Fr8Tech(FRGT) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Second Quarter 2025 Performance Overview Freight Technologies made progress in Q2 2025 by advancing its technological offerings and transitioning to a SaaS provider, achieving profitability through crypto investments and operational improvements despite trade challenges, while also completing initial sales of Fleet Rocket and enhancing Fr8App features - The company made progress on technological elements and continued its transition to a SaaS provider in logistics[3] - Achieved profitability during the quarter through crypto investments and ongoing operational improvements, despite higher tariffs and trade policy uncertainty impacting the brokerage business[3] - Completed initial sales of Fleet Rocket, a Transportation Management System (TMS) software solution, and released several new features to Fr8App[3] Business Highlights Key business achievements in Q2 2025 included the initial enterprise sales of Fleet Rocket, significant feature enhancements for Fr8App and Fr8Fleet with deeper integration, and the creation of AI Logistics Worker agent prototypes in collaboration with the University of Monterrey and Fetch.ai - Completed initial enterprise sales of Fleet Rocket, a cost-effective Transportation Management System (TMS) software solution[6] - Released several new features and capabilities to Fr8App and Fr8Fleet, including deeper integration and electronic data interchange (EDI) connections[6] - Created initial prototypes of AI Logistics Worker agents in collaboration with the University of Monterrey and Fetch.ai to enhance coordination and efficiency[6] - Expanded cryptocurrency treasury with the purchase of Official Trump coins, building on the initial acquisition of FET tokens[6] Financial Highlights For Q2 2025, Freight Technologies achieved a net profit of $649 thousand with a 21.7% net profit margin, primarily due to its cryptocurrency treasury, with operating loss improving year-over-year, and for the six months ended June 30, 2025, the company increased its cash position, lowered interest expense, and improved its equity position Q2 2025 Financial Performance Highlights | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :---------- | :---------- | | Net Profit (Loss) | $649 thousand | $(1.95) million | | Net Profit Margin | 21.7% | N/A | | Operating Loss | $(1.5) million | $(1.7) million | | Change in Operating Loss (YoY) | Improved by $0.2 million | - | - For the six months ended June 30, 2025, the company increased its cash position, lowered interest expense, and increased its equity position[6] Company Profile and Strategy Freight Technologies is a technology company leveraging AI and machine learning to optimize supply chain processes, with a diverse portfolio including Fr8App, Fr8Now, Fr8Fleet, Waavely, and Fleet Rocket, all interconnected to enhance efficiency - Freight Technologies is a technology company offering a diverse portfolio of proprietary platform solutions powered by AI and machine learning to optimize and automate the supply chain process[7] - The company's solutions include Fr8App (OTR B2B cross-border shipping), Fr8Now (LTL shipping), Fr8Fleet (dedicated capacity), Waavely (ocean freight booking), and Fleet Rocket (TMS for logistics operators)[7] - Products are interconnected within a unified platform to connect carriers and shippers, improving matching and operational efficiency via innovative technologies like live pricing and real-time tracking[7] 2025 Annual Outlook Freight Technologies has revised its full-year 2025 outlook, lowering revenue and operating margin projections due to a strategic shift towards higher-margin software sales and AI innovations, selective freight brokerage engagement, and the potential economic impact of higher tariffs on US-Mexico cross-border trade - The company is lowering its revenue and operating margin outlook for 2025 due to a focus on higher-margin software sales and AI innovations, selective customer engagement in freight brokerage, and potential economic impact of higher tariffs[7] Revised 2025 Full-Year Outlook | Metric | Revised Outlook | | :------------- | :---------------- | | Revenue | $13 million to $16 million | | Operating Loss | $(4.5) million to $(6.3) million | Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For Q2 2025, the company reported a net income of $649,238, a significant improvement from a net loss of $(1,954,556) in Q2 2024, primarily driven by a substantial unrealized gain in cryptocurrency fair value, with revenue decreasing year-over-year for both the three and six-month periods, but operating loss improving Key Financial Performance Indicators (Q2 & H1 2025 vs. 2024) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $2,989,910 | $3,837,842 | $7,090,550 | $8,125,602 | | Operating Loss | $(1,470,971) | $(1,704,951) | $(2,935,072) | $(3,788,697) | | Net Income (Loss) | $649,238 | $(1,954,556) | $(952,808) | $(4,211,006) | | Basic Net Income (Loss) Per Share | $0.38 | $(24.66) | $(0.85) | $(63.75) | | Unrealized gain (loss) in fair value of cryptocurrency | $2,427,754 | - | $2,427,754 | - | - Operating loss improved from $(1.7) million in Q2 2024 to $(1.5) million in Q2 2025, and from $(3.8) million in H1 2024 to $(2.9) million in H1 2025[12] Condensed Consolidated Balance Sheets As of June 30, 2025, total assets significantly increased to $17.06 million from $5.69 million at December 31, 2024, primarily driven by the acquisition of cryptocurrencies valued at $8.38 million, with the company also transitioning from a stockholders' deficit to positive equity of $8.78 million Key Balance Sheet Items (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (unaudited) | December 31, 2024 (audited) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $17,060,367 | $5,690,245 | | Cash and cash equivalents | $586,658 | $204,032 | | Accounts receivable, net | $5,610,917 | $3,533,330 | | Cryptocurrencies | $8,376,410 | - | | Total Liabilities | $8,276,987 | $6,345,005 | | Total Stockholders' Equity (Deficit) | $8,783,380 | $(654,760) | - The company's equity position significantly improved from a deficit of $(654,760) at December 31, 2024, to positive equity of $8,783,380 at June 30, 2025[14] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities slightly increased, while net cash used in investing activities significantly rose due to cryptocurrency purchases, with net cash provided by financing activities substantially increasing, leading to a net increase in cash and cash equivalents, reversing the prior year's decrease Key Cash Flow Activities (H1 2025 vs. H1 2024) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(5,039,217) | $(4,857,126) | | Net cash used in investing activities | $(984,831) | $(173,879) | | Net cash provided by financing activities | $6,407,563 | $3,923,593 | | Net increase (decrease) in cash and cash equivalents | $383,515 | $(1,107,412) | - Investing activities in H1 2025 included significant purchases of cryptocurrencies totaling $2,748,777, partially offset by sales of $1,920,064[17] - Financing activities were bolstered by proceeds from notes payable and the issuance of Series A4 Shares, contributing to a net increase in cash[17] Additional Information Forward-Looking Statements This section serves as a standard disclaimer, cautioning readers that actual results may differ from expectations due to significant risks and uncertainties, highlighting factors such as Nasdaq listing maintenance, regulatory changes, economic conditions, and risks related to projected financial information and business growth - The press release includes forward-looking statements, and actual results may differ from expectations due to significant risks and uncertainties[8][9] - Factors that may cause differences include the inability to obtain or maintain Nasdaq listing, changes in applicable laws or regulations, adverse economic/business factors, and risks related to projected financial information and business growth[9] - Readers are cautioned not to place undue reliance on forward-looking statements, and the company does not undertake any obligation to publicly update or revise them[10] Investor Relations Contact For investor inquiries, individuals can contact Jason Finkelstein at IGNITION Investor Relations via the provided email address - Investor relations contact: Jason Finkelstein at IGNITION Investor Relations[18] - Email for investor inquiries: investors@fr8technologies.com[18]