Freightos Limited Ordinary shares (CRGO) Earnings

Management highlights

### Organizational and Leadership Updates - Jaron Eldad will join as new Chief Financial Officer effective September 1, 2026, bringing over 25 years of senior public company and international financial leadership experience to strengthen the management team ahead of the planned breakeven milestone. - Cost optimization actions announced in March 2026 are on track, with operational benefits already visible and full financial impact expected in Q4 2026. ### Network and Strategic Milestones - Confirmed the addition of Korean Air, a major Asian cargo airline, to the Freightos network, fulfilling the stated strategic priority of expanding Asian airline participation. Adding leading carriers across key geographies strengthens network connectivity, increases capacity options, improves data flow, and creates more value for platform users. - Rebranded the full product portfolio under the unified "One Freightos" identity, moving away from historically independent product branding to better reflect the company's connected end-to-end platform vision. ### Product Development Priorities - **Deeper end-to-end workflow solutions**: Enhanced core products for both enterprise shippers and freight forwarders to manage more freight workflow steps within the Freightos platform, replacing fragmented manual and siloed digital processes. Key focus areas include standardizing inconsistent data for ocean freight procurement to reduce manual work, improve decision-making, and lower customer transportation costs. - **Unified platform integration (One Freightos product strategy)**: Integrating historically independent product capabilities into a single seamless platform, while retaining tailored experiences for different customer segments. A core long-term differentiator is multimodality, the ability to manage ocean, air, and land freight in one platform, with new capabilities launching in H2 2026. This unification improves adoption, expands platform usage within customer organizations, and increases monetization opportunities across the full freight journey. - **Modernized technology foundation**: Migrating all products to a common technology architecture to accelerate innovation and enable AI-assisted development. AI is integrated across the product development workflow from design to coding, and embedded into customer workflows to improve decision-making across procurement, pricing, booking, and execution, leveraging the platform's unique proprietary freight data. ### Financial Performance - Non-IFRS gross margin was 74.1%, up from 73.5% in Q2 2025, demonstrating ongoing efficiency gains. Adjusted EBITDA was negative $2.0 million, reflecting disciplined cost management and focused investment. End-of-quarter cash and short-term deposits totaled $21.4 million, providing sufficient capital to reach breakeven and continue investing post-breakeven.

Guidance

- **Transaction growth**: Full-year 2026 transaction growth guidance is revised slightly upward to 12-14% YoY. The outlook assumes Middle East route recovery continues at the Q2 pace, with no further acceleration or full normalization assumed; underlying growth excluding Middle East routes remains on track for the 20-30% long-term target range. - **GBV growth**: Full-year 2026 GBV growth guidance is improved to 19-21% YoY, based on current transaction growth assumptions and expectations that air freight rates will hold near current elevated levels. - **Revenue**: Q3 2026 revenue is expected to be $7.7-$7.8 million. The full-year 2026 revenue guidance range is narrowed to $30.4-$31.0 million, with the strong one-time Q2 platform contribution from ClearIt tariff refund activity offset by weaker-than-expected solutions performance, leaving the full-year midpoint largely unchanged from prior guidance. - **Profitability and cash flow**: Adjusted EBITDA is expected to be negative $1.3-negative $1.2 million in Q3 2026, and a loss of less than $1 million in Q4 2026. Management reaffirms that adjusted EBITDA breakeven will be reached at some point in Q4 2026, with the business exiting 2026 at a breakeven run rate. Positive cash generation is expected by mid-2027, within 1-2 quarters of hitting breakeven. Total cumulative additional cash burn from Q2 2026 through cash flow positivity is expected to be no more than approximately $500,000 above the guided adjusted EBITDA losses for the period.

Segment performance

Total Q2 2026 revenue was above expectations, up 3% year-over-year (YoY). Platform revenue reached $2.9 million, an increase of 90% YoY, accounting for 37.6% of total Q2 revenue. Solutions revenue was $4.8 million, a 4% YoY decline, accounting for 62.4% of total Q2 revenue. Platform segment: total transactions processed were 458,000, up 15% YoY. Excluding Middle East-affected routes, transaction growth matches the company's long-term 20-30% target. Gross booking value (GBV) hit a record $422 million, up 33% YoY, driven by higher transaction volumes and air freight rates that remain 25% above pre-Middle East conflict levels. ClearIt, the customs transactions business line, delivered a large, mostly temporary outperformance driven by tariff refund claim activity, which offset lower booking volumes in Middle East corridors. Active carrier count (carriers with >5 transactions per quarter) was 75, flat YoY and slightly down from 79 in Q1 2026, as the addition of new carriers offset fluctuation in individual carrier activity below the 5-transaction threshold. Solutions segment: YoY revenue decline reflects an execution gap identified in 2025, with insufficient new bookings to offset attrition and pricing pressure on customer renewals. The solutions sales pipeline grew 30% quarter-over-quarter, but has not yet translated to closed bookings and revenue.

Risks & headwinds

- Ongoing conflict in the Middle East continues to disrupt booking volumes in affected corridors, creating headwinds for overall platform transaction growth. A slower-than-expected recovery or further escalation of disruption would negatively impact results. - Solutions segment execution remains below target, with a strong sales pipeline that has not yet converted to closed bookings and revenue. Customer procurement budget constraints and pricing competition from competitors create additional pressure on new bookings and customer renewals. - The large Q2 2026 revenue contribution from ClearIt tariff refund activity is largely temporary, and will not repeat at the same level in future quarters, creating a headwind for sequential revenue growth. - Forward-looking statements around breakeven timing, cash flow generation, and growth are subject to inherent uncertainties, and actual results may differ materially from current expectations.

Analyst Q&A

• Q: What go-to-market changes are being made to improve solutions execution, given current market price volatility should be a favorable environment for Freightos' offerings? /

  A: The unified One Freightos product approach is already increasing customer perceived value, supporting 30% quarter-over-quarter pipeline growth. The main challenge is closing the gap between a strong pipeline and actual bookings: market uncertainty has led to customer budget constraints, and pricing competition puts downward pressure on rates. Management's focus is on shortening sales cycles and more effectively closing opportunities to convert pipeline to revenue in H2.

• Q: How are you addressing renewal pricing pressure, and does the One Freightos platform help mitigate this? /

  A: Yes, the unified platform allows Freightos to deliver broader capabilities and new features to existing customers, creating a stronger overall value proposition that supports renewals.

• Q: How much cash burned in Q2, and what is the expected total cash burn from current quarter through achieving cash flow positivity? /

  A: Cash decreased from $23.5 million at the end of Q1 to $21.4 million at the end of Q2, a quarterly cash burn of $2.1 million. Cash burn tracks very closely to adjusted EBITDA, matching the negative $2 million adjusted EBITDA loss in Q2. Management expects total additional cash burn through cash flow positivity will align with guided adjusted EBITDA, with no more than $500,000 in extra burn beyond those guided losses.

• Q: Why is transaction growth outpacing unique buyer user growth, with higher usage per existing customer? /

  A: The trend is driven by increased value existing users gain from the platform as it expands. When new carriers and capacity are added to the network, existing freight forwarder users increase their average transaction volume ~5x within three quarters and ~7x within four quarters, confirming the existing trend of higher engagement with network expansion.

• Q: Why is the full-year revenue guidance midpoint unchanged despite a Q2 revenue beat, when platform KPIs were better than expected? /

  A: The Q2 beat was driven by temporary, one-time strength in ClearIt tariff refund activity that will not carry over into the second half. This temporary upside is offset by the weaker-than-expected YoY decline in solutions revenue, so management adjusted the full-year guidance to reflect these two offsetting factors leaving the midpoint largely unchanged.