Freightos Limited Q2 FY2025 earnings call

• Board Updates: Udo Lange was appointed Chairman, and Rotem Hershko joined the Board. Udo has extensive logistics leadership experience. - Business Review: Q2 2025 had record revenue and 22nd consecutive quarter of record transactions. The air cargo market was solid but rates down; ocean freight had tariff-driven swings. Platform expanded with new carriers like China Airlines and Air Europa, and a partnership with Ford Air Corporation. Solutions segment grew with contract benchmarking and new customer wins. Network effects showed robust cohort performance from buyers and sellers. - AI Integration: AI-based features were introduced in solutions to enhance value for customers.

The company has two revenue segments. The Platform segment had revenue of $2.5 million in Q2 2025, a 23% year-over-year increase, with 397,000 transactions in Q2, representing a 26% year-over-year growth. The Solutions segment had revenue of $4.9 million in Q2 2025, a 36% year-over-year increase.

• Q3 2025 transactions are expected to be in the range of 419,000 to 425,000, reflecting a 24% to 25% year-over-year growth. - Q3 2025 GPV is projected between $329 million and $333 million, a 51% to 53% year-over-year growth. - Q3 2025 revenue is expected to be $7.6 million to $7.7 million, a 23% to 25% year-over-year increase. - Full year 2025 transactions guidance was increased, and revenue guidance is narrowed to $29.5 million to $30 million. - Adjusted EBITDA loss for Q3 2025 is anticipated to be between $2.6 million and $2.5 million, and for the full year, between $10.9 million and $10.5 million. Target to achieve breakeven adjusted EBITDA by the end of 2026.

• FX Fluctuations: Impacted Q2 profitability, though hedging strategies mitigated the effect. - Tariff Uncertainty: Led to a dip in platform transactions on specific lanes like China-U.S. in Q2. - Slow Sales Cycles: Affecting solutions revenue due to longer decision-making processes for some big shipper deals.

Q: You raised full year GBV guidance but kept revenue at the midpoint largely unchanged. Is there something you're seeing that would suggest take rate weakness for the second half?

A: As usual, it's to do with the mix of transactions. Certain types of transactions with lower take rate grow faster, affecting the mix but all going in the right direction.

Q: Just curious on an update on how the Shipsta acquisition is helping you drive solutions revenue?

A: We don't break out Shipsta anymore. It's part of the Freightos Enterprise Suite. It helps with cross-sell and having a more interesting portfolio, and is an important source of data for Freightos Terminal which now has contract data as well as spot data.

Q: With the appointment of a new Chairman and additional Board expertise, are you evaluating any strategic changes or new growth areas that could further diversify and accelerate revenue growth?

A: We review strategy all the time but haven't decided on major changes. We're fine-tuning resource allocation and looking at AI in every aspect of the business.

Q: You mentioned FX headwinds moderating adjusted EBITDA. Can you quantify how much FX impacted Q2 profitability? And what portion of that is structurally hedged versus still exposed in half 2?

A: FX fluctuations were significant, affecting adjusted EBITDA. Almost 100% of the hedging is covered from a finance interest in under adjusted EBITDA.

Q: With 2.5 years after you've gone public, you have 2.5 years left on the warrants until they expire. Do you plan to do anything about that structure?

A: No plans to spend time and money dealing with the warrants as the strike price is high and not an overhang.

Q: With the introduction of tariffs, are you seeing any change in the booking schedule? Are customers booking earlier, waiting longer to make their booking decisions?

A: In Q2, tariffs drove booking behavior with people shipping ahead or waiting, but now less due to tariffs settling down.

Q: Why do you think the international freight shipping is not fully digitalized until now?

A: The industry is fragmented, international, and conservative, but customers are leaning into digitalization now, which plays into Freightos' growth story.

Q: Can you please expand on how you expect to be breakeven by the end of next year? Would it require the same 2025 revenue growth and margins? Or would you need further improvements?

A: Confidence is high to breakeven in Q4 2026 with same growth ratios and improving gross margins, planning to get there without extra tailwind.