U.S. stock futures were higher this morning, with the Dow futures falling more than 150 points on Wednesday.Shares of Karooooo Ltd (NASDAQ:KARO) fell sharply in pre-market trading following downbeat second-quarter earnings.Karooooo reported quarterly earnings of 44 cents per share which missed the analyst consensus estimate of 46 cents per share. The company reported quarterly sales of $75.598 million which beat the analyst consensus estimate of $75.510 million.Karooooo shares dipped 9.3% to $51.15 in pre-m ...

Group 1: Market Overview - U.S. stock futures were higher this morning, with Dow futures falling more than 150 points on Wednesday [1] Group 2: Company Performance - Karooooo Ltd (NASDAQ:KARO) shares fell sharply in pre-market trading, down 9.3% to $51.15, following disappointing second-quarter earnings [2][4] - Karooooo reported quarterly earnings of 44 cents per share, missing the analyst consensus estimate of 46 cents per share [1] - The company reported quarterly sales of $75.598 million, which beat the analyst consensus estimate of $75.510 million [1] Group 3: Other Stocks Movement - Sable Offshore Corp (NYSE:SOC) shares dipped 38.7% to $10.85 in pre-market trading after falling 5% on Tuesday [4] - AKA Brands Holding Corp (NYSE:AKA) fell 19.6% to $11.60 in pre-market trading after gaining 39% on Tuesday [4] - CNFinance Holdings Ltd – ADR (NASDAQ:CNF) declined 10.2% to $4.30 in pre-market trading after gaining 10% on Tuesday [4] - Nova Minerals Ltd – ADR (NASDAQ:NVA) tumbled 9.2% to $65.19 in pre-market trading after surging 110% on Tuesday [4] - ASP Isotopes Inc (NASDAQ:ASPI) fell 9% to $12.80 in pre-market trading after announcing a $250 million mixed shelf [4] - Nanobiotix SA – ADR (NASDAQ:NBTX) declined 6.8% to $26.31 in pre-market trading after falling 7% on Tuesday [4] - Trilogy Metals Inc (NYSE:TMQ) fell 6% to $9.96 in pre-market trading [4] - Critical Metals Corp (NASDAQ:CRML) fell 5.1% to $28.44 in pre-market trading after jumping 28% on Tuesday [4] - Akso Health Group – ADR (NASDAQ:AHG) declined 4.8% to $1.58 in pre-market trading [4] - Arvinas Inc (NASDAQ:ARVN) fell 4.7% to $8.97 in pre-market trading [4]

Q2 2026 Earnings Presentation October 15, 2025 1 Today's Presenters Zak Calisto Group CEO & Founder Goy Hoeshin Group CFO Carmen Calisto Group Chief Strategy & Marketing Officer 2 2 DISCLAIMER Forward-Looking Statements The information in this presentation (which includes any oral statements made in connection therewith, as applicable) includes "forward-looking statements." Forward-looking statements are based on our beliefs and assumptions and on information currently available to us, and include, without ...

Core Insights - Karooooo Ltd. (KARO) reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and showing an increase from $0.40 per share a year ago, resulting in an earnings surprise of +2.17% [1] - The company achieved revenues of $76.13 million for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.83% and up from $60.7 million year-over-year [2] - Karooooo's stock has increased approximately 16.3% since the beginning of the year, outperforming the S&P 500's gain of 13.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.48, with expected revenues of $78.35 million, and for the current fiscal year, the consensus EPS estimate is $1.93 on revenues of $308.19 million [7] - The estimate revisions trend for Karooooo was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Karooooo belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - Karooooo Limited will release its Second Quarter 2026 Financial Results on October 14, 2025, indicating ongoing financial transparency and engagement with investors [1] Financial Results Announcement - The financial results will be announced shortly after 04:00 p.m. Eastern Time on October 14, 2025 [1] - A corresponding Zoom webinar will be hosted on October 15, 2025, at 08:00 a.m. Eastern Time, allowing investors and analysts to engage directly with the company [1]

Group 1 - Karooooo Ltd. (NASDAQ: KARO) is a leader in fleet management in South Africa, characterized by strong subscription revenue and industry-leading margins [1] - The company's operating profit has more than doubled since 2019, driven by scale and a high fixed-cost base [1]

Group 1 - Karooooo Ltd. (KARO) has reached a significant support level and is considered a good pick for investors from a technical perspective, having recently broken through the 50-day moving average, indicating a short-term bullish trend [1] - The 50-day simple moving average is a key indicator for traders and analysts to determine support or resistance levels, and KARO shares have increased by 6.4% over the past four weeks, currently holding a Zacks Rank 2 (Buy) [2] - Positive earnings estimate revisions strengthen the bullish case for KARO, with 2 upward revisions compared to none lower for the current fiscal year, and the consensus estimate has also increased [3] Group 2 - Investors are encouraged to consider adding KARO to their watchlist due to the important technical indicator and the positive movement in earnings estimate revisions [3]

Company Overview - Karooooo, founded by Zak Calisto, operates in the connected vehicle industry, providing a software platform for fleet management, logistics, and safety [4][5]. - The company started with a focus on vehicle tracking and has evolved into a comprehensive telematics solution [7]. Business Model and Revenue - Approximately 50% of Karooooo's business in South Africa is commercial, while the other 50% is consumer-based [7]. - South Africa accounts for 70% of the company's subscription revenue, with the remaining 30% generated from international markets [7]. Financial Performance - Karooooo has a strong financial profile, with a return on unlevered net tangible assets (RONTA) of about 35%, exceeding Warren Buffett's preferred threshold of 25% [9]. - The company aims for a "rule of 60," combining growth and EBITDA margins, indicating a healthy and profitable business model [10][11]. Leadership and Management Style - Zak Calisto emphasizes the importance of building strong teams and maintaining a culture that supports sustainable growth [12]. - The leadership style focuses on high-level vision while ensuring that critical details affecting business health are monitored [12]. Technological Integration - The company utilizes AI for predictive analysis and risk mitigation, particularly in banking and fraud prevention [14]. - Karooooo is adapting to advancements in autonomous driving, recognizing the need for management systems even as driver roles evolve [16]. Market Position and Growth Potential - The company sees significant growth opportunities in both existing and new markets, with a potential for rapid expansion if execution aligns with market demand [13]. - Karooooo's approach to capital allocation is disciplined, with a focus on sustainable growth rather than aggressive expansion without sufficient cash flow [13].

Core Viewpoint - Growth investors are increasingly focused on stocks with above-average financial growth, which can lead to solid returns, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - Karooooo Ltd. (KARO) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 13.5%, with projected EPS growth of 18.6% this year, surpassing the industry average of 18.3% [5] Group 2: Key Growth Metrics - The asset utilization ratio for Karooooo is 0.97, indicating that the company generates $0.97 in sales for every dollar in assets, significantly higher than the industry average of 0.58 [6] - Sales for Karooooo are expected to grow by 23% this year, compared to the industry average of 5.7% [7] Group 3: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Karooooo, with the Zacks Consensus Estimate for the current year increasing by 3.9% over the past month [9] - The combination of a Growth Score of A and a Zacks Rank 1 positions Karooooo favorably for potential outperformance in the market [11]

Financial Data and Key Metrics Changes - In Q1 FY26, annual recurring revenue (ARR) increased 18% to 4,574 million ZAR and 24% to $254 million on a U.S. Dollar basis [5] - Total revenue for Q1 reached 1,277 million ZAR, an increase of 18%, with subscription revenue also increasing by 18% to 1,141 million ZAR [11][29] - Earnings per share rose 19% to 8.55 ZAR [15][34] - The company maintained a strong balance sheet with net cash and cash equivalents of 1,103 million ZAR [16] Business Line Data and Key Metrics Changes - Kartrak's subscription revenue grew 19% to 1,138 million ZAR, with an operating profit margin of 30% [11][30] - Karoo Logistics generated delivery as a service revenue of 121 million ZAR, an increase of 20% [10][22] - The total subscriber base increased by 17% to approximately 2,400,000 [11][32] Market Data and Key Metrics Changes - South Africa's subscription revenue growth accelerated to 16%, contributing 70% of total subscription revenue [17] - Southeast Asia and the Middle East saw subscription revenue growth accelerate to 30%, with a subscriber base of approximately 290,000 [20] - European subscription revenue growth accelerated to 22%, now comprising 10% of total subscription revenue [21] Company Strategy and Development Direction - The company aims to strengthen its leadership position in South Africa while expanding its distribution footprint in Asia and Europe [23][24] - Capital allocation strategy prioritizes organic growth and innovation, with a disciplined approach to M&A [25][26] - The company is focused on increasing ARPU in South Africa and expanding its sales headcount by 70% by February 2026 [20][24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for both consumer and commercial customers in South Africa [41] - The company does not foresee significant impacts from U.S. tariffs on its Southeast Asia operations, attributing growth to local market engagement [41] - Management reaffirmed the FY26 growth outlook, emphasizing the importance of strategic investments in sales and marketing [36] Other Important Information - The company reported a healthy subscription gross margin of 74% and a customer retention rate of 95% [16] - Free cash flow generation resumed, benefiting from disciplined working capital management [34] - The company plans to return surplus capital to shareholders primarily through dividends [26] Q&A Session Summary Question: Subscriber growth trajectory in South Africa - Management noted strong traction in both commercial and consumer customer growth, expecting this to continue throughout the year [41] Question: Impact of U.S. tariffs on Southeast Asia subscriber growth - Management believes that local economic growth is driving adoption rather than U.S. tariffs [41] Question: Cross-selling initiatives and their impact on ARR growth - Management aims for a 6% increase in ARPU this year, with good progress noted in Q1 [42] Question: Expansion strategy in Southeast Asia versus Africa - Management indicated that Southeast Asia presents a larger market opportunity compared to Africa [44] Question: Mix between subscriber growth and cross-selling initiatives - Management reported a 2% uplift from cross-selling, with expectations for this to increase by Q4 [45] Question: Hiring capacity plans and their impact on subscription growth - Management expects a correlation between increased sales staff and subscriber growth, targeting a 28% increase in Asia [48] Question: Contract performance rollout in South Africa - Management highlighted significant progress with the contract tag, viewing it as a game changer [53] Question: Effective tax rate and its outlook - Management noted benefits from profitable entities that previously had tax losses [54]