Freightos Limited

Hello, and welcome to Freitas Q4 2025 Earnings Conference Call. A press release with detailed financial results was released earlier today and is available on the investor relations section of our website, freitas.com slash investors. My name is Anathion Heilborn, and I'm joined today by Pablo Peneas, Freitas CFO and Interim CEO, and Ian Arroyo, Chief Strategy Officer. We are also joined today by Dr. Udo Lang, Chairman of the Board, to share a brief remarks. Following the prepared remarks, we'll open the call for questions. We are sharing slides during the call and using video, so we recommend using Zoom on a computer rather than dialing in by phone. The slides, as well as a recording of this earnings call, will be available on our website shortly after the call. Please be aware that today's discussion contains forward-looking statements which are subject to a number of risks and uncertainties. Actual results may differ materially due to various risk factors. Please refer to today's press release and our SEC filings for more information on risk factors and other factors which could impact forward-looking statements. Copies of these reports are available online. In discussion of In discussing the results of our operations, we'll be providing and referring to certain non-IFRS financial measures. You can find reconciliations to the most directly comparable IFRS financial measures, along with additional information regarding those non-IFRS financial measures, in the press release on our website at Freightos.com slash investors. The company undertakes no obligation to update any information discussed in this call at any time. Today's earning call will begin with brief remarks from our chairman, Dr. Udo Lang. We will then hear a business overview and outlook by Pablo, followed by Ian, who will deep dive into our strategy. Next, Pablo will present the financial results and the guidance for Q1 and full year 2026. We will conclude with Q&A. Questions can be submitted in writing during the call by using the Q&A feature in Zoom. Udo, please go ahead.

Thank you, Anouk. Good morning, everyone, and thank you all for joining us. I joined the call today to frame where we are headed and how we are going to get there and to express firsthand the board's conviction in the company's vision and success. Let me start by saying that in 2026, we are prioritizing profitability and disciplined growth. We remain committed to reaching break-even by the end of the year. We also remain committed to our long-term ambition of digitalizing the global freight ecosystem with a deliberate strategy that sets out specific step priorities. Freightos has built the leading position in digital air bookings, connecting carriers, shippers, and forwarders on a platform that enhances billions of dollars of global trade flows. This progress has been achieved through times of challenging global macro and trade environments. The board is convinced there's a significant long-term opportunity to digitalize and modernize global freight. Management and the board continuously reflect on what the company needs in terms of governance and leadership in order to succeed as a scaled public business. Last year, the board separated the roles of chair and CEO. There was a natural evolution as the company entered a more mature phase. We also added two external directors with deep logistics and technology experience, Michael Schecher and Rotem Hershko, and established a product, AI, and technology committee in order for the board to bring greater focus on product priorities, capital allocation, and long-term growth drivers. The previously announced CEO transition reflects a shared view that Freightos is entering a stage where operational discipline and execution focus must increasingly complement our strong foundation. On that note, the transition from a founder-led to a professional CEO-led organization is orderly and progressing. The board is considering both internal and external candidates and expects to appoint a new CEO before the next earnings release. Of course, the board is fully supportive of the management team aligned on priorities and appreciative of their efforts. Turning briefly to financial discipline, break-even has been a long-standing objective for the company. The board is confident the company is on track to achieve this goal. We view Breakeven as a milestone towards becoming a self-sustaining growth company with attractive margins and strategic flexibility. In 2026, we are focused on strengthening and expanding our comprehensive solution suite while continuing to drive transaction growth across the platform. Looking ahead to 2027 and beyond, The objective is to build on the operational discipline established in 2026 and accelerate profitable growth from a stronger financial and strategic foundation, including a solid cash balance. To sum up, I and the board see Freitas as a company with a strong platform and a meaningful market opportunity and the foundation to deliver on its commitments and vision. Now over to you, Pablo.

Thank you Udo for the board's ongoing support and good morning everyone. I want to walk you through our priorities before discussing performance. As interim CEO, my priority is disciplined execution and delivering on our short-term commitments while positioning us for a long-term growth. Over the past months, I've worked closely with the leadership team to establish a focused plan of a strong execution and improve predictability. Especially, our commitment to reach break-even adjusted EBITDA in Q4 this year as a forcing function for discipline. It requires prioritization, accountability, and a focus on initiatives that strengthen unit economics and durable growth in the short term. We are concentrating our efforts in three areas. Go-to-market execution, a solution-first focus, and even sharper cost discipline and operating efficiency. We are in parallel preparing for our next phase of growth and validating the initiatives that can drive durable acceleration in 2027 and beyond. This work is focused on areas where we see clear product market fit, a strong return of investments and repeatable sales motion. The goal is to enter 2027 with initiatives that are already tested and measurable, all while supporting our expansion from supporting spot bookings at the scale towards both contracts and tenders as well as ocean. Let me walk through our fourth quarter and full year performance, and then I will return to our 2026 priorities. We delivered results in line with guidance, demonstrating our dedication to executing to our commitments. Full year 2025 revenue grew 24%. Despite a volatile global trade environment, transactions and GBV continue to grow year over year. Solutions growth was comparatively softer, as we have discussed during the year, and that informs our priorities for 2026. As I will share later, I believe we have strong potential here to grow. In Q4, we delivered our 24th consecutive quarter of record transactions. That's already six years. reaching 445,000 bookings, up 27% year-over-year and modestly above expectations. Our active carrier network remained at the record of 77 carriers, unchanged from Q3 and up from 67 in Q4 2022 and A4. More carriers are in the integration phase. We are now integrated to airlines that represent around 80% of global carrier capacity, but continue to see upside. That said, new carriers' logos are just one driver of transactions growth. Another meaningful driver is increased utilization, existing carriers adding lines, expanding capacity distribution, new services, and organic like-for-like growth. Just for context, over 95% of the new unique lines that were booked in 2025 were added by carriers that had joined us before 2025. Gross booking value reached $357 million in Q4, up 27% year over year. Even though the majority of our transactions are monetized on a flat fee basis and not directly tied to GBV, it remains as an indicator of ecosystem liquidity and the growing strategic relevance of the platform within digital freight workflows. On the solution side, During the quarter, two of the largest global freight forwarders selected freighter solutions on a global level for new or expanded services following rigorous evaluations and pilot phases. Beyond our air solution, one of these also selected our ocean rate management and quoting solution as part of their deployment. We also have seen ongoing expansions from our forwarder customers that are using us for procurement. In general, we are seeing broader value emerging from the full extent of our stack, spanning procurement, tender management, rate management, quoting, booking, and sales, as well as our deep integrations. For enterprise shippers, as well as our expansion of our procurement and intelligence offerings for forwarders, the value proposition of our solutions is straightforward. enabling better and faster sourcing decisions and running procurement end-to-end in a single workflow supported by trusted market data. As a reminder, Procure is our enterprise standard management solution, and Terminal is our market intelligence and benchmarking data solution. In Q4, we advance our value proposition by embedding Terminal's ocean benchmark directly into Procure. This allows customers to compare carriers' bids against independent market benchmarks within the same tender workflow and without leaving the interface. An equivalent solution for error procurement is currently in development. This integration improves transparency and reduces friction in the tender process, while increasing the strategic relevance of our solution procurement teams. That said, solutions momentum was softer than we anticipated going into the year. As we said on prior earnings calls, enterprise sales cycles increased in 2025, with budget cautions pushing decisions out. This environment also highlighted areas where we must tighten execution. Those are in product delivery and in the go-to market. We are sequencing 2026 as a solution first year, concentrating our efforts on solutions adoption and product quality, which will allow the platform to grow more organically in the near term. What we found is that investing more in our solution business is the best way to both improve and retain sustainable revenue, while also improving our long-term transaction growth and its monetization. Across the portfolio, investments are being evaluated through a more strict filter of customer impact, delivery, reliability, and return of invested capital. We are concentrated on making strong product integrations and moving from individual tools to a more coherent end-to-end workflow. As our solutions become more deeply embedded in customers' daily operations, the economic value speaks for itself and decision cycles become more straightforward. On the go-to-market, in 2026, we are adopting an even more disciplined model focused on driving more consistent expansion within our base. We believe that we can generate more sales and do so more efficiently by better leveraging our full solutions and platform ecosystem. This includes both expanding shares of wallet from our existing enterprise customers with better cross-sells of the full range of offerings we have, as well as leveraging cross-network effects so that, for example, shippers introduce us to more providers who then introduce us to more shippers. With that in mind, we have revamped our sales and go-to-market approach based on a deep customer research and an expanded commitment to quality and innovation and to the maximum value toward our customers. The objective is clear, increase sales productivity, accelerate new sales and acquisitions of new logos, and drive more reliable renewables and upsell performance. Let me pass it on to Ian to discuss our strategy in more detail, including our belief that a more rigorous focus on solutions is the best long-term driver of both transactions and sustainable revenue growth.