Cision PR Newswire

Freightos Reports Third Quarter Results with Revenue Growth and Progress Toward Profitability

  • Sustained growth in Transactions and in number of Buyer Users reflects continued marketplace growth dynamic
  • Operational efficiency plan yields better than expected results enhancing the Company's financial standing

JERUSALEM, Nov. 21, 2023 /PRNewswire/ -- Freightos Limited (NASDAQ: CRGO), a leading vendor-neutral digital booking and payment platform for the international freight industry, today reported financial results for the quarter ended September 30, 2023.

Freightos Logo

 

"We are pleased with our third quarter results, marking the 15th straight quarter of robust growth in the number of transactions. This is a clear indicator of how strongly our value proposition is resonating, despite the current industry downturn." said Zvi Schreiber, founder and CEO of Freightos. "On a macro level, we are encouraged to see that global trade volumes continue to grow, and look forward to more indications of recovery in the global freight market."

"During the quarter, we enhanced our offerings with key features and expanded our network of buyers and sellers. Even with this growth, we are only scratching the surface of digitizing the international freight market, and we're excited about the opportunities we have as leaders in this ongoing digital transformation."

"We're encouraged by the progress toward profitability in the third quarter, which confirms the effectiveness of our operational efficiency plan launched in July," said Ran Shalev, CFO of Freightos. "The third quarter's results are a testament to our strategic balance of driving growth and managing expenses. This trend together with our solid cash position, keeps us on course to reach profitability with the capital on hand."

Third Quarter 2023 financial highlights

  • Revenue of $5.1 million for the third quarter of 2023, an increase of 9% compared to the third quarter of 2022, or 7% on a constant currency basis.
  • IFRS Gross Margin of 54.9%, the same as for the third quarter of 2022. Non-IFRS Gross Margin of 69.5%, compared to 63.5% for the third quarter of 2022.
  • IFRS operating loss of $9.3 million, compared to $5.3 million in the third quarter of 2022
  • Adjusted EBITDA in the third quarter of 2023 of negative $4.1 million, compared to negative $3.4 million in the third quarter of 2022.
  • Cash and cash equivalents and short term deposits and investments balance at the end of September 2023 of $55.2 million.

Recent business highlights

  • Transaction Growth: Freightos achieved a record 269 thousand Transactions in the third quarter of 2023, up 40% year over year, for the first time exceeding a run rate of a million transactions per year. This growth was achieved while overall global air cargo volumes were flat compared to the third quarter of 2022 and still remain below 2019 levels, based on IATA data. At the same time global ocean container shipping volumes increased 5% from the third quarter of 2022, according to Container Trades Statistics.
  • Gross Booking Value Growth:Gross Booking Value (GBV) was $160.7 million in the third quarter, up 1% compared to the third quarter of 2022, reflecting strong Transactions growth but lower average freight prices.
  • Unique Buyer Users: The number of unique buyer users digitally booking freight services across the Freightos Platform grew 16% compared to the third quarter of 2022, reaching 17,312.
  • Revenue growth: Revenue of $5.1 reflects growth from increased use of platforms and solutions by forwarders and carriers, offset by reduced direct engagement from small to mid-sized importers/exporters compared to the previous year, in line with the company's expectations when it implemented its operational efficiency plan. Total Platform revenue in the third quarter was $1.8 million, at the same level as the third quarter last year, and Solutions revenue was $3.3 million, up 14% year over year.
  • Carrier Growth: Carriers selling on the Platform, primarily on WebCargo, increased to 39 as of the end of the third quarter of 2023. In Q3 the WebCargo platform welcomed new airlines Norse Atlantic Airways and aircraft charter company Chapman Freeborn, more Global Sales Agents (GSAs) offered capacity - including CargoJet and InXpress, while other existing airline sellers expanded available capacity to and from the Americas, Europe, Asia and the Caribbean, and expanded availability of specialized air cargo services for pharma.
  • WebCargo Solutions and Platform Advances: Freightos Solutions for freight forwarders, sold under the WebCargo brand, continued to improve with a range of new features in Q3, including new integrations for air cargo data handling and visibility, enhanced carrier integration and language solutions, and booking and payment solutions for ocean shipments.

Financial outlook


Management Expectations


Q4 2023

FY 2023




 # Transactions

273,000 - 284,000

1,010,500 - 1,021,500

Year over Year Growth

30% - 35%

51% - 53%

GBV ($m)

$ 163.5 - $ 175.0

$ 647.5 - $ 659.0

Year over Year Growth

(4)% - 3%

6% - 8%

Revenue ($m)

$ 5.1 - $ 5.3

$ 20.1 - $ 20.3

Year over Year Growth

4% - 10%

5% - 7%

Adjusted EBITDA ($m)

$ (4.7) - $ (4.4)

$ (19.9) - $ (19.6)

This outlook assumes currency exchange rates, freight price levels and freight volumes as of November 15, 2023.

Earnings Webcast

Freightos' management will host a webcast and conference call to discuss the results today, November 21, 2023 at 8:30 a.m. EST.

To participate in the call, please register at the following link:

https://freightos.zoom.us/webinar/register/WN_vt-BkyB0Qw6Qhj0g32vKUg#/registration

Following registration, you will be sent the link to the conference call which is accessible either via the Zoom app, or alternatively from a dial-in telephone number.

Questions may be submitted in advance to ir@freightos.com or via Zoom during the call.

A replay of the webcast will be available on Freightos' Investor Relations website following the call, as well as the call's transcript.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements, which include the financial outlook of Freightos, are based on various assumptions, whether or not identified in this press release, and on the current expectations of Freightos and are not predictions of actual performance. These forward-looking statements are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Freightos. These forward-looking statements are subject to a number of risks and uncertainties, including the ongoing military conflict in the Middle East; Freightos' ability to effectively execute the previously announced operational efficiency and cost reduction plan without undue disruption to its business; competition and the ability of Freightos to build and maintain relationships with carriers, freight forwarders and importers/exporters and retain its management and key employees; changes in applicable laws or regulations; any downturn or volatility in economic conditions whether related to inflation, armed conflict or otherwise; changes in the competitive environment affecting Freightos or its users, including Freightos' inability to introduce new products or technologies; risks to Freightos' ability to protect its intellectual property and avoid infringement by others, or claims of infringement against Freightos; and those factors discussed in Freightos' annual report on Form 20-F filed with the SEC on March 30, 2023, under the heading "Risk Factors," and any other risk factors Freightos includes in any subsequent reports on Form 6-K furnished to the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Freightos does not presently know or that Freightos currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Freightos' expectations, plans or forecasts of future events and views as of the date of this press release. Freightos anticipates that subsequent events and developments will cause Freightos' assessments to change. However, while Freightos may elect to update these forward-looking statements at some point in the future, Freightos specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Freightos' assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Financial Information; Non-IFRS Financial Measures

While certain financial figures included in this press release have been computed in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, this press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" nor a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". Not all of the financial information in this press release has been audited.

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles ("IFRS") including, but not limited to, Adjusted EBITDA. These non-IFRS measures differ from the most directly comparable measures determined under IFRS, but we have not presented a reconciliation to the most directly comparable IFRS measures, because the non-IFRS measures are forward-looking and a reconciliation cannot be prepared without unreasonable effort. These measures should not be considered in isolation or as an alternative to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under IFRS. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. In addition, this press release discloses revenue on a constant currency basis, which is not presented in accordance with IFRS. Freightos believes that revenue on a constant currency basis, Adjusted EBITDA and other non-IFRS measures provide useful information to investors and others in understanding and evaluating Freightos' operating results because they provide supplemental measures of our core operating performance and offers consistency and comparability with both past financial performance and with financial information of peer companies. Certain monetary amounts, percentages and other figures included in this press release have been subject to rounding adjustments. Certain other amounts that appear in this press release may not sum due to rounding.

Definitions

  • Carriers: Number of unique air and ocean carriers who have been sellers of transactions. For airlines, we count booking carriers, which include separate airlines within the same carrier group. We do not count dozens of other airlines that operate individual segments of air cargo transactions as we do not have a direct booking relationship with them. Carriers include ocean less-than-container load (LCL) consolidators. In addition, we only count carriers when more than five bookings were placed with them over the course of a quarter.
  • Unique buyer users: Unique buyer users represent the number of individual users placing bookings, typically counted based on unique email logins. The number of buyers, which counts unique customer businesses, does not reflect the fact that some buyers are large multinational organizations while others are small or midsize businesses. Therefore, we find it more useful to monitor the number of unique buyer users than the number of buyer businesses.
  • Constant Currency: Comparative information calculated by translating Freightos' current period financial results using the prior period's monthly exchange rates (or other applicable rates, as indicated).
  • GBV: Total value of transactions on the Freightos platform, which is the monetary value of freight and related services contracted between buyers and sellers on the Freightos platform, plus related fees charged to buyers and sellers, and pass-through payments such as duties. GBV is converted to U.S. dollars at the time of each transaction on the Freightos platform. This metric may be similar to what others call gross merchandise value (GMV) or gross services volume (GSV). We believe that this metric reflects the scale of the Freightos platform and our opportunities to generate platform revenue.
  • #Transactions: Number of bookings for freight services, and related services, placed by buyers across the Freightos platform with third-party sellers and with Clearit. Beginning in the third quarter of 2022, #Transactions include trucking bookings, which were added to the Freightos platform following the acquisition of 7LFreight. The number of transactions booked on the Freightos platform in any given time period is net of transactions canceled during the same time period.
  • Adjusted EBITDA: Adjusted EBITDA represents net loss before income taxes, finance income, finance expense, share-based compensation expense, depreciation and amortization, changes in the fair value of contingent consideration, operating expense settled by issuance of shares, redomicile costs, share listing expense, change in fair value of warrants, transaction-related costs, non-recurring expenses associated with the business combination with Gesher I Acquisition Corp and reorganization expenses.
  • Platform Revenue: Platform revenue reflects fees charged to buyers and sellers in relation to transactions executed on the Freightos platform. For bookings conducted by importers/exporters, our fees are typically structured as a percentage of booking value, depending on the mode and nature of the service. When freight forwarders book with carriers, the sellers often pay a pre-negotiated flat fee per transaction. When sellers transact with a buyer who is a new customer to the seller, we may charge a percentage of the booking value as a fee.
  • Solutions Revenue: Solutions revenue is primarily subscription-based SaaS and data. It is typically priced per user or per site, per time period, with larger customers such as multinational freight forwarders often negotiating flat all- inclusive subscriptions. Revenue from our Solutions segment includes certain non-recurring revenue from services ancillary to our SaaS products, such as engineering, customization, configuration and go-live fees, and data services for digitizing offline data.

Contacts

Media:
Tali Aronsky
press@freightos.com

Investors:
Anat Earon-Heilborn 
ir@freightos.com

About Freightos Limited

Freightos® (NASDAQ: CRGO) operates a leading, vendor-neutral booking and payment platform for international freight. Freightos' platform supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers/exporters, thousands of forwarders, and dozens of airlines and ocean carriers.

Freightos.com is a premier digital international freight marketplace for importers and exporters for instant pricing, booking, and shipment management. Thousands of SMBs and enterprises have sourced shipping services via Freightos across dozens of logistics service providers.

WebCargo® by Freightos is a leading global freight platform connecting carriers and forwarders. In particular, it is the largest air cargo eBooking platform, enabling simple and efficient freight pricing and booking between thousands of freight forwarders, including the top twenty global freight forwarders, and hundreds of airlines, ocean liners and trucking carriers. Airlines on the platform represent over a third of global air cargo capacity. WebCargo also offers software as a service for forwarders to facilitate digital freight rate management, quoting, and online sales.

Freightos Data calculates the Freightos Baltic Index, the industry's key daily benchmark of container shipping prices, the Freightos Air Index, as well as other market intelligence products that improve supply chain decision-making, planning, and pricing transparency.

Freightos is a widely recognized logistics technology leader with a worldwide presence and a broad customer network. Incorporated in the Cayman Islands with offices around the world, Freightos is a Nasdaq-listed company trading under Nasdaq:CRGO. More information is available at freightos.com/investors.

 

CONSOLIDATED BALANCE SHEETS

(In thousands)


September 30,
2023


December 31,
2022


(unaudited)


(audited)

Assets




Current Assets:




Cash and cash equivalents

$  5,076


$  6,492

User funds

4,722


3,328

Trade receivables, net

2,258


1,936

Short-term bank deposit

20,000


-

Short-term investments

30,097


-

Other receivables and prepaid expenses

2,524


1,215


64,677


12,971





Non-current Assets:




Property and equipment, net

643


767

Right-of-use assets, net

1,115


1,384

Intangible assets, net

8,088


9,465

Goodwill

15,628


15,628

Deferred taxes

618


573

Other long-term assets

1,585


1,018


27,677


28,835





Total assets

$  92,354


$  41,806





Liabilities and Equity




Current liabilities:




Short-term bank loan and credit

$ -


$  2,505

Trade payables

3,248


3,234

User accounts

4,722


3,328

Current maturity of lease liabilities

652


613

Accrued expenses and other payables

5,876


7,400


14,498


17,080





Long Term Liabilities:




Lease liabilities

193


395

Employee benefit liabilities, net

1,064


1,294

Warrants liability

1,944


-

Other long-term liabilities

440


1,377


3,641


3,066





Equity:




Share capital

*)


*)

Share premium

254,942


140,229

Reserve from remeasurement of defined benefit plans

137


137

Accumulated deficit

(180,864)


(118,706)

Total equity

74,215


21,660





Total liabilities and equity

$  92,354


$  41,806


*) Represents an amount lower than $1.

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2023


2022


2023


2022


(unaudited)


(unaudited)

Revenue

$  5,107


$  4,688


$  15,023


$  14,236

Cost of revenue

2,305


2,113


6,493


5,881

Gross profit

2,802


2,575


8,530


8,355

Operating expenses:








Research and development

2,992


2,526


9,006


7,645

Selling and marketing

3,944


2,437


11,025


7,338

General and administrative

4,274


2,200


10,353


7,197

Reorganization

884


-


884


-

Transaction-related costs

-


741


3,703


1,553

Share listing expense (1)

-


-


46,717


-

Total operating expenses

12,094


7,904


81,688


23,733

Operating loss

(9,292)


(5,329)


(73,158)


(15,378)

Change in fair value of warrants

1,577


-


8,981


-

Finance income

677


91


2,367


262

Finance expenses

(64)


(95)


(287)


(401)

Financing income (expenses), net

613


(4)


2,080


(139)

Loss before taxes on income

(7,102)


(5,333)


(62,097)


(15,517)

Income taxes

58


53


61


91

Loss

$  (7,160)


$  (5,386)


$  (62,158)


$  (15,608)

Other comprehensive income (net of tax effect):








Remeasurement gain from defined benefit plans

-


-


-


225

Total components that will not be reclassified
subsequently to profit or loss

-


-


-


225

Total comprehensive loss

$  (7,160)


$  (5,386)


$  (62,158)


$  (15,383)

Basic and diluted loss per Ordinary share

$  (0.15)


$  (0.95)


$  (1.43)


$  (2.84)

Weighted average number of shares outstanding
used to compute basic and diluted loss per share

47,591,775


8,112,059


43,839,445


7,844,521


(1)  Represents non-recurring, non-cash share-based listing expense incurred in connection with the business
      combination with Gesher I Acquisition Corp.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)




Three Months Ended

Nine Months Ended


September 30,

September 30,


2023

2022

2023

2022


(unaudited)

(unaudited)

Cash flows from operating activities:





Loss

$ (7,160)

$ (5,386)

$ (62,158)

$ (15,608)

Adjustments to reconcile net loss to net cash used in operating activities:





Adjustments to profit or loss items:





Depreciation and amortization

719

640

2,081

1,769

Operating expense settled by issuance of shares

184

-

184

-

Share listing expense

-

-

46,717

-

Change in fair value of warrants

(1,577)

-

(8,981)

-

Changes in the fair value of contingent consideration

109

(96)

(794)

(225)

Share-based compensation

3,375

635

4,503

1,367

Finance expenses (income), net

(722)

99

(1,928)

363

Income taxes

58

53

61

91


2,146

1,331

41,843

3,365

Changes in asset and liability items:





Decrease (increase) in user funds

(1,207)

546

(1,396)

3,237

Increase (decrease) in user accounts

1,207

(546)

1,396

(3,237)

Decrease (increase) in other receivables and prepaid expenses

749

(128)

(336)

(292)

Decrease (increase) in trade receivables

(98)

69

(337)

(259)

Increase (decrease) in trade payables

(245)

906

64

1,679

Increase (decrease) in accrued severance pay, net

(204)

(7)

(216)

78

Increase (decrease) in accrued expenses and other payables

(494)

530

(3,396)

1,554


(292)

1,370

(4,221)

2,760

Cash received (paid) during the year for:





Interest received, net

48

17

523

(144)

Taxes paid

(37)

(65)

(91)

(109)


11

(48)

432

(253)

Net cash used in operating activities

(5,295)

(2,733)

(24,104)

(9,736)

Cash flows from investing activities:





Purchase of property and equipment

(6)

(44)

(74)

(213)

Proceeds from sale of property and equipment

7

1

8

1

Acquisition of a subsidiary, net of cash acquired (a)

-

-

-

(4,183)

Payment of payables for previous acquisition of a subsidiary

-

-

(136)

(156)

Investment in long-term assets

(29)

(13)

(376)

(494)

Withdrawal of a deposit

3

-

3

-

Withdrawal of (investment in) short term investments, net

1,250

-

(29,670)

-

Investment in short-term bank deposit

-

-

(20,000)

-

Net cash provided by (used in) investing activities

1,225

(56)

(50,245)

(5,045)

Cash flows from financing activities:





Proceeds from the issuance of share capital and warrants
 net of transaction costs

-

-

76,044

-

Repayment of lease liabilities

(86)

(136)

(373)

(448)

Repayment of short-term bank loan and credit

-

-

(2,504)

-

Exercise of options

32

22

51

53

Net cash provided by (used in) financing activities

(54)

(114)

73,218

(395)

Exchange differences on balances of cash and cash equivalents

(94)

(179)

(285)

(550)

Decrease in cash and cash equivalents

(4,218)

(3,082)

(1,416)

(15,726)

Cash and cash equivalents at the beginning of the period

9,294

12,435

6,492

25,079

Cash and cash equivalents at the end of the period

$  5,076

$  9,353

$  5,076

$  9,353

(a) Acquisition of an initially consolidated subsidiary:





Working capital (excluding cash and cash equivalents)

$ -

$ -

$ -

$  (992)

Other receivables

-

-

-

163.00

Property and equipment

-

-

-

12

Intangible assets

-

-

-

5,734

Goodwill

-

-

-

7,607

Shares issued

-

-

-

(6,573)

Contingent consideration

-

-

-

(1,768)

Acquisition of a subsidiary, net of cash acquired

$ -

$ -

$ -

$  4,183

(b) Significant non-cash transactions:





Right-of-use asset recognized with corresponding lease liability

$  78

$ -

$  239

$  74

Issuance of shares for previous acquisition of a subsidiary

$ -

$ -

$  113

$ -

 

 

RECONCILIATION OF IFRS TO NON-IFRS GROSS PROFIT AND

GROSS MARGIN


(in thousands, except gross margin data)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2023


2022


2023


2022


(unaudited)


(unaudited)

IFRS gross profit

$ 2,802


$ 2,575


$ 8,530


$ 8,355

Add:








Share-based compensation

432


144


591


209

Depreciation & Amortization

315


256


871


683

Non-IFRS gross profit

$ 3,549


$ 2,975


$ 9,992


$ 9,247

IFRS gross margin

54.9 %


54.9 %


56.8 %


58.7 %

Non-IFRS gross margin

69.5 %


63.5 %


66.5 %


65.0 %

 

 

RECONCILIATION OF IFRS OPERATING LOSS TO ADJUSTED EBITDA

(in thousands)





Three Months Ended


Nine Months Ended


September 30,


September 30,


2023


2022


2023


2022


(unaudited)


(unaudited)









Operating loss

$ (9,292)


$ (5,329)


$ (73,158)


$ (15,378)

Add:








Share-based compensation

3,375


635


4,503


1,367

Depreciation & Amortization

719


640


2,081


1,769

Share listing expense

-


-


46,717


-

Non-recurring expenses

-


-


499


-

Redomicile costs

-


109


-


625

Transaction-related costs

-


741


3,703


1,553

Changes in the fair value of contingent consideration

-


(225)


(642)


(225)

Reorganization

884


-


884


-

Operating expense settled by issuance of shares

184


-


184


-

Adjusted EBITDA

$ (4,130)


$ (3,429)


$ (15,229)


$ (10,289)

Adjusted EBITDA margins

-81 %


-73 %


-101 %


-72 %

 

 

RECONCILIATION OF IFRS LOSS TO NON-IFRS LOSS AND LOSS PER SHARE

(in thousands, except share and per share data)






Three Months Ended


Nine Months Ended


September 30,


September 30,


2023


2022


2023


2022


(unaudited)


(unaudited)

IFRS loss attributable to ordinary shareholders

$  (7,160)


$  (5,386)


$  (62,158)


$ (15,608)

Add:








Share-based compensation

3,375


635


4,503


1,367

Depreciation & Amortization

719


640


2,081


1,769

Share listing expense

-


-


46,717


-

Non-recurring expenses

-


-


499


-

Redomicile costs

-


109


-


625

Transaction-related costs

-


741


3,703


1,553

Changes in the fair value of contingent consideration

109


(96)


(794)


(225)

Reorganization

884


-


884


-

Operating expense settled by issuance of shares

184


-


184


-

Change in fair value of warrants

(1,577)


-


(8,981)


-

Non IFRS loss

$  (3,466)


$  (3,357)


$  (13,362)


$ (10,519)

Non IFRS basic and diluted loss per Ordinary share

$  (0.07)


$  (0.70)


$  (0.32)


$  (2.20)

Weighted average number of shares outstanding used to
compute basic and diluted loss per share

47,591,775


8,112,059


43,839,445


7,844,521

 

Logo - https://mma.prnewswire.com/media/1829748/Freightos_Logo.jpg 

 

Cision View original content:https://www.prnewswire.com/news-releases/freightos-reports-third-quarter-results-with-revenue-growth-and-progress-toward-profitability-301994687.html

SOURCE Freightos

NOTE: This content is not written by or endorsed by "KTXL", its advertisers, or Nexstar Media Inc.

For inquiries or corrections to Press Releases, please reach out to Cision.