Freightos Limited Ordinary shares (CRGO) Earnings

Management highlights

### Leadership Transition - CEO Pablo Pinillos, previously the company's CFO, stepped into the role earlier this year, with a focus on sharpening execution and operating discipline. - A permanent CFO search is underway, with updates to be provided as they become available. ### Strategic Context & Industry Trends - Q1 2026 was a softer quarter than management expected, driven by ongoing volatility in global freight markets, particularly disruptions to Middle East trade corridors. This volatility reduced transaction activity but also increased customer demand for the company's procurement intelligence, multi-modal visibility, and connected operational workflow offerings, which align with Freightos' long-term strategic positioning. - 2026 is a transition year focused on improving go-to-market execution, strengthening operating discipline, concentrating R&D investment on highest-return initiatives, deepening customer adoption, and positioning the company for durable profitable growth. This is not a strategic pivot, but a sharper focus on execution, accountability, and scalability. - Management completed organizational streamlining and cost optimization initiatives in Q1 to align resources with high-priority growth opportunities, improving accountability and simplifying structural complexity. ### Operational Progress - The company's carrier network grew to a record 79 active carriers in Q1 2026, up from 77 in Q4 2025. A major new carrier addition was secured shortly after quarter end that will strengthen the company's position in the APAC region, where it sees meaningful room for expansion relative to Europe and the Americas. - Product development continues to focus on integrating procurement, pricing, quoting, booking, and market intelligence into a single connected operational environment, with expansion of multi-modal ocean and procurement management capabilities. - The company's flywheel platform model (solutions drive transactions, transactions generate unique operational data and intelligence, which improves network-wide decision-making) is strategically differentiated, as it combines live operational data, carrier connectivity, integrated workflows, and embedded customer relationships — an infrastructure layer that is difficult to replicate. AI increases the value of this connected platform by embedding actionable intelligence directly into live operations. ### Financial Performance - Non-IFRS gross margin was 73.5%, which remains within the company's long-term target range of 70% to 80%. - Adjusted EBITDA was negative $2.8 million, in line with management expectations. - A $4.5 million annualized cost optimization plan was launched in the final week of Q1 2026, which will support the path to adjusted EBITDA breakeven by the end of 2026. This is not just a cost-cutting initiative, but a restructuring to build a more disciplined, predictable, and scalable organization. The company closed the quarter with $23.5 million in cash and short-term deposits, which provides sufficient liquidity to cover all operating plans.

Guidance

- Full-year 2026 guidance has been revised downward to reflect softer-than-expected Q1 2026 performance, ongoing impacts from Middle East trade disruptions, and a more cautious enterprise spending environment. Transaction growth expectations have been lowered, and overall annual revenue expectations have been moderated, primarily due to the Q1 shortfall that management does not expect to fully recover over the remainder of 2026. - Management reaffirmed its commitment to achieving adjusted EBITDA breakeven in Q4 2026. Cost reduction actions and tighter operating discipline offset lower revenue expectations, keeping the breakeven target on track. - Management expects the company will return to a 20%+ annual revenue growth trajectory in 2027 and beyond. - For the 2027-2030 period, management's long-term framework targets 20% to 30% annual transaction and GBV growth, 25% to 30% annual revenue growth, sustained non-IFRS gross margins of 70% to 80%, and 8 to 12 percentage points of annual improvement in adjusted EBITDA margins.

Segment performance

Total company Q1 2026 revenue was $7.2 million, up 3% year-over-year. 1. **Platform Transactions Segment**: Processed 425,000 transactions in Q1 2026, up 15% year-over-year (below the 20%+ target). Gross Booking Value (GBV) was $343 million, up 24% year-over-year. Revenue from the Cargo by Freightos platform segment remained healthy, but softer customs transaction activity and lower-than-expected transaction volumes driven by Middle East trade corridor disruptions offset this performance. 2. **Solutions Segment**: Overall Q1 performance was below internal expectations. Within the segment, data products performed well, while SaaS solutions missed targets. The solutions sales pipeline is currently approximately double its size year-over-year. Solutions customers that adopt the company's integrated product offerings transact roughly 3x more volume, retain at higher rates, and expand usage over time.

Risks & headwinds

- Near-term global freight market volatility, particularly ongoing disruption to Middle East trade corridors, has reduced transaction volumes below expectations and is expected to continue pressuring near-term activity. Management does not expect to fully recover the Q1 2026 transaction shortfall over the remainder of 2026. - Macroeconomic uncertainty and a cautious enterprise spending environment have lengthened solutions sales cycles and delayed customer deal closures, contributing to Q1 solutions performance missing internal targets. - Q1 2026 cash burn totaled approximately $5 million, including one-time cash costs related to end-of-quarter cost optimization actions.

Analyst Q&A

• Q: Can you provide more detail on the new predictive risk forecasting offering, what it is built on, and where the largest opportunities for additional automated solutions lie? /

  A: Predictive risk forecasting aggregates global data on factors that impact freight capacity and pricing. It uses AI to combine this historical company data with client-specific inputs on their operating regions and risk factors to generate forecasts for pricing, capacity, and disruption risk across ocean and air freight. The largest opportunities for further automation fall in line with the company's strategic priorities, including automated procurement, actionable intelligence, and automated execution based on client preset parameters, such as pre-positioning backup capacity when a regional disruption is forecast. Opportunities span market intelligence, procurement, and network design.

• Q: How do you reconcile weaker-than-expected Q1 solutions performance with the doubling of the solutions sales pipeline? Are sales cycles longer, or is enterprise spending being impacted by market uncertainty, and when do you expect performance to reaccelerate? /

  A: The overall revenue shortfall in Q1 was 100% driven by platform transaction volumes tied to Middle East disruptions, not solutions. Q1 was the first quarter of the company's shifted focus to improved execution, so performance was not expected to reach target levels immediately. Market uncertainty has delayed some customer purchase decisions, but organizational changes to improve execution have put management in greater control of the sales cycle, and the doubling of the year-over-year pipeline demonstrates building commercial momentum for the segment.

• Q: What is the cadence of the $4.5 million annualized cost savings program, and when will savings begin to impact results? /

  A: The cost optimization plan was executed at the end of March 2026, so there was almost no benefit to Q1 results. Savings will begin to accrue in Q2 2026, with the majority of the benefit realized in Q2 and partial benefit in Q3. The full $4.5 million annualized run-rate of savings will be fully materialized by Q4 2026 as planned.

• Q: How does monetization per transaction and take rate change in the current environment of elevated freight rates and lower transaction volumes? /

  A: The vast majority of the company's transaction revenue comes from flat fees charged to carriers, so revenue mix and take rate do not change materially when freight rates rise or fall. Higher freight rates increased Q1 GBV (which grew 24% year-over-year), but lower transaction volumes from Middle East disruptions drove the softer quarterly transaction revenue result, with no meaningful change to underlying take rate or pricing structure.