Freightos reports second quarter results with record transactions and improved profitability

posted on 21st August 2023 by Eddie Saunders
Freightos reports second quarter results with record transactions and improved profitability

Freightos Limited today reported financial results for the quarter ending June 30, 2023.

Zvi Schreiber, founder and CEO of Freightos, said “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.

“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.

“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

Management Expectations as of Aug. 2023

Q3 2023

FY 2023

# Transactions

243,500 – 259,500

973,000 – 1,042,000

Year over Year Growth

27% – 35%

46% – 57%

GBV ($m)

$ 146.5 – $ 156.5

$ 626.2 – $ 666.6

Year over Year Growth

(8)% – (2)%

3% – 9%

Revenue ($m)

$ 5.0 – $ 5.3

$ 20.0 – $ 21.2

Year over Year Growth

5% – 13%

5% – 11%

Adjusted EBITDA ($m)

$ (5.1) – $ (4.5)

$ (21.5) – $ (19.8)