I would like to welcome everyone to the Karooooo quarter one financial year 2023 earnings presentation. I am Richard Schubert, the Chief Operating Officer. Karooooo management would advise all investors to review this slide. Karooooo, which is listed on Nasdaq under ticker KARO, has three operational entities that we will review: Carzuka, Cartrack, and Karooooo Logistics. Mobility is core to all on-the-ground operations, and we are thinking beyond connected vehicles and equipment by providing a full platform to manage all on-the-ground operations. Our mission is to establish the leading on-the-ground operations cloud platform. We solve problems by digitally transforming businesses. Our fleet management platform manages safety and visibility operations for our customers. Field worker management is helping SMEs like plumbers and ground servicing companies deliver.
Logistics and delivery platforms help supermarkets and pharmacies with their on-time supply chain operations, while Carzuka is providing a safe and easy-to-use vehicle buying and selling platform. We are seeing a growing demand from small to large businesses to add operational efficiencies to their organization. Karooooo investment highlights that drive shareholder value. We are at the early stage of a large and growing addressable market where mobility with IoT is key to improving operational efficiencies. There are large expansion options across 23 countries by tapping into the untapped network effect, and our decade-long track record shows strong customer acquisition, even in challenging markets with a robust and consistent business model. We have a long-term track record with a robust balance sheet and revenue generation, with disciplined capital allocation and a strong cash position despite allocating cash for future growth.
Our track record has positioned us well for accelerated growth with strong operating profits and unit economics, while our founder-led culture focuses on agile innovation. We are at the early stage of a large long-term growth opportunity. We strongly believe that mobility is core to all on-the-ground operational improvements, which represent over 40% of the global GDP. This offers us a massive opportunity. Within South Africa, nearly one in 10 vehicles is managed by Karooooo, while post-COVID, we see all markets opening up with customers adopting the Karooooo platform. The focus in Asia and Europe is now to grow and deliver more operational value to our customers. The scale of Karooooo's data is vast and growing, and we are fully aware of the untapped network effect of our platform.
Carzuka and Karooooo Logistics are both a direct result of our network effect and are both solutions we believe will see large success as we continue to scale them. There are many opportunities that remain ripe for us to disrupt at this point in time. We are able to analyze our data to understand what our customers need and are adding many verticals to our platform to capitalize on our network effect and continue to add growing value to our customers' operations. Our robust and consistently profitable business model supports over 90,000 commercial customers with a compounded annual growth rate of 17%, which translates to just over $182 million. Karooooo wins by providing a fully inclusive end-to-end IoT cloud platform that's easy for our customers to use. It's continually updated and seamlessly integrates with customers' third-party ERP solutions.
Our expanding distribution network ensures we service customers within the shortest possible lead times. We understand our customers day-to-day challenges, and our on-the-ground cloud platform solves these issues and gives them a high ROI. Our fully vertically integrated business model means we have a larger strategic advantage that provides the full control of all aspects of the business. Our established infrastructure gives us the human resources to scale with a proven track record to achieve strong growth. Karooooo is an agile and entrepreneurial culture that has proven to be resilient in challenging times. I will now hand over to Zak to present our Q1 financial numbers.
Thanks, Richard. We had a really good quarter at Q1 in terms of our financial metrics. We had record earnings. We also had record cash generation from operating activities. Our earnings per share was up 42% at ZAR 4.96 for the quarter. If we normalize that and we take Q1 of FY 2022 and remove the IPO costs, then our earnings per share adjusted would be 27%, which is extremely healthy. Our profits for the period has gone up from ZAR 180 million- ZAR 156 million, up 44%, and our cash generated from operating activities is up from ZAR 272 million to a record ZAR 319 million. Obviously, all of this allowed us to declare a $0.60 dividend in April this year.
Our business model remains resilient and highly cash generative. Karooooo continues to grow at scale. Obviously, this is largely supported by its high customer retention rate. If you look at, you know, this quarter's results, our revenue was at ZAR 801 million, up 28% on last year. Operating profit at ZAR 217 million. Record operating profit, 29% up on last year. Adjusted EBITDA at ZAR 354 million, up 29% compared to last year's first quarter. We have very strong unit economics. We have a robust operating margins. We've consistently been in the 140. We have a strong balance sheet with a very strong cash position. We ended off Q1 with a very strong cash position.
We've also got a strong free cash flow generation, and that puts us in a good position for future growth. We ended up with ZAR 854 million cash on hand. This was obviously supported by Cartrack's debtors days, which is now 32 days compared with 34 days in the same quarter last year. We have a strong balance sheet and ample capacity to fund growth. We generated from operating activities ZAR 319 million, up 17% compared to last year. We invested in investing activities ZAR 162 million, which is 37% more than last year. Our free cash flows at ZAR 157 million, 2% up on last year's first quarter. We have strong revenue generation, strong earnings growth, and strong cash flow.
We are focused in increasing Karooooo's presence across industries and geographies. As you can see from the slides, we have a substantial amount of large enterprise customers. Our focus is clearly to service small to large enterprise customers, and we'll continue to allocate capital to acquire more customers. We are reporting our performance by business segment, broken up into Cartrack, Carzuka, and Karooooo Logistics. I think all three entities or three segments have performed well. Our total revenue was up by ZAR 801 million. Our revenue growth was 23%. Operating profit, ZAR 217 million. Operating profit growth at 29%. Adjusted EBITDA at ZAR 354 million. Adjusted EBITDA growth, 29%. Our adjusted EBITDA margin at 44%. In Cartrack, we grew our revenue by 16% to ZAR 724 million.
We grew our operating profit by 29% to ZAR 220 million, record operating profit. Our adjusted EBITDA growth was 28% up to ZAR 357 million in EBITDA. Our adjusted EBITDA at 49%, very much in line with our outlook for the year, and very strong metrics. With Carzuka, we obviously grew revenue from ZAR 2 million last year to ZAR 50 million. If you compare it to Q4 of last financial year, from ZAR 32 million- ZAR 50 million, again, really good growth and really good traction, delivering a lot of value to our existing customers. Our operating profit remains negative at ZAR 4 million, and our adjusted EBITDA also negative at ZAR 3 million. On Karooooo Logistics, also gaining good momentum.
If you compare it to quarter-on-quarter, we're now at ZAR 28 million compared to approximately ZAR 24 million in Q4 of last year. Our operating profit, just under ZAR 1 million, getting closer to break even to become profitable. Our adjusted EBITDA positive, just under ZAR 1 million. All segments are gaining good traction. We continue to build our business, both Cartrack, Karooooo Logistics, and Carzuka. We'll now focus on Cartrack, our main business and underlying asset to our business and the asset that creates all the value in terms of data for our business. As you can see, our subscription revenue growth was 70% compared to the same quarter last year. Revenue growth up 16%, and our.
We remained with very high amount of our subscription revenue being a percentage of the total revenue, 98% in this quarter compared to 97% of last year. What is important is that Cartrack's outlook for 2023 remains unchanged. We have well over 10 years of a track record of being able to execute. We see that on our subscriber growth, on our subscription revenue growth, and on our profitability. We finished the quarter off with 1,543,000 subscribers. Our subscription revenue is at an all-time high of ZAR 707 million, and our operating profit also at an all-time high of ZAR 221 million. We're continuing with our strong financial discipline and our ability to scale in varying market conditions. In this quarter, we saw customers being very cautious with the looming inflation.
We also saw that, the floods in South Africa in KwaZulu-Natal affected our subscriber base, and we added 60,800 net subscribers, by June this year, and certainly we are seeing the same momentum in July. Just in June, we had more than 18,000 net subscribers, and we believe by Q2 this year we'll restore our momentum. We continue to expand our business in all geographies. We saw subscribers up 11% in South Africa, clearly affected by the net subscribers of Q1, which has now been restored in Q2, which is good momentum, as I said previously. In Asia, very encouraging, we're up 25%, and we're certainly hoping to increase that as we allocate more resources into driving growth in Asia. Europe, we certainly also wanna allocate more resources, which we're up 13% in our subscriber base.
In Africa, although we're getting good momentum where we're up 11% on subscribers. Cartrack has attractive unit economics. Our low cost of acquiring a customer allows for our LTV to ACV to be over 9x . If we look at our Cartrack subscription revenue gross profit margin, that is at 72% compared to 72% the same quarter last year. Cartrack's operating profit up 31% with last year, the same quarter was 27%. We're well positioned to materially increase our investment for growth. We'll now discuss Cartrack's robust operating metrics. Our research and development is 6% of our subscription revenue. Our long-term goal is between 4%-6%. Sales and marketing, 13%. We certainly will be allocating more capital to sales and marketing, and we over the long- term will be between 17% and 19%.
Our general and administrative as a percentage of subscription revenue is at 21%, and as we get economies of scale, we believe we'll bring that down to 12%-16%. Our adjusted EBITDA margin as a percentage of subscription revenue is 60%, and our long-term target is between 50% and 55%. Cartrack's outlook for 2023 remains unchanged. Number of subscribers between 1.7 million and 1.9 million. Cartrack's subscription revenue between ZAR 2.95 million and ZAR 3.1 million. Cartrack's adjusted EBITDA margin between 45% and 50%. We had a very solid start to Q2, where in June alone, we added net subscribers of over 18,000 subscribers. We have one slide to summarize the revenue of Carzuka and Karooooo Logistics. It's certainly gaining momentum.
We're very happy with the progress that we're making. As you can see from the slide, we had in Q4 ZAR 32 million, and now we have ZAR 50 million in Carzuka revenue. In Karooooo Logistics we had ZAR 24 million, it's now at ZAR 28 million. You can see quarter-over-quarter how we're growing. I wanna thank everybody for listening, and attending our presentation, and I will now open up to questions. I also remind everyone that wants to ask questions just to type the questions. I have the first question from J. Parker Lane. What are the assumptions around the growth of Carzuka and Karooooo Logistics in FY 2023? How should we think about the impact of the broader macro slowdown could do on those newer businesses compared to Cartrack?
Parker, you know, we don't really know the effects of the new environment, the macro environment. However, we certainly believe that Carzuka will continue to grow quarter on quarter, and I believe we will get strong growth. If just judging at June's numbers, we're really very happy with June's numbers of both Carzuka and Karooooo Logistics. Karooooo Logistics onboarded some very large enterprise customers they've been busy rolling out. So the revenue you see today in Q1 is not the full revenue of all those customers. I believe by Q3, Q4, you will see the revenue of the existing, but clearly we will also be onboarding newer customers.
These large enterprise customers to do all the integrations into their back office, into their warehouses, into their stock takes a bit of time, and it also takes a bit of time to roll out all their stores to be operational on our platform. I'm expecting to continue growing Carzuka and Karooooo, and I'm certainly also expecting Cartrack to meet the outlook that we've given to the market. The next question coming in from Willa, from William Blair. How is the European region performing versus your expectations? I think coming out of COVID, you know, we certainly wanna grow our business.
We've had four months, when I'm gonna call it post-COVID, although, having said that, we've probably had more staff taking off in this last 4-5 months than we did during the two years of the pandemic due to getting COVID. However, we certainly are going to start employing in Europe. It's summer now in Europe, but I think by October this year, November, we'll start getting traction. It's certainly our focus for us to start growing Europe as fast as possible. The same thing goes for Asia. Are you seeing any signs of softer macro, any differences by region? Well, we certainly saw what I believe a response to the macro environment in South Africa, specifically in quarter one.
By quarter two, I think that softness would have eroded because of the value we add in good times or bad times. I believe our offering is good both to save money and to increase productivity. Overall, I think these macroeconomic changes don't necessarily affect us negatively. Another question from Parker Lane: When you look at your headcount expansion plans for the year, are you placing a greater emphasis on APAC or in Europe and Africa? I think our focus is in both, but clearly the biggest opportunity for us is APAC, given that we're coming off a very low base and given that the last two years we were basically on pause. I certainly believe that we will see faster growth in APAC than in Europe and Middle East and Africa.
We have a question from John Messina from Raymond James. Zak, gross profit margins. Gross margins improved 4.3%, sequentially in Q1, which means there is a bit of seasonal trend in Q1. How would you think about the pace of gross margin expansion throughout FY 2023? I think fundamentally, I haven't got the exact detail in front of me, John, so I'm gonna answer you in broad terms. I think we've traditionally had gross profit margins in this sort of region, in the 70%, 72%, 71%, and at times there are funnies that can come through and affect our gross profit margins. I'm expecting gross profit margins to be very in line with Q1. Another question. Profitability of other revenue items.
Zak, we were really impressed with not only the growth of Carzuka and Pikku p, but also the improvement in profitability. While it is a smaller overall component of the company, how should we think about the profitability of them and the longer-term profitability profile of those businesses? John, you know, we've traditionally had a very disciplined way in the way we allocate capital, and we fundamentally like to grow our businesses organically and in a disciplined way and in an organic way. Sometimes we might even be a bit too prudent, and that could even slow down our growth. I certainly believe that Carzuka and Pikku p will be profitable businesses by FY 2024. Right now, the losses we're incurring and considering the scale percentage and the growth percentage we're getting, I think it's quite healthy.
A further question from Rudy van Ryn from Discipline. Can you please talk about the input cost inflation, how you view the future trajectory of output, and whether you will be able to protect margins? Rudy, it's a complex question, and the reality is that what we charged then and what we're charging over 10 years ago is very much the same output, and we've traditionally just relied on economies of scale. Having said that, in Q1 we did test the upselling of certain verticals on our platform that we traditionally just give it to our customers for free. That was very encouraging, the uptake in that.
We do not wanna change our philosophy, which is to create more value at the same money, and rather to rely on economies of scale, to continue having similar margins to what we have today. I believe the opportunity is large, and I believe that we can grow, and with our growth we'll get the benefit of economies of scale, which will offset any inflation pressures, provided obviously these pressures aren't too aggressive. We also don't wanna have a knee-jerk reaction to fuel price increases because that's the underlying, potentially one of the most catalyst, the biggest catalyst into the inflation. We could see the petrol price by Q3 or Q4 drop by 80%. You know, we've seen this before. We don't wanna have a knee-jerk reaction where we start aggressively trying to increase pricing for our customers.
We've got Lucas Grayling. Largest subscription growth is from Asia, Middle East, and Europe. Where do you see the biggest potential growth in the region? How does this compare to South Africa? Well, South Africa, we've got a, you know, first of all it was our home countries where we started the business and, we at this point in time have got about 10% of all vehicles on the road that are on our cloud. We certainly hoping to grow South Africa, and I believe South Africa has still got a lot of potential opportunity for further growth. Clearly, we certainly believe that Asia has got the biggest opportunity. We're also coming off a low base.
The last two years have been very disruptive. We weren't able to really trade, and we certainly are gonna allocate capital and resources to grow Asia, and the same thing can go for Europe. I certainly believe the biggest opportunity for us in the long- term is the growth that we'll get out of Asia and Europe. We have a question from Paul Bieber. How many units did Carzuka sell in Q1 versus Q4? I haven't got the number in front of me, but our average vehicle, because we are selling used vehicles from our customers, we're creating value for our customers by giving them the best price possible in order to sell the vehicles.
The best way to work it out is just to divide it by ZAR 100,000, 'cause that's approximately the average vehicle we sell in the average price. That should give you your answer with good proximity. Rendani? Rendani question. By when do you expect Carzuka and Karooooo Logistics to break even considering the current growth momentum? As I said before, we expect that by FY 2024. I also think that I don't wanna promise anything, but I certainly believe by FY 2024 both would be profitable. A question from Meta. Does Karooooo Logistics own vehicles? No, it does not. It's simply a software platform that does integrations, and obviously it's very much linked into the Cartrack platform, and we're busy merging the technologies.
What Karooooo does is do integrations into customers' warehouses, into customers' stores, into customers' dispatch systems. We allow the platform to help our customers with their own fleet to be able to outsource into professional courier companies to take intercity cargo. Obviously to also, they have always sufficient resources to deal with the demand, they can also tap into third par- you know, crowdsourced drivers. It's really just a software play. There is no hardware involved. We have Patrick from FleetWatch. In terms of Africa, do you see African free trade agreement as an opportunity for growth in terms of tracking devices? Quite frankly, Patrick, I'm not very familiar with the African free trade agreement, but I think there's opportunity whether there's an agreement or no agreement.
I think the opportunity remains. We have a question from Istro Georgia. Given the inflation pressures around the world, have you been thinking of a price increases of your offerings? I think I've covered that. Sorry, there's a lot of questions. As I'm reading the questions, it's live. I'm skipping the questions that I've already answered. They're duplicate questions. We have a question from Zandile. At which phase are you looking to grow total subscribers once environment is fully normalized? Can we reach 30% at one stage, 2024, 2025 financial year? What explains high cash conversion rates at Karooooo? And do you see this holding up going forward? It's very difficult for me to commit to any increase.
I am committing to is to allocate capital to continue to recruit, to continue to train, to continue to build. You know, obviously we would like to be well over 30%, but I can't commit to that. You know, we certainly have got a track record that we believe we can get over the 30%. Then Roy Campbell from Morgan Stanley. Is the strong Q1 earnings, EBITDA margin, cash flow a function of lower growth in the subscriber base in Q1? As growth picks up in Q2 and further out, we should expect lower margins and cash flows. Roy, in essence, the answer is yes. However, what we also saw in, you know, that really talks to customer acquisition.
We still had very good sales, clearly not as we expected, because that was dampened by the cautiousness of our customers with the looming inflation and the KwaZulu-Natal floods. What we did see is also affecting us was the amount of customers that started defaulting payments. A lot of it, I believe, was still very, you know, it was still very much related to customers that in the last two years have been under a lot of stress. I believe what we're obviously trying to achieve is growth subscription revenue growth of more than 17%. Obviously, if we're able to do that will definitely. I believe unless we go over 20% subscription revenue growth, the margins will be. We are only expecting them to stay very much in line with Q1.
We have Trickers. Who are your biggest competitors in Asia and Europe? Asia is a very fragmented market. We've got lots of competitors. What we found is, most of them are local competitors. They haven't really got that much of a sophisticated offering. Over time, I believe they will improve it. What we have found is that very few European or South African companies have been able to go to Asia and been able to acquire customers and own their customers, and be able to operate with the local cultures in a local environment. Traditionally, what other European or South African or American peers is they try to do a license agreement and with very low ARPU. We are going the route where we own the customer.
I'm a great believer that the long-term investment is really for us to have that relationship with the final customer. We've got a question from Konho. In your expectation, how significant are Carzuka and Pikkup's contribution to the overall revenue in the next 2-3 years? I think both of them, you know, we certainly believe that Carzuka's revenue is obviously, it's got much lower gross profit margins. So the revenue in Carzuka will certainly be much bigger than Cartrack, but with much smaller margins. So while the revenue of Carzuka could certainly reach much higher levels than Cartrack, the profitability, it will take quite a bit of time to get there. Pikkup's contribution. Well, like I said, we're hoping to merge the two platforms over the next year or two.
I think the way we see Karooooo Logistics, it just complements all the verticals that we've currently got on the Cartrack platform to help our customers with their operations. Obviously it's a very strategic investment. It allows us to have a more complete offering to all our customers. I think that's all the questions. I wanna thank everybody for making the time and please have a good day.