Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $7.7 million, representing a 24% year-over-year increase [13] - Platform revenue was $2.6 million, up 15% year-over-year, while solutions revenue reached $5.1 million, up 30% year-over-year [13] - Gross margin improved from 65% a year ago to 69.1% in Q3 2025, with non-IFRS gross margin rising from 72.7% to 74.8% [16] - Adjusted EBITDA improved to negative $2.6 million in Q3 2025 compared to negative $2.8 million in Q3 2024 [17] - Cash and short-term bank deposits at the end of the quarter were $30.6 million, supporting continued investments [18] Business Line Data and Key Metrics Changes - The company processed 429,000 transactions in Q3, a 27% increase 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 anticipated to be stronger than the 30% year-on-year growth delivered, impacted by longer sales cycles due to tariffs and macroeconomic conditions [9] Market Data and Key Metrics Changes - Air cargo volumes increased by 4% compared to Q3 2024, despite challenges in trans-Pacific e-commerce volumes [5] - Average global air cargo rates decreased by 6% compared to Q3 last year, reflecting market volatility [5] - The overall global trade is up on the year, but trade with the U.S. has seen a slight decline [30] Company Strategy and Development Direction - The company is focused on expanding airline coverage in Asia and enhancing multimodal capabilities [4][6] - A strategic partnership with Visa and TransCard was announced to provide modern financing solutions for freight forwarders and importers/exporters [6][7] - The launch of the new multimodal rate management and quoting SaaS product, WebCargo Rate & Quote Ocean, aims to unify air and ocean quoting [8] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is less uncertainty than earlier in the year, tariffs and macroeconomic conditions still create friction for imports to the U.S. [28] - The company anticipates meaningful revenue contributions from ocean bookings in the midterm, with significant growth expected by 2028 [44][45] - The focus remains on achieving adjusted EBITDA break-even by Q4 2026, with continued revenue growth and disciplined cost management [18][20] Other Important Information - The company closed the quarter with a cash burn of about $10 million for 2025, down from $15 million in 2024 [20] - The company expects to end the year with cash and equivalents of approximately $27 million [20] Q&A Session Summary Question: Can you discuss the contribution margin and growth opportunities? - Management acknowledged the balance between growth and achieving break-even EBITDA, emphasizing efficiency improvements and potential AI-driven efficiencies [25][26] Question: How is tariff volatility impacting shipping volumes? - Management indicated that while there is some stabilization, uncertainty and higher tariffs still create friction for imports, affecting the ability to secure large contracts [29][31] Question: What is the current penetration of the platform in various markets? - Management stated that penetration varies by geography, with high penetration in Europe, moderate in the U.S., and low in Asia [35] Question: How will the Visa partnership impact opportunities? - 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 minor contributions anticipated in 2027 [44][45] Question: What is the proportion of recurring versus non-recurring revenue in solutions? - Management indicated that a very large majority of solutions revenue is recurring, with non-recurring revenue not exceeding 5% [59][60]
Freightos(CRGO) - 2025 Q3 - Earnings Call Transcript