Freightos Limited ((CRGO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Freightos Limited’s recent earnings call conveyed a generally positive sentiment, underscored by robust growth in transactions and revenue. The company is making strategic strides in expanding its air and ocean freight operations. Despite facing challenges such as currency fluctuations, market rate pressures, and tariff impacts, Freightos remains on a positive growth trajectory with ongoing strategic developments.
Record Transactions
Freightos achieved a significant milestone in Q2 by facilitating 397,000 transactions, marking a 26% increase compared to the same period last year. This achievement represents the 22nd consecutive quarter of record transactions, highlighting the company’s consistent growth in transaction volume.
Revenue Growth
The company reported a revenue of $7.4 million, which signifies a 31% increase year-over-year. This impressive growth in revenue reflects Freightos’ successful strategies in capturing market opportunities and expanding its customer base.
Platform Expansion
Freightos expanded its platform’s reach by adding new buyers and notable carriers, including China Airlines and Air Europa. This expansion brings the total number of carriers to 75, enhancing the platform’s capability to offer diverse freight solutions.
Solutions Segment Growth
The Solutions segment of Freightos saw a 36% year-over-year increase in revenue. This growth is attributed to the company’s proactive approach in expanding its product offerings and deepening client relationships.
Strategic Expansion in Ocean Freight
Freightos completed a comprehensive integration with a major ocean container carrier, which significantly enhances its rate and booking management capabilities. This strategic expansion is expected to bolster the company’s position in the ocean freight market.
Strong Buyer and Seller Engagement
The platform witnessed a 6% year-over-year increase in unique buyer users, totaling 20,200. Additionally, there was growth in transactions per user, indicating strong engagement from both buyers and sellers on the platform.
Currency Fluctuation Impact
Currency fluctuations have negatively impacted Freightos’ profitability, with adjusted EBITDA affected by the depreciation of the dollar against the euro and shekel. This challenge underscores the company’s exposure to foreign exchange risks.
Market Rate Pressure
The Freightos Air Index (FAX) global benchmark average for Q2 decreased by 15% year-on-year, despite volume gains. This market rate pressure reflects the competitive dynamics in the air freight sector.
Tariff Impact
High tariffs, such as the 145% China-U.S. tariff, have led to a decline in platform transactions on certain lanes. This impact highlights the challenges posed by international trade policies on Freightos’ operations.
Extended Sales Cycles
Current economic conditions have resulted in extended sales cycles, with some deals with big shippers taking longer to close. This delay is indicative of the cautious approach adopted by large shippers in the current economic climate.
Forward-Looking Guidance
For Q3 2025, Freightos anticipates transactions to range between 419,000 and 425,000, reflecting a year-over-year growth of 24% to 25%. The gross booking value is expected to be between $329 million and $333 million, representing a growth rate of 51% to 53% year-over-year. Revenue for Q3 is projected to be between $7.6 million and $7.7 million, with a 23% to 25% increase compared to the previous year. For the full year 2025, Freightos has raised its transactions guidance, with revenue expected to be in the range of $29.5 million to $30 million. The company aims to achieve breakeven adjusted EBITDA by the end of 2026, despite foreign exchange headwinds.
In summary, Freightos Limited’s earnings call reflected a positive outlook, driven by strong growth in transactions and revenue. The company is strategically expanding its platform and enhancing its freight solutions, despite facing challenges from currency fluctuations, market rate pressures, and tariffs. With promising forward-looking guidance, Freightos is poised for continued growth and development in the coming quarters.