CRGO Freightos Ltd

• Freightos Platform continues 14 quarter streak of record Transactions.
• Company remains on track to reach profitability with existing cash.

JERUSALEM, Aug. 21, 2023 /PRNewswire/ -- Freightos Limited (NASDAQ: CRGO), a leading vendor-neutral digital booking and payment platform for the international freight industry, today reported financial results for the quarter ending June 30, 2023.

"The Freightos Platform facilitated record Transaction numbers, and earned slightly increased Platform Revenue during the second quarter of 2023, with our growth successfully overcoming depressed international freight rates and reduced industry volumes," said Zvi Schreiber, founder and CEO of Freightos. "Growth and innovation on the carrier supply side, as well as a 10% year over year growth in Unique Buyer Users, has fueled an increase in our market share that emphasizes the continued adoption of digital bookings."

"Looking ahead, we are encouraged to observe that global freight rates in Q3 appear to be recovering slightly as we approach peak season, including a 35% gain on the bellwether FBX01 (China - US West Coast) index since the beginning of the year," Schreiber continued. "Furthermore, In July we announced and implemented an operational efficiency plan which we believe will further improve our profitability from Q3 onwards and enable us to reach profitability with existing funds."

"We are pleased to reaffirm our 2023 guidance that we provided together with the efficiency plan announcement," said Ran Shalev, CFO of Freightos. "Despite difficult industry conditions, the Company remains on track to improve Adjusted EBITDA in Q3 and after. The results of the operational efficiency plan implemented in early Q3 are anticipated to be reflected in the Company's financials as early as this quarter and are not expected to compromise underlying growth. The combination of sustained Solutions sales, particularly the growing data business unit, improved take rates, and careful monitoring of spend, have kept gross margins high and stable."

"The digitalization of global freight is progressing and outperforming the broader market," continued Zvi Schreiber. "Our marketplace growth flywheel, across carriers, forwarders, and importers/exporters continues its momentum, and we expect benefits from new, unique combinations such as our recently piloted interline bookings between airlines, as well as by carefully managing expenses to reach profitability on the existing cash raised."

FY Q2 2023 financial highlights 

• Revenue of $5.1 million for Q2 2023, a decrease of 1.3% compared to Q2 2022, or 2.6% on a constant currency basis
• IFRS Gross Margin of 57.3% compared to 59.6% in Q2 2022. Non-IFRS Gross Margin of 65.0%, the same as in Q2 2022.
• IFRS operating loss of $5.9 million, the same as in Q2 2022.
• IFRS basic and diluted loss per share of $0.12 compared to IFRS basic and diluted loss per share of $1.03 in Q2 2022. Non-IFRS basic and diluted loss per share of $0.10, compared to non-IFRS basic and diluted loss per share of $0.77 in Q2 2022.
• Adjusted EBITDA in Q2 2023 of negative $5.3 million, compared to negative $3.6 million in Q2 2022

Recent business highlights

• Transaction and Revenue Growth: Freightos achieved a record 239 thousand Transactions in Q2 2023, up 59% year over year, and GBV (Gross Booking Value) of $154.8 million. Platform Transactions have continued to grow for 14 consecutive quarters. Ongoing improvement in the take rate on the fastest growing segment of air cargo eBookings saw Platform Revenue increase despite the industry rates being dramatically lower. Total Platform revenue this quarter was $1.8 million, and Solutions revenue was $3.3 million.
• Unique Buyer Users: The number of unique buyer users digitally booking freight services across the Freightos Platform grew over 10% compared to Q2 2022, reaching 16 thousand.
• Carrier Growth: Carriers selling on the Platform, primarily on WebCargo, remained at 37 in Q2 2023, up 19% year over year, with several new carriers already joining in Q3 2023. Exciting developments have taken place on the carrier side in Q2, including successful POCs of our interline solution, more Global Sales Agents (GSAs) offering capacity, and a strong expansion of capacity to and from Asia, including Eastern Air Logistics and Wideroe. Combined with our recently launched Airline Dashboard and upcoming industry pricing tools, carriers remain a central component of Freightos' growth.
• Freightos Terminal: Since launching in April 2023, Freightos Terminal, a real-time global freight market intelligence solution, continues to expand its user base, including a number of licenses from Fortune 1000 companies. More recently, port performance and congestion data was added to the Freightos Terminal, as well as crowd-sourced key event collection capabilities across its 50,000+ user base.
• WebCargo Solutions and Platform Advances: Freightos Solutions for forwarders, sold under the WebCargo brand, continued to improve with a range of new features in Q2, including bookings of allotment space, four new integrations to popular shipment management solutions, improved natural language search, and more.

Financial outlook

This outlook assumes current currency exchange rates, freight price levels and freight volumes. GBV expectations were updated on July 11, 2023 to reflect current freight price levels at that time, while other expectations are unchanged from last quarter.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Freightos and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Freightos. These forward-looking statements are subject to a number of risks and uncertainties, including Freightos' ability to effectively execute the previously announced operational efficiency and cost reduction plan without undue disruption to its business; competition and the ability of Freightos to build and maintain relationships with carriers, freight forwarders and importers/exporters and retain its management and key employees; changes in applicable laws or regulations; any downturn or volatility in economic conditions whether related to inflation, armed conflict or otherwise; the effects of COVID-19 or other pandemics or epidemics; changes in the competitive environment affecting Freightos or its users, including Freightos' inability to introduce new products or technologies; risks to Freightos' ability to protect its intellectual property and avoid infringement by others, or claims of infringement against Freightos; the possibility that Freightos may be adversely affected by other economic, business and/or competitive factors; risks related to the fact that Freightos is incorporated in the Cayman Islands and governed by the laws of the Cayman Islands; and those factors discussed in Freightos' annual report on Form 20-F filed with the SEC on March 30, 2023, under the heading "Risk Factors," and any other risk factors Freightos includes in any subsequent reports on Form 6-K furnished to the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Freightos does not presently know or that Freightos currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Freightos' expectations, plans or forecasts of future events and views as of the date of this press release. Freightos anticipates that subsequent events and developments will cause Freightos' assessments to change. However, while Freightos may elect to update these forward-looking statements at some point in the future, Freightos specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Freightos' assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Financial Information; Non-IFRS Financial Measures

While certain financial figures included in this press release have been computed in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, this press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" nor a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". Not all of the financial information in this press release has been audited.

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles ("IFRS") including, but not limited to, Adjusted EBITDA. These non-IFRS measures differ from the most directly comparable measures determined under IFRS, but we have not presented a reconciliation to the most directly comparable IFRS measures, because the non-IFRS measures are forward-looking and a reconciliation cannot be prepared without unreasonable effort. These measures should not be considered in isolation or as an alternative to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under IFRS. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. Freightos believes that Adjusted EBITDA and other non-IFRS measures provide useful information to investors and others in understanding and evaluating Freightos' operating results because they provide supplemental measures of our core operating performance and offers consistency and comparability with both past financial performance and with financial information of peer companies. Certain monetary amounts, percentages and other figures included in this press release have been subject to rounding adjustments. Certain other amounts that appear in this press release may not sum due to rounding.

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles ("IFRS") including, but not limited to, Adjusted EBITDA. These measures should not be considered in isolation or as an alternative to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under IFRS. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. In addition, this press release also discloses revenue on a constant currency basis, which is not presented in accordance with IFRS.  Freightos believes that revenue on a constant currency basis, Adjusted EBITDA and other non-IFRS measures provide useful information to investors and others in understanding and evaluating Freightos' operating results because they provide supplemental measures of our core operating performance and offers consistency and comparability with both past financial performance and with financial information of peer companies. Certain monetary amounts, percentages and other figures included in this press release have been subject to rounding adjustments. Certain other amounts that appear in this press release may not sum due to rounding.

Definitions

• Carriers: Number of unique air and ocean carriers who have been sellers of transactions. For airlines, we count the booking carrier, which includes separate airlines within the same carrier group. We do not count dozens of other airlines that operate individual segments of air cargo transactions as we do not have a direct booking relationship with them. Carriers include ocean less-than-container load (LCL) consolidators. In addition, we only count carriers when more than five bookings were placed with them over the course of a quarter.
• Unique buyer users: Unique buyer users represent the number of individual users placing bookings, typically counted based on unique email logins. The number of buyers, which counts unique customer businesses, does not reflect the fact that some buyers are large multinational organizations while others are small or midsize businesses. Therefore, we find it more useful to monitor the number of unique buyer users than the number of buyer businesses.
• Constant Currency: Comparative information calculated by translating Freightos' current period financial results using the prior period's monthly exchange rates (or other applicable rates, as indicated).
• GBV: Total value of transactions on the Freightos platform, which is the monetary value of freight and related services contracted between buyers and sellers on the Freightos platform, plus related fees charged to buyers and sellers, and pass-through payments such as duties. GBV is converted to U.S. dollars at the time of each transaction on the Freightos platform. This metric may be similar to what others call gross merchandise value (GMV) or gross services volume (GSV). We believe that this metric reflects the scale of the Freightos platform and our opportunities to generate platform revenue.
• #Transactions: Number of bookings for freight services, and related services, placed by buyers across the Freightos platform with third-party sellers and with Clearit. Beginning in the third quarter of 2022, #Transactions include trucking bookings, which were added to the Freightos platform following the acquisition of 7LFreight. The number of transactions booked on the Freightos platform in any given time period is net of transactions canceled during the same time period.
• Adjusted EBITDA: Adjusted EBITDA represents net loss before income taxes, finance income, finance expense, share-based compensation expense, depreciation and amortization, changes in the fair value of contingent consideration, operating expense settled by issuance of shares, redomicile costs, share listing expense, change in fair value of warrants, transaction-related costs, non-recurring expenses associated with the business combination with Gesher I Acquisition Corp and reorganization expenses.
• Platform Revenue: Platform revenue reflects fees charged to buyers and sellers in relation to transactions executed on the Freightos platform. For bookings conducted by importers/exporters, our fees are typically structured as a percentage of booking value, depending on the mode and nature of the service. When freight forwarders book with carriers, the sellers often pay a pre-negotiated flat fee per transaction. When sellers transact with a buyer who is a new customer to the seller, we may charge a percentage of the booking value as a fee.
• Solutions Revenue: Solutions revenue is primarily subscription-based SaaS and data. It is typically priced per user or per site, per time period, with larger customers such as multinational freight forwarders often negotiating flat all- inclusive subscriptions. Revenue from our Solutions segment includes certain non-recurring revenue from services ancillary to our SaaS products, such as engineering, customization, configuration and go-live fees, and data services for digitizing offline data.

Earnings Webcast

Freightos will hold a public webcast at 8:30 a.m. EDT on August 21, 2023 to discuss the results for its Q2 2023 and financial outlook. The live call may be accessed via Zoom or a dial in number. An archived webcast can be accessed from Freightos' Investor Relations website following the call. To register for this conference call, please use this link. Registrants will receive confirmation with dial-in details.

Contacts

Media:
Tali Aronsky
press@freightos.com

Investors:
Eytan Buchman
ir@freightos.com 

About Freightos Limited

Freightos^® operates a leading, vendor-neutral booking and payment platform for international freight. Freightos' platform supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers/exporters, thousands of forwarders, and dozens of airlines and ocean carriers.

Freightos.com is a premier digital international freight marketplace for importers and exporters for instant pricing, booking, and shipment management. Thousands of SMBs and enterprises have sourced shipping services via Freightos across dozens of logistics service providers.

WebCargo^® by Freightos is a leading global freight platform connecting carriers and forwarders. In particular, it is the largest air cargo eBooking platform, enabling simple and efficient freight pricing and booking between thousands of freight forwarders, including the top twenty global freight forwarders, and hundreds of airlines, ocean liners and trucking carriers. Airlines on the platform represent over a third of global air cargo capacity. WebCargo also offers software as a service for forwarders to facilitate digital freight rate management, quoting, and online sales.

Freightos Data calculates the Freightos Baltic Index, the industry's key daily benchmark of container shipping prices, the Freightos Air Index, as well as other market intelligence products that improve supply chain decision-making, planning, and pricing transparency.

Freightos is a widely recognized logistics technology leader with a worldwide presence and a broad customer network. Incorporated in the Cayman Islands with offices around the world, Freightos is a Nasdaq-listed company trading under Nasdaq:CRGO. More information is available at freightos.com/investors.

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SOURCE Freightos