Freightos Limited Ordinary shares (CRGO) 21 Aug 232023 Q2 Earnings call transcript

Thank you, Eytan, and thanks to everyone who’s joined. And we’re pleased to report continued growth in Q2 and significant progress in our mission to digitalize global freight and to make buying and selling of freight services smoother and more efficient for importers, exporters, carriers, and freight forwarders.

Total transactions booked across our platform grew 59% year-on-year in Q2, reaching 239,000 transactions, a run rate of almost 1 million transactions per year. This growth is driven by a number of factors.

The first is persistent use by existing users who place the majority of our bookings. continue strong users and of cohorts to retention demonstrate growth. These

well who the early bookings doing from more the cohort also fact, Liquidity first per XXXX XX month. bookings of now supply in In comes platforms users placed growth times Freightos’ are are side. over on

continue services China these Air and range the Emirates Wideroe during grow offered WebCargo live, Freightos, went to cargo by via example, expansions significantly. For Eastern while transactions QX, ongoing expanded of both and LATAM, Avianca platform air Qatar,

year For has example, XX% one worked with major saw airline partner us who for transactions over still over by grow quarter-on-quarter. a

The booked growth turn continues to to second a users. users attract shipments dynamic. and buyer us. via marketplace effect in unique flywheel growth the attract core is more This the ahead in demand capture sellers in our which growth vast network factor growth The strategy in new who to opportunity, Freightos is still our quarter. creating business is ability sustainable Over buyers, of XX,XXX unique platforms the the market

more which that be optimize usage agile believe and existing to our data, We newly our attraction in pricing, cargo provides market development their in to carriers them them Dashboard, example valuable updating analytics to launched improve the and help leveraging vast One new is by of our customers. customers the supporting help conversion Airline ongoing is also product that expanded services. investment rates, airline

permutations in the shockingly cargo world’s recently Airways It’s common with Qatar digital where Freightos on interlining aircraft the utilization, purchases would days, thousands on code forwarders Interlining interlining cargo for supplies on WebCargo test in unlock our one shipment kinds global businesses new and for similar our cargo customers. early to platform travel. the airline technology coverage by services are new opportunities excited of first by but booking airlines capacity Another quite are sharing improve thousands our another. important is broaden These creates combine available but to announced and innovation on of the inefficient. unique new flight. interlining we cargo Airways ITA freight from to us all third-party our that of in cargo using cargo, We booking, is work passenger globally

market As is significant freight going downturn a you cyclical know, all this through the year.

backdrop will a Terminal Freightos And product. quick using the own at to the our projections. that from take Let’s results do industry we look and conditions form that our data

industry North still are half time, XX-foot in same from ocean broader First, increase mid-July, begun tracked container. finally to down XX% saw since index the small their up than $XXX the more rates peak. on freight China Coast At a from the of have to August, by first level, bellwether a rebound American rates our West FBXXX but per

XXXX closer we X% holidays August above levels the the peak Retail increase National through U.S. As are the by peak to between Federation the to season typical be and months, months. get to shipping by season and volumes July projected the and slightly enter

for which increased the for able X% XX-foot down was demand, keep carriers entire from levels, quarter. Europe sluggish though June, $X,XXX North were for at are to this to Asia it container. year rates demand to ‘XX year-on-year XXXX about trade, Despite June the to $X,XXX

air at is travel to peak the rates is planes not significant well. demand down cargo’s QX. is the from and until least being of are A typical do air have recovery. capacity, in capacity by increase season, due combination and passenger pushed increased largely cargo, cargo passenger Many to Moving as freight ocean which capacity lukewarm rebound expected in

last to rates year. relative IATA show lower than have volume does fallen. May, still June Air latest data slightly cargo improved from X% The but

while Air to North Asia from is Europe year global is lower down than last Our ago, lower. America from Freightos XX% rates for a down XX% FAX peak. to transatlantic is XX% Asia August. FAX, its And XX% price Index, are

air are However, rates still above cargo pre-pandemic ocean, unlike levels.

decision profitable were conditions market an reduced these are compromising a important reserves. our to factor both reach July, announced growth plan All in we plan in efficiency the significantly our ensure existing initiate to investment barely cash while spend offerings. our This we track high to on and in saw on organizational profitability

enterprise regrettably together solutions team, and Just subscriptions. focused approximately software business by XX XX% investment carriers, comprises of and business freight headcount our and for reduced we ongoing efforts exporters, the which with and employees, platform to the growth our importers forwarders data recap, on in

QX I mentioned, rates in global Higher be positively business impact to rates appear ways. could in freight two slightly. freight recovered As our

of where in First, business flat a higher the fee, of increase portion paid than our a percentage rather the our revenue. we’re do transaction rates

on make money of Second, spend solutions. more said platform by freight we’re for for growth despite therefore customers freight it in higher monetization. to days easier rates booking and our industry early our than that, the measure transaction more the strong should by digitalizing mean forwarders, Having new which volumes, revenue still success

world. innovative the air dip compared [ph] in To we one volumes strong winning we XX%. Ari export transparency one for year-over-year, while North our conditions. industry of to a lanes, is X.X% offer, strong summarize, year, last slightly over and with June cargo dropped booking air core solutions on volumes we by those European our cyclical June data digitalize exports, XX% while track over example, industry year-on-year, believe that in we’re American of shows look lanes the efficiency grew that offline the our this grew Similarly, on largest a for cargo If industries bookings in to at shows demand

is we continue still are a industry and this to benefit freight aligned. of with on positioned come fraction the As global in only platforms, from market demand. strong pioneer freight well digital to leadership And a

The as a efficient continue Freightos scale capital of scratching and excited only sustainable the team potential. we’re to I business. So, this to market’s are surface and

have a the positive outstanding people signals, We we deliver. and trajectory, resources need and growth to

QX CFO, to to our results me discuss guidance. our hand it Ran QX over Let and now

good to see review ‘XX and our results. QX to Zvi, everyone. pleased I’m Thanks, quarterly

Revenue down million, was basis. a constant QX $X.X ‘XX on X.X% QX X.X% currency to compared ‘XX of or for

margins Our XX.X% excellent our business remained with high segment with XX.X% mix XX%. IFRS compared margin mixed Gross a segment. lower of reflect margins, to margin gross in at platform somewhat at gross solution stable last non-IFRS our very year, margins the

well public X announcement long the on a as QX QX as due was of our million first in comparison to to a the EBITDA the $X.X July, meaningful reflects million more grow primarily efficiency company our run, efficiency. our million compared transactional to our believe increase last as Adjusted across improvement matures. margins negative company. $X.X constant million our quarter mentioned structured I of was ‘XX, cost a adjusted in quarter-over-quarter public we to transactions negative year, QX gross ‘XX, platform emphasis a plan ‘XX negative platforms $X.X We call. in to both Over when as EBITDA being expect between as is in dollars. The particularly business transaction we’ll in Perhaps a

such rate conditions. and broader X% XX%, achieve structure, remain we in lean cost to light of a are be on market As industry low particularly rates growth pleased able to with the

EBITDA stable margins, gross plan, of operational our to we well efficiency adjusted $X.X and our $X.X as high with losses anticipating as are Combined million million.

remain rates Difficulty] $XXX.X $XXX.X and anticipate gross low, between bookings industry [Technical we As million value million.

thrive segment. platform on liquidity, so Star are North Marketplaces transactions of our

we monetized demand, supply share expand our are growing market also increase continue ensures of less revenue and short fee a Fixed on exposed that basis, partners. majority The increasing platform. our are fee but gross value it as by We still may the which our while reduce our transactions both fixed our to revenue underlying gradually our to growth, to enhancing bookings we our value delivered fluctuations. term structure is

revenue segment, recurring and high typically business solutions gross our margins. In is

Beyond revenue is found and This strategy of responsible we’ve for data strongly SaaS our enabled that transactions. acquisition powerful as users known software retention support businesses and also marketplace.

the figures are release slide. on presented we in previous our for are our reiterating full year and expectations. As guidance, press The this

it questions. Let Zvi for some me pass take some to we remarks before back

Ran. Thanks,

heading We’re a platform thrive recovery. digital gradual may indications conditions. pleased market freight a all to global be can in see said, building that we’re industry that business That the towards

invest to AI-driven forwarder, exciting and of research development, new software launches, number and providers features, which importer with and to a carrier, months continue coming and freight integrations in our We the with expect innovations exporter and more will see supply out carrier chain in roll partners. other leading the

Okay.

think off. dropped Eytan may I have

Eytan, So, Okay. questions. going you to are some I’m there? take

Good.

if much mostly are versus us adding So, existing you Greg understand with Hi or guidance carriers? is question Pendy. Greg from any that carriers add the how more Can new Greg. XQ in you transactions? help for new carriers to How think about growth here,

didn’t any major that announcements So, they those yes, answer the new have to think lumpy, obviously we time time. we summer, happen carrier during are but I see the from is do --

Asia, carrier And carriers quarter are so, a also in our are in of be several with going hope that all But of the still but make -- who major are couple with natural it’s And joining. them QX there not on and significant a with that a we’ll jump. we’re not that to have carriers. West help we certainly especially can in us line you’re touch sure every the network, -- as in And can others, that couple yet I a you well. touch -- the in over major get

jumps believe can good we without So, we carriers but who’ll can joining. the be big of And as come have still come. grow. a bit carriers new new little a I grow pipeline We carriers, do

questions? sec. Okay. a other Any Good. on Hold

Okay.

you we going Jason. right Jason, I a to unmute can from, there’s see Here I’m now. question go.

should open. line be Your

Thanks. Good afternoon, morning, everybody else. guys. Good

questions. acceleration the guidance year in One, two full transactions. implies an So,

takes. about risks or talk maybe outlook this puts and Just the the of

about versus the growth basically the what segment, the the how And way, Jason conservative to how by about from second first revenue Thank contract quarter question, raise what prices be could did upsell this services? be the risks? to solutions to think then your solutions growth on And or you Oppenheimer. you. slow talk revenue? Why ability could So, more in terms, Helfstein catalyst the and start accelerate are in

Yes. Jason. Thanks,

growth good. ability pretty been our predict to look, transactions has So,

if is Greg’s carriers, small record any We to I a expect, acceleration some like, transactions. I not had expect perfect. at we’ve couple couple half we good think carriers, new in down, growth air more in But do The transactions tie it’s carriers, still back of course, market we hope still both. during got do also With reason new major every of down. adding do question, it didn’t A, forwarders of Of carriers are is, joining new year. add to see a also predicting are But, We we volumes the we day. freight QX. a -- the of you prediction, big have second because why but the no

at look we hope -- for see cargo to market of ocean. do so. the too the you air, stabilize. you increase. late the in see is QX, by that hope see send the point, it’s QX, in that airlines can But by If peak retailers financial season And will that stuff is QX market we results down, to an because we for

QX quarter a in So to tends be strong air.

in bigger still we peak for that I the that given carriers, of about given us, half year, second second question? think of first transactions have even more ahead projections during we a feel that your our to do couple answer increased good adding So half. hope forwarders, Does are we the the given season carriers

really if the about quarter third think, the its more you quarter, -- the the acceleration guide the bottom, just quarter at implies number fourth it’s fourth mean, I being in of I transactions. the look with Yes. actually

Yes.

into that So, hope said, I more do our and majority we’ll a then normally account we the QX as is are Plus bookings strong. couple have air. seasonality QX, carriers I online. by take of the do

prediction. I like guarantee we think, can’t XXX% So, -- anything feel we any

think feel some of in good good I got strong of that. about we number terms confidence transactions. a We’ve QX in our for prediction

know, you question second mean, I to as I the solutions, software Regarding are look, a selling we distressed industry. yes, with think,

the forwarders, freight they’re of year-on-year. If results of tens financial carriers, at down percent look you ocean

well prices would we to cyclical to be I tough, our a And a Hopefully, to than rate customers like. in industry. -- have year. increase so, been this good. But, been of year over percent done bit, yes, customers. our high-XXs it’s And little well able market big retention able few it’s our we right been overall, tickets a by will now this feel quite with we But harder new to increase -- maintain all prices easier. has in to Again, we’ve is ability sell tough retain hurting, next revenue, retention a market our were to percent

going into be much I overall, upturn. So, the solutions well, as think its to and will think more next grow we that’s able I market goes

Thank you.

Okay.

of is next Brian question is open. Chardan. from Our Brian, line Dobson your

much. very Thanks

of you So, is where the peak you on strength or regarding positive have signs any had global or heading you of industry third to quarter life some as relative in your in period. in Do release freight that commentary the strength indices are color additional stemming geography? terms from in

That’s air. how great typically, freight tend on circumstances. -- are containers little They see it, necessarily tons which breakdown don’t unless don’t books, a We many depends not the we shipped have -- But tell industry, We we forwarder question. how But in a the us do know tons. always industry not air to a it we it’s shipped, volume handling. X cases, are actually is, exactly because in by It by many we many necessarily. what’s know. don’t to bit special in relates see it whatever the

ocean the it a think I trade sort sort industry. in we’re uptick. seeing the across yet, but want two you both call which But cannot Asia- America, So, I board Asia-North recovery breakdown are don’t biggest an give of to an by Europe, lanes. of I uptick rates,

out fact starting the have we’re the season. stuff This the And I Asia that shelf ocean or starting time retailers to when we’re related believe are the for Christmas. of to ship on is it’s Thanksgiving approaching peak to the --

seasonal think this sort in of even I it’s year. normal see we So, that market, soft but the are seeing good uptick, is uptick to the that this

that. be wouldn’t there worry people Some

worries, great, you retail better I not inflation is -- has know than it’s fear. spending may despite -- holding down and but not not some as Brian, this as saying I’m spending spending consumers think too much consumer okay. other also up but me, or people slowed is much retail

worst. So overall side I the industry, the on ocean that there’s feeling a the in think seen certainly we’ve

threats. orders board. coming that, still planes Having ships, there of said There’s are still and on a still there’s for backlog

-- if are can holding downward volumes price, pressure okay. there more So, still be on the up even down

And Yes. Thanks. positive? rolled last feedback WebCargo. That’s on color. month, digital the you How’s very Has helpful early out been been? interlining that

been has excellent. The early feedback

of shipments, yet mean, feedback to volume don’t just I months doing will want But real we’re -- take to I that and mislead Now, get to many still no has you. volume. test there’s to speak the been excellent.

to they phone there’s a less two No -- and number than day makes sense. interlining flies airlines would of literally agreements or already literally or there’s that. forth email should, of who’ve believe, airline We -- not you would have lot how airlines no everywhere. hard -- a they’re to signed interlining you painful it’s agreements because do is the right and believe spend industry, believe not mean, interlining by negotiating you’re it for to And cargo. going from actually, happening not I who a join And perfect if back now calls.

be And So there painful very it’s of getting is interlining a manual today. cargo across yet process globe. important that so way with the should the

has So Having the airlines. that, take been universally said time feedback things excellent. with

while good I take but good So I take way feedback, now. affects our it will -- think really great till a think will got line. our momentum, bottom we’re We’ve it on it

from is caller Sutton George Our next Craig-Hallum.

real and went those So, had quick? carriers Zvi, carriers through in new you through just the go very Could expanded. you quickly added the certain that quarter again

Yes, sure.

so pull Yes. I get it Just notes don’t my up wrong.

which so which don’t maybe of we ones. Asian But actually, be of because stages. before, out -- airline. exposure the Still whole new new sort yet that in that the is major rolling is two it’s network, China -- one Even I there substantial mentioned one we carrier. have is was a gradually. was I will Eastern, One So, misspoke said

But well. we smaller as Scandinavian regional Another is that a one Wideroe, which airline. is like

attractive important us freight coverage, forwarders. the well, airlines to because comprehensive is niche think that niche as to helps the I or airlines the it’s really provide which very have really to

two more names bring Like So big those are hard the that of missing. we’re the familiar I working to some on say, new we’re ones.

We of many them. have

in LATAM, like expansion and saw We airlines Avianca, Emirates. Qatar,

are airlines So biggest those two Qatar the reminder, Emirates, cargo the world. and in

to of expanded details, products don’t both permission exact they weight new So, I them have us gave new or say the range. but or bigger countries breaks.

airlines. of on direction, exciting both with now They existing we So which to come it’s network very right but airlines, then a us and the a more Freightos, to good to like going as WebCargo okay, see. is always channel also it’s they back that put and want in say, new by see

about I most you the your at cargo meaningful time saw was in Europe the digitization landscape So, what overall fell. And that. comment XX% and if seeing, from market that are you market a sort I’m competitive what made I thought is you seeing a from wondered could comment just growth the looking of talk relative of exports that at air the you market, to the

you’re from competitors know, terms our Well, companies. what we our -- of of for bookings in if competitors private competition, asking are both, are Okay. airline we course,

they -- we numbers. see publish don’t So, don’t direct

However, how with share are they us, choose of we airlines feedback to big the do sort versus get from if we other often platforms.

us, indications are with we And that really and some good indications. share to choose positive. they Sometimes then get the

a it when have a at nearest marketplace, be Xx And have seems have seems got the ago. at at it be I as That up. competitor, lead at I we to a year is liquidity. a the -- think sort least market least more as to we’ve of to held was means that big seems all from lead least very which you’re least the lead substantial data points, substantial

very maintain very position. know, it’s And leadership very, about. that a strong when we marketplace, I’m encouraged that’s what you’re a as you all So,

liquidity, and the got can you liquidity is. come then you’ve sellers If the to that because the very because that’s self-sustaining all the be buyers where

So, good that. yes, feeling about

Perfect. Thank you.

George. Thanks,

Okay. recording website A for of this this here, to joining. Well, seeing for webcast everybody call. be questions more thank freightos.com/investors. there That I’d concludes attending. you available like a everybody are reminder Thank at that our will no on