CRGOW — Freightos Limited

Summary of Freightos Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $7.7 million, up 24% year-over-year.
  • Platform Revenue: $2.6 million, up 15% year-over-year.
  • Solutions Revenue: $5.1 million, up 30% year-over-year.
• Gross Margin: Improved to 69.1% (IFRS) from 65% a year ago; non-IFRS gross margin rose to 74.8%.
• Adjusted EBITDA: Loss of $2.6 million, an improvement from a loss of $2.8 million in Q3 2024.
• Cash Position: $30.6 million in cash and short-term deposits, with an expected cash burn of $10 million for 2025, down from $15 million in 2024.

2. Strategic Updates and Business Highlights

• Transaction Growth: Processed 429,000 transactions, a 27% increase year-on-year, marking the 23rd consecutive quarter of record transactions.
• Partnerships: Announced a strategic partnership with Visa to enhance payment solutions for freight forwarders, expected to improve monetization.
• Product Launch: Launched WebCargo Rate & Quote, integrating air and ocean quoting, with early adoption from major forwarders like Nippon Express.
• Market Position: Significant penetration in Europe, with ongoing efforts to expand in Asia, where penetration remains low.

3. Forward Guidance and Outlook

• Q4 2025 Expectations: Anticipate continued year-on-year growth across transactions, GBV, and revenue, but expect slower revenue growth due to delays in closing enterprise SaaS deals.
• Adjusted EBITDA Breakeven Target: Aiming for breakeven by Q4 2026, with a focus on maintaining disciplined cost management.
• Long-Term Revenue Contribution: Significant revenue from ocean bookings expected to begin in 2028, with some contributions from solutions in 2026.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Ongoing uncertainty due to tariffs and macroeconomic conditions affecting customer willingness to commit to large contracts.
• Sales Cycle Delays: Longer sales cycles for enterprise SaaS deals have impacted anticipated revenue growth, particularly in the Solutions segment.
• Foreign Exchange Headwinds: Currency fluctuations have negatively impacted adjusted EBITDA, although cash position remains stable due to hedging.

5. Notable Q&A Insights

• Growth vs. Breakeven: CEO Zvi Schreiber emphasized the balance between pursuing growth and managing costs to achieve breakeven by the end of next year.
• Tariff Impact: While there is less uncertainty than earlier in the year, tariffs still create friction in U.S. imports, affecting overall trade dynamics.
• Penetration Analysis: High penetration in Europe but low in Asia; significant growth opportunities remain in underpenetrated markets.
• Recurring Revenue: Solutions revenue is predominantly recurring, with nonrecurring revenue making up less than 5%, indicating a stable revenue model.

Overall, Freightos demonstrated solid growth in Q3 2025 but faces challenges from market volatility and longer sales cycles, while strategically positioning itself for future growth through partnerships and product innovations.