Billionaire Zak Calisto's Karooooo delivers record earnings in FY2026 and raises dividend 20% as Cartrack accelerates across Africawith rahim66

Zak Calisto's Karooooo Ltd. closed its 2026 financial year with record subscription revenue, record operating income and record adjusted earnings per share, and then raised its annual dividend by 20%, signaling that the Singapore-listed vehicle intelligence company believes the best of what it has built is still ahead of it.

The company reported fourth-quarter and full-year results for the period ending February 28, 2026. Cartrack, the South African-born connected vehicle platform that is the heart of the Karooooo group, grew full-year subscription revenue 19%, an acceleration from 15% in the prior year. Annual recurring revenue reached ZAR5,179 million, up 18% in rand terms and 38% in US dollar equivalent. The USD equivalent ARR now stands at $325 million.

The South Africa business, which Calisto has been pressing to grow faster, delivered. Cartrack South Africa subscription revenue growth accelerated to 22% in the fourth quarter alone, and the company closed the year with South Africa ARR growing at 23%. That is a meaningful shift for a business operating in a market where load-shedding, logistics disruption and cost pressure on small businesses have made selling recurring software subscriptions harder than the headline GDP numbers suggest.

Full-year adjusted EPS rose 3% in rand terms to ZAR32.55, and 20% in dollar terms to USD2.05. The dollar divergence reflects the rand's strength against the US dollar during the period, which flattered the rand-denominated headline but still produced genuine growth in real purchasing power terms at the dollar level. Adjusted free cash flow jumped 90% year on year to ZAR809 million, the strongest cash generation the business has recorded. That number matters more than the EPS line for a business at this stage of its growth, because it validates the claim that Cartrack's subscriber economics are genuinely improving as the base scales.

The board declared a dividend of USD1.50 per share, payable in July 2026, a 20% increase on the prior year's payout. Karooooo is listed on both the Nasdaq and the Johannesburg Stock Exchange, and its dividend policy reflects the dual nature of its investor base, distributing in US dollars to serve institutional shareholders across both exchanges.

Calisto, who founded Cartrack in 2004 out of a South African garage and built it into the continent's dominant fleet and vehicle intelligence platform before listing Karooooo on Nasdaq in 2021, has used each results cycle to press the same message: the business is built for durable compounding, not short-cycle optionality. His language in the FY2026 statement reflects that orientation. He pointed to continued distribution network investment during the year and described early-stage results as encouraging. He flagged the commercial launch of Cartrack-Tag, a new hardware tracking product, and advances in AI-powered video capabilities as the platform initiatives that will sustain the premium in Cartrack's value proposition against lower-cost competitors.

The FY2027 outlook is calibrated rather than aggressive. Cartrack subscription revenue growth is guided to accelerate again, and the midpoint of EPS growth guidance sits at 21% compared with FY2026 EPS excluding secondary offering costs. But Calisto has been transparent about the trade-off: gross profit margin is expected to contract in FY2027 as the business invests in distribution infrastructure ahead of the revenue it will generate. He has also flagged a deliberate slowdown in hiring, describing a shift toward sales force efficiency and AI adoption rather than headcount growth.

That combination, margin pressure acknowledged, hiring restrained, cash flow accelerating, growth guidance held firm, is the signature of a founder-operator who is managing for the long duration rather than the next quarter.

Calisto controls Karooooo through a majority shareholding structure he has maintained since the Nasdaq listing. His net worth tracks the stock, which has been one of the stronger-performing African tech equities on an international exchange since the IPO. The FY2026 results will give shareholders little reason to question whether his original investment thesis, that connected vehicle intelligence in high-growth African and emerging markets can be delivered profitably at scale, continues to hold up.

from Billionaires.Africa https://ift.tt/DXxzwco

fromahim7867