Q2 2025 Karooooo Ltd Earnings Call
Episode 2
Episode 2
Unknown Executive: This meeting is being recorded.
This meeting is being recorded.
[inaudible]
Episode 2
Speaker Change: Hello and welcome to Carous Financial Year 2025, Q2 earnings call. On behalf of Carous, we would like to thank you for joining us today.
Carmen Calisto: Hello 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 Hushin, our Group Chief Financial Officer, will discuss our Q2 results and key business highlights. Our Group CEO and founder, Zach Calisto, will be available for Q&A following our presentation.
Speaker Change: I'm Carmen, the Groups Chief Strategy and Marketing Officer, and together with Hushin, our Group Chief Financial Officer will discuss our Q2 results and key business highlights. Our Group CEO and founder, Zach Calisto, will be available for Q&A following our presentation.
Carmen Calisto: All investors are advised to read the disclaimer. During the call, we will review both of Karoo's operating units, Karchek and Karoo Logistics. For those new to Karoo, Karchek is our operations management SaaS platform focused in Asia, Africa, and Europe. Karchek operates at scale and has a very attractive financial profile. As of August 2024, Karchek's annual recurring revenue was $3,990 million or $224 million US dollars, and Karchek's Q2 operating profit margin was 29%. Historically, Karchek's operating momentum has driven Karoo's growth and strong financial performance. Karoo logistics is our rapidly growing delivery of the service business that empowers large enterprises to scale their e-commerce operations and capabilities.
Speaker Change: All Investors are advised to read the disclaimer.
Speaker Change: During the call, we will review both of career operating units, cotric and career logistics.
Speaker Change: For those who need to crew, caught track is our Operations Management SAS platform focused in Asia, Africa and Europe.
Speaker Change: Kachark Operator Scale and has a very attractive financial profile. As of August 2024, Kachark's annual recurring revenue was $3,990 million or $224 million US dollars.
Speaker Change: and Karchek's Q2 operating profit margin was 29%. Historically, Karchek's operating momentum has driven career growth and strong financial performance.
Speaker Change: Career Logistics is our rapidly growing delivery of the service business that empowers large enterprises to scale their e-commerce operations and capabilities.
Carmen Calisto: Karoo logistics is a structurally lower margin business than Karchek and it is growing rapidly. As of August 2024, Karoo Logistics annualized B2B delivery as a service revenue was $418 million or $24 million US dollars. Given Karoo Logistics's 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. In Q2, Karoo delivered another strong quarter with total revenue of $1,107 million, an increase of 16% year-on-year; subscription revenue of $986 million, an increase of 15% year-on-year; an adjusted earnings per share of $7.35, an increase of 31% year-on-year.
Speaker Change: Career Logistics is a structurally lower margin business and car track, and it is growing rapidly. As of August 2024, Career Logistics analyzed B2B delivery as a service revenue, was $418 million or $24 million US dollars.
Speaker Change: Giving Career Logistics is robust revenue growth, we are very excited about the long-term growth opportunity for the business. We also proud that Career Logistics is profitable at its current scale.
Speaker Change: In Q2, Corridor Levitt and other strong quarter with total revenue of 1,107 millions are an increase of 16% year on year.
Speaker Change: Subscription Revenue of 986 million, an increase of 15% year on year, an adjusted earnings per share of 7.35 cents, an increase of 31% year on year.
Carmen Calisto: 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 car track adjusted EBITAR margin of 45%. For the benefit of investors in the US, we believe our quality of earnings is high as there is no stock-based compensation in our adjusted EBITAR reconciliation, unlike many US-based technology companies. We ended Q2 with over 2.1 million subscribers, an increase of 17% year on year, and more than 125,000 businesses across all industries trust us to power their daily operations.
Speaker Change: Q2 continued out track record of delivering profitable growth at scale. In Q2, we were a rule of 60 company when adding out Q2 subscription revenue growth of 15% year on year, and out Q2 car track adjusted either term margin of 45%.
Speaker Change: For the benefit of investors in the US, we believe our quality of earnings is high, as there is no stock-based compensation in our adjusted ebitari consideration, unlike many US-based technology companies.
Speaker Change: We ended Q2 with over 2.1 million subscribers, an increase of 17% year on year, and more than 125,000 businesses across all industries trust us to power their daily operations.
Carmen Calisto: We continue to build upon our strong data pool, and our platform now generates over 180 billion 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 headcounts, but it also provides a layout that ensures we continue to foster the car track DNA and our strong culture as we scale.
Speaker Change: We continue to build upon our strong data pool, and our platform now generates over 180 billion valuable data points monthly, strengthening our position to capitalize on our strong network effects and continue driving enhanced insights for our customers.
Speaker Change: 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.
Speaker Change: Not only does this office ensure that we can continue to grow ahead counts, but it also provides a layout that ensures we continue to foster the contract DNA and our strong culture as we scale. We completed the move into Timber and are already seeing the positive improvements.
Carmen Calisto: We 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, car track delivered record net subscriber additions in Q2 while maintaining strong unit economics with an LTV to catch ratio greater than 9. Our commercial customer retention rate remains at 95%, and we continue to grow the business at scale with strong discipline.
Speaker Change: 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 of the medium to long-term.
Speaker Change: Finally, Karchak delivered record net subscriber additions in Q2, whilst maintaining strong unit economics with an LTV to Kak ratio greater than 9. Our commercial customer are a temporary to remain at 95% and we continue to grow the business at scale with strong discipline.
Carmen Calisto: Our Q2 financial highlights included car track subscription revenue increased 15% year on year to 983 million ZAR. Car track's growth margin improved approximately 300 basis points year on year to 74%. Car track subscribers increased 17% year on year to 2.1 million. Coruse adjusted earnings per share increased 31% year on year to 7.35. Our balance sheet remained strong and leveraged, and we ended the quarter with net cash and cash equivalents of 674 million ZAR. Additionally, given our strong Q2 financial performance and operating momentum, we are increasing the midpoint of our guidance ranges for our FY25 outlook for subscribers and car track subscription revenue.
Speaker Change: Our Q2 Financial Highlights Included, Contract subscription revenue increased 15% year-on-year to 983 million Contracts growth margin improved approximately 300 basis points year-on-year to 74%.
Speaker Change: Contract Subscribers, increase 17% year on year to 2.1 million.
Speaker Change: Corruse adjusted earnings per share increased 31% year on year to 735 cents.
Speaker Change: Our balance sheet remains strong and unleveraged, and we ended the quarter with net cash and cash equivalent of 674 millions are. Additionally, given our strong Q2 financial performance and operating momentum, we are increasing the midpoint of our guidance ranges for our FY25 outlook for subscribers and cartridge subscription revenue.
Carmen Calisto: We 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 sales platform that leverages our vast and proprietary data assets. We have a strong track record of compelling financials in our Rule of 60 company with a strong and unleveled balance.
Speaker Change: We 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.
Speaker Change: We offer an easy-to-use and differentiated enterprise set platform that leverages our vast and proprietary data assets.
Speaker Change: We have a strong track record of compelling financials in our rule of 60 company with a strong and unlevered balance sheet. Finally, we have found a lead with a unique winning culture and operate in a very large term with a massive runway ahead of us.
Carmen Calisto: Karooooo. How do you simplify the lives of operators to help them maximize the scale and efficiency of their operations? Our 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 attention, 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.
Speaker Change: Career simplifies the lives of operators to help them maximize the scale and efficiency of their operations. Our innovative platform goes far beyond connected vehicles and equipment. We simplify the decision-making of physical operations.
Speaker Change: 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.
Speaker Change: It centralizes the operations of businesses across diverse industries into a single place.
Speaker Change: and helps customers conquer complex challenges around safety, compliance, productivity, service delivery, cost management, fuel, maintenance, routing, resource allocation, driver and worker attention and more.
Speaker Change: Our platform leverages our large data scale, AI and data analytics to offer customers pragmatic and impactful insights that are easy to execute on.
Carmen Calisto: Given 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.
Speaker Change: Given Carous 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.
Speaker Change: We constantly innovate to ensure our platform keeps the decision making simple, fast and agile.
Speaker Change: 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.
Speaker Change: 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.
Carmen Calisto: The 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 three key things that could cause this. You'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 advantages are and, more importantly, offering solutions for each.
Speaker Change: The 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.
Speaker Change: Well, firstly, we'll benchmark you to others in your industry so you can understand how much of a problem this really is.
Speaker Change: Then, there are three key things that could cause this, you're paying for fuel, your vehicles aren't using, spending too much fuel per mile travelled or traveling more miles than you need to to achieve the same result. Our platform takes customers through each of these, highlighting where the janages are and more importantly offering solutions for each.
Carmen Calisto: 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 $300,000 USD purely on idling in a year, and we have others who have managed to scale their business 12-fold 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 operations.
Speaker Change: By simplifying these decisions, we empower our customers to spend their time, energy and resources overcoming their challenges and improving their businesses.
Speaker Change: We have some businesses saving over 300,000 US dollars purely on idling in a year and we have others who have managed to scale their business 12fold as a result of the control, disability and digitalization are platform provides.
Speaker Change: We remain committed to investing in product innovation that leverages AI to deliver ROI to our customers.
Speaker Change: 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.
Carmen Calisto: In 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 help the South African customer reduce fatigue driving by 32% and mobile phone usage by 13%, while improving their seatbelt 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.
Speaker Change: In doing so, we believe we are using AI to help our customers mitigate risk, improve their service delivery, save money, and likely save lives.
Speaker Change: For example, our AI powered cameras alongside our fully digitalized coaching platform and actionable analytics.
Speaker Change: Helped the South African customer reduced fatigue driving by 32%.
Speaker Change: and mobile phone usage by 13% while improving their seatbelt compliance, all of which are key contributors to eliminating fatalities on the road. During Q2, momentum for our camera business was strong and we excited about customer interest in our vision solutions.
Speaker Change: 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.
Carmen Calisto: This has been a continued driver for career logistics, which continues to gain adoption by our large enterprise customers seeking to scale their e-commerce capabilities under their own terms. During Q2, career logistics delivered revenue of 101 million zah, an increase of 40% year on year, and an operating profit of 9 million zah. We see a large opportunity for career 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.
Speaker Change: This has been a continued driver for Karul logistics, which continues to gain adoption by our large enterprise customers, seeking to scale their e-commerce capabilities under their own terms. During Q2, Karul logistics delivered revenue of 101 millions are an increase of 40% year on year, and an operating profit of 9 millions are.
Speaker Change: We see a large opportunity for career logistics and continue to maintain a positive outlook on this business unit.
Speaker Change: 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.
Carmen Calisto: As we continue to execute and scale, we believe we are only getting started. We 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.
Speaker Change: As we continue to execute and scale, we believe we are only getting started. We 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 new geographies and expand our operations platform and services.
Speaker Change: We will continue to invest in all geographies to expand our sales and support infrastructures, to achieve growth and maintain our customer's interest in an expect Southeast Asia will be our largest drive-off growth over the medium to long term.
Speaker Change: Our balance sheet and strong cash generation put us in a good position to accelerate our customer acquisition strategy while remaining highly profitable.
Carmen Calisto: 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. In Q2, we maintained our leading unit economics with an LTV to CAC ratio of overnight. Our strong, disciplined and 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.
Speaker Change: I'll found the lead culture and vertically integrated business model have created an entrepreneurial environment with high customer's interest rate.
Speaker Change: This...
Speaker Change: 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.
Speaker Change: In Q2, we maintain our leading unity economics with an LTV to CAC ratio of over 9.
Speaker Change: A strong, disciplined, capital allocation, high-platform ROI, customer's interest rate, and tight efficiencies at scale lead to a low cost of acquiring a customer, high customer lifetime value and retention rate, as well as strong benefits from economies of scale.
Carmen Calisto: Our Q2 growth profit margin was 75%. Thank you, Carmen.
Speaker Change: I'll cue two gross profit margin with 75% and I'll cue two commercial customer retention rate with 95%. We are excited about our massive term and remain committed to profitable growth as we pursue the expansive growth opportunity ahead of us.
Speaker Change: I will now hand over to Hussian who will discuss our Q2 financial performance.
Hushin: I will now discuss Karoo's financial performance for the quarter to FY25. Please note that all comparisons are against quarter to FY24 unless otherwise stated. Our proven and profitable sales business model continue to deliver strong results in quarter two. Karoo's total subscription revenue increased 15% to 986 million rand, operating profit increased 22% to 300 and 2 million rand, and adjusted earning per share increased 31% to 7,000 and 35 cents. In this quarter, Karoo's experience strong customer acquisition and quarter to subscriber increased 17% to 2,136,000 subscribers. Subscription revenue increased 15% to 983 million rent, and operating profit was 293 million rent.
Speaker Change: i
Hussian: Thank you, Carmen. I will now discuss Peru's financial performance for Quarter 2 FY 25. Please note that all comparisons are against Quarter 2 FY 24, unless otherwise stated.
Hussian: Our proven and profitable sales business model continue to deliver strong results in quarter two. Curious total subscription revenue increased 15% to 1986 million rent, operating profit increased 22% to 300 and 2 million rent and adjusted earning per share increased at 1% to 7 rent and 35 cents.
Hussian: In this quarter, Carmen experienced wrong customer excretion and quarter to a subscriber increased 17% to 21,136,000 subscribers.
Hussian: Subscription Revenue Increased 15% to 1983 Million Brand and Operating Profit was 293 Million Brand.
Hushin: Karoo's continues to prove its ability to scale in varying macroeconomic conditions and was a rule of 60 company when adding our second quarter subscription revenue growth of 15% and our second quarter adjusted EBITDA margins of 45%. Our solid start in quarter one continue as we gain momentum in quarter two with a record net subscriber addition of over 89,000 in this quarter and an increase of 18% year over year. We operate in a massive adjustable market. In 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.
Hussian: Carjack continues to prove its ability to scale in very macroeconomic conditions and was a rule of 60 company when adding our second quarter subscription revenue growth of 15%. And our second quarter adjusted EBDAR margins of 45%.
Hussian: Our solid star in quarter one continues as we gain momentum in quarter two, with a record net subscriber addition of over 80,000 in this quarter.
Hussian: and increase of 18% year over year. We operate in a massive adjustable market. In August this year, we accelerated our capital location to sales and marketing, and we are comfortable that we can continue to grow our subscriber base profitably at scale.
Hushin: Karoo's continues to grow its subscriber base across geographies. In quarter two, self-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 positioned 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. This region made up of 12% of our total subscribers. Southeast Asia remains the second largest contributors to the group's revenue, representing the most compelling growth opportunity over the medium to long term.
Hussian: Tashex continues to grow its subscriber base across drug office. In quarter two, South African subscriber increased 16%, represents 76% of two to subscribe.
Hussian: 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, the decision as to support strong organic growth as it will allow us to expand our customer base and increase subscription sales to existing customers.
Hussian: Asia, the Middle East and USA subscribers increased 21% with strong momentum in Southeast Asia. This region made up of 3% of our total subscribers.
Hussian: Software Research remains the second largest contributor to the group's revenue, representing the most compelling growth of opportunity over the medium to long term.
Hushin: As such, in September, we started to prudently invest in sales and marketing in Southeast Asia to drive incremental growth. Europe's subscriber increased 17% and comprise 8% of total subscriber. We remain focused on increasing our presence in the region, especially through OEM partnership with our proprietary compliance technology. Africa, excluding self-African subscriber, increased 15% and comprise 4% of total subscribers. With the strong attractions, we believe we have developed the vision for geographical expansion. Karu's quarter-two adjusted earning per share increased 31% to 7,000,000 and 35%, mainly driven by highly subscription revenue and expanding growth margin. Khashakh's earning per share increased 22% to 7,000,000 and 17%, and Karu's logistic earning per share increased 29% to run 18% as Karu continues to scale, grow and increases earning per share. We are confident in our FY25 earnings per share outlook.
Hussian: As such, in September, we started to prudently invest in sales and marketing in to drive incremental growth.
Hussian: Europe subscriber increased 17% and comprise 8% of total subscriber. We remain focused on increasing our presence in the region, especially to OEM partnership with our proprietary compliance technology.
Hussian: Africa, excluding South African subscribers, increase 15% and comprise 4% of both those subscribers. With the strong attractions, we believe we are about the decision for your graphical expansion.
Hussian: Karus Kota 2 adjusted earning per share increased at 1% to 7, and 35 cents, mainly driven by highly subscription revenue and expanding growth margin.
Hussian: Carfx Learning Pasha increased 22%, 27, and 17, and Karoo Logistic Learning Pasha increased 29%, to RAN 18, and sends.
Hussian: As Carol continues to scale, grow and increase its earnings per share, we are confident in our FY25 earnings per share outlook.
Hushin: In quarter-two, we continue to demonstrate high-catch conversions as our earnings increased. Three cash flow was 166 million rent. We invested 49 million in the development of our South African Central Office, bringing the total investment in our new office to 316 million rent. We believe our strong track record of discipline capital allocations, earnings and free cash flow will continue to blower 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 674 million rent.
Hussian: In Quarter 2, we continue to demonstrate high-catch conversions as our earnings increased. 3 cash flow was 166 million rent.
Hussian: We invested 49 million in the development of our South African Central Office, bringing the total investment in our new office to 316 million rent. We believe our strong track record of visiting capital locations, earnings, and free cash flow will continue to blow stir our balance sheet.
Hussian: Our consistent result extends our chart record of groove at scale, profitability and cash generation of greedy. In this quarter, our net cash on hand plus cash in Bank 60% suit at 674 million rent.
Hushin: That this then overday 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 $1.8 per share, a total of $33.4 million to our shareholders, an increase of 27% per share year over year. We have strong unit economics, robust operating margin and leverage 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.
Hussian: That first and all of the days was 27 days, which includes proven provisioning given strong economic hate winds in some of the markets we are operating.
Hussian: In August, we paid a cash dividend of $1.08 per share, a total of the $3.4 million to our shareholders. And increase up to the 7% per share year over year.
Hussian: We have strong unique economies, robust operating margin and unleveraged balance sheet and strong cash conversion.
Hussian: Our robust business model are geared for growth with a 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.
Hushin: Given our strong quarter-to-results in operating momentum, we are raising our outlook for FY-25 subscriber and car track subscription revenue at the midpoint. We are now expecting car track subscriber to be between 2.3 to 2.4 million compared to 2.2 to 2.4 million previously. Car track subscription revenue to be between 3.95 to 4.15 billion rand as compared to 3.9 to 4.15 billion rand previously. Car track operating profit margin outlook of between 27 to 31% and carose earning per share outlook of between 27.5 to 31 ran remains unchanged.
Hussian: Given our strong quarter to results and operating momentum, we are raising our outlook for FY25 subscriber and how track subscription revenue at the mid-point.
Hussian: We are now expecting Carmen Calisto to be between 2.3 to 2.4 million, compared to 2.2 to 2.4 million previously, Carmen Calisto's subscription revenue to be between 3.5 to 4.15 billion rent, as compared to 3.9 to 4.15 billion rent previously.
Hussian: Car Trek operating profit margin outlook of between 27 to 31%. And to lose earning per share outlook of between 27.5 to 31.3 remains unchanged.
Hushin: In closing, we are excited about the operating momentum in the business and our strong first half result highlighted by our improved outlook for FY-25. Looking forward, we believe our attractive sales business model, strong cash generation and strong balance sheet provision us to capitalize on the expensive growth opportunity in front of us.
Hussian: 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.
Hussian: Looking forward, we believe our attractive SaaS business model, strong cash generation, and strong balance sheet decision as to capitalize on the expensive growth opportunity in front of us.
Carmen Calisto: I would like to thank everybody for joining us today, and we will now open the floor to Q&A with our Group CEO and founder, Mr. Zack Kalisto.
Speaker Change: I would like to thank everybody for joining us today and we will now open the floor to Q&A with our group CEO and founder, Mr. Zach Calisto.
Zach Calisto: Thank you, Eugene.
Unknown Executive: But a few questions. So I'll start with the first question from Adi Al. They really just reported the revenue of under the one million dollars off of Q2 if 25, which while demonstrating a strong 40% union growth shows muted quote on quote to growth as it matches the Q1 in 25 revenue.
Speaker Change: Thank you, we have a few questions, so I'll start with the first question from IVL.
Speaker Change: and...
Speaker Change: Can you suggest you go to the revenue manager that I'm making so on, or QQ, if I'm trying to find out.
Speaker Change: Which while demonstrating a strong 40% journey on guard shows muted court on court to guard.
Zach Calisto: This appears to be the first time we've seen muted Q1 to your growth for career logistics. Could you comment on the factors contributing to the stagnation?
Speaker Change: As it matches the Q1 Infantry and Carb.
Speaker Change: Revenue. The FPSB, the first arm was seen needed to enter your growth in previous logistics. Could you comment on the factors contributing to this stagnation? Additional advantages for the chief double-digit annual revenue growth over the next few years. And if so, or the key job is expected to support the script.
Zach Calisto: Additional, de-anticipated career logistics will achieve double digits annual revenue growth over the next few years. And if so, are the key drivers expected to support the 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. The further we also needed to increase our operational capabilities. So we did stagnate intentionally.
Speaker Change: 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 Change: The further we also needed to increase our operational capabilities. So we did stagnate in English, you will see in QT, you already see a much better performance compared to QQ.
Zach Calisto: You will see in Q3, you already see a much better performance compared to Q2. And we certainly believe that we can continue delivering double-digit growth.
Speaker Change: And we certainly believe that we can continue the Lebrain Double Digit Grunge.
Zach Calisto: A question from Alex Scala: can you talk about the mix of the record subscriber ads, the squatter, any change in commercial mix, or larger enterprise net ads? It was very much a situation where most of our drivers on our growth was thought SME business. Clearly, we did get some large enterprise customers. You know, we got one or two customers with more than 2,000 trucks. That's fundamentally driven by SME being still primarily the most the biggest contributed drought growth.
Speaker Change: A question from Alex Skala.
Alex Skala: Is that? Can you talk about the mix of the record subscriber add the scooter? Any change in commercial mix or larger in the past make add?
Speaker Change: It was a very much a situation where most of our drive or our roads were still its unique business. Clearly we did get some large enterprise customers. We got one or two customers with more than 2,000 trucks.
Speaker Change: What's fun to maintain this driven by SME being still primarily the most the biggest contribution to Dreal growth.
Zach Calisto: Another question from Alex, Zach Oushin, entire project goes margin; it just looks like a new record, the squatter. Can you talk about the drivers there? Our sustainable design goes margin level. A lot of it comes from operation efficiencies, but as you've seen over the past years, our margins tend to go up and down in a very tight span. So we did see a very good increase in growth profits. I think we're not our business model; it's not to try and keep it at 74%. But frankly, if it goes down to 72%, it's full great margins.
Speaker Change: and other questions from LA.
Speaker Change: Zack Ocean, in part project ice margin, ex logistic, looks like a new vehicle, this quarter. Can you talk about the drive as we ask the animal, is the firegrace margin level?
Speaker Change: and a lot of it comes from operation efficiencies.
Speaker Change: But as you've seen over the past years, our margins seem to go up and down in a very tight tight.
Speaker Change: So, we did see a very good increase in growth of profits, I think we're not now business model is not the 70% but frankly, if it goes into 72% it's all great margins and we look at the full margins of the business, I do not believe.
Zach Calisto: And 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 won't fluctuate, but in a very narrow bend.
Speaker Change: That we can get much better margin if we still want growth while we growing. I think these margins won't fluctuate, but in a very narrow range.
Unknown Executive: Thanks for taking my question.
Jack Hunt: Jack Hunt.
Zach Calisto: I'm Zach. from Gellon-Guy Research.
Jack Hunt: Thanks for taking my question, I'm Jack.
Jack Hunt: from Le M. Gallon-Goy research, what is the major driving force for R2 discordant? Could you give some colour on the R2 for the next year's coaches?
Zach Calisto: What is the major driving force for R3DS Quartet? Could you give some color on the R3DS for the next year's Quartet? Given our new products, I believe that R3DS will have a tendency to increase.
Speaker Change: Given how new products are believed that our products will have a tendency to increase, all their age as Singapore becomes a smaller part of the business, the art will in Asia or public decrease, because the art will be experiencing most Asian countries are very much in keeping with the South African art group.
Zach Calisto: Although in Asia, Singapore becomes a smaller part of the business, the R3 in Asia will probably decrease because the R3DS will experience in most Asian countries are very much in keeping with the South African R3DS.
Zach Calisto: So our driving revenue is really just due a custom acquisition, and it's been our model for since day one, which is 20 years ago. We've continuously driven subscription revenue to custom acquisition.
Speaker Change: So, our drive in revenue is really just to a customer acquisition. And it's been our model for since day one, which is 20 years ago. It's continuously driven subscription revenue to customer acquisition.
Unknown Executive: Question from Roy Campbell from Morgan Stanley.
Speaker Change: Question from Roy Campbell for more instanding.
Zach Calisto: As the company participated into the ship bar back over the last quarter, Roy, we haven't participated. What we experience in the ability for our ability to buy shares is quite difficult. Now the SEC rules make it very difficult in the way we can buy shares, and at the moment, we are picking up liquidity, and I think we need to support the growth in our liquidity.
Speaker Change: As the company potter-spaded into the ship by back over the last quarter.
Speaker Change: A Roy, we haven't participated.
Speaker Change: What we stand in there is there.
Speaker Change: Yeah, in the...
Speaker Change: In the ability for our ability to buy a shares, it's quite difficult. Now the SEC rules make it very difficult in a way we can buy a shares.
Speaker Change: And 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 all beaver as either by internal relations. So we will be doing a lot more activity on the investor side to bold up liquidity. And I don't believe a share buyback that, you know, we're getting again, considering if we now start and get more benefit worth in the right message. Thank you very much.
Zach Calisto: We've also brought on poor people 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 bar back that will get considering if we now start to get revenue, we'll send the right message.
Unknown Executive: A question from SITI from Eschmol.
Speaker Change: Equation from Fiki, from Eshma.
Zach Calisto: How is sub-scrolling Asia-Pacific, the Middle East, creating versus management-based case, and what we also do is agree with the upcoming terms of numbers and sub-saintly, as this is the current $250,000. We started on September, a huge drive to get ourselves a hit count to a level that we really wanted.
Speaker Change: Subscribing Asia-Pacific, the Middle East, King versus Managedance Base Case, and what we constitute a good outcome in terms of numbers and subs, saying, key is this is the current trend of interest details. And we thought that those obtained a huge drive.
Speaker Change: To get our sales head count to a level that we really wanted. I think we thought about a lot of our ability to recruit into all the team and I believe that we would certainly want to start growing at the 30% year and year and I believe we can do that in the next 26th.
Zach Calisto: I think we've sought out a lot of our ability to recruit and to build the team, and I believe that we would certainly not have to start growing until the 30% year and year, and I believe we can do that starting in 2016.
Unknown Executive: A question from Goukou Raj.
Speaker Change: Em...
Zach Calisto: Could you update on the second-year public offering of your shielding, and also what should be the long-term flow in the stock that we should expect? In July this year, we basically did an offering to the market, the signal offering to the market, where it was me selling down secondary shares, my shares, and I've made a public that over time, I will sell about 6 million of my shares over the next five or six years. I will do it in a responsible way. So this is public knowledge; this documentation out there.
Speaker Change: A question from Goku 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 Change: is that in July this year, we basically did an offering to the market, the signal of the market, and we took me selling down second year's market, and I made a public that over time, I will tell about six million of my shares.
Speaker Change: Over the next five or six years, I'll do it in a responsible way.
Speaker Change: So, this is public knowledge, this documentation out there. So, the first, uh, global that we did, we wanted to sell a semi-farmament shift. We were well over the script already in the first day.
Zach Calisto: So the first blockfall that we did, we went to sell 75 million shares. We were well oversubscribed already in the first 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 had the bookfall of about 150 million dollars for the 75 million that I wasn't willing to sell at $28.80, and for that matter, we terminated the second year off.
Speaker Change: and King.
Speaker Change: For reasons that are done right there in the standard shape, I stopped from $35 to $28. And then, if I remember correctly, we read, read.
Speaker Change: is the book called by Vangetin, 15 million dollars for the 75 million dollar offering. That's our wasn't willing to sell a $22.80 and for that matter, we are going to see the second year offering.
Unknown Executive: Karooooo.
Zach Calisto: So at the time we do expect, as I sell it, the market or if we happen to get M and A, we will expect higher liquidity, and we certainly working towards that.
Speaker Change: And so at the time we do expect, as I sell it to the market or if we happen to get MLA, we will expect I'll quickly give him a city of working towards that.
Zach Calisto: Mostly, if the route doesn't make transformation or acquisitions, why isn't the balance sheet leveraged? I don't think that's really our DNA. I mean, we one can get into very cable financial engineering where you start, but I don't believe we need to do that. And I'm quite brilliant, you know. If we look, we've been a public company as a car track before JSC. We've always run a very clean balance sheet. I believe you only get that if it's absolutely necessary. And, you know, we might have a few rainy days, and we want to be brought position. You know, when COVID came, we continued to grow, and we want what is about the balance sheet.
Speaker Change: If Kuru doesn't make transformation or acquisitions, why isn't the balance sheet leverage?
Speaker Change: Um, I don't think that's really out DNA. I mean, we won't get into very capable financial engineering where you start.
Speaker Change: But I don't believe we need to do that, and I'm quite brilliant, you know, we've been, we've been a public company as contract before in JSC, we've always run a very clean balance sheet.
Speaker Change: I believe you only get debt if it's absolutely necessary and you know, we might have a few rainy days and we want to be in position, you know, when COVID came we continue to go and we want what is 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 out our door, you know, we start panicking. We're rather being that we're very comfortable to remain in a net cash position as opposed to net in a debt position.
Zach Calisto: So we never know what's around the corner, and we don't want to be where, when the banks not get our door, you know, we start panicking. We're rather being, we're very comfortable to remain in a net cash position as opposed to net in a debt position. However, we're not scared of debt.
Zach Calisto: If it makes absolute sense, you know, but I don't think we need to do it just to leverage our balance sheet so that we can engineer our balance sheet.
Speaker Change: However, we're not scared of death 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.
Zach Calisto: A question from patients from Kumar. Is that how did it get much higher in Southeast Asia versus company average of nine as this network was out there, I changed much in the past few years. And I don't, a patient, I don't have the outfit to kick for each geography and then out of it to kick the nine is for the whole of car track.
Speaker Change: He's there, I'll see these cats, my child, and Southeast Asia vs. company average of 9, as the genetic process has changed much in the past few years.
Speaker Change: In Adon, a patient Adon has a belt with a pack for each geography, and then an altitude to pack to nine is for the whole of Car Trek.
Zach Calisto: But fundamentally, with what really high out of it to kick in all our geographies. We are now going to go into quite a substantial increase in account, and we normally find these accounts on normally deliver results in the first six months. That could obviously have a negative impact on out of it to kick, but we believe that we should still be able to keep it overnight. And if it drops below nine, it's also fine. Out of it to get up nine is very high. If it goes to eight, if it goes to seven, and we could believe we're going to get the results.
Speaker Change: That's fundamentally with what's very high altitude to catch in all our geographies.
Speaker Change: We are now going to quite a substantial increase in 8 counts and we normally find these 8 counts on normally the level results in the first six months.
Speaker Change: That could obviously have a negative impact on RTR, RTV to CAC, but we believe that we should be able to keep it overnight, and if it drops below 9, it's also fine. RTV 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 on the right path, we don't mind dropping to RTV to CAC of 7, you know, for that matter.
Zach Calisto: And if we believe the way we're advocating capital, we on the right path, we don't mind dropping to out of it. You know, for that matter.
Zach Calisto: Thank you for showcasing the AI capabilities of the company, approximately what the single use quadric AI by benefits as opposed to just vehicle tracking out was the base of our usage customer's growing. That one said to that AI is, in my opinion, it's just the latest fashionable word. So for me to answer that, I will just like to give a bit of color what I believe AI needs. and AI is really just a ability, in our case, is to have a substantial amount of data, the ability to process the data, the ability to have algorithms, and the ability to get instant information to our customers to better improve their businesses.
Speaker Change: And...
Speaker Change: Thank you for showcasing AI capabilities of the company. Approximately what the thing is, Scarves Use Quadric AI by Benefit as opposed to just vehicle tracking. Our trust is the base of AI, our usage capacity is growing.
Speaker Change: The answer to that AI is, in my opinion, it's just the latest, fashionable word.
Speaker Change: So for me to answer that I will just like to give a bit of color what I believe AI is.
Speaker Change: And AI is really just a ability in our case.
Speaker Change: is to have a substantial amount of data, the ability to process the data, the ability to have algorithms, and the ability to keep instant information to our customers to better improve their businesses. And that's really, you know, terminology is a new, it's a new terminology it's used to use, but you know, we've been doing this.
Zach Calisto: And that's really AI. Then, you know, the terminology, it's a new terminology; it's used to use, but you know, we've been doing this for many years. Over time, obviously, we get better with our predictions, our data, amounts of data, we've got our algorithms, get better; the three'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 we are talking about.
Speaker Change: for many years. Over time, obviously we get better with our predictions, our data, the amount of data we've got, our arguments get better, the three opinions. So I would say that all our business customers have got some form of AR 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. But I mean, when it comes to the business intelligence reports, the lighter alerts, all of that is part and parcel of a broader definition of AR.
Zach Calisto: So, when it comes to the vision, let's say that's something that we've introduced in the last year. But I mean, when it comes to the business intelligence reports, the lighter loads, all of that is part and parcel of a broader definition of AI.
Zach Calisto: A question from a rumor from Wooden Bay. Can you provide some color on the SNM investment across each region as great since we brought base? How are you thinking about sustainable efficiency across these investments?
Speaker Change: The question from Mike Rumer from William B. Can you provide some colour on the SNM investment across each region as drugs since we brought back? How are you thinking about sustainable efficiency across these investments? So...
Zach Calisto: So we've got a capital allocation team that is run by On Up. And in a capital allocation team that actually look at each country and not that each country, they also look at each go to market strategy within each country. And on that basis, we are 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 the company. We do it quite granular, and 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 are perhaps being too prudent in the way we allocate capital.
Speaker Change: We've got a capital allocation scheme that is run by on yet.
Speaker Change: And in a scapularification team that exceed look at each country and not at each country they also look at each, go to market strategy with the each country.
Speaker Change: On that basis, we always completely 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. And we've been doing this for many years and we do it in my opinion really well. I think like our lead.
Speaker Change: Is that we attack?
Speaker Change: I've been to Cudent in the way we allocate capital, so the ease we go, we definitely are going to see a lift help in the short term as we grow our house force, but over time we will go back to very returns on our house force.
Zach Calisto: So we are going to see less yield in the short term as we grow our house force. But over time, you know, we will go back to very high returns on our house force.
Speaker Change: Episode 2
Unknown Executive: In Sikki, we took water from Osho.
Speaker Change: In Seki Mutu Quaker from Oshku.
Zach Calisto: Eric Ardens, a downstairs market; there's a percentage of such revenues as contracts are important. That is currently increasing at this point in time. We will obviously do this, you know, in keeping with our crack 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 spin on 1000 market.
Speaker Change: Irrigalence, a dance-out-out mock dance at the same age of such revenues as Court Jack and Ford, that is currently increasing at the point in time.
Speaker Change: We will obviously do this in keeping without accurate code, which is in a very disciplined way. But the intention is definitely to increase that as a percentage of subscription revenue, which will increase the spend of thousands of markets.
Zach Calisto: A question from Alex Scholar: Can you elaborate on your account growth progress over the next 12 months? How much are you planning to grow 1000 marketing accounts in the next 12 months?
Speaker Change: A question from Alex.
Alex Skala: Scholar, can you elaborate on your 8-count girl's target over the next 12 months? How much are you planning to grow 1000 more of the 8-count in the next 12 months?
Zach Calisto: Alex, we actually quite, we actually busy most of the day today with these budgets for the next year. And my gap appeal is at this point in time, we're probably going to grow the failed account in. In terms of Asia, that will be substantial, but in South Africa, it will probably about 20%, and in Europe, it will be about 25%. But in South Asia, we expect it to go with the PLB. I will do about 70% increase in the account, about 20% for today.
Speaker Change: Alex, we actually quite really actually busy most of the day today with these budgets for the next year. And Mark has to feel, is at this point in time, we probably going to grow the failed account in.
Speaker Change: In terms of Asia, that will be substantial, but in South Africa, it will probably about 25% and in Europe it will be about 25%. But in South Africa, in Asia, we expect to go with that PLP, I have what you do about a 70% increase in your count.
Speaker Change: Rachi 20%
Zach Calisto: Thank you very much for joining me. Thank you, bye bye.