Freightos Limited Q1 FY2025 earnings call

• Q1 2025 had record revenues and 21st consecutive quarter of record transactions. - Added 4 new carriers to the platform, bringing total carriers selling digitally to 71. - Launched a comprehensive Freightos enterprise Software-as-a-Service solution after quarter end. - In air cargo, global volumes were up 8% year-over-year, but rates were 6% lower than last year. - In ocean, China-U.S. volumes were affected by tariffs, but rates started to normalize. - Progress in Platform: Expanding across multiple dimensions, e.g., partnership with a major North American ground transportation provider for trucking services. - Progress in Solutions: Enterprise customer wins, data solutions with 100% customer retention in Q1. - Network effects: Growing buyer and seller cohorts, with unique buyer users up 10% year-over-year.

The company has two revenue segments: Platform and Solutions. In Q1, Platform revenue was $2.3 million, up 23% year-over-year. Solutions revenue was $4.6 million, up 33% year-over-year. For Platform, transaction volume grew strongly in Q1 and 4 new carriers were onboarded. For Solutions, there were notable enterprise customer wins, like a global industrial conglomerate renewing a license for Freightos terminal data and a new 5-year contract with a European building materials manufacturer.

• Q2 2025 expected transactions: 380,000 to 385,000 (20%-22% y-o-y growth), GBV: $278 million to $285 million (37%-40% y-o-y growth), revenue: $7.0 million to $7.1 million (23%-25% y-o-y growth), adjusted EBITDA loss: $2.8 million to $2.9 million. - Full year 2025 guidance reiterated, with confidence in digital freight booking growth despite macro environment uncertainties.

• Trade policy fluctuations can affect platform transaction volumes. - Economic uncertainty can impact solutions revenue as enterprises may be hesitant to sign big contracts. - Potential drop in ocean/air freight rates if the Red Sea reopens and carriers adjust capacity to maintain rates.

Q: What could throw off the ability to hit targets for the year?

A: Platform is sensitive to trade volume fluctuations; solutions is sensitive to macroeconomic environment and economic uncertainty.

Q: How quickly could Temu, Shein supply come online?

A: Not seen much impact yet; rates haven't dropped much, and monitoring to see if charter planes become available.

Q: Walk through revenue dynamic behind new trucking partnership?

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

Q: Why mismatch between GBV and revenue growth?

A: Large portion of transactional bookings are flat fee; solutions revenue not directly tied to GBV.

Q: Expect further M&A?

A: Probably not, focusing on organic growth and preserving cash to reach breakeven by end of 2026.

Q: Effect of Red Sea reopening?

A: If reopened, ocean rates could drop significantly, but carriers may counteract by reducing supply.