Karooooo Boosts Dividend and Revenue as Market Focuses on Earnings Miss While JSE Share Price Pulls Back
Karooooo reported record revenue and strong cash flow growth for FY2026, although the company’s shares weakened after earnings per share missed analyst expectations.
Quick overview
- Karooooo reported record revenue of $314.1 million and strong cash flow growth for FY2026, driven by its Cartrack division.
- Despite exceeding revenue expectations for the fourth quarter, the company's earnings per share fell short of analyst forecasts, leading to a decline in share price.
- The company experienced a 20% increase in total revenue and a 90% surge in adjusted free cash flow, while also raising its interim dividend by 20%.
- Looking ahead, Karooooo projects continued double-digit growth in revenue and earnings for FY2027, with optimistic guidance for Cartrack subscription revenue.
Karooooo reported record revenue and strong cash flow growth for FY2026, although the company’s shares weakened after earnings per share missed analyst expectations.
Revenue Growth and Cash Flow Reach Record Levels
Karooooo delivered record results for the fourth quarter and full fiscal year ended February 28, 2026, supported by continued expansion at its Cartrack division.
The company reported fourth-quarter revenue of $88.5 million, above analyst expectations of $87.1 million. Quarterly profit came in at $13.6 million, or 44 cents per share.
However, earnings per share missed Wall Street forecasts of 51 cents, which contributed to weakness in the JSE-listed KRO share price during the week despite the strong operational performance.
For the full year, Karooooo generated revenue of $314.1 million and profit of $57 million, or $1.84 per share.
KROJ Chart Weekly – 
Cartrack Continues Driving Growth
The group’s core growth engine remained Cartrack, which contributed the vast majority of revenue and continued expanding strongly across key markets.
Highlights from FY2026 included:
- Total revenue increased 20% to ZAR5.48 billion
- Subscription revenue rose 19% to ZAR4.84 billion
- Cartrack subscription revenue grew 19% to ZAR4.83 billion
- Gross profit margin remained strong at 72%
- Annual recurring revenue increased 18% to ZAR5.18 billion
- Adjusted free cash flow surged 90% to ZAR809 million
The company also increased its interim dividend by 20% to USD1.50 per share, supported by stronger cash generation.
South African Business Shows Acceleration
CEO Zak Calisto highlighted accelerating growth within South Africa as one of the year’s strongest developments.
According to management, South African annual recurring revenue growth reached 23% by year-end, improving meaningfully from prior periods despite the impact of a stronger South African rand.
The company also noted that Cartrack continued expanding internationally while maintaining high profitability levels.
Outlook for FY2027 Remains Positive
Karooooo issued optimistic guidance for FY2027, projecting continued double-digit growth across revenue and earnings metrics.
Management expects:
- Cartrack subscription revenue growth of 18% to 24%
- Gross margins between 70% and 72%
- Operating margins between 27% and 30%
- Earnings per share growth of 18% to 23%
Conclusion
Despite the recent pullback in the share price following the quarterly earnings miss, Karooooo’s broader financial performance remained strong. Solid subscription growth, expanding cash flow, and improving recurring revenue trends continue supporting the company’s long-term growth outlook, although investors appear cautious about valuation and earnings consistency going forward.
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