Freightos Limited (NASDAQ: CRGO) Q2 2025 Earnings Call | 08/18/2025

Overall Performance: Freightos reported a strong Q2 2025, achieving record revenue and its 22nd consecutive quarter of record transaction growth. The company is successfully navigating a dynamic trade environment and remains on track to reach breakeven adjusted EBITDA by the end of 2026.

Key Financial Highlights (Q2 2025):

• Revenue: $7.4 million, up 31% year-over-year.

• Transactions: 397,000, up 26% year-over-year.

• Gross Margin: Non-IFRS gross margin was ~74%, up from 72% a year ago.

• Adjusted EBITDA: Loss of $2.5 million, an improvement from a loss of $3.1 million in Q2 2024. This was at the low end of guidance due to foreign exchange (FX) headwinds.

Business Updates & Strategic Progress:

1. Leadership & Governance: The company announced new board leadership, appointing logistics industry veteran Dr. Udo Lang as Chairman. A new director, Rotem Hershko (ex-Amazon, Flexport), was also added, bringing expertise in scaling technology-driven logistics platforms.

2. Platform Growth:

   • The core platform saw sustained growth, adding major carriers like China Airlines and Air Europa, bringing the total to 75 carriers.

   • A key partnership with FedEx Air (previously announced) was detailed, focusing on integrating air and ground transportation.

   • A significant milestone was achieved with the first fully integrated ocean carrier for both contract and spot bookings. This marks concrete progress in digitalizing the ocean freight industry, a massive long-term opportunity.

3. Solutions Growth:

   • The Solutions segment revenue grew 36% year-over-year to $4.9 million.

   • The acquisition of Shipster (now Freightos Procure) is paying off, enabling new features like contract rate benchmarking and facilitating cross-selling into the enterprise customer base.

   • Notable customer wins included a major North American fiber networking company and a top global retailer for the Freightos Procure solution.

4. Market Conditions & Impact of Tariffs:

   • The company noted that recent tariff changes and trade volatility have had a mixed impact.

   • Tailwind: Market uncertainty increases the need for Freightos's real-time data and marketplace for finding alternatives.

   • Headwind: Extremely high tariffs on specific lanes (e.g., a brief 145% China-US tariff) caused a temporary dip in transactions on those lanes, and some enterprise sales cycles have lengthened as customers await clarity.

   • Overall, the secular trend of digitalization is seen as a much stronger long-term driver than short-term tariff impacts.

Guidance & Outlook:

• The company raised its full-year 2025 guidance for Transactions and Gross Booking Value (GBV), reflecting strong first-half performance.

• Full-Year Revenue guidance was narrowed to $29.5 - $30 million.

• Q3 2025 expectations include:

  • Transactions: 419k - 425k (~25% YoY growth)

  • Revenue: $7.6 - $7.7 million (~24% YoY growth)

  • Adjusted EBITDA Loss: $2.6 - $2.5 million

• Management expressed high confidence in achieving its goal of breakeven adjusted EBITDA by the end of 2026 based on current growth trends and cost discipline, even without assuming any major industry inflection points.