Freightos 20 May 242024 Q1 Earnings call transcript

Hello, and welcome to Freightos Q1 2024 Earnings Conference Call. A press release with detailed financial results was released earlier today and is available on the Investor Relations section of our website, freightos.com. My name is Anat Earon-Heilborn, and I'm joined today by Zvi Schreiber, the CEO of Freightos; and Ran Shalev, CFO.

Following the prepared remarks, we will open the call for questions.

We are sharing slides during the call, so we recommend using Zoom on a computer instead of dialing in by phone. contains as on this the of our aware today's well also call call.Please risks as are that available which be website discussion and slides, uncertainties. recordings a earning of will be subject The to statements, number forward-looking shortly after Actual differ to materially various factors. results may due risk on forward-looking to other factors, and today's our statements. Please factors release refer SEC filings could impact risk and press for more information which Copies of available reports these are online. providing and of measures. results discussing be non-IFRS operations, In to our financial referring we'll the certain

time. QX additional call overview You our directly can the to in find with an comparable The IFRS reconciliations on by begin performance regarding current Today's earnings provide discussed update no to at freight website the at any financial information insights of most will measures, those undertakes along will information in Zvi, release company measures financial also this non-IFRS trends. freightos.com/investors. the into press obligation market any with call

Next, results Ran and will QX. for present the guidance the financial

conclude will the be feature submitted Q&A the please Questions with Zoom. can during Zvi, using by ahead. in call go in writing Q&A. We

strides high annual Good morning, expectations of pleased increase to of report results to growing XXX,XXX our of adjusted is expectations and I'm for highlights transactions. year quarter XX% making robustness joining marking first alone, and performance nearly for of quarter XXth and consecutive digitalizing the above This in transactions at we're record start the namely quarter quarter long-term to in order in our strong and exceeding acceptance and our the booking to XX% significant you Freightos with bring this first XX% expectations the every the value, the crucial In growth. revenue us. transparency end sector. efficiency a facilitated the year-over-year, our international platform a freight metric, to gross thank transactions, EBITDA. and This

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were might GBV pass. crisis the modest Our the Sea expectations based Red that on hope

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recently We carrier cargo, Delta our expanded this Fits Airlines. their capacity quarter. about new include several available These made on Cargo On we the Singapore expanding platform making seller capacity. our side, to or announcements and base their airlines sellers carrier

Our a U.S., Cargo most our with last expanding air expansion recent domestic with our announcement largest Airlines regional partnership just the booking of the pleased availability. These Airlines. in contribute to pipeline week, cargo place and a busiest offering to now quarter, the took are Pacific's examples strong Delta enhances growth available with coming rollouts Cargo X our Fits our booking domestic and Asia of carriers U.S. Asia, in quarter. second in multiple And all and electronic presence, the the say years. United our discussed boosting of we expanding which are for that I'm transaction new few all options the of collaboration airlines new our with the hubs interlining that in Meanwhile, for platform. our nascent additions to collaboration carrier first via have Singapore In expected boosts months

call, growth number first affirming the we in approximately carrier bookings key joining growth a each which in our bookings after believe Our marketplace, new we be for platform leader set marketplace to above scope the maintained transactions. the the our share digital quarter, clear of on dramatic indicates cargo and emerging the digital space XX% on platforms. the our of strength in air of In international We last strategies out our increase carrier for in of cargo. soon of cohort continues that analysis this all over and expanding earnings right air X

seen we've X. This across the progress each of meaningful quarter,

transactions. of types more Firstly,

we how options air premium value continue diverse value. first to each Express our and, products types transactional but people offerings We for suggesting cases, customers when These optimizing service generate some highlighting transactions, leverage on only efforts, quarter, enhance not monetization to we increasing revenue the relevant alternative stock in driving their transaction cargo book, and like broad to dynamically from more including searches, transaction. more revenue. to encourage started our our enhanced In also contribute

we on payments growth although out countries aim in still payments in partner in pleased very platform. payments We transaction. to transaction numbers to the successfully cover In rolled related of more a services aspects new revenue, by with small. more strong are covering We're the more Secondly, QX, the Asia. adding each

more it a our and interactions. buyer-seller exceeded little another, to purchases the and a still such year. is small initiative of codeshare here, quarter last number. introduced although continues interlining and passenger cargo we airline bit like strong, one where services Traction Interlining key it's the Thirdly, offering number transactions expectations, in a be this significantly from for

was make the revenue and expect revenue grow. airlines While these from on booking platform, interlines to the our value as contribution we modest, transactions interlining available for more capacity from

connectivity. Lastly, and data

has crisis. Sea insights throughout the market Red Freightos through utilization provided data terminal valuable Our

available cargo to and customers as through cargo a new This its to have We're appearances directly United freight technology United platform. from The service quarter, we to a in through portal. booking FOX publicity web how new also experience BBC access as portal other to offerings, our Airlines heightened enable functionality got subscribers like as their enhance intended my data chosen we I'd is forwarders. seamless attract News. Freightos Cargo's capabilities. leveraged well capacity Cargo's to will website good online week. to and tracking build your News announcement United such on United state-of-the-art to book has draw air Airlines the last United proud attention The choice or and our partner and again some improve website main offering that once while web as

sectors in levels. our we avenues, combined core strategic market, market booking important market our price value keep ocean growth the totals huge for the size The to gross As fluctuates mind us. potential advance size potential billions and per in freight through of although exact of to course, it's year, the in hundreds of of with available air

us of $XX presenting be XX% to high-margin transactional in transactions offerings. drive XX% and data spot our a to this that This to our coming on potential solution could opportunity the is like potentially an target some enhance market recurring fuels indicates years, innovate us platform's market billion revenue. Importantly, platform-based in and for

typical and and year-on-year. freight decline conditions the chart both on Year Starting Total China volumes normal and compared February again March. ocean to as first seasonal Lunar up the market QX ocean Asia in increased volumes then the but in to the the X% picked up New Moving decreased left with during were volumes, in ocean global The of in freight showed air parts during seasonality the during XXXX. shows first quarter. holiday on of quarter

cargo, data compared to though the for demand QX, IATA to air last On the side, is of right growth year. continued attributable the disruptions XX% pushed especially presence segment, as China CA that increasing shows as to Shein new while out recovery Hub, Demand some freight volumes volumes BXC and of its to global ocean largely QX global in cargo air a Sea ocean and such e-commerce and India growing Dubai. volumes, Temu major the cargo out air of Red

we freight the Sea air also showed were affected can that also a crisis. trend, by Looking but seasonal and at see our freightos Red ocean price terminal, typical levels

On a gradually peak pressure new XXX% Africa. demand the late to than stabilized their the from to the container rates XXXX savings operations the more circumventing left, carriers indices and networks QX to and new schedules in close FBX the then that from our increased but January ocean shipping showed the of eased January, XX% of until end normal and situation decreased as of peak as speeds adjusted

normal, the due and exposed, Index, XX% GBV journeys more rates absorbing dipped QX to the by end X% at FBX significantly FAX, double is period, e-commerce new the year. QX volumes the China which from than to Freightos the New to December average, level during On capacity crisis. routine higher shows Red but quarter of Sea driven since chart tracked and next cargo more BXC last late by remains higher year. higher the that However, than significantly ended and QX. Lunar rates our Year last which more than This sea air longer air to compared vessels, Air and was from shifts than in XX% our requires This was it's

average, North contributing XXX% industry cargo was freight XX% In commitment reshaping level. innovation. price compared in rates our QX Europe, closing, export South the the index to FAX increased through reinforces to progress last optimism to America air Asia this to and lower and rate global year. our also XX% quarter On our

continues streamline mission our to and Our to inspire drive actions. Global us Logistics forward

discuss results our who for our projections Now the our QX CFO, to outline will Ran. and let's future. Ran, turn

Thank to which top metric, at the in first you, exceeded our our driving leverage. operating I'm time, delivering while growth same share quarter results, every expectations pleased line Zvi.

'XX. that of to pleased 'XX up are been compared into of XX% growth million, first was up growth off. see revenues quarter Revenue platform $X.X $X.X to XX% highest We Total focusing in have public business company. to the areas the a quarters million, in QX paying the as of our was rate the 'XX, resources compared our for our X QX quarter first

Within from platform the main freight mix the forwarders. came of by air cargo revenue, booking growth to this contribution digital

Solution XX% revenue of was from up million, year. QX last $X.X

reflects solid software Solution revenue this and balanced QX and the growth both performance growing. data subscription with components across segment of

have XX.X% of The improvement platform comes from increased profitability reaching up XX.X%, and level XX.X% margin from at up margins higher the successful scale solutions. non-IFRS margin of XX% We maintaining in from are gross with QX efficiencies benefiting both QX and quarter, 'XX been Platform IFRS gross in automation. 'XX. from and in for of

economic operations Solution and team. scales of service margins benefiting customer from are in

last significant primarily in year-on-yield at and program, well more profit achieved million margin which March the to of operating was compared are at reduced as We end $X.X this Adjusted to XXX contribution negative line. in March end year This negative from to of as 'XX cost increased of $X.X EBITDA restructuring million the our last QX year improvement through headcount bottom revenues was QX year. the efficiently. XXX

continue to improve year. rest expect the each EBITDA for quarter We to of the adjusted

deposits flow year hand. bank our cash on balance remain short-term million. with $XX.X was expenses, We investments, and cash we of continue responsibly confident reach the that the to positive available at Our end we includes cash manage as will short-term

Let's QX guidance. move our on to

We XX% expect to transaction growth. XX% of

model growth to joined that long-term as again, and modes. the XX%. at many once airlines of beginning the This of supply availability end at the the well the is by high platform growth transaction driven other in XX% expanded year of So as

rate to As the to rates for outlook air of current for beginning year-on-year freight year. in growth the compared facing GBV, XX% is the decline XX%

our last is $X.X it basis, revenue solid growth transaction is the show year-on-year expected a expected reach year rate to growth on to driven reflects sales. growth. of QX However, to of solution incremental million. and low both monetization the platform and Revenue is by $X.X and in segments, million QX

very positive the continue adjusted cash. and future same costs time, At our our we hiring manage to to track invest to throughout it the to outlook on of expect our closely and goals, on of reaching continue remain as We goal in we full our amount the our committed of remains for existing year to EBITDA the Overall, small support our are growth. and was. rest year achieve a year

Our Sutton. first from George question come will

I wondered more on platform, you're we of a time from could pricing? analysis participating starts seeing we're really your walk cohort strength getting in higher if negotiating question. and the are the a is where it's And that that turn pricing point through folks there into to

we're for time. and a that bigger as a are yes, more fee. then sense most volumes sales our return that Yes, negotiation that important very and to contracts demonstrate as the question. we we've able us particularly up sales airlines, sellers. to for that related in certainly them them sellers, renewal, which George, significant in the your over I channel the channel their And thanks investment for for it's a become higher become on come a think typically the transaction justify bigger channel grow, on the the helps helps valuable And

So channel, platforms. our is valuable correlation, a we're The for sales yes, definitely. to more willingness more a there's there a pay the

is sure on on it doing. to creating of was for portal what normally clear terms unique that. sounded just Curious than you're little you're broader United them? I in deal. was this a this make How want I It like the

-- actually most we're is to for connects them, it's platform that but the doing their Indeed, building we're of we're that so not airlines What other Yes. a portal.

So, involved or if to not the Lufthansa you in whatever website go we're of France-KLM, Air that. then

directly, to their them You're not building we're involved talking and own portals. in private

through which our with us, portal, you small through own third-party the means their But on to their we're United, even If we're providing by for can web and technology us. come build come website, to through then communicate own their that effectively. cargo partner channels goes Freightos, the for actually their being you the of of go you airlines to all all bookings whether you as United, whether platforms, course, all that trusted one actually

to relative issue. me, for lastly then the Sea Red And

I just to You mentioned that. more a it's rates down supply-demand out from Dubai, are sure creating of And make India but cargo and understand air significantly. perspective, that pretty want we

that cargo it many helped out to a specific rate tell if rates in Asia, check, have don't big that I demand Asia may be very you capacity I there other parts you could though, at of extra thought much in my some have fingertips some can hasn't I sort companies perfectly Origin because India have the actually and be rates spot of hasn't of Sutton, monopolized of air that while there's maybe are up been and you us Overall the not. honest, for of air. capacity, some lot cases, available. been

been India. to on us Origin spot there's capacity fact, sell Origin platform, Southeast our less Asia, In for available

actually when anything, will of if Asia. out that normalizes, situation our help hopefully So, bookings it

from The next question Jason will Helfstein. come

kind I growth? both of break level of to the I to So, at Obviously, the you I kind working on mean, XX% the have full teens by sustain kind It sustainable boosting to -- or what's you you're plus to But kept of the pretty pathway get this much XX% the mean, spending marketplace. year. of the model path the But does look very say what's seems XX% hard the can EBITDA guide out revenue year could current the profitability keep it's sides kind to high like the as revenue of as want autopilot. you on of leaning same. the to to growth desire just end And the are much that not wasn't to you Are focus? if you into you kind have of growth? line? prove in the maybe be

do a growing growth I'm sense immediately. found breakeven, return on a balance cost I comfortable now Yes. and we've balance with reserves. Thanks, between emphasis some think yes, cash lot our always existing the Look, obviously, reaching which we doesn't right with have money, Jason. breakeven that, But of in there's that itself

amount more, considerably. even least at I a lot lot But issue, found invest We're us to still as still in So, fair comfortable yes. and an we're we'd development, in wasn't research I'm marketing. and grow investing a you a investing that very see. we We're XX%. cash money in investing to can on Obviously, a allows break but growth. sales which even balance, current hope reserves, our if

in grove. I think were that already XX%

amount without Now of further we're capital. spending large looking that to ways a accelerate continuously for

So fair and profitability can getting for and overall, we I how exploring to breaking between without sure the growing faster ideas found always even a think bank. we've balance grow

you're least We're then as of that in still a rate mean, in growing COVID obviously, of some seeing, kind shipping remote the hangover and can consumer will still not U.S., benefit we're of when be it's or kind of kind consumer positive do through the the growth think way at the whether as spending, overall kind in you you that I ultimately the ease of consumer et a the impact is we're and dynamics fast with spending that certain unlocked And extent services. to that system. broader spending, spending, you going but business. cetera, on more but that about on there have consumer can playing think goods seeing macro, broadly

something is that going guess spending people given knows. in nobody smarter best the to I the mean predicting it's than and -- me consumer elsewhere or I'm U.S. not really

is of the much market XX% point, I think at The so to market this off-line. got still we've capture.

increases, material. slight X%, it's spending up that it's not is all down a if consumer or I think headwind So, spending if but consumer X%

emphasis main all freight and pretty to a off-line us the opportunity such marginal it. the the And is huge -- macroeconomics almost digitalize to is have, we for if -- have makes of is take sense. growth that's that that We the that opportunity

And year without product about the there plan meaningfully year end that the you to of next features but this of being release pipeline kind products last new inflect around then that thinking products solutions? one could any question. potentially specific, Are you're as curve just new growth and into or

-- But yes, potentially, think say careful. too in product to research I plans. development. lot about a be and I've can't investing got I got a we've much we're

to airlines. ideas sell to many more have We

the You United announcement. saw

given that's sell airlines, which as we validation well so encouraging. airlines us can And to platform that to solutions as is

Within forwarders, the now some freight we then different and working product. made create payments. mentioned hard new we comments have world because acquisitions those we interlining products that also my to over time. of directions multimodal unify about a and in stronger some We're mentioned I And

So assured teams have say yes, of I a the too product things much. innovating rest whole time. But that we going lot in exciting and yes, can't on. development are

we So as of or next, a is, about daily from question The flights to question have it weekly number and Delta. can United the you related chat. talk

number don't carriers talked daily of the well, X, you which biggest I if the off these and add in my the of we about, head. But those United know, States. the are top the United of as X flights as X know So, you are apologize. I then

domestic -- to track So, I their Web all I But talking cargo don't Cargo flights on thousands by have about the international number. and available we we're day, of that have know we're believe on exact capacity, Freightos. a but of

between don't big of air are a very them them exact huge proportion X the flights. a the And big it's the of I number. of -- are So, market. very American number know

available in in the gross chat Freightos? question on of from terms, for is you another can revenue not terms expand booking but And TAM,

to that I Yes. alluded before.

revenue. with gross talking end, the we're where if bookings our over think you -- is I start -- platform if revenue because opportunity that's revenue the biggest the in time

it gross value booking the So, is related TAM. to

but multiple an exact is because billions. market is hundreds it's over our quite segments, dollars. of the booking I relevant most number, magnitude the billions exact it $X air trillion, some take but rates well market is value the change. an if rate of say spot So, and as ocean won't the of in lot fluctuates order number gross it's let's hundreds time, sort won't a say entire of I percent. today give X% And but of

is of of And billions so, several dollars. platform XX% percent, hundreds potentially our revenue eventually maybe of

for dollars. tens is So, easily platform of many potential TAM our of the it's -- revenue billions

Instructions] [Operator

By Anat, Asia, rates, to that Europe the got that to just looked up discussed. air which the U.S., confirmed so somebody are the way, just rates China to And reasons asked. George for for China although overall strong, China we just be I not about may he to mention, the elevated indeed me

a you, Zvi everyone, joining. and Thank for you, Have thank good day.