Group 1 - The fundamental rule of investment compounding is to buy quality and hold, emphasizing the importance of long-term investment in great growth companies [1] - Ron Baron, CEO of Baron Capital, highlights the necessity of holding quality companies for long-term growth as a key to successful investing [1] - Ariel Sokol has over twenty years of experience in corporate finance, focusing on subscription and edtech businesses, and has held significant roles in various companies including Pearson [1]

If you want full access to all our reports, data and investing ideas, join The Aerospace Forum , the #1 aerospace, defense and airline investment research service on Seeking Alpha, with access to evoX Data Analytics, our in-house developed data analytics platform.Dhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aeros ...

Core Insights - Freightos Limited (NASDAQ: CRGO) reported preliminary key performance indicators for Q4 2025, showing strong execution and engagement in its digital freight booking platform [1][4] - The company is set to release its full earnings report on February 23, 2026, with a conference call scheduled for the same day [5][6] Performance Metrics - Q4 2025 transactions reached 445,000, reflecting a 27% year-over-year growth, slightly exceeding management's expectations [2][4] - For the full year 2025, total transactions were 1,643,000, with a growth rate of 26% [2] - Gross Booking Value (GBV) for Q4 2025 was $357 million, marking a 27% increase year-over-year, while the full-year GBV reached $1.29 billion, up 44% [2][4] Platform and Network Expansion - Freightos achieved its 24th consecutive quarter of record transactions, driven by the WebCargo platform and the carrier portal [3][4] - The active carrier network maintained a record level of 77 carriers in Q4 2025, with new additions like Euroairlines and Jambojet being integrated [4] - Unique buyer users increased to approximately 20,700, indicating stable engagement from freight buyers [4] Strategic Focus - The company continues to expand its coverage with regional and specialist carriers while preparing for broader participation from ocean carriers [5] - Management emphasizes disciplined execution against its growth roadmap as the platform scales [5]

Company Transition - Founder and CEO Zvi Schreiber will step down from his role as CEO on January 31, 2026, to pursue other entrepreneurial interests while remaining a non-executive board member [1] - CFO Pablo Pinillos has been appointed as Interim CEO during the transition period, and the board is conducting a comprehensive search for a new CEO [2] Company Performance and Strategy - Freightos is experiencing strong momentum, with recent enterprise agreements with multiple top ten global freight forwarders and an expansion into ocean freight [3] - The company has surpassed an annualized run rate of 1.7 million bookings and is handling over a billion dollars in annual Gross Booking Value, indicating significant growth in connecting freight buyers and sellers globally [3] Industry Position - Freightos is recognized as the leading vendor-neutral global freight booking platform, facilitating connections among airlines, ocean carriers, freight forwarders, and over ten thousand importers and exporters [4] - The platform digitizes the trillion-dollar international freight industry, offering a suite of software solutions for pricing, quoting, booking, shipment management, and payments [5]

Group 1 - The 2025 Annual General Meeting of Freightos Limited was called to order by the CEO and Chairman, Zvi Schreiber [2] - Michael Oberlander, the General Counsel, confirmed that the Board of Directors authorized the Annual General Meeting and provided details about the mailing of the proxy materials to shareholders [3] - A certified list of ordinary shareholders as of the record date was compiled, showing a total of 51,314,432 ordinary shares issued and outstanding [4]

Summary of Freightos Conference Call Company Overview - **Company**: Freightos - **Industry**: International Freight and Logistics - **Market Size**: The international freight market is approximately $600 billion annually, with $150 billion in air cargo and $350 billion in ocean cargo [6][20] Core Insights and Arguments - **Digital Transformation**: Freightos aims to digitize the international freight industry, which is largely offline, using a platform that connects carriers, freight forwarders, and shippers [4][5] - **Market Opportunity**: Over 90% of international freight bookings are still offline, indicating a significant opportunity for digital solutions [6][20] - **Platform Structure**: The platform operates as a three-sided network, facilitating real-time pricing, instant booking, and efficient procurement across the supply chain [5][12] - **Growth Metrics**: Freightos reported over 1.3 million bookings in 2024, with a run rate of over 1.5 million bookings for the current year [9][21] - **Revenue Streams**: Revenue is divided into solutions revenue (SaaS and data) and platform revenue (transaction fees), with two-thirds currently from solutions revenue [16][17] Financial Performance - **Revenue Growth**: Expected revenue for 2025 is projected between $29.5 billion and $29.6 billion, with a year-on-year growth of 20%-22% [16][19] - **Gross Margin**: Non-IFRS gross margin is expected to grow from 73%-75%, while IFRS gross margin is projected to increase from 65%-69% [17][24] - **Profitability Outlook**: Freightos anticipates reaching profitability by Q4 of the next year, with a current cash position of $31 million [18][20] Competitive Landscape - **Market Position**: Freightos maintains a higher market share in the forwarding sector, with a unique position as it combines SaaS and transaction-based services [29][30] - **Competitive Advantage**: The company has built a robust network over 13 years, providing trust and reliability in its data and services [30] Additional Insights - **Cohort Retention**: Forwarders typically see their bookings grow 3-5 times over the first two years on the platform, indicating strong customer retention and value [13] - **Impact of Tariffs**: Tariffs have increased demand for Freightos' services as companies seek visibility and efficiency in navigating supply chain disruptions [31][32] - **Capital Structure**: Freightos has a clean balance sheet with no debt, operating primarily on an OpEx model [33] Conclusion - **Vision**: Freightos aims to become the indispensable digital backbone of global trade, leveraging its platform to drive efficiency and transparency in the international freight industry [21][20]

Core Insights - Freightos has integrated Jambojet Cargo into its WebCargo platform, enhancing digital booking capabilities for freight forwarders across East Africa [1][2][3] - Jambojet Cargo operates nine key routes connecting major economic centers in Kenya and Tanzania, facilitating the transport of various goods [2][3] - The partnership aims to improve visibility, reduce manual coordination, and ensure faster service for freight forwarders [2][3] Company Overview - Freightos is a leading global freight booking and payment platform, facilitating connections between airlines, ocean carriers, freight forwarders, and importers/exporters [4][5] - The platform digitizes the international freight industry, offering a suite of software solutions for pricing, quoting, booking, shipment management, and payments [5][6] - Freightos processes over 1.6 million transactions annually, showcasing its significant market presence [2] Market Impact - The integration of Jambojet Cargo expands Freightos' reach in Africa's logistics market, supporting regional trade and supply chains [3] - Digitalization is transforming air cargo operations in Africa, with Jambojet positioning itself as a leader in this shift [3] - The partnership is expected to strengthen trade links between African markets and the global economy [3]

Core Viewpoint - Freightos Limited, a digital booking and payment platform for the international freight industry, reported a challenging Q3 2025 with an EPS loss that fell short of estimates, despite a notable year-over-year revenue increase [2][3][6] Financial Performance - The company reported a Q3 EPS of -$0.10, missing the estimated EPS of -$0.07 and the Zacks Consensus Estimate of a $0.08 loss, resulting in a 25% negative surprise [2][6] - Revenue for the quarter was $7.67 million, slightly above the estimated $7.64 million, but 0.36% below the Zacks Consensus Estimate, representing a 24% increase from $6.18 million in the same quarter last year [3][6] Operational Highlights - Freightos achieved an annualized run rate of over 1.7 million transactions and a gross booking value (GBV) of $1.3 billion, indicating strong operational performance [4] - The CEO attributed growth to the industry's shift towards digital solutions amid volatile freight rates, with a focus on a multimodal strategy gaining traction [4] Financial Ratios - The company has a negative price-to-earnings (P/E) ratio of -7.73 and an earnings yield of -12.94%, indicating financial challenges [5] - Despite these challenges, Freightos maintains a low debt-to-equity ratio of 0.04 and a strong current ratio of 2.15, reflecting a solid ability to cover short-term liabilities [5][6]

Core Insights - Freightos is transitioning from a booking marketplace to a full-stack freight-commerce platform, with embedded payments as a key growth driver [1][12] - The company is experiencing strong platform growth, with record transactions and a significant increase in gross booking value (GBV) [2][5] - Despite growth, Freightos faces profitability challenges and increasing competition from both traditional and digital logistics players [1][8] Company Performance - Freightos reported a 54% year-over-year increase in gross booking value (GBV) to $336 million [5] - The number of transactions on the platform reached a record 429,000, marking the 23rd consecutive quarter of record transactions, with a 27% year-over-year growth [5] - The company is seeing a shift in enterprise customers towards multimodal solutions, moving from air-only to global multimodal deployments [4] Market Context - The global freight forwarding market is valued in the hundreds of billions of dollars, yet many booking and payment workflows remain offline and manual [6] - Ongoing trade volatility has increased demand for agile digital solutions, although conversion from legacy practices remains a challenge [7] - Competition is intensifying as larger players invest in digital offerings and pure-play digital logistics platforms raise capital [8] Strategic Initiatives - Freightos aims to enhance its platform by embedding payments, which could lead to increased customer loyalty and revenue growth [11] - The strategy includes treating payments as a core feature rather than a side offering, aiming to create a comprehensive ecosystem for booking, settlement, and financing [12] - By owning the payment layer, Freightos can collect valuable data that can drive analytics and potentially lead to additional services [13]

Financial Data and Key Metrics Changes - Revenue for Q3 was $7.7 million, up 24% year-over-year [14] - Platform revenue was $2.6 million, up 15% year-over-year, while solutions revenue was $5.1 million, up 30% year-over-year [14] - Gross margin improved from 65% a year ago to 69.1% in Q3, with non-IFRS gross margin rising from 72.7% to 74.8% [16] - Adjusted EBITDA improved to -$2.6 million in Q3 2025 from -$2.8 million in Q3 last year [17] - Cash and short-term bank deposits at the end of the quarter were $30.6 million [18] Business Line Data and Key Metrics Changes - The company processed 429,000 transactions in Q3, up 27% year-on-year, marking the 23rd consecutive quarter of record transactions [4] - Unique buyer users were approximately 20,600, and the number of carriers with more than five bookings increased to 77 [4] - Solutions revenue growth was 30% year-on-year, but anticipated stronger growth was impacted by longer sales cycles due to tariffs and macroeconomic conditions [9][19] Market Data and Key Metrics Changes - Air cargo volumes increased by 4% compared to Q3 2024, despite headwinds from tariffs and changes to U.S. import regulations [5] - Average global air cargo rates decreased by 6% compared to Q3 last year [5] - The overall freight market is characterized by volatility and nervousness due to tariffs and macroeconomic uncertainty [6] Company Strategy and Development Direction - The company is focused on expanding airline coverage in Asia and expects further global expansion as smaller carriers leverage digital channels [5] - A strategic partnership with Visa and Transcard was announced, aimed at providing modern financing solutions for freight forwarders and importers/exporters [7] - The launch of the new multimodal rate management and quoting SaaS product, WebCargo Rate & Quote Ocean, is expected to enhance service offerings [8] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is less uncertainty than earlier in the year, tariffs still create friction for imports to the U.S. [30] - The company anticipates meaningful revenue contribution from ocean bookings in the midterm, with significant growth expected by 2028 [41][44] - The focus remains on growing revenue and margins while maintaining operational efficiency to reach adjusted EBITDA break-even by Q4 2026 [18][21] Other Important Information - The company closed the quarter with a cash burn of about $10 million for 2025, compared to $15 million in 2024 [21] - The revenue mix has shifted, with platform revenue performing slightly better than initially expected, impacting overall profitability [20] Q&A Session Summary Question: Can you discuss the contribution margin and growth factors? - Management acknowledged a balance between growth and achieving break-even EBITDA, emphasizing efficiency improvements and potential AI-driven efficiencies [25][26] Question: How is tariff volatility affecting shipping volumes? - Management indicated that while there is some stabilization, uncertainty and higher tariffs still create friction for imports, impacting customer behavior [30][31] Question: Can you elaborate on market penetration and growth opportunities? - Management highlighted high penetration in Europe, moderate growth in the U.S., and low penetration in Asia, indicating significant growth potential in the latter [36] Question: What impact will the Visa partnership have? - The partnership is expected to enhance payment solutions, potentially increasing average take rates with airlines [40] Question: When will ocean bookings start contributing significantly to revenue? - Significant revenue from ocean bookings is not expected until 2028, with some contributions anticipated from solutions in 2026 [44][45] Question: What is the proportion of recurring versus non-recurring revenue in solutions? - The majority of solutions revenue is recurring, with non-recurring revenue not exceeding 5% [57][58]