Freightos Limited

Hello, and welcome to FREDO's Q1 2026 Earnings Conference Call. A press release with details and actual results was released earlier today and is available on the Investor Relations section of our website. My name is Alati Ron Heilborn, and I'm joined today by Pablo Pineos, FREDO's CEO and Interim CFO, and Ian Arroyo, Chief Strategy Officer. 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 discussing the results of our operations, we'll be providing and referring to certain non-IFRS financial measures. You can find reconciliation to the most directly comparable IFRS financial measures along with additional information regarding those known IFRS financial measures in the press release on our website at fredos.com slash investors. The company undertakes no obligation to update any information discussed in this call at any time. Before we begin, I'd like to note our upcoming investor events. This week, Freitas will participate in the Virtual Lithium Partners Spring Investor Conference. In September, management will attend the H.C. Wainwright Annual Investor Conference in New York. Links to the webcast, when applicable, and other event updates can be found on our website. Today's earnings call will begin with 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 Q2 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. With that, I will hand it over to Pablo.

Thank you, Anat, and thank you, everyone, for joining us today. Before discussing the quarter, I would like to briefly acknowledge the leadership transition announced earlier this year. I'm honored to step into the role of CEO after joining Freitas as CFO a little over a year ago. During that time, I have developed a deep understanding of both the strengths of the business and the areas where we need to sharpen execution and operating disciplines. We have initiated the search process for a permanent CFO, and we will provide updates as appropriate. Let me start summarizing a few things in regards last quarter. First, while Q1 was a softer quarter than we expected, we continue making important progress across several strategic priorities. including expanding our carrier network, growing our solution sales pipeline, and advancing workflow integration across procurement, pricing, and execution. Second, the freight market remained volatile during the quarter, particularly following the disruption across Middle East trade corridors. That volatility impacted capacity, routine behaviors, and transactions activity during the quarter. but it also reinforced the customer demand for procurement intelligence, multimodal visibility, and more connected operational workflows. The broader direction of the industry continues moving exactly where we believe Freightos is positioning to win. Customers increasingly need faster procurement decisions, multimodal visibility, integrated operational workflows, and better market intelligence across air and ocean freight. That trend directly supports our long-term strategy. Third, as discussed during Q4 earnings call, 2026 is a transition year for Kratos and during the quarter, we continue executing on our priorities by improving go-to-market execution, sharper operating discipline, focused R&D investments on the highest return initiatives, deepen customer adoption, and position the company for durable, profitable growth. Importantly, this is not a change in strategy. It is a stronger focus on execution, accountability, and scalability. During Q1, we took several important steps in that direction. Tightening prioritization, simplifying organizational complexity, improving operational accountability, aligning resource more directly to our highest conviction growth opportunities. And finally, while near-term conditions remain challenging, we remain confident in both our long-term strategic positioning and our path towards adjusted EBITDA rate given by the end of 2026. Now, let me turn to solutions. Q1 performance was below our expectations, reflecting both a cautious enterprise environment and areas where we need to improve execution consistency. Customers are expressing growing demand for benchmarking and forecasting capabilities, procurement intelligence, and index-linked purchasing strategies designed to help customers manage volatility more dynamically across air and ocean freight. At the same time, we are seeing stronger commercial momentum in our solutions pipeline, which is currently approximately double what it was a year ago. As we outlined it in February, our focus in 2026 is improving commercial execution, sharpening prioritization, and increasing operating consistency across the business. On the product side, we continue aligning our R&D investments around integrating procurement, pricing, quoting, booking, and market intelligence into a more connected operational environment. We believe this becomes increasingly valuable in volatile freight markets where customers need faster decision-making across transportation modes, suppliers, and trade lines. We are also continuing to expand our multimodal capabilities, including ocean and procurement management, as part of the broader strategy. Importantly, we continue seeing the same structural dynamic across the platform. Customers that adopt our solutions transact approximately three times more, retain at higher levels, and expand usage over time. That remains one of the most clear validations of our long-term strategy and why our focus remains on building a stronger recurring customer value first, while transactions scale from a more durable foundation. Moving to transactions, Q1 revenue and platform activity reflected the shortfall we reported in our KPI update last month. We processed 425,000 transactions in the quarter, up 15% year-over-year, but below our 20% plus target. The shortfall was driven primarily by disruptions in the Middle East, where capacity was unavailable for extended periods across important trade corridors. Outside that region, transaction growth was healthier, supported by continued activity across other markets and increased use of alternative routing. April improved relative to March, which is encouraging. However, activity involving the Middle East remains below prior year levels, and while we expect conditions to improve gradually through the rest of the year, we do not expect to fully recover the shortfall already incurred in Q1. On the carrier side, our network reached a record of 79 active carriers in the quarter, up from 77 in Q4. Shortly after quarter end, we also secured a major carrier addition that we expect to further strengthen our position in APAC, a region where we continue to see meaningful room to expand relative to Europe and Americas. We hope to announce this carrier formally soon. Gross booking value was $343 million in the quarter, up 24% year-over-year. While GBV has a limited direct impact on revenue because much of our transaction monetization remains fee-based, it remains an important measure of platform scale, liquidity, and customer relevance. Let me pass it to Ian to discuss our strategy in more details.

Thanks, Pablo. One of the most important structural shifts we continue seeing across global freight is that procurement execution, market intelligence decisions are becoming increasingly interconnected across transportation modes and counterparties. Historically, many of these systems operated independently across air cargo, ocean freight, procurement, and execution environments. This is rapidly changing. Our customers increasingly need to compare alternatives, reroute freight, adjust sourcing decisions, and execute procurement decisions dynamically across both air and ocean networks. A very recent example involves a Fortune 500 oil and gas services company with a major spare parts distribution hub in the Gulf region. During the Middle East disruption, they were able to rapidly shift operations to the Americas to maintain customer support and supply chain continuity. Moves like these create significant complexities across procurement, across routing, capacity management, and execution. That reinforces our view that the long-term opportunity is not simply digitizing freight transactions. The larger opportunity is connecting procurement, pricing, quoting, execution, and market intelligence within a single operational environment spanning multiple transportation modes and participants. That is the direction that Freightos is building. You can think about the platform as a reinforcing flywheel model. Solutions drive transactions. Transactions generate additional operational data and market intelligence. That intelligence then improves procurement, pricing, and execution decisions across the broader network. We believe that model becomes increasingly valuable as freight markets become even more dynamic and operationally complex. This is also where we believe FreightOS is strategically differentiated. There is obviously significant discussion across software markets around AI, but in fragmented industries like global freight, long-term value will not come from AI alone. It will come from combining live operational data, our carrier connectivity, integrated operational work, and deeply embedded customer relationships. The operational data and connectivity across carriers, freight boarders, and shippers create an infrastructure layer that is very difficult to replicate. In many ways, AI increases the value of connected platforms because customers increasingly need actionable intelligence embedded directly into live procurement and execution workflows. Going back to my earlier oil and gas example, Freightos recently launched predictive risk forecasting, and that could have identified the need for network adjustments before the disruption materially impacted operations. allowing procurement teams to proactively secure capacity and reduce downstream disruption. Over time, we believe increasingly intelligent and automated decision support can materially reduce friction across freight procurement and execution, while improving responsiveness, efficiency, and operational resilience. Overall, we continue seeing the market evolve in a direction that reinforces our strategic priorities, deeper multimodal connectivity, stronger procurement capabilities, integrated operational workflows, embedded market intelligence, and more disciplined execution. With that, Pablo will go over our financial review.