Karooooo Ltd.

Hello and welcome to Kourou's Q3 FY2026 earnings call. On behalf of Kourou, we would like to thank you for joining us today. I'm Paul Weber, VP of Investor Relations and Strategic Finance. We are joined today by Zach Kalisto, Founder and Group CEO, Hoshin Goy, Chief Financial Officer, and Carmen Kalisto, Chief Strategy and Marketing Officer. 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. Such statements are based on current expectations and assumptions. 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 and the 6-K that we filed yesterday. We undertake no obligation to update any forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in the 6K that we filed with the SEC yesterday. Our comments will refer to year-over-year comparison unless we state otherwise. I will now pass the call over to Carmen.

Thanks, Paul. Welcome to Carew's Q3 FY2026 financial results presentation. Carew delivered outstanding results this quarter, highlighted by accelerating ARR growth, strong subscriber momentum with record net additions, and continued robust profitability. We also made progress towards an important milestone and ended the quarter on the verge of $300 million in ARR. We achieved these results even as we made significant and planned upfront investments in sales and marketing to drive future recurring revenue and earnings. These achievements underscore our ability to scale efficiently while delivering meaningful value to our customers and shareholders. Before diving into the details, we would like to provide a quick introduction to Karoo. We operate a SaaS platform for connected vehicles and mobile assets that enables businesses to enhance operational efficiency, reduce costs, improve safety and customer service, and ensure compliance. We help businesses simplify decision-making to optimize their physical operations. We serve a large, under-penetrated market with strong, sustained demand driven by digital transformation, a constant need to improve operational efficiency, and an increasing focus on safety and compliance. We are a founder-led business with a strong financial profile, a two-decade proven track record of execution excellence, and a cultural focus on disciplined capital allocation and operational efficiency, Our platform supports approximately 2.6 million subscribers across more than 125,000 businesses spanning a diverse set of industries. Importantly, our financial model is anchored by accelerating ARR growth, high margin subscription revenue, exceptional commercial ARR retention, and powerful unit economics. In Q3, our ARR increased 22% to 5,106 million ZAR and on a US dollar basis increased 28% to 298 million US dollars. Our commercial customer ARR retention rate remained at 95% and subscription revenue accounted for 97% of car track revenue. We continue to scale our proprietary data assets, now generating more than 275 billion data points monthly, which we leverage to deliver impactful insights and value to our customers. Finally, our LTV to CAC remains above nine times, underpinned by strong retention, disciplined capital allocation, and efficient distribution, which are embedded in our vertically integrated business model and company culture. During today's presentation, we will review both of Karoo's operating segments, Kartrak and Karoo Logistics. Kartrak is our SaaS operations management platform. Kartrak operates at scale and has a very attractive financial profile. Kartrak's operating momentum is the primary driver of Karoo's growth and strong financial performance. In Q3, Kartrak delivered exceptional results highlighted by accelerating subscription revenue growth in South Africa. These results reflect the early returns from the strategic investments we have made in expanding our sales capacity in recent quarters and selling video and car track tag to our existing customers in South Africa. The results also underscore the continued growth potential in South Africa. In Q3, CarTrack generated approximately 1.2 billion ZAR in subscription revenue, an increase of 20% or 27% on a US dollar basis. A strengthening ZAR negatively impacted reported Q3 CarTrack subscription revenue growth. Year-to-date, CarTrack subscription revenue has increased 20% to 15% in FY 2025, a material acceleration. CarTrack's operating profit margin was a healthy 28% in Q3. Carew Logistics is our rapidly growing delivery-as-a-service offering that empowers large enterprise customers to scale their e-commerce and logistics operations. Carew Logistics continues to demonstrate strong growth and operating momentum while delivering real value to our enterprise customers. We report Carew Logistics separately as its delivery-as-a-service financial profile differs from CarTrack's SaaS financial profile. Karoo 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 car-track customer retention. We continue to profitably scale the Karoo Logistics business. In Q3, Karoo Logistics' delivery-as-a-service revenue reached 135 million ZAR, an increase of 24% or 31% on a US dollar basis. Given Karoo Logistics' robust revenue growth, we are very excited about the long-term growth opportunity. In Q3, Karoo delivered strong consolidated financial results. Total revenue increased 22% to 1,410 million ZAR. Subscription revenue increased 20% to 1,239 million ZAR. Operating profit increased 14% to 369 million ZAR. And total subscribers increased 16% to approximately 2.6 million. CarTrack's 20% subscription revenue growth and 28% operating profit margin were the primary drivers of our strong financial performance in Q3. Q3 continued our track record of delivering profitable growth at scale. In Q3, we were a Rule of 60 company when adding our CarTrack subscription revenue growth of 20% and our CarTrack adjusted EBITDA margin of 45%. We note that our EBITDA margin does not include any stock-based compensation add-back. Before detailing our Q3 performance, it is important to underscore just how differentiated our financial model has become in the context of the broader SaaS universe. We believe we are among a select few SaaS companies operating at a rule of 50 plus based on calendar year 2026 Gap Street estimates. Within a SaaS universe of approximately 140 companies, there are less than 10 companies operating at this level, and Karoo is the only small cap company. Our financial profile is incredibly rare in public markets, especially among small cap companies. Being part of this elite group reflects our unwavering commitment to disciplined and profitable growth. In addition, with an essentially unchanged share count over the last several years and no stock-based compensation, growth in free cash flow directly translates into higher per share value given the absence of dilution. This is a key point of differentiation relative to many SaaS peers that fund growth with significant equity issuance and SBC. Now, let's discuss our Q3 financial and operational highlights. In Q3, SAS ARR accelerated to 22% compared to Q2 FY2026 growth of 20%, and ARR growth in U.S. dollars accelerated to 28%, reaching $298 million. Cartrack's subscription revenue growth increased 20%, underpinned by 21% growth in South Africa. The 21% growth rate in South Africa represents a significant acceleration compared to FY2026 Q2 growth of 18% and 14% in Q3 of the prior fiscal year. CarTrack's total subscribers increased 16% to approximately 2.6 million, driven by healthy growth across all regions. Notably, CarTrack delivered record subscriber net additions of 111,000 in Q3. Also, year-to-date net subscriber additions increased 30% in Asia. CarTrack's operating profit margin remained healthy at 28% despite a 47% increase in sales and marketing expenses in Q3. We were a rule of 60 company in Q3 and our balance sheet remained strong and unleveraged. We ended the quarter with net cash and cash equivalents of 531 million ZAR. Our healthy subscription growth margin, efficient customer acquisition, and attractive commercial customer ARR retention rate continued to drive our healthy unit economics. In Q3, our subscription growth margin was 73%, our LTV to CAC ratio remained above 9 times, and our commercial customer ARR retention rate was 95%. Our unit economics remain healthy despite the significant increase in sales and marketing expenses during Q3. It is also noteworthy that we accelerated our subscription revenue growth from 14% in Q3 last year to 20% this quarter while maintaining our strong unit economics. We remain committed to profitable growth and strong unit economics as we pursue the expansive growth opportunity ahead of us. We ended Q3 with approximately 1.9 million subscribers in South Africa, an increase of 16%. Q3 subscription revenue growth was 21%, a significant acceleration compared to Q2 FY2026 growth of 18% and 14% in Q3 of the prior fiscal year. South Africa represented 72% of total CarTrack subscription revenue. The pace of growth reflects our strategy to drive CarTrack subscription revenue growth through a balanced combination of subscriber additions and selling video and CarTrack tag to our existing customers. South African subscriber and subscription revenue growth is a clear signal that our strategy is driving results. This accelerated growth reflects our deliberate strategy to cement our leadership position in South Africa by simultaneously growing our customer base and selling video and contract tag to customers in South Africa. Average revenue per user, or ARPU, in South Africa increased 7% to 162 ZAR in November 2025 compared to November 2024. We are committed to continue building our distribution capabilities to service the demand for our products from both new and existing customers, and we are confident that our investment in sales capacity this year will have a positive impact on CarTrack subscriber growth in FY2027. We are optimistic about the market opportunity in South Africa and believe there is a long runway to drive strong subscription growth. We ended Q3 with approximately 318,000 subscribers in Southeast Asia and the Middle East, an increase of 20% with most of the subscribers in Southeast Asia. Year-to-date, net subscriber additions in the region increased 30%. Southeast Asia and the Middle East comprised 15% of total subscription revenue, and Southeast Asia and the Middle East subscription revenue growth increased 14%. The pace of subscription revenue growth in the region reflects an increase in subscribers from lower ARPU countries, combined with the translation impact of a strengthening czar. As the second largest contributor to group revenue, Southeast Asia continues to present the most compelling growth opportunity for our group in the medium to long term, Southeast Asia is a vast, underpenetrated market for sophisticated fleet management and video-based solutions, and we are well positioned to capitalize on the opportunity. We ended Q3 with approximately 223,000 subscribers in Europe, an increase of 16%. European subscription revenue increased 24% and Europe comprised 10% of our total subscription revenue. We continue to expand our customer base and drive our distribution capabilities in the region. We have partnered with leading OEMs to provide easy access to our platform, seamlessly integrating their connected vehicle data to our platform through APIs. We expect these partnerships to contribute to our results in the medium to long term. In addition, we are experiencing encouraging demand for our proprietary compliance technology in the region as customers seek to simplify compliance with evolving legislation and enforcement. In Q3, Karoo Logistics continued to build scale and delivered revenue of 135 million ZAR, an increase of 24% and a 7% operating profit margin. Growth in e-commerce orders drove Karoo Logistics' revenue growth. Karoo supports our strong financial performance by immersing our platform into large customers' operations, contributing to strong customer retention. Karoo 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 their e-commerce offerings and optimize their logistics capabilities through a capital-like model. In Q3, we continue to make progress with our FY2026 priorities. First, we continue to strengthen our leadership position in South Africa by driving the adoption of video solutions and car track tag within our existing customer base. The early results are promising, with South African ARPU increasing 7% as of November 2025 compared to November 2024, highlighting growing customer engagement and product uptake. In addition, we expect our ongoing investment in distribution capacity to create durable growth benefits that extend beyond the current financial year. Second, we continue to expand our distribution footprint in Asia and Europe, and we are seeing success in expanding our teams in the regions. Finally, we continue to work with our customers globally to drive broad engagement with our platform and to capture the growing demand for video capabilities, including AI video. We are very excited about the momentum we are experiencing with our video solutions in the market, including AI video. Capital allocation is a fundamental part of our disciplined culture, rooted in a 20-year culture of profitable growth at scale and prudent financial management, key drivers of long-term shareholder value. 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 growth rates, our business generates significant excess cash. With our strong balance sheet and net cash position, we aim to return surplus capital to shareholders when we cannot efficiently invest it for growth, primarily through an annual dividend. As to avoid doubt, management prioritizes growth over dividends. 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 or strengthen our competitive position. However, given our compelling organic growth, customer-centric culture and attractive unit economics, we set a high bar for any potential acquisitions. 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 Hu Xin, who will discuss our Q3 financial performance.

Thank you, Carmen. I will now discuss Carew's financial performance for Q3 FY2026. Please note, my comments will refer to year-over-year comparisons, unless we state otherwise. Our proven and profitable SaaS business model continued to deliver strong results in Q3. Karoo's total subscription revenue increased 20% to RM1,239 million, operating profit increased 14% to RM369 million and earnings per share increased 11% to RM8.55. Earnings growth remain robust despite significant and planned upfront investment in sales and marketing to drive future revenue and earnings. In other words, these investments are fully expensed as incurred, while the associated recurring revenue benefits are expected to realize over time. We will now focus on CarTrak's financial performance which is fueled by SaaS revenue momentum. In Q3, CarTrack's revenue increased 21% to RM1,275 million, and CarTrack's subscription revenue increased 20% to RM1,236 million. Subscription revenue comprised 97% of CarTrack's total revenue. Quarter 3 ARR growth accelerated to 22%, reaching 5,106 million rand. In US dollar, ARR growth accelerated to 28%, reaching 298 million dollars. As you can see from the trend of the charts, CarTrack has a proven track record of scaling in varying macroeconomic conditions, given our consistent executions, resilient subscription revenue model, and attractive historic retention rates. In Q3, subscriber increased 16% to approximately 2.6 million. subscription revenue increased by 20% to RM1,236 million and operating profit increased 14% to RM359 million. Fastrack experienced record customer acquisition in Q3 with net subscriber additions of 111,478 subscribers. The record net subscriber additions reflects our strategic investment in sales capacity and success selling video and car track tag. Total subscriber growth increased 16% in Q3, underpinned by record subscriber net additions. Importantly, South Africa subscriber growth also increased 16%, underscoring the growth potential in the region. Q3 says ARR accelerated to 22% compared to Q2 growth of 20% and Q3 FY 2025 growth of 14%. In USD, Q3 says ARR increased 28%, reaching $298 million. This marked the fourth consecutive quarter of ARR growth accelerations. We believe the accelerations in ARR growth reflects the underlying momentum in the business and signal that our strategic initiatives are gaining momentum. Hardtracks continue to grow its subscription revenue across geographies, highlighted by an acceleration in South Africa. South Africa's subscription revenue growth accelerated to 21% compared to Q2 growth of 18% and Q3 FY2025 growth of 14%. The accelerations indicates that our efforts to cement our leadership position are driving measurable results. Europe's subscription revenue growth increased 24% and 19% on a constant currency basis. Asia and the Middle East's subscription revenue growth increased 14% and 18% on a constant currency basis. Asia and the Middle East's reported subscription revenue growth reflects an increase in subscribers from lower APU countries in the region, combined with the translation impact of a strengthening South African RAN. Healthy growth across regions reflects our strong executions and provide a solid foundation for continual growth. KERU Adjusted Earning Per Share increased 11% to RM8.54. CarTracks Earning Per Share Contribution increased 11% to RM8.35. KERU Logistic Earning Per Share Contribution increased 25% to RM0.20. Adjusted earning per share growth reflects significant planned investment in sales capacity and customer acquisition, evidenced by the 47% increase in sales and marketing expense by Carew in Q3. Our upfront sales and marketing costs are not aligned with the lifetime value of customer recurring revenue and related earnings in our financial statements. Importantly, our powerful unit economics remain intact and our balance sheet remains strong as we invest in sales capacity. On a year-to-date basis, our adjusted free cash flow increased 37% to R597 million, underscoring the strength of our operating model. Quarter 3 adjusted free cash flow increased 28% to R239 million. As we pursue accelerated growth, we expect free cash flow to reflect our investment to drive growth. While quarterly fluctuations may occur due to working capital dynamics and growth-oriented investment, we remain confident in our ability to consistently generate meaningful free cash flow. KERU's consistent free cash flow generations powers our disciplined capital allocation strategy and precision us well for future growth. Our balance sheet reflects our track record of durable growth at scale, profitability and cash generations. Our net cash on hand plus cash in bank fixed deposit was R531 million. Debtors' collection days remain healthy at 31 days and are within our historical norm. In August, we paid a total cash dividend of approximately $38.6 million to our shareholders, which equates to a dividend of $1.25 per share. We believe that our ability to generate healthy cash flow is sustainable given our annuity business model, coupled with our track record of consistent executions. We believe KERU remains strongly positioned for growth as we operate in an expanding and largely under-penetrated market filled by robust and sustained customer demand. This demand is driven by a heightened focus on digitalization, the need to improve operational efficiencies and reduce costs, and an increasing attention to safety in physical operations. Year-to-date in FY2026, we have accelerated car-track subscription revenue growth by expanding our distribution footprint in existing markets, driving broader platform adoptions, and capitalizing on growing demand for video solutions including AI videos. We are encouraged by our positive performance, evidenced by CarTrack Q3 subscription revenue growth of 20% and ARR growth of 22%. CarTrack delivered a 29% operating profit margin, reflecting strong executions while investing in sales and marketing capacity to support future growth. While we have delivered strong year-to-date results, the appreciation of the South African Rand has created a currency translation headwind on our reported revenue, constraining the flow-through of our strong performance to our FY2026 outlook. We do not hedge our foreign currency exposure, so fluctuation in exchange rates may create some variability in our reported result, despite our underlying operating momentum. Given our momentum year-to-date, we are increasing our FY2026 car track subscription revenue outlook to between RM4,785 million and RM4,900 million, implying growth between 18% and 21%. As compared to our previous outlook of RM4,700 million and RM4,900 million, implying growth between 16% and 21%. We are also revising our FY2026 Car Track Operating Profit Margin Outlook to between 27% and 30%, as compared with our previous outlook of 26% and 31%. Our FY2026 Curve Adjusted Earning Per Share Outlook remain unchanged at R32.5 to R35.5. As we work towards closing the financial year, we are executing on two fronts, expanding our sales capacity to drive new customer acquisition and strengthening our relationship with current customer through increased adoption of video and car track tech. While the business is accelerating, we remain people constrained and will continue to build the sales capability to meet these goals. At this stage, we believe the right strategy for the long-term health of the business is to lean into driving adoption of video and car track tech with our existing customer base to further cement our leadership decision in South Africa. With that said, we are also confident that our investment in sales capacity this year will have a positive impact on subscriber growth in FY2027. In closing, Karus delivered an outstanding result this quarter, highlighted by accelerating ARR growth, strong subscriber momentum with record net additions, and continued robust profitability. We also made progress towards an important milestone and ended the quarter approaching US$300 million in ARR. We achieved this result even as we make significant and planned upfront investment in sales and marketing to drive future recurring revenues and earnings. These achievements underscore our ability to scale efficiently while delivering meaningful value to our customers and shareholders. The underlying acceleration in the business reflects the strength of our operating model and early traction from strategic investment in sales capacity and customer acquisition. As we continue to enhance our distribution footprint, we expect our ongoing investment in distribution capacity to create durable advantages that extend beyond the current financial year. With continued execution, disciplined investment, and growing regional momentum, we believe that we are well positioned to deliver profitable and durable long-term growth. Finally, we remain firmly committed to thoughtful capital allocation, strong unit economics, and our vertically integrated and open operating culture. With that, I will turn the presentation over to Zach Calisto for Q&A.