Freightos Ltd. Q1 FY2025 earnings call

• Q1 2025 had record revenues and 21st consecutive quarter of record transactions, with over 370,000 transactions (+25% YOY) and 4 new carriers added. Launched Freightos enterprise SaaS solution post-quarter end.
• Market conditions: Air cargo volumes up 8% YOY but rates down 6% due to Red Sea crisis; ocean volumes dropped in China-U.S. lane due to 145% tariff.
• Strategic areas: Platform focused on expanding with new carriers and partnerships (e.g., North American ground transportation provider). Solutions saw enterprise wins and data solutions with 100% retention. Network effects drive competitive advantage.
• Financials: Gross margin improved to 66.8% IFRS, adjusted EBITDA was negative $3.0 million (better than prior year), and ended the quarter with $36.4 million in cash and cash equivalents.

Platform: Connected importers, exporters, freight forwarders, and carriers. Q1 had over 370,000 transactions, a 25% increase year-over-year, and added 4 new carriers. The airline network represents carriers responsible for 70% of global capacity. Solutions: Saw notable enterprise customer wins, including a global industrial conglomerate renewing a license and a major European building materials manufacturer signing a new 5-year contract. Data solutions achieved 100% customer retention in Q1. Revenue Contribution: Platform revenue was $2.3 million (23% year-over-year growth), Solutions revenue was $4.6 million (33% year-over-year growth), and total revenue was $6.9 million (30% year-over-year growth).

• Q2 2025: Expected 380,000-385,000 transactions, GBV $278 million-$285 million, revenue $7.0 million-$7.1 million, and adjusted EBITDA loss $2.8 million-$2.9 million.
• Full Year 2025: Reiterated previous guidance, emphasizing resilience despite macro uncertainties and the vast offline freight booking market as a growth opportunity.

• Trade Volatility: Fluctuations in trade volumes, such as the impact of tariffs on China-U.S. transactions affecting platform performance.
• Economic Uncertainty: Economic downturns or uncertainty can lead to hesitation from enterprise customers in signing big deals, impacting solutions revenue.
• Rate Volatility: Potential drops in ocean and air freight rates if supply chain disruptions (e.g., Red Sea reopening) increase capacity, affecting revenue.

Q: What factors could affect targets?

A: Trade volumes impact the platform, while economic uncertainty impacts solutions revenue. Diversification in supply chain is a tailwind.

Q: What about Temu, Shein opportunity?

A: They mostly used direct charter planes, not much on the platform yet; waiting to see if charter capacity comes online.

Q: Details on the trucking partnership?

A: Enables freight forwarders to book trucking services relevant to air cargo directly through the platform, creating seamless multimodal shipments.

Q: M&A and GBV vs revenue?

A: Likely no further M&A, and the mismatch between GBV and revenue is due to a flat fee transaction mix; revenue is related to platform transactions.

Q: Impact of Red Sea?

A: Not reopened, potential rate drop if supply chain returns, but carriers are good at blanking sailings to control capacity.