Karooooo : announces results for the third quarter of 2022

Exhibit 99.1

SINGAPORE (January 18, 2022) - Karooooo Ltd. ("Karooooo"), which owns 100% of Cartrack Holdings ("Cartrack"), today reported results for the third quarter of its 2022 financial year ("2022"), ended November 30, 2021.

Cartrack is a leading provider of an on-the-ground operations cloud that maximizes the value of data by providing insightful real-time data analytics and business intelligence reports. Its offering extends beyond connected vehicles and equipment, assisting diverse enterprise customers in digitally transforming their on-the-ground operations, including systems integrations, fleet administration, field worker management, video-based safety, risk mitigation, delivery management and ESG compliance and reporting.

"We believe that we are in an early stage of a large and long-term opportunity and we remain very excited about Karooooo's growth trajectory. Globally, we see a growing demand by small to large enterprises wanting to digitally transform their business' to remain competitive.

Being in a pandemic, we are constantly evaluating the trade-off between our unit economics and our intended accelerated investment for growth. We are well positioned to materially increase our spend on sales and marketing to achieve even stronger growth given that our Lifetime Value ("LTV") of a Customer to CAC ratio (a non-IFRS measure) is greater than nine times, and we have consistently beaten the rule of 40 (a non-IFRS measure), in the last four quarters.

Year-to-date, our revenue is up 20%, which equates to a 23% increase on a constant currency basis (a non-IFRS measure), and our strong customer acquisition is encouraging given the ongoing uncertainty in policies dealing with the pandemic. Our growth expectations for the year remain unchanged as set out in our outlook upon listing on the Nasdaq in April 2021.

Strong financial discipline in our approach to capital allocation and cash management has allowed for a robust unleveraged balance sheet and strong cash position with ample capacity to fund growth. Balancing our significant and continuing investment for growth whilst exercising caution in allocating capital during the pandemic, has been top of mind in this financial year and we believe we have positioned ourselves favourably for the long term.

As demonstrated for over a decade, our robust and consistently profitable business model coupled with our evolving end-to-end all inclusive Internet of Things ("IOT") platform, vertically integrated business model, established infrastructure, expanding distribution network and ability to execute and scale gives me comfort to believe that we will continue scaling our customer base and continue to improve our offering.

The scale of data on our platform is vast and growing. We contextualize billions of data points on a daily basis enabling us to provide differentiated and innovative insights to customers which enriches their day-to-day operations. We believe that there is a significant economic upside to the large data pool that we have built and continue to build. Further, we believe that there is significant untapped network effect value for other much needed related services given the size of our subscriber base." Zak Calisto, CEO and Founder.

Karooooo Ltd. Announces Third Quarter 2022 Unaudited Financial Results

Third Quarter 2022 Highlights:

(Comparisons are relative to the Third Quarter 2021, unless otherwise stated)

SCALE

Karooooo's strong growth momentum in the number of subscribers continues. Despite ongoing disruption from the global effects of the pandemic, our business model drove new customer additions, delivering growth in the total number of subscribers (connected vehicles or other assets on our platform).

1,470,385 subscribers in total as of November 30, 2021, up 18% (Q3 2021: 1,246,089)

164,385 net subscriber additions for the nine months ended November 30, 2021, up 37% (Nine months ended November 30, 2020: 119,574)

GROWTH

Total revenue increased 22% to ZAR720 million (Q3 2021: ZAR589 million)

Total revenue increased 25% on a constant currency basis (a non-IFRS measure)

Subscription revenue increased 17% to ZAR664 million (Q3 2021: ZAR567 million)

Subscription revenue increased 19% on a constant currency basis (a non-IFRS measure)

SaaS Annualized Recurring Revenue ("ARR"), (a non-IFRS measure), increased 16% to ZAR2,760 million as at November 2021 (November 2020: ZAR2,373 million).

Operating Profit increased 3% to ZAR205 million for the period (Q3 2021: ZAR198 million)

Earnings per share increased 10% to ZAR4.72 (Q3 2021: ZAR4.30)

Third Quarter 2022 Financial Overview

Subscription Revenue and Total Revenue

Karooooo achieved revenue growth of 22% and subscription revenue growth of 17% in the third quarter of 2022. Subscription revenue growth was driven by Karooooo's robust business model that delivered 18% growth in the number of subscribers to 1,470,385.

The ZAR strengthened against the basket of currencies in which Karooooo operates. On a constant currency basis (a non-IFRS measure) revenue grew 25% and subscription revenue by 19%. New customer additions contributed to the net increase of 164,385 in subscribers in the first nine months of 2022, 37% higher than the increase of 119,574 subscribers in the first nine months of 2021.

Included in total revenue for the third quarter, ZAR24 million relates to revenue earned from Carzuka, a vertical currently in beta phase, gaining traction and expected to launch late in the fourth quarter of 2022 and ZAR18 million relates to Picup, a logistics cloud-based disruptive technology company located in South Africa, that has been working with Cartrack to address the challenges of on-the-ground distribution for large enterprises requiring systems integrations, payment gateways, third-party long haul services and crowd-sourced drivers in order to scale and meet their operational needs.

Karooooo has high revenue visibility with subscription revenue accounting for 98% of total revenue (excluding revenue derived from the beta launch of Carzuka and Picup).

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In ZAR, SaaS ARR (a non-IFRS measure), increased 16% to ZAR2,760 million as at November 30, 2021, compared to ZAR2,373 million as at November 30, 2020. In USD, SaaS ARR (a non-IFRS measure), increased 12% to USD172.5 million as at November 30, 2021, compared to USD153.7 million as at November 30, 2020. SaaS ARR was driven by the 18% increase in subscribers and offset by a weaker ZAR, with the ZAR to USD exchange rate of ZAR16.00 at the end of November 2021 compared to ZAR15.43 at the end of November 2020. Amounts in ZAR have been translated to USD using exchange rates as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System on November 30, 2021.

Operating Expenses

As planned, operating expenses increased 21% to ZAR250 million compared to the third quarter of 2021 given the continued preparation for future growth, with a significant recruitment drive focused mainly on sales, customer experience and R&D. Excluding, Carzuka and Picup, operating expenses increased 15%.

Sales and marketing operating expenditure increased 23% compared to the third quarter of 2021. Sales and marketing basic salaries are a major component of the cost of acquiring new customers and are not expensed over the expected life span of a customer, but rather when incurred. This component of operating expenditure increased 44% in this quarter compared to the third quarter of 2021. We believe that the continued and strategic investment in enhancing our vertically integrated sales and marketing capabilities to leverage our go-to-market strategy drives customer acquisition and places us well for long term growth and margin expansion.

R&D operating expenditure increased 80% compared to the third quarter of 2021, partly due to the base effect of subdued investment in the third quarter of 2021 given COVID-19 imposed operating restrictions at the time coupled with continued investment for improvement, enrichment and expansion of our connected cloud in the third quarter of 2022.

General and administration expenditure increased only 10% compared to the third quarter of 2021 as a result of growth, favorably offset by continued realization of economies of scale and increased staff productivity as a result of investment in internal systems.

The trend in expenses as a relative portion of subscription revenue reported below are in accordance with Karooooo's long-term financial goals set out upon listing on the Nasdaq in April, 2021 and are reflective of the Group's accelerated growth strategy by investing for growth.

Sales and marketing expenses as a percentage of subscription revenue increased to 12.0% compared to 11.5% in the third quarter of 2021.

R&D expenses as a percentage of subscription revenue increased to 5.6% compared to 3.6% in the third quarter of 2021.

General and administration expenses as a percentage of subscription revenue decreased to 20.0% compared to 21.3% in the third quarter of 2021.

Operating Profit, Profit and Earnings per Share

The Group delivered operating profit of ZAR205 million for the period (Q3 2021: ZAR198 million), 3% higher than the third quarter of 2021. This result comprises strong subscriber and revenue growth despite the challenging operating environment and adverse currency fluctuations.

The profit generated for the quarter increased 12% to ZAR148 million (Q3 2021: ZAR133 million) partly impacted by the lower effective tax rate of 27% in the third quarter of 2022, compared to 33% in 2021.

In line with management's expectations, earnings per share increased 10% to ZAR4.72 in the third quarter of 2022 (Q3 2021: ZAR4.30).

Karooooo's IPO costs were fully accounted for by the end of the first quarter of 2022, thus reference to Adjusted profit and Adjusted earnings per share (both non-IFRS measures) are not applicable in the third quarter of 2022.

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Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA (a non-IFRS measure) increased 13% to ZAR342 million (Q3 2021: ZAR302 million). In the third quarter of 2021 when Karooooo experienced margin expansion, reporting an Adjusted EBITDA margin (a non-IFRS measure) of 51% as a result of lower growth due to the ongoing pandemic related constraints, management indicated that the preference then would have been to invest significantly into higher growth.

In line with Karooooo's planned investment for future growth and as set out in management's guidance range for 2022, the Adjusted EBITDA margin (a non-IFRS measure) was 47% in the third quarter of 2022. Adjusted EBITDA (a non-IFRS measure) as a percentage of subscription revenue was 52% in the third quarter of 2022.

The Adjusted EBITDA (a non-IFRS measure) for the first nine months of 2022 increased 7% to ZAR914 million (Nine months ended November 30, 2020: ZAR857 million), translating to an Adjusted EBITDA margin (a non-IFRS measure) of 46% for the first nine months of 2022.

Outlook

Karooooo has a history of consistent organic growth, scalability, strong earnings and financial discipline. The Group has been highly cash generative with most of its revenues recurring in nature and has operated with high operating and Adjusted EBITDA margins.

Karooooo's growth expectation ranges for full year 2022 compared to full year 2021 remain unchanged. Management expects the following ranges for full year 2022:

Number of subscribers between 1,500,000 and 1,600,000

Subscription revenue between ZAR2.5 billion and ZAR2.7 billion

Adjusted EBITDA margin between 45% and 50% (excluding Carzuka and Picup)

Operating in a growing and largely underpenetrated market and with the tailwind of customers seeking software solutions to successfully digitalize their businesses and improve their operations, we believe Karooooo is well positioned for growth.

Karooooo's multiple levers for expansion are supported by a proven, robust and consistently profitable business model, further enhanced by its unleveraged balance sheet and strong cash position.

The intended investment in marketing and sales, coupled with the realization of economies of scale across business segments, is expected to generate robust results in the future.

Actual results may differ materially from Karooooo's Financial Outlook as a result of the pandemic and exchange rate fluctuations, among other factors described under "Forward-Looking Statements" below.

Balance Sheet, Liquidity and cash flow

Karooooo has a robust balance sheet with ample capacity to fund organic growth and remains disciplined in its approach to capital allocation and cash management.

The Group's Capital Allocation Committee has adopted a cash management policy whereby Karooooo's excess cash reserves on hand will be held in US Dollars, which will be translated into ZAR for reporting purposes.

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Cash and cash equivalents as at November 30, 2021

After Karooooo listed on the Nasdaq and bought out all minority shareholders of Cartrack in the first quarter of 2022, the net proceeds raised equated to ZAR349 million. During the third quarter of 2022, Karooooo paid ZAR70 million in acquiring 70.1% of Picup, announced to the market on September 13, 2021.

Karooooo ended the third quarter of 2022 with ZAR799 million in cash and cash equivalents, significantly higher compared to ZAR67 million at the end of the third quarter of 2021. Further, the Group has bank facilities for growth initiatives and other general corporate purposes comprised of: ZAR925 million with The Standard Bank of South Africa and ZAR75 million with Mercantile Bank, a division of Capitec Bank Limited.

Free Cash Flow (a non-IFRS measure)

Cash generated from operating activities decreased 6% to ZAR750 million for the nine months ended November 30, 2021 (nine months ended November 30, 2020: ZAR794 million) in line with the Group's continued and strategic investment into customer acquisition and long term growth.

Karooooo's investment for growth contributed to the 37% increase in net subscriber additions to 164,385 in the nine months ended November 30, 2021 (nine months ended November 30, 2020: 119,574). Karooooo invested ZAR445 million into PPE and infrastructure during the first nine months of 2022, 16% more than the ZAR383 million invested in the first nine months of 2021.

The Group generated Free Cash Flow (a non-IFRS measure) of ZAR306 million in the first nine months of 2022 compared to ZAR411 million in the first nine months of 2021.

Share Capital and Reserves

Karooooo has 30,951,106 ordinary shares issued with a paid-up share capital of USD505,956,659 plus SGD1,000.

The negative common control reserve of ZAR2.7 billion on the balance sheet relates to a common control transaction on November 18, 2020 in which the loan of USD194 million from Isaias Jose Calisto was converted into Karooooo share capital and as a consequence Karooooo acquired control of Cartrack. On that date, 20,331,894 shares were issued to Isaias Jose Calisto and Karooooo registered ZAR2.7 billion paid-up capital resulting in the common control reserve.

The ZAR3.6 billion negative capital reserve on the balance sheet relates to the buyout of 95,350,657 Cartrack shares at ZAR42.00 per share from minorities when Cartrack delisted from the JSE totaling ZAR4.0 billion, offset by the ZAR0.4 billion previously reported in the Non-controlling interest reserve line item. The ZAR0.4 billion relates to the net asset value of the 95,350,637 Cartrack minority shares bought by Karooooo.

Third Quarter 2022 Segmental Overview

South Africa

This segment, being less impacted by COVID-19 operating restrictions, allowed Karooooo to leverage its strong market position and well-established national distribution network to deliver strong subscriber growth in the quarter, contributing to Karooooo's robust financial performance. Revenue and subscription revenue (excluding Carzuka and Picup) in South Africa increased by 19% and 21% respectively, compared to the third quarter of 2021. At the end of the third quarter of 2022, South Africa had 1,141,112 subscribers, up 19% compared to the third quarter of 2021, a result supported by our consistent investment for growth. We believe that we are the largest and fastest growing enterprise mobility SaaS provider in South Africa.

Carzuka, currently in beta phase, generated ZAR24 million during the quarter compared to ZAR9 million in the previous quarter. We are excited about its launch and are feeling increasingly more confident with the business model.

Picup earned ZAR18 million of revenue during the third quarter of 2022.

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