Freightos Limited ((CRGO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Freightos Limited’s recent earnings call for Q4 2024 was marked by a positive sentiment, highlighting the company’s robust performance. The company reported significant revenue growth, record transactions, and successful onboarding of new carriers. Despite these achievements, challenges such as negative adjusted EBITDA and potential impacts from tariff changes and seasonal weaknesses were acknowledged.
Strong Revenue Growth
Freightos reported a remarkable 25% year-over-year increase in revenue for Q4 2024, reaching $6.6 million. This marks the highest quarterly growth rate since the company went public, underscoring its strong market position and effective strategies.
Record Transactions and Onboarding
The company facilitated over 350,000 transactions, a 22% increase from the previous year, and successfully added twelve new carriers. This achievement represents the strongest onboarding of new carriers in Freightos’ history, enhancing its platform’s reach and capabilities.
SaaS Revenue Milestone
Freightos’ SaaS solution subsegment achieved its highest quarterly revenue ever in Q4 2024, bolstered by the recently acquired Shipster business. This milestone highlights the growing importance and success of their SaaS offerings.
AI-Driven Solutions Success
The newly launched AI-powered airline dynamic pricing tool, Skyway, demonstrated a 70% revenue increase during a test phase. This success indicates the promising potential of AI-driven solutions in enhancing Freightos’ service offerings.
Improved Gross Margins
Freightos reported an improvement in gross margins, with IFRS gross margin rising to 68% from 62% in Q4 2023, and non-IFRS gross margin increasing to 74% from 70% last year. These improvements reflect ongoing cost efficiencies and effective management strategies.
Negative Adjusted EBITDA
Despite the positive financial metrics, Freightos reported a negative adjusted EBITDA of $3.1 million for Q4 2024. However, this figure is within the guidance range and shows improvement from the previous year, indicating a potential turnaround.
Potential Tariff Impacts
The company expressed concerns about the potential escalation of a trade war and changes in tariff policies, which could dampen international trade volumes. This uncertainty poses a challenge for Freightos as it navigates the global market.
Seasonal Weakness in Q1
Freightos anticipates flat adjusted EBITDA for Q1 2025 due to seasonal cost increases and weak freight volumes. This seasonal weakness is expected to impact the company’s short-term financial performance.
Forward-Looking Guidance
Freightos provided forward-looking guidance, expecting transactions between 362,000 and 370,000 for Q1 2025, with GBV between $272 million and $280 million, and revenue between $6.7 million and $6.8 million. The company anticipates full-year 2025 revenue to be between $29 million and $30.6 million. Freightos aims for breakeven adjusted EBITDA by the end of 2026, focusing on platform expansion, AI-driven solutions, and navigating potential tariff impacts.
In summary, Freightos Limited’s earnings call for Q4 2024 painted a picture of strong growth and strategic advancements, despite facing challenges such as negative adjusted EBITDA and potential tariff impacts. The company’s commitment to leveraging AI and expanding its platform positions it well for future success, with a focus on achieving breakeven by 2026.