Q4 2025 Karooooo Ltd Earnings Call
Hello, and welcome to cruise fourth quarter and full year fiscal 2025 financial results presentation on behalf of crew, we would like to thank you for joining us today I'm, Paul Bieber VP of Investor Relations and strategic finance.
Pushi Gorey: We are joined today by <unk> founder and group CEO, pushing Gorey, Chief Financial Officer, and Carmen <unk>, Chief strategy and marketing officer.
Speaker Change: I would like to remind everyone that some of the statements that we make today regarding our business operations and financial performance may be considered forward looking.
Speaker Change: Such statements are based on current expectations and assumptions.
Speaker Change: They are subject to several risks and uncertainties our actual results could differ materially. Please refer to the safe Harbor statement in our form 20-F, including the risk factors in the 6K that we filed yesterday.
Speaker Change: We undertake no obligation to update any forward looking statements.
Speaker Change: During this call we will present, both <unk> and non <unk> financial measures.
Speaker Change: Non <unk> measures is included in the 6K that we filed with the SEC yesterday.
Speaker Change: Our comments will refer to year over year comparisons unless stated otherwise.
Speaker Change: Before handing the call over to Carmen, we'd like to present, the six minute video of our SaaS platform to illustrate the depth and breadth of our platform's capabilities.
Speaker Change: <unk> all in one Iot platform to simplify decision, making from conquering fuel and maintenance.
Speaker Change: Empowering our safety first culture and setting teams up for success, our platform business is visibility and control of their entire operation in a single place blow visibility and manual checks lead companies struggling with fuel cost.
Speaker Change: Fuel card fraud claim validation and inefficient driving behavior challenges our platform validate the fuel transactions with telematics data to ensure that vehicles. We're at the right station and that all fuel actually entered the right tank.
Speaker Change: Transactions are assessed from low to high risk.
Speaker Change: <unk> notifying managers and enabling quick verification of fuel claim.
Speaker Change: 100, the fuel transactions are verified in minutes.
Speaker Change: All transactions are audited and time and money are seen.
Speaker Change: You're wasting habits like idling, our Concord within vehicle Buzzard management alert and comparative dashboard that benchmark drivers and businesses against others in their industry. This empowered a top food and beverage company to save more than 200000 U S dollars in fuel cost in a year.
Speaker Change: When managing deliveries or field jobs across our fleet keeping track of where everyone is and what is getting done is no small feat drivers need clear instructions dispatch and collections teams need estimated time of arrival to prepare clients want real time updates and in such competitive industries.
Speaker Change: Even minor delays and a few bad days can affect brand and customer loyalty.
Speaker Change: Our workforce management solution allows businesses to transform their workflow by digitally creating assigning and monitoring each task. They simply indicate daily jobs to complete driver availability and any special requirements, such as cold storage or skills to landscape.
Speaker Change: Bonds is in our platform automatically generates job cards for every worker that optimize the workflow of the entire business minimizing total travel distance and cost.
Speaker Change: Workers' get everything to complete their tasks via mobile App and customers get real time updates with live tracking and proof of job completion, our tool enabled a medical lab to quickly expand its blood collection operations from 15 clinics to more than 410 folding productivity and decreasing sample.
Speaker Change: Collection time Biz.
Speaker Change: Businesses sharing vehicles in assets struggle with double booking cumbersome booking processes frustrating key management and license renewal slip ups.
Speaker Change: Resulting in unnecessary team friction fleet increases and wasted costs.
Speaker Change: Our software allows businesses to seamlessly combine vehicles and centralized fleet.
Speaker Change: Managers setup driver permission vehicle requirements and an approval matrix.
Speaker Change: Then workers request bookings via our App and vehicles are automatically allocated to evenly distribute asset usage and maximize acceptance rates drivers digitally lock and unlock vehicles and requirements for inspections are automated into one workflow with full reporting.
Speaker Change: Our tool empowers businesses to reduce fleet sizes increased utilization and improve user experience, while eliminating unnecessary admin headaches and cost.
Speaker Change: Globally businesses and governments have growing road safety concerns are AI vision technology scans and monitors hundreds of data points every second detecting high risk driving behaviors. The moment they happen when high risk driving its spotted and immediate in cabin audible alert gives drivers the chance to <unk>.
Speaker Change: Their actions and prevent an accident.
Speaker Change: But the goal isn't to be reactive managers gain unmatched visibility into the drivers seat. So they can coach drivers before bad habits turn into real risks setting a new proactive standard for safer driving.
Speaker Change: Everyday off the road Costa fleet preventative maintenance is key our platform since managers custom reminders using real time data when it's time for a service tire swap oil change and more they assign the vehicle out for maintenance and once it's back drivers confirm that ever.
Speaker Change: The thing is in order and if drivers spot something out of the ordinary they simply report an AD hoc defect or highlight this in customized digital inspection form everything gets logged.
Speaker Change: Let's get repaired quickly maintenance cost decrease and fleets run reliably.
Speaker Change: Times every second counts businesses need a control room that keeps an eye on all events and takes action right away whether that means live streaming what's happening on the ground for dialing into the cabin and speaking to drivers directly or using real time sensor data teams can react instantly investigate appropriate.
Speaker Change: Lee and Mark incidents as resolved with full audit trail.
Speaker Change: Fuel to maintenance defines and taxes businesses enter all of their expenses to understand their full cost of ownership and how that translates to outputs and profit.
Speaker Change: We integrate with tons of partners and bring all fleet data into one place with.
With contextualized data points tailored reporting and one single source of truth for their operation businesses easily pinpoint leakage is make the right decisions faster and better deliver on their missions simplify decision, making with car track today.
Speaker Change: Welcome to <unk> Q4, and full year fiscal 2025 financial results presentation.
Speaker Change: We hope you enjoyed the demonstration of our SaaS platform.
Speaker Change: For those new to Korea, we operate a SaaS platform for connected vehicles and mobile assets that enables businesses to enhance operational efficiency reduce costs improve safety and ensure compliance we help businesses across industries simplify decision, making to optimize our physical operate.
Speaker Change: <unk>.
Speaker Change: We serve a large underpenetrated market with strong sustained demand driven by digital transformation, a constant need to improve operational efficiency and an increasing focus on safety and compliance.
Speaker Change: As a founder led business, we have a strong financial profile, a proven track record of execution excellence and our cultural focus on disciplined capital allocation.
Speaker Change: That form supports more than $2 3 million subscribers across more than 125000 businesses in South Africa, Southeast Asia, and Europe spanning industries, such as logistics mining agriculture, construction retail and the public sector.
Speaker Change: All financial model is anchored by high margin subscription revenue and robust customer retention, we continue to scale, our proprietary data asset now generating over 200 billion data points monthly, which we leverage to drive actionable insights for our customers and long term customer value.
Speaker Change: During our presentation, we will review both of crews operating segments cartridge and career logistics.
Speaker Change: <unk> is our operations management SaaS platform contract operates at scale and has a very attractive financial profile contracts operating momentum has primarily driven <unk> growth and strong financial performance.
Speaker Change: <unk> momentum continued in FY two five in FY, two five contract generated $4 1 billion Czar in subscription revenue, an increase of 15% or 19% on a U S dollar basis and contracts operating profit margin was a healthy 31%.
Speaker Change: Career logistics is a rapidly growing delivery as a service business that empowers large enterprise customers to scale their e-commerce and logistics operations career logistics is a structurally lower margin business and contract showing strong growth momentum.
Speaker Change: <unk> logistics is strategically important to us as it empowers our customers to scale their e-commerce and logistics operations through a capital light model, while driving high contract customer retention.
Speaker Change: We continue to profitably scale the career logistics business in FY, two five and <unk>.
Speaker Change: F Y two five career logistics is delivery as a service revenue reached 420 million Saar and increase of 33% or 37% on a us dollar basis.
Speaker Change: Given career logistics is robust revenue growth. We are very excited about the long term growth opportunity for the business.
Speaker Change: Carew exited FY two five with growing momentum despite the fluid macro backdrop in Q4 hundred $20 million an increase of 16%.
Speaker Change: Subscription revenue of 1080, 6 million Saar and increase of 16% and adjusted earnings per share of nine point Foyt saw an increase of 59% delivering profitable growth at scale. In Q4, we were a rule of 60 company when adding our Q4.
Speaker Change: Subscription revenue growth of 16% at all Q4, <unk> adjusted EBITDA margin of 48% operating profit margin exceeding 10% and operating profit margin of 34% remained robust in Q4 and underpins our stellar financial performance.
Speaker Change: It's noteworthy that the Q4 <unk> subscriber growth rate of 17% was consistent throughout FY, two five and represented a 200 basis point acceleration versus FY two full <unk>.
Speaker Change: Also contracts FY two five operating profit margin expanded modestly while FY two five subscriber growth accelerated before detailing our Q4 business and operational accomplishments, we want to take a moment to underscore our distinctive financial profile something that is exceptionally rare.
Speaker Change: And the public markets, particularly among small cap companies. We believe we are among a select few SaaS companies operating at a rule of 50, plus based on 2025 GAAP Street estimates, notably.
Speaker Change: Notably within SaaS universe of approximately 160 companies. We believe we are the only small cap company operating at this level being part of this elite group reflects our unwavering commitment to disciplined and profitable growth in Q4 contracts total subscribers increased.
Speaker Change: 17% highlighted by stable growth in South Africa, and a 100 basis points quarter on quarter acceleration in Europe.
Speaker Change: Net subscriber additions were strong and increased 25% and 30% in Q4 and FY two five respectively.
Speaker Change: With ongoing investments in sales marketing and infrastructure to support future growth. We believe we have ample runway to accelerate our organic growth, while maintaining strong robust earnings.
Speaker Change: Annualized recurring revenue or a or accelerated 300 basis points quarter on quarter to 17% and they are increased 21% in U S. Dollars, we delivered healthy subscriber additions in Q4, while maintaining strong unit economics.
Speaker Change: <unk> reflect our ability to grow at scale with discipline.
Speaker Change: Q4 financial highlights included cartridge subscription revenue accelerated 200 basis points quarter on quarter to 16% contract subscription revenue increased 20% on a us dollar basis.
Speaker Change: Southeast Asia constant currency revenue growth accelerated to 31% compared to 26% in Q3.
Speaker Change: <unk> operating profit margin was a robust 34%. We remained a rule of 60 company and peruse adjusted earnings per share increased 39% to $9 four a czar.
Speaker Change: Our balance sheet remains strong and unleveraged and we ended the quarter with net cash and cash equivalents of 838 million Saar.
Speaker Change: Healthy subscription gross margin efficient customer acquisition and attractive commercial retention rates continued to drive our healthy unit economics in Q4, our subscription gross margin was 76% of LTV.
Speaker Change: LTV to CAC ratio remained above nine and all commercial retention rate was 95%. It's noteworthy that we accelerated our subscriber growth by 200 basis points in FY two five while maintaining healthy unit economics. We are excited about a massive tam and remain committed to <unk>.
Speaker Change: <unk> growth as we pursue the expansive growth opportunity ahead of us.
Speaker Change: We ended FY two five with more than one 7 million subscribers in South Africa, representing 75% of our global subscriber base. Our recent investment in a newly built central office supports our long term growth strategy in the region by enabling us to scale operations enhance customer service.
Speaker Change: And drive deeper platform penetration within our existing customer base, we are optimistic about the future of our business in South Africa, driven by ongoing digital transformation rising demand for video solutions and the market expanding impact of contract tag.
Speaker Change: With a trusted brand and an experienced team we're well positioned for continued success in South Africa. We are encouraged by the strong momentum that we are building to accelerate our organic growth in the region.
Speaker Change: We ended FY two five with more than 274000 subscribers in southeast Asia, and the Middle East with most of the subscribers in Southeast Asia Southeast Asia, and the Middle East comprised 12% of total subscribers in Q4, our constant currency subscription revenue growth in the region.
Speaker Change: <unk> reached an impressive 31% an acceleration compared to 26% in Q3.
Speaker Change: As the second largest contributor to group revenue Southeast Asia continues to present, the most compelling growth opportunity for the group in the medium to long term.
Speaker Change: In September 2024, we started a strong yet prudent drive to increase sales and marketing in southeast Asia and believe that we will begin to see results in FY. Two six we aim to increase our sales head count by 70% in FY two six in the region.
Speaker Change: <unk> SaaS platform growing brand equity built on superior customer service service delivery and distribution and attractive regional macro trends provide us with a solid foundation to drive continued growth and expansion in the region for years to come we ended FY two five with more than 200.
Speaker Change: Subscribe as in Europe, which comprised 9% of our total subscribers our subscriber growth in the region accelerated 100 basis points quarter on quarter to 20% in Q4, we remain.
Speaker Change: <unk> focused on increasing our presence in the region, especially through OEM partnerships, we have partnered with leading Oems to provide easy access to our platform seamlessly integrating their connected vehicle data into our platform through application programming interfaces or Apis we.
Speaker Change: We expect these partnerships to contribute to our results in the medium term in.
Speaker Change: In addition, we are experiencing encouraging demand for proprietary compliance technology in the region as customers seek to simplify compliance with evolving legislation and enforcement in FY. Two five career logistics continued to build scale and delivered revenue of 420 million Saar.
Speaker Change: An increase of 53% and a 9% operating profit by addressing our platform into large customers operations contributing to strong customer retention.
Speaker Change: Career logistics also enables us to learn about the operational and logistics challenges confronting our large customers, we see a large opportunity for career logistics going forward as large businesses seek to increase our e-commerce offerings and optimize their logistics capabilities through a capital light model.
Speaker Change: Platforms simplifies decision, making by seamlessly unifying and contextualized data from a wide range of sources, including OEM devices and proprietary devices as well as open Apis by consolidating business operations into a single centralized hub, we enable our customers to overcome.
Speaker Change: <unk> operational challenges related to safety compliance productivity service delivery cost control fuel management maintenance routing resource allocation and workforce retention.
Speaker Change: Powered by extensive data asset advanced AI and robust analytics.
Speaker Change: Platform delivers actionable insights that drive meaningful improvements to our customers' physical operations we.
Speaker Change: We are deeply committed to continuous innovation, ensuring our platform remains intuitive fast and adaptable to the ever evolving business needs of our customers.
Speaker Change: Simplicity is at the core of our solution from implementation to daily use helping customers make smarter decisions faster while driving ROI.
Speaker Change: The contract operations cloud is an end to end SaaS platform that deliver significantly more than traditional telematics.
Speaker Change: By unifying mission critical capabilities into one intelligence solution, we help customers enhance safety boost productivity and reduce operating costs driving measurable ROI keep.
Speaker Change: Key platform capabilities include real time, Telematics fleet management and asset optimization video and AI powered safety monitoring field service and workforce management risk management and compliance last mile delivery and logistics management seamless integration.
Speaker Change: Our open Apis and analytics and reporting by delivering a unified feature each platform, we empower our customers to scale efficiently improve operational and financial performance and drive long term growth.
Speaker Change: We remain deeply committed to investing in product innovation and contract tag exemplifies our commitment to innovation and expanding the power of our platform in Q4, we launched contract tag and next generation wireless asset tag that extends our platform to any mobile asset in South Africa delivering <unk>.
Speaker Change: A cure near real time visibility, even in areas with limited or no cellular coverage both.
Speaker Change: For demanding commercial environments contract tag helps businesses locate misplaced or stolen assets reduce operating costs and simplify asset management.
Speaker Change: Powered by our proprietary RF network and cloud integration contract Tag office tamper resistant protection when paired with our contract Iot device. It can detect signal interference and instantly alert both the asset owner and our 24 seven surveillance team, enabling rapid response and recovery.
Speaker Change: We're excited about contract tags potential to deliver unparalleled asset protection advanced risk management and expanded operational oversight, it's easy installation on a wide range of mobile assets, such as trailers generators compressors heavy machinery and large tools reduces.
Speaker Change: To adoption and supports all committed Tam expansion across industries, our customers choose us because we deliver tangible ROI by reducing costs boosting productivity and enhancing safety through user friendly platform backed by our best in class service team.
Speaker Change: The value proposition of our platform is significant with a proven ability to create meaningful business impact.
Speaker Change: Why two five was a year of strong execution impactful innovation and significant progress.
Speaker Change: We accelerated customer acquisition and Huntsville platform with more advanced AI video capabilities and other features and successfully launched the contract tag. We also continue to invest in strategic head count expansion, ensuring we are very well positioned for durable long term growth.
Speaker Change: Solid financial performance and robust balance sheet underscore the strength of our operating model, we remain confident in our competitive positioning across regions and believe we are exceptionally well positioned to accelerate our growth in FY two six <unk>.
Speaker Change: Looking ahead, our key strategic priorities for FY two six are as follows cement our leadership position in the countries we have achieved scale.
Speaker Change: Spanned our distribution footprint in Asia and Europe.
Speaker Change: <unk> platform adoption by driving deeper customer engagement with our platform and capturing growing demand for video capabilities, including AI video.
Speaker Change: Capital allocation is a fundamental part of our culture and we aim to remain disciplined with our capital allocation strategy rooted in a 20 year culture of profitable growth and prudent financial management key drivers of long term shareholder value.
Speaker Change: Our capital allocation framework is unchanged and prioritizes organic growth and innovation, our Paramount priority is investing in organic growth and product innovation, given our strong unit economics sustained profitability and large market opportunity returning capital to shareholders at current.
Speaker Change: Rates are business generate significant excess cash with our strong balance sheet and net cash position. We aim to return surplus capital to shareholders. When we cannot efficiently invested for growth primarily through an annual dividend as to avoid out management prioritizes growth over dividends.
Speaker Change: Strategic M&A, we take a prudent and strategic approach to M&A, we view M&A as a tool to accelerate time to market in key geographies expand our product portfolio will strengthen our competitive position. However, given our compelling organic growth profile customer centric culture and <unk>.
Speaker Change: <unk> unit economics, we set a high bar for any potential acquisitions M&A opportunities most of our clear strategic value optionality to meet our criteria.
Speaker Change: Ultimately, we see it as our responsibility to allocate capital thoughtfully always with the goal of maximizing long term shareholder returns I will now hand, it over to <unk>, who will discuss our Q4 and full year FY two five financial performance as well as our outlook for FY <unk>.
Speaker Change: Six.
Thank you Carman I will now discuss <unk> financial performance for quarter, four FY 'twenty, five and the full year FY 'twenty five.
Speaker Change: Please note my comments will refer to year over year comparisons unless we state otherwise our proven and profitable SaaS business model continue to deliver strong results in quarter four.
Speaker Change: Coastal dos subscription revenue increased 16% to 1080 6 million win on a U S dollar basis Carew subscription revenue increased 20%.
Speaker Change: Operating profit increased 30% to 385 million rent and adjusted earning per share increased 39% to nine ran and 48 cents.
Speaker Change: For FY 'twenty five coastal dos subscription revenue increased 15% to 4060 8 million van on a U S dollar basis subscription revenue increased 19%.
Speaker Change: Operating profit increased 96% to 1300 and shelf million van.
Speaker Change: Adjusted earnings per share increased that the cheapest sin 231 win and 67 since we will not focus on contracts financial performance, which is still by SaaS revenue momentum in quarter four contract subscription revenue increased 16% to 1080 4 million.
Speaker Change: <unk> and comprised 98% of contracts total revenue.
Speaker Change: On a U S dollar basis contracts subsection revenue increased 90%.
Speaker Change: For FY 'twenty five contract subscription revenue increased 15% to 4055 millions in and comprised 98% of contracts total revenue.
Speaker Change: On a U S dollar basis contract subscription revenue increased 19%.
Speaker Change: In quarter, four a aro increased 17% and 21% in Rand and U S. Dollar respectively. As you can see from the trend of the chats contract has a proven track record of scaling in varying macroeconomic conditions, given our consistent executions resilient subscription revenue model.
Speaker Change: And attractive historical retention rates in quarter, four contract experienced healthy customer acquisitions and quota for subscriber increased 17% to $2 3 billion.
Speaker Change: Subscription revenue increased 16% to 1080 4 million win and operating profit increased 30% to a record 377 million win.
Speaker Change: I'll try to experience solid customer acquisition in quarter four with net subscriber additions of about 79000, an increase of 25% for FY 'twenty five net subscriber addition exceeded 330000, an increase of 30% contract continues to grow.
Speaker Change: Subscription revenue across geographies, most notably in quarter, four our Asia and Europe constant currency subscription revenue grew 31% and 19% respectively.
Speaker Change: And we are encouraged by our momentum in both regions South Africa. Subsequent showed revenue growth was 15% in quarter four and we remain excited about the opportunity in this region.
Speaker Change: Contract continues to grow its subscription revenue across geographies, most notably in quarter, four our Asia and Europe constant currency subscription revenue grew 31% and 19% respectively and we are encouraged by our momentum in both regions South Africa subscription.
Speaker Change: Revenue growth was 15% in quarter four and we remain excited about the opportunity in this region.
Speaker Change: We are proud of the momentum in our business highlighted by the underlying acceleration in FY 'twenty five most notably contract subscriber growth accelerated 200 basis point in FY, 'twenty, 5% to 17%, reflecting strong execution investment in sales and marketing and a broader distribution footprint.
Speaker Change: Seth I'll also accelerated basis points to 17% in FY 'twenty five caboose adjusted earning per share increased 39% to nine and 48 cents in quarter four driven by higher subscription revenue expanding gross margins and disciplined expense management.
Speaker Change: For FY 'twenty five coos adjusted earning per share increase that the cheapest thing to 31 win in 67 cents in quarter fall Cartwright, adjusted earning per share increased 42% to nine and 28 cents and Caruso logistic, earning per share increased 54% to 20 cents spin.
Speaker Change: For FY 'twenty five contract adjusted earning per share increased 25% to 30 rent and 90 cents and Caruso I'll just stick, earning per share increased 60% to 77 cents man in.
Speaker Change: In FY 'twenty five we continue to generate significant free cash flow.
Speaker Change: Adjusted free cash flow was 435 million range.
Speaker Change: In quarter, four repo actively scaled up our Iot device investment to meet anticipated demand.
Speaker Change: We also meet additional goof oriented investment that impacted working capital and other property plant and equipment.
Speaker Change: Influencing adjusted free cash flow in quarter four.
Speaker Change: Importantly, we experienced an acceleration in subscriber goals.
Speaker Change: This performance underscores the soundness of our strategy and reflects disciplined executions as our growth accelerates its natural that capital expenditure and strategic investment temporarily increase as a percentage of revenue to support the planned growth.
Speaker Change: Maybe stabilize at a higher growth rate. We also expect adjusted free cash flow to normalize at higher levels.
Speaker Change: To be clear the recent decline in quarterly adjusted free cash flow does not indicate a structural issue with our ability to generate strong free cash flow the.
Speaker Change: The decline is the result of deliberate investments made to support growth as evidenced by our growth in quarter, four and our outlook for accelerating contract subscription revenue growth.
Speaker Change: The adjusted free cash flow generators is in line with coast disciplined capital allocation strategy and support our future growth.
Speaker Change: Our balance sheet reflects our track record of growth at scale profitability and cash generation, our net cash on hand, plus cash in bank fixed deposits was 838 million win.
Speaker Change: We expect our disciplined approach to capital location, coupled with our earnings and free cash flow growth to continue to close that our strong balance sheet.
Speaker Change: This collection days remain extremely healthy and within our historical norms at 32 days last August we paid a cash dividend of $33.4 million.
Speaker Change: Oh, one dollar and eight cents per share to our shareholders the dividend per share increased 97%.
Speaker Change: We have strong unit economics robust operating margins and unlevered balance sheet and attractive cash conversions remain confident that our track record of consistent execution and success, especially our ability to generate healthy cash flow is sustainable we are.
Speaker Change: All of our execution in financial year, 'twenty 'twenty five S. We comfortably met our outlook moving onto our outlook for financial year 'twenty 26 over the last several years Colby and the challenges associated with the post Covid labor market negatively impacted our growth in financial year 295.
Speaker Change: We accelerated the pace of our contract subscriber growth in financial year 'twenty 'twenty six we aim to continue accelerate contract subscription revenue growth by expanding our distribution footprint in existing market driving broader platform adoptions and capitalizing on growing demand for <unk>.
Speaker Change: Our solutions.
Speaker Change: We see our guidance for financial year 'twenty 'twenty six is as follows contract subscription revenue between 4000, and 700 million to 4900, minivan, which implies contract subscription revenue will grow between 16% to 21%.
Speaker Change: Contracts operating profit margin between 36% to 31%.
Speaker Change: Koos, earning per share between 32.5 to 35.5 fan.
Speaker Change: As we expand our distribution footprint in existing market, we expect lower earnings per share growth in financial year, 'twenty 'twenty six given our planned upfront investment in sales and marketing for the year, our strong and proven track record of disciplined execution sustained growth at scale and highly profit.
Speaker Change: The boat business model is supported by a solid balance sheet and healthy cash position, we believe our ongoing investment in AI platform innovation and customer experience will continue to drive durable growth and robust results. We are excited about the year ahead with that I would tell.
Speaker Change: The presentation over to Zack Callisto for Q&A.
Zack Callisto: Hello, Good morning, good afternoon good.
Speaker Change: Good evening, Thank you everybody for joining us today.
Zack Callisto: I will go to the questions.
Zack Callisto: I'll start off the first question is from Dillon.
Zack Callisto: And from William Blair.
William Blair: Hi team.
William Blair: Christians pillar.
Speaker Change: And Christian one contract tag launch. These cases, you've just seen receptivity of the product and now you're looking and thinking about the opportunity Jonathan can mean from adoption of the products within this core subscription base.
Speaker Change: And then we've only put up the infrastructure in Southern Africa. So that infrastructure goes all the way from Cape town until about Kenya.
Speaker Change: And we've started very successfully.
Speaker Change: Providing the product to our customers.
It's being taken up really well for both businesses and consumers in South Africa, and I believe it's got traction.
Speaker Change: It's very robust.
Speaker Change: We now feel pretty comfortable that we are already reaching.
Speaker Change: Quite a quite a substantial amount of scale. So we feel pretty comfortable it was the right decision that we took and that one it's Ricky wrong. We can then decide which is the next region that we can do the same.
Probably be Asia.
Speaker Change: John basically acceleration for <unk>.
Oh I'll frame it down we do think about.
Speaker Change: Earnings growth algorithm between subscriber count from new logos and can mean for product upsell and cabinet cabinet Tech and.
Speaker Change: To your existing customer Sandra Wallach incoming classes.
Speaker Change: We plan that in FY 'twenty six.
Speaker Change: We haven't given an amount.
Speaker Change: Got it.
Speaker Change: Because we've decided that this year specifically.
Speaker Change: Southern Africa, we are going to be very much focused on the pig going to be focused on the big job, we're going to focus on a lot of.
Speaker Change: At the sales to existing customers, because we need to we've got the footprint into the customers. So we need to know.
Speaker Change: As a customer offering so that's going to be our primary focus in FY 'twenty six and they believe that would lead to.
Speaker Change: Are.
Speaker Change: We expect an increasing or pupae in of about 10%.
Speaker Change: Alright, thank you.
Speaker Change: Thinking about the opportunity for added capacity.
Speaker Change: And where are you in the rent mature I share of existing sales force across street.
Speaker Change: The reason is as I look around the entire customer footprint.
Speaker Change: I think as we continue to hire we now have quite more than 4000 employees. I think this is an ongoing challenge because if you want to grow and you want to accelerate your growth.
Speaker Change: Each Q4 inches.
Speaker Change: The mathematics behind it would be if you increase for instance in Asia, 70% of your sales force.
Speaker Change: In a perfect world that should give you about 70%.
Speaker Change: It's 70%.
Speaker Change: It's probably too difficult to increase the subscriber growth, but that's just can you can sort of see the compounding effect. So this we lost you we increased.
Speaker Change: Ill start by about a thousand people, we expect in this year, we could do as much as 1500 people. So so ongoing exercise, but I certainly believe that we started to get really good traction in the last six months and I believe in April 26, we will continue with that good traction.
Speaker Change: Regions continued strength in South Africa acceleration in Europe strong momentum in southeast Asia anything to call out relative to each of the Cold War Cassini that'd be sustained broad based success.
Speaker Change: Focus on all the regions I think all our regions of.
Speaker Change: Huge opportunity for growth.
Speaker Change: Yeah over the long term, we believe that Asia has got the best.
Speaker Change: Biggest market with it.
Speaker Change: Highest growth opportunity, but I don't believe we will get good growth in the FY 'twenty six from all the regions.
Speaker Change: Yeah.
Speaker Change: Next question from.
Speaker Change: Alexander score.
Speaker Change: Basically the acceleration guys have been pretty upfront six what is giving you the confidence on being able to execute on the sales hiring plans.
Speaker Change: Alex the reality is we saw good momentum in the last six months and we really believe that we're going to get even accelerated momentum Judy if what's interesting I think the work from home culture that we saw globally I think most companies have realized that.
Speaker Change: That doesn't actually work.
Speaker Change: That ties exactly to the way we operate the business.
Speaker Change: We've never had a culture of work from home and.
Speaker Change: I believe that the states.
Speaker Change: It's it's normalizing to pre Covid I believe that we would have less headwind C&I and people.
Speaker Change: Second question, how would you think about potentially being at the ARPA growth in chemicals.
Speaker Change: As I said before we are expecting about a 10% increase in our RP treating FY 'twenty six.
Speaker Change: Really finally cook.
Speaker Change: You ended the period with net cash of about 840 million and no dividends declared what is your thinking about the net cash balance.
Speaker Change: Really we remain very much focused that.
Speaker Change: It's all about how quickly can we allocate this capital for shareholders because our return on investment.
Speaker Change: He is very high and we will deploy as much capital as we can to customer acquisition.
Speaker Change: During which we will return any excess cash, which we believe the board will look at it and to your shareholders. Typically we we look at this at the end of Q1, and we typically adds in the past decided whether we pay a dividend.
Speaker Change: Q2, and we paid the dividend will say in Q2 typically this is how we've done it in the past.
Speaker Change: As a follow up question from Brady what is your current view on share buybacks.
Speaker Change: I'll think shaped by index, it's pretty difficult fly with a low liquidity, we've tried to do it on and with little success. So I think we must pay down focusing to other things at this point in time.
Speaker Change: We've been fairly successful given the low liquidity.
Alex: Another question from Alex.
Speaker Change: Okay.
Speaker Change: Epic needs.
Speaker Change: Nick.
Speaker Change: Fortunately for slightly down versus the 424 levels is there anything you'd call out in the market do you feel about the existing sales productivity no small cafe in.
Speaker Change: Bulk of great Alrighty.
Speaker Change: I think the sales productivity in Asia.
Speaker Change: It was strong.
Speaker Change: We certainly believe as we hire more people that the sales productivity it will probably take a little bit about the.
Speaker Change: So typically we sell if people have been with us for over six.
Speaker Change: Uh huh.
Speaker Change: And then I believe we will get productivity, even in the south that salespeople that's real either in the first two months of the year. We've done really good focus already in the first two months.
Alex: Alex with 10% ARPA growth.
Alex: Any like for like pricing and cases for the core bundle plans, we're just camera attach Greg.
Alex: It's mostly on the back of camera and the TEG growth.
Alex: So to get it didn't seem to increase for you all.
Alex: Do you see can only sell to small percentage of your base and it's been up.
Alex: We expect small percent euro base to take up the products in year, one and year, two and as we progress that should increase further.
Alex: I think thats all the questions for today. Thank you very much everybody that's joined us.
Alex: Bye bye.
Alex: Goodbye.