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01/11 13:58
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a positive outlook with revenue growth, improved gross margins, and strategic partnerships like Visa. Despite negative adjusted EBITDA, there's a clear path to breakeven by 2026. The Q&A revealed management's strategic focus on efficiency and expansion, supported by strong cash reserves. The announcement of a Visa partnership is a positive catalyst, and the raised guidance further supports a positive sentiment. While there are some uncertainties, such as tariffs and FX impacts, the overall sentiment remains positive given the growth trajectory and strategic initiatives.
Transactions Processed 429,000 transactions in Q3 2025, up 27% year-over-year. This marks the 23rd consecutive quarter of record transactions. The increase is attributed to more buyers and sellers using Freightos more frequently, driving short-term revenue growth and long-term scalability.
Unique Buyer Users 20,600 unique buyer users in Q3 2025. The number of carriers with more than 5 bookings increased to 77. Growth is driven by expanding airline coverage in Asia and global expansion of smaller carriers leveraging the digital channel.
Air Cargo Volumes Increased 4% compared to Q3 2024. Growth in many markets was offset by headwinds from tariffs and changes to U.S. import regulations.
Global Air Cargo Rates Decreased 6% compared to Q3 2024. The decline reflects market volatility and nervousness due to tariffs and macroeconomic uncertainty.
Revenue $7.7 million in Q3 2025, up 24% year-over-year. Platform revenue was $2.6 million (up 15% year-over-year), and Solutions revenue was $5.1 million (up 30% year-over-year). Growth is attributed to increased transaction volumes and the adoption of mission-critical SaaS solutions.
Gross Margin Improved to 69.1% (IFRS basis) in Q3 2025 from 65% a year ago. Non-IFRS gross margin rose to 74.8% from 72.7%. The improvement is due to scaling, automation efforts in customer services, and infrastructure cost optimizations.
Adjusted EBITDA Negative $2.6 million in Q3 2025, an improvement from negative $2.8 million in Q3 2024. The improvement is driven by revenue growth, stronger gross margins, and disciplined cost management, partially offset by currency impacts.
Cash and Short-Term Bank Deposits $30.6 million as of Q3 2025. Cash position supports continued investments in product and commercial execution while scaling the business to breakeven.
Multimodal rate management and quoting SaaS product: Freightos launched and validated the WebCargo Rate & Quote Ocean product, enabling unified air and ocean quoting. Nippon Express, a top 5 global freight forwarder, expanded its use of Freightos, increasing its annual commitment by multiples.
Airline coverage expansion: Freightos is expanding airline coverage in Asia and globally, focusing on smaller carriers to leverage its digital channel.
Ocean carrier integrations: Progress made with two more ocean carrier integrations, expected to go live in the coming quarters, enhancing real-time shipping options.
Transaction growth: Processed 429,000 transactions in Q3, up 27% year-on-year, marking the 23rd consecutive quarter of record transactions.
Revenue growth: Revenue for Q3 was $7.7 million, up 24% year-on-year, with platform revenue growing 15% and solutions revenue growing 30%.
Gross margin improvement: Non-IFRS gross margin improved to 74.8% in Q3 2025 from 72.7% a year ago, driven by scaling and automation efforts.
Partnership with Visa and Transcard: Freightos partnered with Visa and Transcard to provide modern financing solutions for freight forwarders and importers/exporters, enhancing payment efficiency.
Leadership addition: Michael Netter joined as Chief Revenue Officer to scale multimodal adoption and enterprise deployments, focusing on value-based selling.
Market Volatility and Nervousness: The freight market is experiencing volatility and nervousness due to tariffs and macroeconomic uncertainty. This environment creates challenges for selling solutions and impacts customer decision-making.
Longer Sales Cycles for Enterprise SaaS Deals: Due to tariffs and the current macro environment, enterprise SaaS deals are experiencing longer sales cycles, which has impacted anticipated revenue growth.
Foreign Exchange Headwinds: Currency fluctuations, particularly a stronger euro and SEKO versus the U.S. dollar, have negatively impacted adjusted EBITDA and profitability.
Revenue Composition Shift: A shift in revenue composition, with platform revenue performing better relative to solutions revenue, has modestly impacted overall profitability due to solutions typically generating higher margins.
Ocean Carrier Digitalization: The transition to digital booking for ocean carriers is progressing slowly, which delays the realization of significant revenue contributions from this segment.
Economic Uncertainty Impacting Logistics Industry: The logistics industry is facing a challenging year due to economic uncertainties, which has affected revenue growth and profitability.
Q4 2025 and Full Year 2025 Revenue Growth: Continued year-on-year growth across transactions, GBV, and revenue is anticipated for Q4 2025. The company remains on track to meet its revenue guidance for the full year 2025 despite challenges in the logistics industry.
Adjusted EBITDA Outlook: The company plans to reach adjusted EBITDA breakeven by Q4 2026. Adjusted EBITDA for Q4 2025 will likely continue to be impacted by foreign exchange headwinds, leading to a more modest year-on-year improvement than initially projected.
Cash and Liquidity: The company expects to end 2025 with cash and equivalents of approximately $27 million, reflecting a cash burn of about $10 million for 2025 compared to $15 million in 2024.
Platform Revenue Growth: Platform revenue is expected to grow faster than Solutions revenue over the long term, with the company targeting Platform revenue to ultimately outpace Solutions revenue.
Ocean Booking Transactions: Progress with two more ocean carrier integrations is expected to go live in the coming quarters, contributing to midterm revenue growth. However, meaningful revenue contribution from ocean bookings is anticipated in the midterm, not immediately.
Gross Margin Improvements: The company plans to continue improving gross margins through restructuring hosting agreements and optimizing infrastructure costs.
The selected topic was not discussed during the call.
The earnings call presents a mixed outlook: while there are positive elements such as improved gross margins, reduced operational expenses, and strategic partnerships, these are countered by revenue softening due to supply chain issues and regulatory challenges. The Q&A section reflects a cautiously optimistic sentiment with clarity in responses. However, the absence of strong guidance and risks related to partnerships and regulatory compliance suggest a balanced view, leading to a neutral sentiment rating.
The earnings call presents a mixed picture. Positive aspects include strong shareholder returns through buybacks and dividends, a solid EBITDAX, and manageable net debt. However, concerns arise from anticipated production declines in 2026, cautious capital allocation due to oil price volatility, and unclear management responses on future guidance and M&A specifics. These elements combined with no clear market cap information lead to a neutral sentiment, indicating minor stock price movement.
The earnings call reflects a positive outlook with revenue growth, improved gross margins, and strategic partnerships like Visa. Despite negative adjusted EBITDA, there's a clear path to breakeven by 2026. The Q&A revealed management's strategic focus on efficiency and expansion, supported by strong cash reserves. The announcement of a Visa partnership is a positive catalyst, and the raised guidance further supports a positive sentiment. While there are some uncertainties, such as tariffs and FX impacts, the overall sentiment remains positive given the growth trajectory and strategic initiatives.
The earnings call highlights significant financial and strategic challenges, including zero revenue, increased expenses, and a substantial net loss. Regulatory and manufacturing hurdles for Deramiocel add uncertainty, while competitive and strategic execution risks further threaten market position. Despite a strong cash position, the lack of revenue and reliance on Deramiocel's approval create a precarious outlook. These factors, combined with the absence of positive catalysts, suggest a strong negative stock price movement over the next two weeks.
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