Freightos Limited Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Quarterly Highlights: In Q3, 429,000 transactions were processed (23rd consecutive record), unique buyer users were ~20,600, and 77% of carriers had >5 bookings from the platform. Air cargo volumes increased 4% Y/Y, but average global air cargo rates decreased 6% Y/Y.
• Product and Network Progress: Partnership with Visa for financing solutions; launched multimodal rate management SaaS product WebCargo Rate & Quote ocean, validated with Nippon Express; Solutions segment had renewals and scope expansions.
• Efficiency and Scaling: Gross margin improved to 69.1% IFRS and 74.8% non-IFRS; adjusted EBITDA improved to -$2.6 million in Q3 2025 vs -$2.8 million in Q3 2024; ended the quarter with $30.6 million in cash and short-term bank deposits.

Segment Performance

• Platform Revenue: $2.6 million, up 15% year-on-year. Platform transaction volume and GBV are growing faster than platform revenue due to the business mix, with WebCargo (fixed fee model) growing faster than Freightos.com (higher take rate structure).
• Solutions Revenue: $5.1 million, up 30% year-on-year. Included renewals and targeted scope expansions, but enterprise SaaS deals faced longer sales cycles due to tariffs and the macro environment.

Guidance

• Q4 2025: Anticipates continued growth in transactions, GBV, and revenue; adjusted EBITDA impacted by foreign exchange (FX) headwinds.
• Full Year 2025: Modest adjusted EBITDA improvement due to FX and revenue mix shift; expects cash and equivalents ~$27 million, with cash burn ~$10 million in 2025.
• Breakeven Target: Plans to reach adjusted EBITDA breakeven in Q4 2026.

Risks

• Tariffs and Macro Uncertainty: Volatility and nervousness in the freight market impact selling solutions; tariffs and import regulations affect e-commerce volumes.
• FX Impact: Exchange rate fluctuations reduce cost savings and impact adjusted EBITDA.
• Sales Cycles: Longer sales cycles for enterprise SaaS deals due to the macro environment.

Question and Answer Q: Thoughts on organic vs inorganic growth and gating factors to breakeven A: Balance between growth and breakeven; efficiency improvements with AI, focus on cost-efficient growth; FX affects expense side, but budgeted for next year.

Q: Penetration of carriers A: High penetration in Europe, growing in US, single digits in Asia; varies by geography.

Q: Visa partnership impact A: Enhances payment solution, aims to increase take rates with airlines by improving payment attractiveness.

Q: Midterm growth for ocean carriers A: Midterm (2028) for significant revenue from ocean; solutions revenue from ocean to contribute in 2026.

Q: Take rate target by 2026 A: Plan to increase take rate, not decline year-on-year, depends on business mix.

Q: Revenue growth slowdown in Q4 and FX impact A: Slowdown due to delayed solutions revenue; FX affects expense side, but breakeven target remains on track.

Q: Traction with forwarders for WebCargo Ocean A: Good traction on solutions side with existing customers; platform side not yet critical mass but expected to grow.

Q: Revenue share with partners A: Partners treated as carriers, pay fee for bookings; not revenue share with airlines.

Q: Recurring vs nonrecurring in solutions revenue A: Very big majority of solutions revenue is recurring, nonrecurring <5%.