Cartrack Adds a Record 142,472 Subscribers as Subscription Revenue Grows 19%
Jul 16, 2026The connected-operations company is adding subscribers faster after expanding its sales team. Its latest results also show the cash demands of a subscription business that pairs software with physical devices.
Cartrack added a record 142,472 net subscribers during its latest quarter, giving subscription executives a useful look at the cost of fast growth in a business built around recurring revenue and connected devices.
Cartrack provides software and tracking devices that businesses use to manage vehicles, equipment, drivers, and field operations. Customers pay recurring fees for services that include vehicle tracking, video monitoring, fleet management, and operating data.
Cartrack is owned by Karooooo, the public company that reports its financial results.
During the three months ended May 31, 2026, Cartrack added 70% more net subscribers than it did during the same quarter last year, when it added 84,013.
The company ended the quarter with 2.8 million subscribers, up 18% year over year.
Subscription revenue reaches ZAR1.35 billion
Cartrack subscription revenue increased 19% to ZAR1.35 billion, or about $83 million using the exchange rate included in the company’s results.
Annualized recurring revenue, or ARR, also increased 19% to ZAR5.43 billion. ARR is the amount of recurring revenue the company would expect over a full year based on its current subscription base.
On a constant-currency basis, subscription revenue grew 21% and ARR grew 22%.
Cartrack said stronger customer acquisition and demand for its Video and Cartrack-Tag products helped drive the results. Those products were sold to new and existing customers.
The company expanded its sales team during the previous fiscal year. It now plans to slow hiring and focus on helping the larger team produce more sales.
Faster growth required more cash up front
Net subscriber additions grew much faster than Cartrack’s total subscriber base or subscription revenue during the quarter. Those figures measure different things, so they shouldn’t be compared directly.
The cash-flow results still show that Cartrack invested more to support the faster pace of acquisition.
The company spent ZAR462 million on connected devices installed for customers and devices held for future use. That was up from ZAR284 million during the same quarter last year.
Cartrack also tied up more cash in sales commissions, component prepayments, and amounts owed by customers following higher subscription sales.
Free cash flow fell from ZAR338 million to ZAR60 million, even as subscriber growth and subscription revenue increased.
That’s an important part of the story for subscription executives. A company may begin counting a subscriber before it has recovered the cost of winning and serving that account.
The timing is easier to see when the subscription includes devices, commissions, or inventory that must be paid for before the customer produces the full value of the relationship.
Growth puts some pressure on margins
Cartrack’s operating profit increased 16% to ZAR395 million. Its operating margin fell from 30% to 28%.
The company expects its operating margin to remain between 27% and 30% for the full fiscal year.
Cartrack also kept its subscription revenue forecast of ZAR5.7 billion to ZAR6 billion. That would represent growth of 18% to 24%.
The key question is whether Cartrack can turn its record subscriber additions into steady recurring revenue while improving the performance of its larger sales team.
Retention will matter. So will adoption of services such as video monitoring and asset tracking, which can increase the value of an existing customer without requiring Cartrack to win a new account.
Insider Take
Cartrack’s record subscriber additions are a strong sign of demand. They also came with higher spending on connected devices, sales commissions, inventory, and amounts owed by customers.
Subscription businesses with physical products or other up-front costs will recognize the pattern. New subscribers can begin generating revenue quickly, but the company may wait much longer to recover what it spent to acquire and serve them.
The next test for Cartrack is whether these customers stay, add more services, and produce enough cash and profit to support the initial investment.
Subscriber growth starts the relationship. Retention and expansion determine what it becomes.