# Karooooo Q2 2027 Earnings Report

> Karooooo reports record Q2 operating profit and accelerated subscription growth amid strategic investments.
- Title: Karooooo Q2 2027 Earnings Report · The Motley Fool | Shortify
- Summary: Karooooo reports record Q2 operating profit and accelerated subscription growth amid strategic investments. Karooooo achieved record Q2 operating profit of…
- Keywords: karooooo, q2 2027, earnings call, subscription revenue, net subscriber additions, cartrack, karooooo logistics, operating profit, zimbabwe, south africa, finance, money
- Source: The Motley Fool — https://fool.com/earnings/call-transcripts/2026/10/20/karooooo-karo-q2-2027-earnings-call-transcript
- Author: Motley Fool Transcribing
- Published: 2026-10-20T17:07:52+00:00
- Read time: 2 min
- Topics: karooooo, q2 2027, earnings call, subscription revenue, net subscriber additions, cartrack, karooooo logistics, operating profit, zimbabwe, south africa, finance, money
## Q2 Earnings Results
Karooooo reported record quarterly operating profit of ZAR 422 million, a 19% increase despite foreign exchange headwinds.
## Subscription Revenue Growth
Subscription revenue increased 20% to ZAR 1,418 million, representing 98% of total Cartrack revenue.
## Net Subscriber Additions
Net subscriber additions reached 94,516, a record for the second quarter and a 34% increase from the previous quarter.
## Total Subscribers
Total subscribers reached 2,899,210, reflecting an 18% increase driven by video solutions and Cartrack Tag adoption.
## Annualized Recurring Revenue
Annualized Recurring Revenue (ARR) increased 22% to ZAR 5,708 million, with a 30% U.S. dollar increase.
## Operating Profit Margin
Cartrack operating profit margin remained at 28%, a slight decrease from 29% in the prior year.
## Logistics Revenue
Karooooo Logistics revenue reached ZAR 189 million, a 36% increase driven by quick-commerce delivery services.
## Gross Margin
Subscription gross margin remained at 71%, slightly down from 72% in the prior-year period.
## LTV to CAC Ratio
LTV to CAC ratio remained above nine times, supporting disciplined customer acquisition strategies.
## Inventory Investment
Inventory investment reached ZAR 966 million for the first half of the year, an 86% increase to buffer against RAM and memory price rises.
## Free Cash Flow
Free cash flow was ZAR 41 million for the quarter, impacted by investments in in-vehicle IoT devices.
## Cash Reserves
Cash and cash equivalents decreased to ZAR 649 million after a ZAR 752 million dividend payment.
## South Africa Growth
South Africa subscription revenue grew 25%, marking the seventh consecutive quarter of acceleration in the region.
## Asia Growth
Asia constant currency subscription revenue grew 25% compared to 17% in the first quarter.
## Q2 Guidance
FY 2027 subscription revenue guidance is ZAR 5,700 million to ZAR 6,000 million, implying 18% to 24% growth.
## What's Next
Karooooo expects free cash flow to strengthen in the second half of FY 2027 following heavy upfront investments in hardware inventory.
## Key takeaway

Karooooo achieved record Q2 operating profit of ZAR 422 million with 20% subscription revenue growth and 94,516 net subscriber additions.