Karooooo Earnings Spark Share Price Jump in JSE: KRO as SaaS Growth Speeds Up
Karooooo shares jumped in after-hours trading after third-quarter FY2026 results showed faster ARR growth, record subscriber additions, and
Quick overview
- Karooooo's stock rose 7.2% in after-hours trading following strong Q3 FY2026 results, highlighting faster ARR growth and record subscriber additions.
- The company reported an EPS of $0.49, surpassing estimates, and provided optimistic guidance for FY 2026 with projected EPS between 1.876 and 2.049.
- Annual recurring revenue (ARR) grew 22% year-over-year to ZAR 5,106 million, with a record addition of 111,478 net subscribers during the quarter.
- CEO Zak Calisto emphasized the importance of long-term value creation through disciplined capital allocation and investment in distribution capacity.
Karooooo shares jumped in after-hours trading after third-quarter FY2026 results showed faster ARR growth, record subscriber additions, and confident forward guidance.
Earnings Spark an After-Hours Rally
Karooooo Ltd (NASDAQ: KARO) saw its stock climb 7.2% after hours on Tuesday following the release of its fiscal third-quarter 2026 results. The market reaction reflected improving growth trends across the company’s mobility SaaS platform, with investors responding positively to accelerating recurring revenue and strong customer additions.
The results reinforced Karooooo’s ability to scale profitably, even as the company continues to invest heavily in expanding its product suite and distribution footprint.
Karooooo Q1 Earnings Snapshot
Earnings Beat:
- Reported EPS of $0.49, exceeding consensus estimates of $0.46 by $0.03
Results released on Tuesday, January 20
Profitability Metrics:
- Return on Equity: 31.64%
- Net Margin: 19.90%
Highlights strong operational efficiency and pricing power
Guidance and Earnings Outlook
FY 2026 EPS Guidance:
- Management guided to a range of 1.876 – 2.049 EPS
Street Expectations:
- Analysts currently forecast 1.57 EPS for the current fiscal year
- Implies confidence in continued earnings acceleration beyond near-term estimates
ARR Growth Accelerates Sharply
Cartrack SaaS ARR Performance:
- +22% YoY to ZAR 5,106 million
- Accelerated from 14% YoY growth in the same quarter last year
USD-Reported ARR:
- +28% YoY to USD 298 million
- Reflects both strong underlying demand and favorable currency dynamics
Subscription Revenue and Customer Expansion
Quarterly Subscription Revenue:
- ZAR 1,236 million, up 20% YoY
- Quarter ended November 30, 2025
Subscriber Growth:
- Added a record 111,478 net subscribers during the quarter
- +29% YoY increase in net additions
- Total subscriber base reached 2.6 million, up 16% YoY
Drivers of Performance
Product Adoption:
- Increased uptake of Video and Cartrack Tag solutions
- Expansion into higher-value services boosted ARPU and retention
Customer Expansion:
- Strong growth across both new and existing customers
- Reinforces Cartrack’s position as a scalable mobility SaaS platform
Growth Metrics Continue to Strengthen
The quarter highlighted clear operational momentum. Karooooo delivered an earnings beat alongside accelerating annualised recurring revenue (ARR) and record net subscriber additions, strengthening confidence in the durability of its subscription-based model.
Management reiterated that the business is entering a phase where scale, product penetration, and recurring revenue growth are beginning to reinforce one another. While near-term margins may fluctuate due to investment timing, the underlying economics of the platform remain intact.
Management Focused on Long-Term Value
CEO Zak Calisto pointed to strong customer expansion and rising adoption of Video and Cartrack Tag solutions as key drivers of the quarter’s performance. He acknowledged that faster growth can create short-term mismatches between upfront costs and revenue recognition, but stressed that the strategy is designed to maximise long-term shareholder value.
Calisto also emphasised disciplined capital allocation, noting that continued investment in distribution capacity should create durable competitive advantages beyond the current financial year.
Market Reaction and Technical Picture
Karooooo shares closed 2.66% higher at R787 during regular trading before earnings-related volatility emerged after hours. The stock initially surged on the EPS beat before retracing some gains as investors digested the broader outlook.
KROJ Chart Weekly – The 100 SMA Keeping It Supported
From a technical perspective, the 100-week simple moving average continues to act as solid long-term support. Although upside momentum has cooled since mid-2025, the stock remains in a consolidation phase, suggesting the broader uptrend remains intact while the market reassesses the next leg of growth.
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