This meeting is being recorded. Hello, and welcome to Karooooo's financial year 2024 Q1 earnings call. On behalf of Karooooo, we would like to thank you for joining us today. I'm Carmen, the group's Chief Strategy and Marketing Officer, and together with Goy Hoeshin, our Group Chief Financial Officer, we'll be taking you through our strong performance and growth. All investors are advised to read through the disclaimer. We will be reviewing all three of Karooooo's business units in today's webinar, namely Cartrack, Carzuka, and Karooooo Logistics. Our mission remains to be the leading operations cloud as we persist in helping to define the future of operations. We continue to see how crucial mobility is to all operations and how our customers derive huge value from having more than just their vehicles and equipment, but entire operational workforce connected. Our innovative solutions are allowing customers to meet strict government compliance while achieving more with less. Our customers are continuously tackling challenges around their operations efficiencies, including fuel, safety, maintenance, resource scheduling, and more. They were also increasingly facing new obstacles, from new government mandates to carbon footprint tracking and worker retention. These all contribute to the growing demand for our platform. Our strong track record of identifying trends and developing solutions that successfully solve customer challenges to add huge value to their daily operations is evident, and this is a strong driver for our continued strong, sustainable growth. Through digital transformation and user-friendly tools, we offer invaluable support to customers in achieving compliance and navigating their day-to-day challenges, simplifying their operations, and boosting their efficiencies. Karooooo operates within massive, interconnected, and mostly untapped global markets. Analysts estimate that operations contribute to over 40% of the global GDP, and as businesses recognize the importance of IoT data in enhancing their operations, the opportunities for us continue to expand. With operations becoming more cross-functional and new government mandates arising and being enforced, the range of problems we can address is widening alongside the need for our platform, setting the stage for substantial and long-term growth ahead. Karooooo's ownership-orientated culture is deeply entrenched in all parts of our business. Being vertically integrated has not only given us deep, tangible knowledge about operations, but has allowed us to control our distribution to ensure we are able to quickly adapt to our customers' growing needs. This, alongside our continuous investment in our proprietary internal solutions, has fostered a customer-centric culture that focuses on providing world-class customer service. We have a strong history of building scalable software that solves complex problems across different disciplines, and customers quickly understand their large ROI from our platform. Through an ecosystem of open APIs, our platform enables customers to connect with other tools to bring all their operational data into a single unified cloud, where they receive actionable insights that drive huge impact. Karooooo's constant innovation, customer centricity, and ownership-orientated culture has enabled us to develop a platform that benefits from long-term stickiness, as shown by our 95% customer retention rate, and is easily implemented in small to large enterprises across a range of diverse industries. At the core of our success is the ability to set ourselves apart through strong execution. Our forward-looking approach delivers high ROI to customers and enables us to build a sustainable business that will benefit stakeholders for generations to come. We have unique go-to-market strategies, strong distribution channels, and place full focus on providing a great customer experience on our end-to-end operations cloud. We have a vertically integrated business model, proprietary internal management systems, and a strong entrepreneurial culture. These all come together to allow us to challenge the status quo, to successfully solve problems, and provide customers with a platform they can rely on as the backbone of their operations. This is highlighted by our increase in commercial customers to over 108,000. We continue to see no industry or customer concentration risk. Digitalization, ESG, and compliance continue to drive increased demand and adoption of our platform across all geographies. Operators crave visibility and are looking to leverage the power of IoT to gain full control over their operations. End customers and governments are increasingly focusing on net zero and putting significant pressure on our customers to reduce their carbon emissions and increase their positive impact on the community. Finally, we have seen large strides by governments to increase compliance across geographies, both in terms of new laws as well as enforcement. These are no longer negotiables. Our approach to ESG successfully solves all government mandates whilst also ensuring customers drive strong operational value from their ESG initiatives. Reducing carbon emissions by cutting fuel is clear. However, our platform goes beyond to ensure customers are also focusing on other aspects of their operations, such as maintenance plans, to reduce their maintenance costs and, in turn, slash their emissions. Tracking emissions in a simple-to-digest format that contextualizes data has enabled customers to embark on government's efforts to reduce emissions more easily. As previously mentioned, governments are increasingly implementing sophisticated mandates that are spreading to all aspects of an operation. From driver shifts to regulatory paperwork and machinery inspections, customers rely on our easy-to-use digital tools to digitalize their operations and ensure compliance with the latest standards. Customers are also now better equipped to tackle driver and work site safety through gamified scorecards and AI cameras that reduce speeding and accidents and increase driver well-being and retention, as well as company brand within the community. By interconnecting their ESG and operations, we help customers meet their ESG and compliance goals while cutting costs. All in all, leading to increased customer ROI and stickiness. We continue to believe that our advanced cloud platform and unrivaled service delivery position us well in Asia. The rapidly growing market remains largely under-penetrated and fragmented. Small to large business operators are increasingly looking to digitalize their operations to enhance efficiencies and competitive advantage. Our strong growth in this segment is testament to our ability to localize our solutions and adapt to different customer cultures and needs, while ensuring they remain reliable, effective, and easy to use. Our solutions are robust and built for scale. There are a large number of companies in Asia paving the way globally with their sophisticated approaches to their operations. Despite Asia's reputation for price sensitivity, customers are increasingly looking towards value for money as they continue to understand how data can revolutionize their businesses. Some customers are focusing on improving their reputation and brand through increased safety, risk management, and guaranteed service delivery. Others are leading the way with electric vehicles, leveraging our platform to eliminate challenges around battery life and vehicle demand hotspots. Others are powering over 10,000 daily deliveries whilst reducing fuel costs, vehicle loading downtimes, and admin. They use our sophisticated APIs to connect into their ERP and other tools to get a single, unified view of their complex operation. With over 155 billion valuable data points generated monthly, and over 10% of all vehicles on the road in South Africa, Karooooo has a huge untapped network effect opportunity. We continue to focus on using our scale advantages to benefit our customers through personalized experiences and advanced machine learning and insights. This remains aligned with our belief to drive sustained, long-term value for customers. Our strong management, entrepreneurial culture, and vertically integrated business model have empowered us to remain agile and adaptable, resulting in our proven track record of growth and profitability across the varying macroeconomic headwinds across regions. We continue to offer a strong value proposition to customers by continuously adding new, innovative solutions to our cloud, whilst also passing on the benefits of our economies of scale to our customers. Our ARPU has remained stable, and our customer retention remains very high. We have a resilient business model that is highly cash generative, with strong margins and large visibility over future revenue. Our balance sheet is robust, and management continues to drive strong unit economics with sustained growth of scale. Given the large TAM and our strong principles, we have ample runway for growth. I will now pass over to Goy Hoeshin, who will take us through our financial performance. Thank you, Carmen. I will now talk through Karooooo's financial performance for quarter one, FY24. Please note that all comparisons are against quarter one, FY23, unless otherwise stated. Our proven and profitable SaaS business model continued and delivered a solid start for the financial year. In Q1, Karooooo's total revenue increased by 24% to ZAR 997 million, and ARR increased 20% to ZAR 3,409 million. As expected, after substantial investment for future growth in all segments, operating profit increased marginally by 3% to ZAR 224 million, and earnings per share increased 3% to ZAR 5.09. All segments continue to see strong traction, with the benefits of our strategic investment beginning to show. Our consistent results extend our track records of growth at scale, profitability, and cash generation ability. Free cash flow in this quarter up by 39% to ZAR 158 million and continue to bolster our balance sheet. Net cash on hand up by 18% to ZAR 1,137 million. In this quarter, ZAR 32 million are invested in the development of the South African central office, and ZAR 19 million are invested in the working capital of Carzuka. Debtors turnover days continue to show improvement to 28 days, alongside with prudent provisioning to weather off strong economic headwinds in some of the markets we are operating. The healthy cash generation drove up net cash and cash equivalents and support future cash outflows required for future growth. We have strong unit economics, robust operating margins, unleveraged balance sheet, and a strong cash conversion. We remain confident that our track records of success, especially our ability to generate healthy cash flow, is sustainable. Our earnings per share increased by 3% to ZAR 5.09 in this quarter. The increase is the result of positive revenue growth and improved profitability, despite our prudent and strategic investment for growth. We will now focus on Cartrack, the underlying assets to Karooooo's success. Cartrack's continued to prove its ability to scale in varying macroeconomic conditions and consistently beaten the Rule of 40. Overall, subscriber grew at scale by 14% to 1,757,452. In this quarter, subscription revenue grew 18% to ZAR 834 million, and operating profit stood at ZAR 232 million. Cartrack continue with strong SaaS revenue growth, Cartrack's total revenue grew 18% to ZAR 853 million. Cartrack's total subscription revenue represents 98% of total revenue, which is in line with our SaaS business model. With mentioning, our SaaS ARR grew 20% to ZAR 3,401 million. The strong performance of Cartrack was largely supported by demand of small to large enterprise, wanting to improve its compliance function and to digitally transform their business to become more efficient and competitive. Cartrack continue to have strong visibility of its future SaaS revenue, our realization of economies of scale continue to demonstrate our ability to drive earnings. Gross profit in this quarter increased by 16% to ZAR 600 million. Despite the investment for growth, our operating profit increased by 5% to ZAR 232 million. In this quarter, we increased our headcount both in sales and G&A. We are building strong support and distribution capabilities as we expand in our territories. Our adjusted EBITDA up by 10% to ZAR 392 million. Cartrack's low cost of acquiring a customer, high customer lifetime value and retention rate, as well as strong benefits from economies of scale, results in our leading unit economics. Our LTV to CAC is over 9. We have strong profit margins with our gross profit margin on subscription revenue at 71% and commercial customer retention rate of 95%. While we remain prudent with our capital allocation, we started our hiring drive in quarter one for territorial expansion and growth of the business. Over the years, Cartrack has maintained a steady ARPU and average upfront cost of acquiring a subscriber. ARPU for the quarter was ZAR 160. Cartrack's average lifetime revenue per subscriber increased to ZAR 9,604 in this quarter. The average upfront cost of adding a subscriber to our club in this quarter was ZAR 2,363. This cost mainly relates to sales commission and telematic device, which are capitalized, and sales and marketing expenses that are expensed off. The headroom derived from the average lifetime revenue per subscriber after subtracting the average upfront cost of adding a subscriber was ZAR 7,241 per subscriber. From the ZAR 7,241, we incur the cost to service a subscriber over the contract life cycle of 60 months. The cost to service a subscriber decrease as we grow our subscriber base. Our unit economics have remained steady, allowing us strong operating profits. Cartrack continue to grow its subscriber base and ARR to expand in all geographies. The South African economics remains under pressure as a result of continuing strain on the national power grid. Despite the challenging trading conditions, our subscriber grew by 13%. In Asia, the Middle East and USA, subscriber grew by 24%, as the traction in Southeast Asia has been encouraging. Southeast Asia remain as the second-largest contributor to the group's revenue, presenting the most compelling growth opportunity to the group in medium to long term. Europe saw a healthy growth of 12% and remain a region we are focusing our resources on. With our recent partnership with leading OEMs, we are poised to leverage our extensive offerings to further develop the connected vehicle ecosystem and expect these partnerships to contribute to our results in medium term. Africa/Other maintained its growth with 7% increase in subscribers. At the end of Q1, our ARR increased 20% to ZAR 3,401 million. This is at a good trending as we continue to see the momentum of growth in our subscriber and ARR. Cartrack continue to have robust operating margins, and our trends are in line with the long-term financial goals set out upon our listing in 2021. In this quarter, our subscription revenue gross profit margin stood at 71%, which is consistent with our expectation. Research and development expenses as a percentage of subscription revenue are 6%. With the start of our hiring drive in Q1, we prudently invest into sales and marketing headcounts to drive our territorial expansion and growth. As a result, sales and marketing expenses as a percentage of subscription revenue increased to 14%. General and admin expenses as a percentage of subscription revenue are at 21% and will continue to improve as we remain pragmatic in our operating expenses. Operating profit as a percentage of subscription revenue are 28%, and our adjusted EBITDA as a percentage of subscription revenue are at 47%. We have had a solid start to our financial year 2024. Our guidance for Cartrack's outlook remain unchanged, with number of subscriber between 1.9 million-2.1 million. Cartrack subscription revenue between ZAR 3.4 million-ZAR 3.6 million, and Cartrack's operating profit margin between 28%-31%. Carzuka and Karooooo Logistics continue to gain traction and bolster Karooooo's revenue growth. Both segments show good progress with strong quarter one growth. Carzuka delivered ZAR 82 million in revenue in this quarter. This growth continues to support our belief in the sustainability of its agile, data-enhanced, and highly scalable business model. It is also a testament of Karooooo's customer-centric innovation in solving unique mobility needs. While it is at an operating loss, as we carry on to invest in the infrastructure and brand building, we will also focus in refining our internal processes to improvise the efficacy and being pragmatic in our spending. We consider this an asset-like investment, and once Carzuka's revenue exceeds ZAR 300 million per quarter, we believe the business will give us the return we expect. Karooooo Logistics delivered significant growth, generating ZAR 62 million in revenue and an encouraging operating profit of ZAR 5 million in this quarter. Its focus on delivery as a service has gained momentum while we continue to integrate into Cartrack's platform to expand its customer base. The Karooooo Logistics stack is expected to deliver a long-term revenue stream to the group. I would like to thank everybody for joining us today, and we will now open the floor to Q&A with our group CEO and founder, Mr. Zak Calisto. Thank you, Hoeshin. Thank you, everybody, for joining us today. I'm gonna start off with a question from Matthew from William Blair. How have subscriber additions changed within June and July relative to the first quarter? We've certainly had a much stronger June and July compared to the first three months of the financial year. This quarter, we are hoping to see a substantially better quarter than the previous year in terms of subscriber additions. Another question from Matthew, from William Blair: Which expense lines do you anticipate to show the most leverage throughout the year so that Cartrack segment can meet its operating profit and margin target? In the first quarter, we spent a substantial amount of money of recruiting people support, which falls under G&A. We will continue in Q2 to also recruit and add more headcount. I certainly believe G&A is the one that will then taper off and allow us to meet our targets. I certainly believe we are on track, and we're going in accordance with budgets, and we to meet our targets. The next question from Parker Lane: How should we think about the balance of growth and profitability over the medium to long term as Carzuka and Karooooo Logistics continue to scale? Parker, I think one needs to see these three different segments in isolation. They've got very different margins, and as they've got different margins on the consolidated numbers, that's gonna affect our margins. I see Carzuka reaching breakeven in the short term, and I certainly see Karooooo Logistics, that is already profitable, continue to scale that. I think for a very long time to come, Cartrack will certainly be the driving force of our operating profits. The next question, I'm going to Matthew from Confluence Impact Fund. 2 areas I would like to understand better, the change in capitalization of costs and the resulting lower reported EBITDA. What were the nature of these costs? Maybe it needs a bit of clarity. There is no change in the way we capitalize costs. That is something that's not discretionary, that's something by IFRS. What has changed is that what we've seen is a huge increase in marketing costs, and those marketing costs are expensed upfront. With those being expensed upfront, they obviously affect our operating profit. As Shin took us through the unit economics, you can also see the higher ARPU, and we will drive more value out of each subscriber, and it will offset that initial cost that we do have upfront that is affecting us, so we'll reap the benefits going into the future. Is there a better way that we can better understand comparable reporting for historical periods? The only way we can do that is by either cash accounting, and in terms of cash accounting, what we've see is that our breakeven of the cost that we incur upfront has remained fairly constant. I haven't got the exact number on me, but I think it's around 22 or 23 months. Despite the total costs going up, given the ARPU and given the lower costs to service each vehicle on a cloud every month, we have a breakeven point that's remained fairly constant historically. Asian growth, also from Matthew from Confluence Impact Fund: Which markets are responsible for the growth in Asia? Clearly, we're gaining stronger and strong momentum in Singapore, and we're certainly the market leaders in Singapore, and we're getting really good momentum in the Philippines, Indonesia, Thailand, at this stage. How is the sales marketing set up there? We've got the same setup throughout all the geographies that we operate in. Are you happy that you will be able to sustain 20% growth in this geography? Well, we certainly believe 20% to be a very low growth in Asia, and clearly with COVID, that was very difficult. I think the year post-COVID was difficult, but for different reasons. I think the job market was quite difficult. I think we're now starting to get the momentum that we need, and I certainly believe we'll grow much faster than we currently are. Certainly, it's my opinion, and also the team's opinion, that we'll grow faster than we're currently growing. We'll go to Sebastian. Can you comment further on the higher proportion of cost of goods sold that was expensed during this quarter? What changed this figure? Is this due to customers? What changed the figure, it's really what does it cost us to put a vehicle on the cloud. This... I might be being a bit repetitive here, but I will do it for the sake of clarity. The portion of those costs, we actually expense up front, which is the sales, salaries, and the marketing costs. The other costs we capitalize, which is the IoT devices, and the technicians, and the commissions paid. This is our IFRS rules, how to do the accounting for it. It's, you know, is this due to customers canceling? It's got absolutely nothing to do with customers canceling. What customers canceling will do, it will reduce your customer retention, and it will also reduce your life cycle of the vehicle on your cloud, and we've consistently been at over 60 months, and this is obviously an actuarial calculation. The next one from Alexandra Scholtz. Southeast Asia growth continue well above the company average. How much go-to-market investment are you putting in behind the current momentum in the region? Clearly, our biggest capital allocation continues still to be South Africa, obviously in, as a proportion, that's decreasing, and Southeast Asia is clearly increasing substantially. What we did see is a huge increase in that in Q1 this year. Definitely, it had been a focus, but what are your latest thoughts around pricing and the ability to push pricing as a growth driver? Our pricing model is very much around our unit economics, and while we're having operating profits of in the region of 30%, in terms of our PNL, we believe there's no need to drive up pricing at this stage. We are getting great benefits from the economies of scale. Our ability to drive up pricing, we did test it last year, and we believe, should it be necessary, that we certainly got a lot of elasticity to push up pricing, given that we're continuously adding stack to our platform. If one had to take the route that every time you put on a new stack or you enhance the stack, that you can go to the market and upsell, I believe we can do that should it be necessary. Next question from Rudi van Niekerk. You are evidently spending for future growth, for example, the hiring drive. Typically, how many months does it take before the spending starts translating into revenue growth? It's typically, I would say, it's about six months. The real effect of investment, what I've learned is you invest, and the real benefits actually comes 2 or 3 years later. Normally, what you find is when you bring on staff, it takes them about 6 months to settle, they really, most staff only start adding real value after they've been with us for about 24 months. But you do start seeing value after 6 months. Next question from Goku Rai. With a low base in Asia and Europe, should we not expect higher growth rate than what the firm has delivered currently? I certainly believe so, and I certainly believe that we are going to be driving that. Our commitment now is to really start growing Asia and Europe faster. Question from Kan Ho. The number of net additions in subscribers slowed down to 25,000 in South Africa for this quarter and last quarter. What are the reasons for this? Kan Ho, South Africa at the moment has got quite a few challenges. South Africa is quite a resilient country. It every so often goes through these challenges, and one of the biggest challenges we've got now is the stress on our electricity grid, and obviously, that's having quite a negative effect on the economy as a whole. Next question from Keen Fai, from Coronation. How did you manage to grow subs in South Africa? Is it increased market share or higher industry penetration? We don't have the full market statistics to be able to answer you with... with the level of degree of confidence that I would like, but I believe it's a combination of market share and higher industry penetration. Next question, Prashant Khemka: Can you please provide some context on ESG carbon footprint monitoring being a driver for growth? What are some of the specific government regulations driving adoption, and which geographies? There's a lot of talk about ESG. There's a lot of very positive movements in that direction, and what we are seeing is government legislation starting to come through in many geographies for compliance. One good example is Europe is now bringing in eTachograph, which also is gonna be used in sedan vehicles that are used for companies. We are looking to get real benefit out of that. It's really gonna take... I certainly believe ESG, we're very well positioned to help corporates report on their compliance, on many of the ESG aspects, and we certainly believe that's gonna become a stronger and stronger drive for our growth. Chris, his question: Is Samsara making much out of utilizing artificial intelligence to improve safety and efficiency and the general AI innovation? If this is an area that sees potential in. Chris, I think the word artificial intelligence is the word of the day today. Everybody's using it. I think artificial intelligence has been with us for about 20 years, but certainly in the last 3-4 years, we've seen a huge exponential growth in the maths behind it. We've been doing it for many years, if you look at our platform and our offering, it'll be quite evident that we are driving the benefits that come from good algorithms and good data collection, good data presentation and the facility, and that's fundamentally what artificial intelligence is. It really is just a buzzword that's, at the moment, being used very loosely. I certainly believe we are very much involved in delivering artificial intelligence and continue to improve on that aspect of our business. I've got a question from Miles Fareed. Is subscription growth outside Africa taking longer and costing more than anticipated since COVID-19? It's certainly taking longer. The costing more, I don't think that's necessarily the case, outside Africa, or what we did see specifically is the last FY23, very turbulent, very difficult to hire people. That's starting to normalize in Q1 and in Q2, we certainly believe that once we get the necessary momentum with the hiring, then we'll reap the results in the revenue growth. The next question from Miles Fareed: How is trading going outside Africa in Q2 off a low base relative to temps? As I said earlier, we are having a stronger Q2. What are the inhibitors to doubling subscribers? The reality of that, it's just the ability to distribute, and we are very much focused on increasing our distribution capabilities. Another question from Miles: What EBITDA percentage of costs we could achieve on a quarterly revenue of $300 million? We're looking that once we get to $300 million, we'll probably be sitting on an operating profit of around 4%-5%. I wanna thank everybody for joining us. Thank you, and I look forward to talking to you in approximately 90 days time.