opportunity for the group over the medium to long term. Finally, Kartrak delivered record net subscriber additions in Q2 whilst maintaining strong unit economics with an LTV to CAC ratio greater than 9. Our commercial customer retention rate remains at 95%, and we continue to grow the business at scale with strong discipline. Operator00:04:25Our Q2 financial highlights included: Kartrak subscription revenue increased 15% year on year to $983,000,000 XAR. Kartrak's growth margin improved approximately 300 basis points year on year to 74%. Kartrak subscribers increased 17% year on year to 2,140,000. Karoo's adjusted earnings per share increased 31% year on year to ZAR7.35 Our balance sheet remains strong and unleveraged and we ended the quarter with net cash and cash equivalents of ZAR674,000,000. Additionally, given our strong Q2 financial performance and operating momentum, we are increasing the midpoint of our guidance ranges for our FY 'twenty five outlook for subscribers and Kartrak subscription revenue. Operator00:05:18We believe that we are very well positioned to drive profitable and durable growth given our efficient unit economics and have a proven track record and culture of operating with financial and capital allocation discipline. We offer an easy to use and differentiated enterprise SaaS platform that leverages our vast and proprietary data assets. We have a strong track record of compelling financials and our rule of 60 company with a strong and unlevered balance sheet. Finally, we are founder led with a unique winning culture and operate in a very large TAM with a massive runway ahead of us. Karoo simplifies the lives of operators to help them maximize the scale and efficiency of their operations. Operator00:06:04Our innovative platform goes far beyond connected vehicles and equipment. We simplify the decision making of physical operations. Our platform transforms decision making by unifying and contextualizing the data and information we collect from OEM devices, proprietary devices as well as open APIs. It centralizes the operations of businesses across diverse industries into a single place and helps customers conquer complex challenges around safety, compliance, productivity, service delivery, cost management, fuel, maintenance, routing, resource allocation, driver and worker retention, and more. Our platform leverages our large data scale, AI and data analytics to offer customers pragmatic and impactful insights that are easy to execute on. Operator00:06:57Given Karoo's vertical integration and long track record of strong capital allocation and efficiencies, we have a real edge in knowing what data actually matters to physical operations and how to provide that data in a way that is easy to implement and will drive real impact. We constantly innovate to ensure our platform keeps decision making simple, fast and agile. Our platform is easy to use and it's pragmatic. From start to finish, our entire solution focuses on simplifying complex decisions to ensure huge ROI for our customers. Our customers choose us because we deliver ROI by reducing costs, increasing productivity and improving safety with a user friendly platform supported by a best in class service team. Operator00:07:47The value proposition of our platform is massive. If you think about your day to day, the toughest part really is around decision making. Let's say for example your business is suffering from high fuel costs. Well firstly we'll benchmark you to others in your industry so you can understand how much of a problem this really is. Then there are 3 key things that could cause this. Operator00:08:09You're paying for fuel your vehicles aren't using, spending too much fuel per mile traveled, or traveling more miles than you need to to achieve the same result. Our platform takes customers through each of these, highlighting where the Janeages are and more importantly, offering solutions for each. By simplifying these decisions, we empower our customers to spend their time, energy and resources, overcoming their challenges and improving their businesses. We have some businesses saving over US300000 dollars purely on idling in a year, and we have others who have managed to scale their business twelvefold as a result of the control, visibility and digitalization our platform provides. We remain committed to investing in product innovation that leverages AI to deliver ROI to our customers From fatigue driving to unscheduled stopping and detecting fuel fraud to end user risk profiles, our platform harnesses AI to deliver insights around areas that negatively impact operational performance. Operator00:09:15In doing so, we believe we are using AI to help our customers mitigate risk, improve their service delivery, save money and likely save lives. For example, our AI powered cameras alongside our fully digitalized coaching platform and actionable analytics helped a South African customer reduce fatigue driving by 32% and mobile phone usage by 13% whilst improving their seat belt compliance, all of which are key contributors to eliminating fatalities on the road. During Q2, momentum for our camera business was strong, and we are excited about customer interest in our vision solutions. As businesses look to increase their e commerce offerings, many are also looking to move away from online marketplaces as they see a risk in losing control of their customers. This has been a continued driver for Karoo Logistics, which continues to gain adoption by our large enterprise customers seeking to scale their e commerce capabilities under their own terms. Operator00:10:21During Q2, Karoo Logistics delivered revenue of 101,000,000 ZAR, an increase of 40% year on year and an operating profit of 9,000,000. We see a large opportunity for Karoo Logistics and continue to maintain a positive outlook on this business unit. Our commitment to product innovation and a disciplined approach to profitable growth positions us to capitalize on the large and growing market opportunity. We believe we have ample runway for growth as businesses across industries seek to leverage technology to optimize their physical operations. As we continue to execute and scale, we believe we are only getting started. Operator00:11:05We believe there is ample opportunity for growth and we plan to increase subscription sales to existing customers, expand our customer base, expand the scope of our operations in newer geographies and expand our operations platform and services. We will continue to invest in all geographies to expand our sales and support infrastructures to achieve growth and maintain our customer centricity and expect Southeast Asia will be our largest driver of growth over the medium to long term. Our balance sheet and strong cash generation put us in a good position to accelerate our customer acquisition strategy whilst remaining highly profitable. Our founder led culture and vertically integrated business model have created an entrepreneurial environment with high customer centricity. This alongside our open APIs, innovative platform that is easy to use and continuous investment in proprietary internal systems ensures we offer customers an unparalleled offering and is why we win. Operator00:12:09In Q2, we maintained our leading unit economics with an LTV to CAC ratio of over 9. Our strong discipline in capital allocation, high platform ROI, customer centricity and tight efficiencies at scale lead to our low cost of acquiring a customer, high customer lifetime value and retention rate, as well as strong benefits from economies of scale. Our Q2 gross profit margin was 75% and our Q2 commercial customer retention rate was 95%. We are excited about our massive TAM and remain committed to profitable growth as we pursue the expansive growth opportunity ahead of us. I will now hand over to Hu Shen who will discuss our Q2 financial performance. Speaker 100:12:59Thank you, Carmen. I will now discuss Karoo's financial performance for Q2 FY 'twenty five. Please note that all comparisons are against Q2 FY 'twenty four unless otherwise stated. Our proven and profitable SaaS business model continued to deliver strong results in Q2. Karoo's total subscription revenue increased 15% to R986 million. Speaker 100:13:26Operating profit increased 22 percent to R302 million and adjusted earnings per share increased 31% to R7.35 dollars In this quarter, Kartrak experienced strong customer acquisition and quarter 2 subscriber increased 17% to 2,136,000 subscribers. Subscription revenue increased 15% to R983 million and operating profit was R293 million. Kartrak continues to prove its ability to scale in varying macroeconomic conditions and was a rule of 60 company when adding our 2nd quarter subscription revenue growth of 15% and our 2nd quarter adjusted EBITDA margins of 45%. Our solid start in Q1 continued as we gained momentum in Q2 with a record net subscriber addition of over 89,000 in this quarter, an increase of 18% year over year. We operate in a massive addressable market. Speaker 100:14:33In August this year, we accelerated our capital allocation to sales and marketing and we are comfortable that we can continue to grow our subscriber base profitably at scale. TaskRx continues to grow its subscriber base across geographies. In Q2, South African subscriber increased 16% represents 76% of total subscriber. We believe the economic environment in South Africa continues to improve and we are confident that our move to our newly built central office in September 2024 position us to support strong organic growth as it will allow us to expand our customer base and increase subscription sales to existing customers. Asia, the Middle East and USA subscribers increased 21% with strong momentum in Southeast Asia. Speaker 100:15:27This region made up of 12% of our total subscribers. Southeast Asia remains the 2nd largest contributors to the group's revenue representing the most compelling growth opportunity over the medium to long term. As such, in September, we started to prudently invest in sales and marketing in Southeast Asia to drive incremental growth. Europe subscriber increased 17% and comprised 8% of total subscriber. We remain focused on increasing our presence in the region especially through OEM partnership with our proprietary compliance technology. Speaker 100:16:06Africa excluding South African subscriber increased 15% and comprised 4% of total subscribers. With the strong tractions, we believe we are well positioned for geographical expansion. Karoo's quarter 2 adjusted earnings per share increased 31% to R7.35¢ mainly driven by highly subscription revenue and expanding gross margin. Carsrex earnings per share increased 22% to R7.17 dollars and Karoo Logistics earnings per share increased 29% to R0.18 dollars As Karoo continues to scale, grow and increase its earnings per share, we are confident in our FY 'twenty five earnings per share outlook. In Q2, we continue to demonstrate high cash conversions as our earnings increased. Speaker 100:17:00Free cash flow was R166 1,000,000. We invested R49 1,000,000 in the development of our South African central office bringing the total investment in our new office to R316 1,000,000. We believe our strong track record of disciplined capital allocations, earnings and free cash flow will continue to bolster our balance sheet. Our consistent result extend our track record of growth at scale, profitability and cash generation ability. In this quarter our net cash on hand plus cash in bank fixed deposit stood at R674,000,000. Speaker 100:17:41Debt test turnover days was 27 days which includes prudent provisioning given strong economic headwinds in some of the markets we are operating. In August we paid a cash dividend of $1.08 per share, a total of $33,400,000 to our shareholders an increase of 27% per share year over year. We have strong unit economics, robust operating margin and unleveraged balance sheet and strong cash conversion. Our robust business model are geared for growth with massive opportunities ahead of us. This was backed by a strong and clean balance sheet and we remain confident that our track record of success especially our ability to generate healthy cash flow is sustainable. Speaker 100:18:32Given our strong quarter two results and operating momentum we are raising our outlook for FY25 subscriber and Kartrak subscription revenue at the midpoint. We are now expecting Kartrak subscriber to be between R2.3 million to R2.4 million compared to R2.2 million to R2.4 million previously. Kartrak subscription revenue to be between R3.95 billion to R4.15 billion as compared to R3.9 billion to R4.15 billion previously. Kartrak operating profit margin outlook of between 27% to 31% and Karoo's earnings per share outlook of between R27.5 billion to R31 remains unchanged. In closing, we are excited about the operating momentum in the business and our strong first half result highlighted by our improved outlook for FY25. Speaker 100:19:26Looking forward, we believe our attractive SaaS business model, strong cash generation and strong balance sheet position us to capitalize on the expensive growth opportunity in front of us. I would like to thank everybody for joining us today and we'll now open the floor to Q and A with our Group CEO and Founder, Mr. Zack Callisto. Speaker 200:19:50Thank you, Yuxin. I've got a few questions. So I'll start with the first question from Adi Al. Peru Logistics reported revenue of DKK101 1,000,000 for Q2 FY 'twenty five, which, while demonstrating a strong 40% year on year growth, shows muted quarter on quarter growth as it matches the Q1 FY 'twenty five revenue. This appears to be the first time we've seen muted Q on Q growth for Koori Logistics. Speaker 200:20:20Could you comment on the factors contributing to the stagnation? Additionally, do you anticipate logistics will achieve double digit annual revenue growth over the next few years? And if so, are the key drivers expected to support this growth? So in Q1, we really stagnated quite a lot because we needed to basically increase our driver capacity. And we needed to onboard more drivers to be able to deal with the increased demand. Speaker 200:20:53And further, we also needed to increase our operational capabilities. So, we did stagnate intentionally. You will see in Q3, you'll already see a much better performance compared to Q2. And we certainly believe that we can continue delivering double digit growth. A question from Alex Scala. Speaker 200:21:19Zach, can you talk about the mix of the record subscriber adds this quarter? Any change in commercial mix or larger enterprise net adds? It was very much a situation where most of our drive of our growth was still SME Business. Clearly, we did get some large enterprise customers. We got 1 or 2 customers with more than 2,000 trucks. Speaker 200:21:44But fundamentally, it was driven by SME being still primarily the most the biggest contributor to our growth. Another question from Alex. Zach, Oisin, implied contract gross margin, ex logistics looks like a new record this quarter. Can you talk about the drivers there? How sustainable is this higher gross margin level? Speaker 200:22:13A lot of it comes from operational efficiencies. But as you've seen over the past years, our margins tend to go up and down in a very tight band. So we did see a very good increase in gross profit. I think we not our business model is not to try and keep it at 74%. But frankly, if it goes down to 72%, it's still great margins. Speaker 200:22:41And we look at the full margins of the business. I do not believe that we can get much better margins if we still want growth. While we're growing, I think these margins will fluctuate but in a very narrow band. Jack Sun. I'm Jack from Telangui Research. Speaker 200:23:14What is the major driving force for ARPU this quarter? Could you give some color on the ARPU for the next few quarters? Given our new products, I believe that the ARPU will have a tendency to increase, although in Asia as Singapore becomes a smaller part of the business, the ARPU in Asia will probably decrease because the ARPUs we experience in most Asian countries are very much in keeping with the South African ARPU. So our drive in revenue is really just through customer acquisition. And it's been our model for since day 1, which is 20 years ago. Speaker 200:23:52We've continuously driven subscription revenue through customer acquisition. Question from Roy Campbell from Morgan Stanley. As the company participated in further share buyback over the last quarter, Roy, we haven't participated. What we experienced in the ability for our ability to buy shares, it's quite difficult. Now the SEC rules make it very difficult in a way we can buy shares. Speaker 200:24:29And at the moment, we are picking up liquidity. And I think we need to support the growth in our liquidity. We've also bought on Paul Beaver as either by internal relations. So we will be doing a lot more activity on the investor side to build up liquidity. And I don't believe a share buyback that we're getting considering that we're now starting to get momentum, we'll send the right message. Speaker 200:24:57A question from Sethi from Ashmore. How is subs growth in Asia Pacific, the Middle East, failing versus management's base case? And what would constitute a good outcome in terms of numbers and subs, say, in 3 years versus the current 250,000. And we started now in September a huge drive to get our sales headcount to a level that we really wanted. I think we've sorted out a lot of our ability to recruit and to build a team. Speaker 200:25:32And I believe that we would certainly like to start growing at the 30% year on year. And I believe we can do that starting FY 'twenty 6. A question from Gokul Raj. Could you update on the secondary public offering of your shielding? And also, what should be the long term float in the stock that we should expect? Speaker 200:26:01In July this year, we basically did an offering to the market, a 2nd offering to the market, where it was me selling down secondary shares, my shares. And I've made it public that over time, I will sell about 6,000,000 of my shares over the next 5 or 6 years. I'll do it in a responsible way. So this is public knowledge. There's documentation out there. Speaker 200:26:27So the first block build that we did, we wanted to sell 75,000,000 shares. We were well oversubscribed already in the 1st day. And then, for reasons that I don't really understand, our share price dropped from $35 to $28.80. And then, if I remember correctly, we've had we had we had the book build of $150,000,000 for the $75,000,000 offering, but I wasn't willing to sell it $28.80. And for that matter, we terminated the secondary offering. Speaker 200:27:07So over time, we do expect as I sell into the market or if we happen to do M and A, we will expect higher liquidity, and we're certainly working towards that. If Karoo doesn't make transformational acquisitions, why isn't the balance sheet leveraged? I don't think that's really our DNA. I mean, we want to get into very clever financial engineering where you start, but I don't believe we need to do that. And I'm quite prudent. Speaker 200:27:46If you look, we've been we've been a public company as Cartrack before and JSC. We've always run a very clean balance sheet. I believe you only get debt if it's absolutely necessary. And we might have a few rainy days. And we want to be well positioned. Speaker 200:28:04You know, when COVID came, we continued growing. We weren't worried about the balance sheet. So we never know what's around the corner. And we don't want to be where, when the banks knock at our door, we start panicking. We'd rather be in we're very comfortable to remain in a net cash position as opposed to in a debt position. Speaker 200:28:26However, we're not scared of debt if it makes absolute sense. But I don't think we need to do it just to leverage our balance sheet so that we can engineer our balance sheet. A question from Prashant Premkumar. Is the LTV to cap much higher in Southeast Asia versus company average of 9? As this metric for South Australia has changed much in the past few years. Speaker 200:28:57And I don't, Prashant, I don't have the LTV to CAC for each geography. And then LTV to CAC to 9 is for the whole of Car Track. But fundamentally, we've got very high LTV to CACs in all our geographies. We are now going to go into quite a substantial increase in headcount, And we normally find these headcounts don't normally deliver results in the 1st 6 months. That could obviously have a negative impact on our LTV to CAC. Speaker 200:29:32But we believe that we should be still be able to keep it over 9. And if it drops below 9, it's also fine. Our LTV to CAC of 9 is very high. If it goes to 8, if it goes to 7, and if we believe we're going to get the results, and if we believe the way we're allocating capital, we're on the right path. We don't mind dropping to RTV to CAC of 7 for that matter. Speaker 200:30:01Thank you for showcasing the AI capabilities of the company. Approximately, what percentage of staff use Quadric AI based benefits as opposed to just vehicle tracking? How fast is the base of AI usage customers growing? The answer to that, AI is, in my opinion, it's just the latest fashionable word. So for me to answer that, I would just like to give a bit of color of what I believe AI is. Speaker 200:30:30And AI is really just ability, in our case, is to have a substantial amount of data, the ability to process the data, the ability of algorithms, and the ability to give instant information to our customers to better improve their businesses. And that's really AI. Then, you know, the terminology is a new it's a new terminology. It's loosely used. But, you know, we've been doing this for many years. Speaker 200:31:00Over time, obviously, we get better and better with our predictions, our data, amount of data. We've got our algorithms better get better, but we've been doing this. So I would say that all our business customers have got some form of AI in real time and access to it. It just depends what exactly are we talking about. So when it comes to the video, that's very much something that we've introduced in the last year. Speaker 200:31:26But I mean, when it comes to the business intelligence reports, the live alerts, all of that is part and parcel of a broader definition of AI. A question from Faith Rumer from William Blair. Can you provide some color on the S and M investment across each region as growth seems to be broad based? How are you thinking about sustainable efficiency across these investments? So we've got a capital allocation team that is run by Hong Yap. Speaker 200:32:02And in this capital allocation team, they actually look at each country. And not at each country, they also look at each go to market strategy within each country. And on that basis, we always continuously measuring our return on investment. So it's something that we do as a full time job, and we don't do it just across, you know, the company. We do it quite granular. Speaker 200:32:30And we we've been doing this for many years, and we do it, in my opinion, really well. I think, like, our lead is that we perhaps have been too prudent in the way we allocate capital. So there is we definitely are going to see less yield in the short term as we grow our sales force. But over time, we will go back to very high returns on our sales force. Nsiki Mutukwaka from Oshkom. Speaker 200:33:10Any guidance about sales market as a percentage of such revenue as Kartra going forward? That is currently increasing at this point in time. We will obviously do this, you know, in keeping with our track record, which is, you know, in a very disciplined way. But the intention is definitely to increase that as a percentage of subscription revenue to increase the spend on sales and marketing. A question from Alex, scholar. Speaker 200:33:41Can you elaborate on your headcount growth targets over the next 12 months? How much are you planning to grow sales and marketing headcount in the next 12 months? Alex, we actually quite we're actually busy most of the day to day with these budgets for the next year. And, my gut feel is, at this point in time, we're probably gonna grow the the sales headcount. In in terms of Asia that will be substantial. Speaker 200:34:10But in South Africa, it will probably about 25%. And in Europe, it will be about 25%. But in Asia, we expect to go that we'll be able to do about a 70% increase in headcount, about 70%. The questions for today.Read morePowered by