Freightos Limited Ordinary shares (CRGO) 25 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to Freightos Q3 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/investors. My name is [indiscernible] and I'm joined today by Dr. Zvi Schreiber, the CEO of Freres and Ran Shalev, CFO. [Operator Instructions] These slides as well as a recording of this earnings call will be available on our website shortly after the call.

today's number forward-looking of that subject which aware a to risks be discussion statements, contains are Please and uncertainties. differ may results materially various to Actual risk due factors. more and to which factors, forward-looking SEC press refer impact risk release Please filings and today's could for information statements. other on factors our

the and of certain referring Copies discussing non-IFRS reports operations, our financial available are of these to we'll In measures. online. results be providing

in regarding company along those to reconciliations most comparable discussed with update the in Conference the Growth virtually. participate additional information note AGP's the measures release at that at December, information also obligation financial You in our can find press any and any non-IFRS IFRS in directly time. vehicles in Please January undertakes this measures call electric website financial to transportation Needham will on management and in Freightos.com/investors. no conference The virtual

may and Today's listed from conferences performance Participation updated time be by investor will X. call earnings Frito's time to overview on with begin and of in an QX are events Investor events upcoming website.

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

We with go will please ahead. Q&A. [Operator Instructions] conclude Zvi,

thanks results. to quarter us for and discuss third rates' morning, Good joining XXXX

wanted to search that we discussing quarter, at job and a smooth keep has active during that new this a will for another opportunity the Before transition. will smoothly Ran CFO. year we Ran to will handover. underway the ensure throughout a just of start announced is be team end working engaged strong remain mention I built everything that finance QX Ran the Freightos leaving to pursue

years. the thank Ran all for We to incredible contributions company X over his

global of our market. digital record and to recent drive strengthening freight volumes, integration acquisition in successful the users and position step Freightos This growth procurement our in quarter Tender solution, transformation another buyer forward unique with of Shipta reflects the transaction mission in the

efficiency on bring and and freight growing forefront solutions Freightos quarter resilience performance the digital remains industry's transparency, global this highlights shift. the at to reliance Our to the of

discuss our the increased and for the Freightos will network. quarter and In peak customers, to conditions remained these on areas: Platform e-commerce rates results, elevated have as higher the this remained in on volumes volumes X an and Global is quarter. X were turn rates to X X valuable XX% international into progress to focus the let's platform, recently the are influenced and XX% in market last our on U.S. begun of trend. Meanwhile, accelerated how solutions Air let's performed have levels QX ways part are, segments Before cargo to X to although similar see the routes year. this course, we season ocean across end. my and comments which revenue. direct-to-consumer year-on-year ongoing ease main EU quarter. how we to China this shipping deliver and to in holidays diving QX Against higher also report they China at briefly comes our backdrop, an our elevated, air of Solutions compared XX% this Cargo Sea rates due crisis, Red given routes, QX and performance products

continued ensure are effects Network we efficient how long-term capital growth.

our start discussing Let's by growth. platform

number platform transactions. most of Our remains the KPI important

marking compared quarter, the our to year This period least record transactions. transactions, XXth consecutive achieved XXX,XXX increase at quarter and same we last of a XX%

logistic a forwarder freight bookings reminder, a service between and As are platform. freight a or transactions services on placed our carrier buyer provider, a digital of

in operations. digital, total of tool small of market. is We're for addressable percentage leader This global the consistent platform growth as adoption a a still essential reflects the digital digital Freightos but freight only increasing an

come. to consistent this keep So to we expect many momentum years growth for going

key side sell capacity the and new Australian with QX, services the both passenger airlines adds across reached which planes and in of freighter transpacific carriers, XX of we U.S. platform, Qantas, among hubs. On

is also carriers GSA We time Progress were ongoing whose a couple with as added that general sales year side, last discussed or delayed on integration to big we of challenges Air India their agent Aviation. lines due Eurocargo earlier call. via this on our IT

think in volume transaction QX. to despite contribute carriers those volumes in I delays, And remain transaction on guidance the to track exceeded XXXX. those

million QX, an of and and the international value GBV, buyers driven Red This in reached supported On performance. buyer XX% e-commerce prices freight we platform, year-over-year. by to of to XX,XXX Higher the which side the GBV the for ongoing the unique also contributed in booking a year-over-year increase quarter. growth both increase buy users the sellers increased crisis of $XXX.X in gross Sea XX% strong

performed mile continued last door-to-door the as or transactions has experience. highlighting on the capabilities. scope to such to Freightos a of seamless freight multimodal value integrating by well, focus mile first QX, provide enhancing solutions offerings, services of expanding and our trucking our less truckload additional LTL and than In

We continue third-party providers to as well. to expand our solution integration

an Logistics. high expansion [ partnership large in part its as Key air rates of airlines. of cargo and growth revenue large value, booking from freight real-time and directly booking [indiscernible] with in experienced pricing a ] growth instant reflecting week, forwarder platform, customer volumes our Worldwide quote see Crane chain This strong our provider freight into [indiscernible] this VP cargo of and forwarders can WebCargo, embeds Enterprise with each Offering freight booking forward transaction capabilities. freight continued integration as with access QX, system real from to supply Platform [indiscernible] rapid at customer, transactional TMS. transportation drives air we a announced Freightos.com Megan where Solutions or own of Last you dynamic software. management This

providers. it by a some Freightos.com platforms highlight capture also diverse across these serving freight the Together, bookings to good ability from growing in seeking our year, solutions. best had digital higher and Freightos' small importers freight [indiscernible] And and as this a booked exporters take value rate transaction ecosystem. per service although customs of quarter. time, efficient digital its segments not were broker quarter we're with had imported it exporters still investing in contributing

The of second solutions. is strategy Freightos' pillar

focus revenue data we SaaS Here, growing through products. and on recurring subscription

in improve efficiency subscription-based and Our power to digital and data-driven freight solutions operational through make cutting-edge decisions exporters and forwarders importers tools.

Solutions the revenue in continued a QX to steadily, integration management procurement Shipta, supported August. acquired tender of in which grow and by we leading platform.

customer operations, is closely the enabling As opportunities, to for the fit streamline cross-selling Freightos complex and covering significant introduce Shipta's capability a align reminder, contracts. to strategic customers is solutions. freight further started large processes mission enterprise shippers capabilities digitalize We've primarily freight to Shipta validating freight procurement to with between long-term base us X

leader customer Meanwhile, grow in continue deals Shipta its top and elevator to in and a pharma with manufacturing, escalator a leading company a QX, global X winning cosmetics base brand.

features to Freightos provide customer other in logistics Sorry, names. AI and Freightos' to experimenting actionable for new benchmarking insights data I the offering, yet to don't permission improve terminal. sophisticated This automatically with share [indiscernible] introduced to our have decision-making. broader rates capabilities

brings to from other Now our value the the network airlines third network. value on is which airline interlining airlines airlines each buying pillar on customer all of where for in other example Freightos' strategy of our every A new therefore, and great new customers. the effects, or network focuses strengthens network

of airlines. bookings big are their interlining with Some airline other that me XX% partners tell

visited complete first I interlining few user days the bookings. X,XXX a a ago, who to Just was

So is is to that platform off amongst proves we freight not joined the Repeat think both coverage remained and engagement in freight by take again forwarders really features. underlining in analysis driven their that the usage and grow to only platform carriers offering set Cohort This who growth carriers high both XXXX. time. new forwarders but and network continue finally expanding stay, QX. over

growing growth. proves -- the ongoing the buyers bring engagement ongoing drives buyer both brings sellers that buyer growing that network from The seller effects and

XX days QX customers of services our As business supply to in or the from XX QX, expansions the over from of and communicated geographies days, existing an growing supply XX XX last example launches new ranging days airline airlines. business in to the expanded business total we over

It's our very almost QX, annual added vision Freightos leaders align industry bring airline was Freight to wasn't every the new can across note, logistics together Barcelona. even and our exciting capacity that road industry map another Tech again On to freight. airline. see own day, In near during other brand-new there for if to words, Freightos on hosted the a Conference, network international digitalizing

performance engagement now on This level. our event, of customers I'll our more QX. also hand detail with in at fosters course, Ran. over executive closer financial to top a provide to And

Thank you, Zvi.

cost public, highlighting previous results Revenue trend and of and significant execution. resulted time. to and of the lower sold the guidance exceeded We the goods metrics. adoption and gross and the us to by on EBITDA better-than-expected our elevated Operational driven at strength of by expectations cash track transaction Our quarter rates. value positive of adjusted there keeping third since end outperformed get across our improvements also at XXXX for pace fastest continuing going all with grew adjusted achieve on high and transaction volumes surpasses booking EBITDA market platform the our in

both increase 'XX to performance $X.X growth driven QX million, year-over-year XX% by grew volumes. continuing a subscription across revenue. for was with million, transaction strong lead through transactional Revenue XX% revenue web reflecting by Platform cargo year-over-year $X.X to and high

the expansion Shipta of by SaaS to integration. year-over-year XX% supported by from offering increased and revenue Solutions contribution steady $X.X early million, the

reflect again non-IFRS to These rising efficiently customers. results last XX% needs the our and approach Freightos XX.X%, gross management. up gross our improvement growing ability while scale margins of to margins adoption gains meeting in compared cost reflect These Gross showed of significant and platform maintaining reaching the to scaling Freightos XX.X% IFRS on with focus disciplined to of a in diverse effectively 'XX margins while QX XX.X% from year. QX

results to to was and improvement to ability a driven improvement range million scalability gross QX management. million as EBITDA million by platform in [indiscernible] our cost margins $X.X $X.X 'XX. the our million, growth, QX combination expense negative $X.X disciplined improved $X.X outperforming and in significantly million negative of highlights of of efficiency year-over-year compared we our maintain 'XX Adjusted These This a of and to improved negative $X.X guidance revenue representing

as sell short-term we quarter, consideration acquisition paid strategy. as growth continue the shares, closing Freightos cash but a Therefore, million execution solid September During as in holdbacks. providing before XX, of cash well million XXXX, the Shipta, for to some on reflecting the foundation and after in deposits, approximately adjustment of our $X.X acquisition

EBITDA strong without This achieve confidence us by funding. to position adjusted of 'XX the end the gives additional positive cash acquiring

QX momentum the of to compared upwards close and previous as expected now adjusted year out with XXX,XXX. growth year-over-year between are 'XX is and range guidance expectations to we several narrowing to Transactions continued XXX.X metrics Our upwards. guidance reflects strong XX%. This XX% reflecting

$XXX million year-over-year XX% growth has $XXX Revenue to been increased Gross growth guidance million, $X.X booking been to million, upwards value to XX%. to XX%. guidance to has narrowed indicating of of XX% representing million $X.X to year-over-year

of guidance $X.X efficiencies been to adjusted negative and or improved negative operational Finally, EBITDA reflecting a further has $X.X range cost management. million, disciplined million

despite budget to EBITDA pleased be to some support we very spending quarter the improve come. finalizing and QX continue are of momentum guidance and the the to the business planning We and Shipta XXXX, adjusted hiring for together to XXXX. done fact year on throughout expect to to grow for full that the We're with for we first QX now be able consolidating time, will

and fully a Zvi strong pursue the a the look well-oiled is for me appropriate machine forward ensuring I that company. to to financial a team, privilege be and to it With growth time talented Freightos Freightos built the having I'll a of work feel and to on and supporter company operations the X shareholder As and turn It's remaining breakeven. to path true and been new I leave it an to is back Zvi. funded opportunities. that, mentioned, with

positioned to I been NASDAQ, Freightos left to growth. leadership for Since recognize a in consistent financially financial public and contributions on acquisitions growth. strong has XXXX, Ran's take to strategic in joining Thanks, instrumental continued has operations Ran moment want our Freightos well His and shaping listing Ran. Freightos. including

have your dedication success. had we throughout operations who as team. bring Runners fresh best Freightos for thanks We you next team your strong wish impact A search the and is finance and in for on chapter. underway Ran, a the and some you've managing available a I'm all needed will under to well. transition. continue new ideas as the and all engaged talent the be to excited committed executive replacement, QX during

forward for and We're to And we happy the sharing budgeting, about XXXX. in your commercial planning you XXXX team to is and investor look product We questions. midst road we'll we're upcoming take that planning and can I of initiatives calls. very the those map tell and the be now excited during

Instructions] a that chat. came the question [Operator the meantime, I in will read In

So despite down to guidance goes I QX revenue? EBITDA is guess QX increased Ran. it for over Why

Anat. Thanks, Yes.

things. it So drives many from X

we cannot Ran you. hear

I hear Ran.

hear you okay? Can me,

hear I Ran you Yes,

Okay. Good.

start So the from beginning. I'll

So X things. of are we is the time, it first you are middle may stuff closed mainly August. drives One for the whole we quarter. for some I deal consolidating we -- remind the ship that

So a quarter. quarter. for consolidated them full This half it's in only QX, we time, a

you As burning there in XXXX. giving XXXX are be they we helping also all and know, to flow still us are cash and free but cash some are already in some breaking supposed even them,

mainly expected growth that marketing in XXXX QX. Group are kind of EBITDA gives that to are doing support Freightos X we slightly sales that for the So increases the in the staffing, with some those and hiring elements the them fact support the some in together the QX,

Okay.

Our line the of Jason will call come Helfstein. from next

you me okay? Can hear

good. Yes,

few questions. a So

First, what broadly? you administration specifically thoughts a have your give revenue increasing perspectives the just I us given mind, but growth initial know of unchanged. third, year's about can you're you've in early, Second, us margin obviously, keeping around kind some it's any a guidance by you the industry? does commentary broad GBV So And EBITDA? just you're just for like year if standpoint, X%, the from basically, on Trump this the and guide next then mean

So about just maybe there. the talk dynamics

question the Trump same on administration. asked and first about your the as the Yes, Jason. Mike Thanks, that see I chat

me start a it course, context. don't say with I of Look, let know few can in comments we to So that. put fully.

time, First any in or a else. anywhere reduce administration, did that of all, there lot imposed. Trump during the trade not first with were way they At of the with tariffs China

the that in Trump experience first administration. So was the

they the affect if than know are it. don't will we lot course, time a perhaps higher Of tariffs this

But was experience at to mentioned is dampening I of our trade But take industry. stage as thing time freight. last of wasn't this we're remarks wasn't before, a account an my digitizing effect into of early where, there that -- it other the in that an

the the in getting still is we're way, ocean off-line. or for started is although industry cargo in certainly leaders digital, just a and air of So XX% something

So we growth have huge here. room

a great. It difference doesn't material Now decades. trade international even bit. has does up percent if there's said it it goes just and few digitalize really a freight strongly been trends percent, if international usually If goes doesn't growing down a opportunity then few a industry like matter. to to down it so because our for the much for Having little Trade that, World make very

don't but while. the if world dampen trade a points if it against a wouldn't I -- for few somewhat, percentage it Trump know even policies down bet goes general, if I So will by in

to Regarding XXXX we've put than and should expect we I we we your us year. expect quarter. for EBITDA, second we'll should did of from even hope end now excited said halfway faster we're grow not about the question, getting But out of the roughly XXXX. to this -- XXXX where next see And break by you terms so towards that putting can XXXX that obviously, we're you to very -- out say are the us so We XXXX guidance in in see, X. towards in trending

specific year. the -- a caught out don't Jason, Could rough. it? put in very guidance question. I that's I call your QX think repeat for But you third the We'll in sorry, QX I'm

Sure.

X%, but guidance. think revenue the So the changing bookings, full you I gross or you're guide it's raised year not by the

there? So about dynamic talk maybe just the

a sort a, say reason want to anything Ran, transactions probably in this, prices is, you higher expected. as than performing Yes. little add I'll up to we because a the of -- and went that are if Jason, the strongly b, but know, of I market the GBV lot you mean the were case

up or Canal, from closed not not, As the is demand air. partly a plus believe and Temu some I Swiss still e-commerce some capacity virtually for like it more Shein year functioning and due that's said to on the that taking fact than has been earlier,

a are rates the higher. So bit

But a fact, transaction. is, revenue our of fair per platform of our proportion flat fees in transactional revenue

lot of price. to tied a the So actually it not is

-- through is than are we extent our expected, higher prices platform revenue it only limited the but why of market to to a Some that's when in flows Yes.

And just the follow-up. how canal reopen, maybe one quick like do year? that If you was think to next impacts

would be net go down. I us. -- suddenly, Well, to mean cause good I almost it ease definitely -- think actually would ocean it cause I for it would to think the would prices good

suffered good probably would small industry positive there that could effects. some in also some extent. spot out spillover have air free Canal. and but cargo -- to bit We've And the a of So would Cargo. capacity there's would sort no be some virtually air it effect a volumes Swiss a e-commerce actually up negative Asia increase we've as It of in little the that from from

a be sort quite air see cargo the of patterns bit. normalizing to we'd happy So

So good I have it But -- would effect, probably obviously world. would for have a would be I think. mixed it would a us, the it think net slight for positive,

Appreciate it.

from will The next question Thanks. [indiscernible] Okay. come Logan

$XXX,XXX the remainder of follow-up expected to Is year. you curious has would a that the been? response you I'm had a early information you first on little George. of what Logan think guys on Shipta? the to you what still of on your kind in question I go existing cross-sell good then give customers. us was if this just of use with more is This is said contribution try of Shipta. just My kind that the be, And that for can to number takeaways kind wondering are for I'm kind as the

know an if defer second our being to for So question, solutions don't -- on segment. that because update want rapidly into I we give the ships just Ran, because I'll our integrated and

products Shipta getting guess question forward, it to out. doing going your sort won't first to answer we'll be more so more it sense planning revenue the always out the break already be of we're break not are doing we'll tied so and because And sometimes make more joint and is I more. to together and deals,

these overall, we I Overall so well. August, in it because So update way. we a and Shipta they already that months momentum. time. less orders And been are going an us to closed becoming it's -- give it's your first versa. product on vice several us to sure we since that's in customers both deals, their want X discussions less relevant acquired I'm so both But specifically enterprise only purchase our their take if on question, back started we've And closed has several going was them, but in introducing not only which of cross-selling -- mean and ago. it's to own to already talking directions, good

but I say us, it's there, now. of us it's all course

some there's So the opportunities. cross-selling, cross-selling already concrete

it orders. so these yes, time that take But get will Given far are to good. so purchase enterprise deals, some actually

to importers enterprise big other. the So far, and exporters shippers, definitely how complement each of these And the up the customers expectations. understand products it's living our the definitely value understand

kind all? you speed pipeline And could talked that I the that they with it for guess, Okay. some of know delayed being I do on little you the think just But last your projects I'm just curious [indiscernible] think you've then of going. integration up me of Understood. the about have it week. internal to at does a bit pipeline, maybe carriers. one what other

countries side. specifically. for said, see -- far partnered Actually, even releases, Qantas, is launching and forwarders going ] well. shippers us I every them they almost Airlines -- And a products it, don't products. even exporters. you distinction, new which that and I with as launched we [ Yes. that have for big importers we know, wouldn't airlines we been or Like as new make press we on we day, partner. We've freight our add launched others are They put help and with new to EXopen but so don't a

fine. going that's So

IT delayed, are some happening. even just big airlines that those had projects. in They their it's And delays

them. So going some publicly Crane for a of with, which is that chain they're forwarders airlines we ] specifically, [ fairly [indiscernible] work is software very one is are freight player well. in has and specifically using supply the big big mentioned

into And our ecosystem. part done other the strategy. play software want to so nice it's We with part of -- it's systems. of strategy leading our We've integrations

to customers work want with other Our Freightos product their of products. well our suite

we're customers an so part software our have. other make And to software it's the together ongoing think that sure of doing they use I strategy, which our can that with well

session. the everyone. Thanks, a concludes That Have good Okay. Q&A week.