Financial Data and Key Metrics Changes - Revenue for Q4 2024 was 3.1 million, within guidance range, with an expected improvement in adjusted EBITDA for 2025 [46][50] - Gross margins improved, with IFRS gross margin reaching 68%, up from 62% in Q4 2023, and non-IFRS gross margin rising to 74% compared to 70% last year [45][135] Business Line Data and Key Metrics Changes - Platform revenue grew 21% year-over-year to 4.3 million, benefiting from SaaS expansion and the inclusion of Shipster [44][135] - The SaaS solution subsegment generated its highest quarterly revenue ever in Q4, highlighting strong demand for digital procurement and benchmarking solutions [28][117] Market Data and Key Metrics Changes - The air cargo market saw robust demand driven by e-commerce, with Q4 volumes up 10% compared to the previous year [15][104] - Air cargo rates reached year highs during peak season, with a global average price essentially flat on Q4 2023 and up 5% from Q3 [15][104] - The potential reinstatement of the de minimis exemption could lead to a sharp drop in transpacific air cargo volumes and rates, impacting the industry [16][106] Company Strategy and Development Direction - The company is focused on capturing the market opportunity of digitalizing international freight, with a commitment to innovation and operational excellence [11][100] - Three strategic pillars are emphasized: platform, solutions, and network, with ongoing enhancements to capabilities across these fronts [20][109] - A major initiative called Fusion aims to unify all software into one modern, efficient, scalable stack, enhancing operational efficiency [118][119] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term digitalization of freight as the most powerful driver of business, despite potential short-term uncertainties from tariffs [18][40] - The company expects continued improvements in adjusted EBITDA, reflecting revenue growth and operational efficiencies, with a target for breakeven by the end of 2026 [47][50] - Management noted that the industry is still at an early stage of digitalization, with expectations for significant growth as digital connections become more prevalent [60][62] Other Important Information - The company added twelve new carriers in Q4, marking the strongest onboarding of new carriers in its history, bringing the total to 67 carriers [13][102] - The integration of Shipster is progressing well, with plans to retire the Shipster brand and incorporate its capabilities into the company's solutions [33][123] - The company is promoting a toolkit for index linking for freight contracts, enabling rates to adjust dynamically based on market conditions [125][126] Q&A Session Summary Question: Industry Inflection Point - Management indicated that the air cargo sector is further along in digitalization compared to ocean freight, which is still in early stages, with hopes for API connectivity from ocean liners [60][62] Question: Strategic M&A Using Stock - Management stated that while the stock price rebound provides more options, there are no active plans for acquisitions using stock, but they remain open to opportunistic opportunities [67][68] Question: Potential Tariff Impacts - Management discussed the short-term positive effects of front-loading shipments to avoid tariffs, but noted potential mid-term uncertainties and the resilience of global trade [74][76][79] Question: AI Adoption and Rollout - Management highlighted ongoing efforts to integrate AI across the platform, with promising results from AI-driven solutions like dynamic pricing tools, and anticipates measurable impacts on productivity [82][86]
Freightos(CRGO) - 2024 Q4 - Earnings Call Transcript