Freightos Q2 2025 Earnings Report

Freightos EPS Results

• Actual EPS: -$0.09
• Consensus EPS: -$0.09
• Beat/Miss: Met Expectations
• One Year Ago EPS: -$0.05

Freightos Revenue Results

• Actual Revenue: $7.44 million
• Expected Revenue: $7.22 million
• Beat/Miss: Beat by +$217.00 thousand
• YoY Revenue Growth: N/A

Freightos Announcement Details

• Quarter: Q2 2025
• Date: 8/18/2025
• Time: Before Market Opens
• Conference Call Date: Monday, August 18, 2025
• Conference Call Time: 8:30AM ET

Freightos (NASDAQ:CRGO), together with its subsidiaries, operates a vendor-neutral booking and payment platform for international freight. It operates WebCargo, a platform for connecting carriers and forwarders; and Freightos.com, a platform for connecting service providers to importers/exporters. The company also offers software-as-a-service solutions, such as WebCargo Air for airline rates and ebookings; WebCargo AcceleRate, a multi-modal rate repository; data services; and WebCargo Airline Control Panel that enables airlines to control bookings and optimize pricing with real-time booking analytics. In addition, it provides digital customs brokerage services. The company is based in Jerusalem, Israel.

Freightos Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In Q2, Freytag’s platform facilitated 397,000 transactions, a 26% year-over-year increase, and delivered record revenue, marking its 22nd consecutive quarter of growth.
• Positive Sentiment: The platform expanded to 75 carriers with additions like China Airlines and Air Europa, partnered with Ford Air for integrated ground transportation, and processed its first end-to-end ocean booking via a major carrier API.
• Positive Sentiment: Solutions revenue rose 36% to $4.9 million, driven by the launch of a contract benchmarking feature in Freightos Terminal and major client wins with CECO Logistics and a top global retailer.
• Negative Sentiment: Foreign currency fluctuations in the euro and shekel, along with short-lived China-U.S. tariffs, pressured adjusted EBITDA and briefly reduced platform transactions on that lane.
• Positive Sentiment: Freytag raised full-year transactions guidance to 419–425 thousand and narrowed revenue guidance to $29.5–30 million, reaffirming a path to adjusted EBITDA breakeven by Q4 2026.

Presentation

[Anat Earon-Heilborn, Investor Relations at Freightos]

Hello, and welcome to Freytag's Q2 twenty twenty five Earnings Conference Call. A press release with detailed financial results was released earlier today and is available on the Investor Relations section of our website, freitas.com/investors. My name is Anatio Ron Heilborn, and I'm joined today by Doctor. Zvi Schreiber, the CEO of Freitas and Pablo Pinheos, CFO. Today, we also have pleasure in inviting Doctor.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Ude Lang, recently appointed Chairman of the Board, to share brief remarks at the start of the call. Following the prepared remarks, we will open the call for questions. We are sharing slides during the call and using video, so we recommend using Zoom on a computer rather than dialing in by phone. The slides, as well as a recording of this earnings call, will be available on our website shortly after the call. Please be aware that today's discussion contains forward looking statements, which are subject to a number of risks and uncertainties.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Actual results may differ materially due to various risk factors. Please refer to today's press release and our SEC filings for more information on risk factors and other factors which could impact forward looking statements. Copies of these reports are available online. In discussing the results of our operations, we'll be providing and referring to certain non IFRS financial measures. You can find reconciliations to the more directly comparable IFRS financial measures, along with additional information regarding those non IFRS financial measures, in the press release on our website at firtus.com/investors.

[Anat Earon-Heilborn, Investor Relations at Freightos]

The company undertakes no obligation to update any information discussed in this call at any time. Before we begin, I'd like to note our upcoming investor events. In September, Fretus will participate in the H. C. Wainwright Annual Investment Conference in New York.

[Anat Earon-Heilborn, Investor Relations at Freightos]

In October, the company will participate in the LD Micro Main Event Conference in San Diego. Links to webcasts, when applicable, and other event updates can be found on our website. In addition, at the September, we will be holding our annual FRETER conference for industry executives from around the world in Barcelona. If you would like to attend, please e mail us at irfreitos dot com. Today's earnings call will begin with an intro by Zvi, brief remarks from our Chairman, Doctor.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Oude Lang, and then an overview of Q2 performance by Zvi. Next, Pablo will present the financial results and the guidance for Q3 and full year 2025. We will conclude with Q and A. Questions can be submitted in writing during the call by using the Q and A feature in Zoom. Zvi, please go ahead.

[Zvi Schreiber, CEO at Freightos]

Thanks, Anat, and welcome, everyone. We'll start with updates on our Board of Directors before moving on to the business review. As you saw in our recent announcement, Udo Lange has been appointed Chairman of the Board after being a Board observer and then Director for seven years. Udo has over three decades of global logistics leadership. He's currently CEO of Stolt Nielsen, a sizable ocean liner and logistics company and was previously President of Healthcare Logistics and Americas International at FedEx Logistics where he was also a customer of Fredos.

[Zvi Schreiber, CEO at Freightos]

We also welcomed Rotem Hirschko to our board, Rotemat's platform technology and logistics expertise having led global e commerce operations at Amazon and served as chief product officer at Maersk Logistics. These board changes reflect an exciting new chapter for Freitas as we continue growing and maturing as a public company, and I'm confident they'll help us to get an to get even more value from our board as well as even stronger governance. Now it's my pleasure to introduce you to Udo, and then I'll be back to walk you through the quarter's highlights and outlook. Udo?

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

Yeah. Thank you so much, Svi. First, let me introduce myself. I met Zvi and the team when I was a customer of Freitas as COO of FedEx Logistics. And I was so impressed by Freitas' vision to digitalize international freight that I had drive the decision by FedEx to invest in the company in 02/2018, and I was a board adviser for a number of years before joining the board.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

One of the most exciting aspects of Kratos for me as a former customer, director, and now as chairman, is the breadth of the vision and the platform. Freighters spends carriers, freight forwarders, and both SMB and enterprise importers and exporters across air, ocean, and some land. That footprint is incredibly powerful, truly unique, and underpins our ability to deliver a seamless end to end solution for international freight. As a career logistics executive, I can conform you to you that the opportunity to digitalize this industry is vast. Over the last seven years, I've seen freighters grow into a leading global freight platform.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

Stepping into the role of chairman marks not only a personal milestone for me, but also a new chapter for the company, one that reflects its maturity. The role allows me to focus on drawing out the full value of our board of directors, facilitating strong engagement, aligning diverse expertise with our strategic priorities, and ensuring we are providing meaningful support to management. I'm excited about the opportunities ahead and look forward to helping position Freitas to capture the significant market potential in digitalizing global trade. I'm already enjoying working with our newest director, Rotem. His track record in scaling complex technology driven logistics platforms will be instrumental as we refine and expand our portfolio.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

As a Chairman, I'm excited to work with the Board and management to build the booking.com of international freight. Back to Svi.

[Zvi Schreiber, CEO at Freightos]

Thanks, Odo. I think we've reached a stage where where separating the role of CEO and chairman is positive for our governance and very much look forward to working with you as chairman. So let's turn to the business review. I'm pleased to report another quarter of strong performance with record revenue and our twenty second consecutive quarter of record transactions. In Q2, we facilitated 397,000 transactions, a 26% increase compared to the same period last year, demonstrating consistent transaction growth.

[Zvi Schreiber, CEO at Freightos]

Our platform's reach expanded with the addition of new buyers as well as notable carriers, including China Airlines and Air Europa, pushing our total to 75 carriers. This expansion combined with the continued relevance of our comprehensive portfolio of solutions has been instrumental in achieving record revenue underscoring Freitas' strong performance and strategic growth trajectory. Let's talk about the market that we operate in leveraging our unique data. The air cargo market remained solid in Q2 with market volumes up 3% compared to Q2 last year. This strength comes despite The US ending the de minimis exemption for low value imports from China in May, which had been a big driver of e commerce air cargo.

[Zvi Schreiber, CEO at Freightos]

While China US demand has eased since then, stronger volumes on other lanes like Asia Europe have kept the overall market growing. At the same time, more capacity and freighters freed up from China US services and they may have put some pressure on rates. The Freightos Air Index, FAX, global benchmark, average for q two decreased 15% year on year despite the volume gains. In ocean freight, tariff changes drove sharp swings in Transpacific volumes with front loading ahead of tariff deadlines boosting demand in Q2. Rates rose 43% from Q1 but were still 11% lower than last year, reflecting capacity growth and signs of overcapacity that will keep downward pressure on prices.

[Zvi Schreiber, CEO at Freightos]

As for the impact on freight costs, we believe that in recent months, tariffs have had a mixed impact on our business. On the tailwind side, market volatility and rapidly changing trade conditions have actually increased the need for our marketplace and our real time data. We also believe some of the recent strength in air cargo volumes may reflect short term pull forward activity ahead of tariff changes. These dynamics play to our strengths as customers turn to freight offs for alternatives, price transparency and flexibility when supply chains need to adapt quickly. On the other hand, on the headwind side, elevated tariffs on specific lanes, most notably the brief 145 China U.

[Zvi Schreiber, CEO at Freightos]

S. Tariff for a few weeks, did lead to a dip in platform transactions on that lane. However, this trade lane is a small part of our overall platform activity. In addition, during periods of high uncertainty, some enterprise customers in our solutions business have been more cautious in committing to large contracts, delaying decision making until conditions become clearer. But overall, the impact of the trade war is minor when compared to the secular trend of digitalization which really drives our long term growth.

[Zvi Schreiber, CEO at Freightos]

Now let's discuss progress in our main strategic areas. Our business is organized into two revenue segments, platform and solutions. And the third focus area, network effects, underpins our sustainable competitive advantage and capital efficient growth. Starting with our platform. In Q2, our platform further strengthened its role in connecting importers, exporters, freight forwarders and carriers.

[Zvi Schreiber, CEO at Freightos]

We maintained robust transaction volume growth, marking the twenty second consecutive quarter of record transactions with 397,000 transactions representing a 26% year over year growth. Our platform's resilience and versatility continue to shine, adapting to the complexities of today's trade environment. We expanded our network by adding airlines such as China Airlines, a top 15 air cargo carrier in the world, enhancing our coverage on critical Asia Europe Americas routes and Europa, a vital addition to strengthening key Spain to Latin America trade lanes, bringing our total to 75 carriers. This strategic expansion into Asia with China Airlines underscores our commitment to being a truly global platform. Looking ahead, there are still some major Asian airlines we would like to see joining the platform and we're continuously working towards that.

[Zvi Schreiber, CEO at Freightos]

Importantly, despite our strong transactions growth and while maintaining our position as the market leader in digital, our penetration rate within the global air cargo market is still low. The market is is still mostly offline, so there is huge growth potential. Currently, Freightos is typically accounting for less than 10% of the overall bookings received by any given airline although we estimate that we may be approaching or even exceeding 10% in specific regions especially in Europe. In our last call, we mentioned an agreement to reach we reached with a major North American ground transportation provider, and during the quarter, we announced the partner's identity as Ford Air Corporation. Connecting air and ground transportation seamlessly aligns with our goal of adding more value to each platform transaction and growing our platform in multiple ways.

[Zvi Schreiber, CEO at Freightos]

This includes the addition of new types of transaction enriching existing ones with additional services, creating new buyer seller combinations, and leveraging our growing data assets. As we expand platform growth by enabling more types of transactions, an important focus is increasing the liquidity of ocean capacity. While much of the ocean industry still remains on legacy systems, lacks modern APIs or digital connections, or is only beginning to explore platform based commercial models, we're finally seeing some concrete signs of progress as ocean liners find that their own customers push for digitalized bookings and rate management. This demand is influencing carrier priorities creating opportunities for deeper integrations that can bring ocean freight closer to the level of connectivity already seen in air and other modes. So specifically in Q2 we reached a major milestone with one of the world's largest ocean container carriers completing a fully integrated contract and spot booking connection.

[Zvi Schreiber, CEO at Freightos]

We gained access to their modern API late last year, finalized the integration in Q1 and processed our first e booking with them in Q2. Unlike previous integrations, this integration is comprehensive. It covers both contract and spot in a single end to end workflow for rate and booking management. The comprehensiveness of this solution with one major carrier delivers substantial value in Ocean Freight where shipment volumes and costs are high. Our freight forwarder and shipper customers have been asking for digital bookings for containers for years and gradual advances in carrier technology are now finally making that possible one carrier at a time.

[Zvi Schreiber, CEO at Freightos]

Looking ahead, we expect more carriers to modernize their IT. While it will take time for Ocean Freight to become a major contributor to our KPIs, each new integration like the one we had in Q2 expands our addressable market in container shipping and brings us closer to that goal. In our Solutions segment, we made significant strides this quarter achieving a 36% year over year increase in revenue, a nice achievement given the market. This growth reflects our proactive approach in expanding product capabilities and deepening client relationships. One specific highlight was the successful deployment of contract benchmarking feature within Freitas Terminal, our data product.

[Zvi Schreiber, CEO at Freightos]

Prior to acquiring ShipStar, our Freitas Terminal data product was only really offering spot market data. Using data from freighters enterprise which builds on the technology we acquired from ShipStar as well as other sources, we have expanded our capability and are now helping enterprises to benchmark their contract rates against the market. For context, if you're a global 1,000 retailer or manufacturer spending hundreds of millions on international shipping, the ability to sharpen your rate negotiation with data from Freightos based on real market data can be worth millions. Among our freight forwarding customers, a notable expanding partnership is with CECO Logistics, a global freight forwarder and logistics company. By integrating Freightos freight forwarder solutions, CECO is streamlining access to both air and ground carrier rates.

[Zvi Schreiber, CEO at Freightos]

This results in faster, more accurate quoting to the importers and exporters that they serve. This expansion is a great example of our commitment to providing scalable solutions that drive efficiency and meet the growing demands of modern logistics. It also highlights our vast growth opportunity with existing customers. While we already serve 19 of the world's largest 20 freight forwarders and thousands more, we have significant room to continue expanding our solution offering to them given our comprehensive and ever evolving portfolio. Turning to shippers, there is is importers and exporters, we achieved notable wins this quarter.

[Zvi Schreiber, CEO at Freightos]

A leading North American fiber networking company chose Freitas Procure to replace their current solutions for negotiating freight tenders. Some of the winning features were our data, our ERP integration capabilities. Similarly, a top global retailer signed a multiyear contract with us highlighting the value of Fragos Precor solutions and optimizing freight sourcing. Having said that, given the current economic conditions we have seen certain deals with big shippers taking longer to close. We continue to enhance our portfolio with AI playing a growing role in what we offer.

[Zvi Schreiber, CEO at Freightos]

We've long used AI to improve efficiency and accuracy in our internal operations and we're now introducing AI based features into our solutions leveraging our unique data this combination provides a competitive edge and enables us to deliver greater value to our customers helping them optimize their logistic strategies and reinforcing our leadership in international freight innovation. Moving to network effects, we continue to observe robust cohort performance from both buyers and sellers on our platform. Unique buyer users increased by 6% year over year to a total of 20,200 reflecting the sustained appeal of our offerings. Furthermore, transactions per user also saw growth compared to the previous quarter. Our cohort data highlights a positive trajectory.

[Zvi Schreiber, CEO at Freightos]

Once freight forwarders engage with our platform, their booking volumes tend to increase steadily over time demonstrating long term value realization. On the carrier side, we're witnessing strong adoption trends with cohorts of carriers consistently expanding their participation on the platform. This growing engagement from both buyers and sellers fuels a positive feedback loop reinforcing our competitive position and driving sustainable growth. In summary, Q2 was another robust quarter reflecting our continued success in navigating challenging conditions as we advance our mission to digitalize global freight. We remain on track to deliver strong growth while achieving breakeven by the end of next year.

[Zvi Schreiber, CEO at Freightos]

Well, thank you and I'll now hand the call over to Pablo to discuss our financial results in greater detail.

[Pablo Pinillos, CFO at Freightos]

Thank you, Svi, and good day, everyone. I'm pleased to report that we continue to build momentum into Q2 despite the dynamic economic landscape. Our Q2 results reflect the relevance of our offering and our consistent execution capabilities. We successfully surpassed our guidance in transactions, gross booking value, and revenue, demonstrating the sustained demand for our digital solutions. Even though currency fluctuations negatively impacted profitability, our adjusted EBITDA was within our guidance, thanks to our focus on disciplined cost controls.

[Pablo Pinillos, CFO at Freightos]

Now let's take a look at the specifics of our revenue growth. We reported revenue of $7,400,000, marking a 31 increase year over year. Platform revenue of $2,500,000 was up 23% year over year, marking our fourth consecutive quarters of growth that exceeded 20% year over year on year. Growth continues to be higher on the web cargo platform that connects carriers with freight forwarders than for the freighters.com platform that connects freight forwarders with importers and exporters. Solutions revenue of $4,900,000 was up 36% year over year.

[Pablo Pinillos, CFO at Freightos]

Gross margin on IFRS basics was approximately 67% in q two, up from 65% in q two last year. Non IFRS gross margin increased to nearly 74% from 72% last year. Operating profitability benefit from revenue growth, gross margin expansion, and our disciplined cost management, but these benefits were partially mitigated by foreign currency fluctuations, especially the euro and the shekel appreciate against the dollar during the quarter, impacting our adjusted EBITDA and holding it back from showing an even greater improvement. Adjusted EBITDA for the second quarter was negative $2,500,000 compared with negative $3,100,000 in q two twenty four. It is important to note that our effective hedging strategies have mitigated the effect of a change rate in an overall cash position.

[Pablo Pinillos, CFO at Freightos]

We remain on track to achieve breakeven adjusted EBITDA by the 2026. We ended the quarter with $34,000,000 in cash and cash equivalents, maintaining a strong balance sheet as we progress towards our profitability goals while continue our measured investments in the business. For the 2025, we anticipate transactions in the range of 419 to 425,000, reflecting a year over year growth rate of 24 to 25%. For the full year, we have increased our transactions guidance to reflect the strength already delivered in the first half and our expectations for the robust platform activity to continue. In q three, we project GPB between 329 and $333,000,000, reflecting a growth rate of 51 to 53% year over year.

[Pablo Pinillos, CFO at Freightos]

Our full year estimate for gross booking value has also been raised in line with transactions and with the prevailing market rates. Revenue for the third quarter is expected to be 7.6 and $7,700,000, up at 23 to 25% increase year over year. We have narrowed our full year revenue guidance to the range of 29.5 to $30,000,000. This reflects our confidence in achieving sustained growth, balanced with some cautions with respect to longer sales cycles potentially impacting our solutions revenue. In terms of adjusted EBITDA in the 2025, we anticipate a loss between 2.6 and $2,500,000 and a loss between 10.9 and $10,500,000 for the full year.

[Pablo Pinillos, CFO at Freightos]

This reflects our expectations for a continued FX impact. As we navigate the latter half of the year, we remain focused on executing our growth initiatives, maximizing operational efficiency, and moving closer to breakeven adjusted EBITDA by the 2026. Thank you for your attention. We are now open to questions.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Help team.

[Zvi Schreiber, CEO at Freightos]

Say again.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Sorry. The first question will come from the line of Jason help team. Actually, Ethan, can you please, enable that?

[Analyst]

Hi, everyone. This is Steve Perlman on for Jason. Two questions from us. One, so you raised full year GBV guidance but kept revenue, the midpoint largely unchanged. Is there something that you're seeing that would suggest take rate weakness for the second half?

[Analyst]

And then just an up curious on an update on how the ShipStack position is helping you drive solutions revenue. Thanks.

[Zvi Schreiber, CEO at Freightos]

Yeah. Thanks, Steve. Yeah. I think it's it's as you as usual, it's to do with the the mix of transactions. There are certain types of transactions like portal which are performing well, to GBV, and of course, contributing to revenue as well, but contributing a little less in terms of the mix.

[Zvi Schreiber, CEO at Freightos]

So overall, everything's going in right direction but sometimes the the transactions which have the lower take rate sort of grow faster and and bring down the mix a bit but all going in the right direction. And oh, sorry, Steve. What was your second question?

[Analyst]

Just curious if you could give some color on how Sheeps does helping drive the software business.

[Zvi Schreiber, CEO at Freightos]

Yeah. You know, very well. And we don't even break out Shipster anymore. We just call it now their product is called Freightos Procure, it's mostly sold as the Freightos Enterprise Suite. And yeah, we've had some specific wins of cross sells.

[Zvi Schreiber, CEO at Freightos]

So as we anticipated, you know, we're selling it's still a, you know, a handful, but some big names, you know, who who bought Fredrik's procure, which is Shipster, and now buying our data, who bought our data, and now buying Shipster procure. So it's helping us in terms of, you know, cross sell and and just having a a more interesting portfolio. Some of the names that well, I don't have permission to say names, but some of the big enterprises I I referred to the the in my remarks definitely were helped by the fact that we have the the broader suite now. And also, it's an important source of data. So I mentioned that we've now one of one of the big moves for sort of steps forward for Fredos terminal is that we now have contract data as well as short term spot data, which is a really important enhancement to Fredos terminal.

[Zvi Schreiber, CEO at Freightos]

And in a large part, that's part of the, you know, data asset we acquired with Shipstars. So so, you know, it's it's we're really achieving the strategic benefits that that we hoped with that. And it's exactly a year, I think, almost to the day since we closed that deal. It was a timely question.

[Analyst]

Great. Thank you.

[Zvi Schreiber, CEO at Freightos]

Thanks, Steve.

[Anat Earon-Heilborn, Investor Relations at Freightos]

The next question will come from George Sutton.

[Zvi Schreiber, CEO at Freightos]

George.

[George Sutton, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Thank you. Zvi, I've been doing this long enough to know that you're excited, you're newly excited about Ocean.

[Zvi Schreiber, CEO at Freightos]

Yes.

[George Sutton, Senior Research Analyst at Craig-Hallum Capital Group LLC]

And I'm curious if you could give us some sense of what's driving the pressure. Obviously, you've got few ocean players. Where is the pressure coming for the modernization?

[Zvi Schreiber, CEO at Freightos]

Yes. So, yeah, you know, one we've been discussing this, as you say, George, for for a while. But I'm pleased that this quarter, we have a, you know, a concrete step, another major carrier for live with us. And and remember, Ocean is a pretty consolidated industry. You know this, George, but for the benefit of other people on the on the call, you know, each carrier can be, you know, each big carrier can be 10 or 20% of the world market.

[Zvi Schreiber, CEO at Freightos]

So each one is a big win, even more than an air where the biggest carriers are sort of 6% or so of the market. The biggest ocean liners are 20% and so each each carrier is a big win. I'd love to tell you the pressure's coming, you know, that they just so much wanna work with Freightos. That's part of it. But but really, of course, what we're leveraging here is our network.

[Zvi Schreiber, CEO at Freightos]

So it's not so much that they wanna work with us, but they wanna work with our network. We have these big freight forwarders. We have these big enterprise retailers and and manufacturers. And and these guys are just fed up of getting Excel sheets. Yeah.

[Zvi Schreiber, CEO at Freightos]

It's very simple. You know, the value proposition is just you send Excel sheets, there's a delay, there's mistakes, you know, just just give them a a digital connection. So more than ourselves, we're leveraging our customer base to just just remind the ocean carriers that there's a there's a way you do these things in the in the twenty first century, and emailing Excels is is not that way anymore. And and it's it's happening one step at a time.

[George Sutton, Senior Research Analyst at Craig-Hallum Capital Group LLC]

So I wanted to take advantage of having Udo on the call given his background, and he he had sort of reemphasized what we've talked about for years of being the bookings.com of the space. I wondered if he could just give his his perspective on that opportunity and also the secular dynamics that you referred to offsetting everything else right now.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

Yeah. Thank you so much for the question. So I think we are really at a great moment right now at at Freitas. And with my appointment, we really also drive a clear focus where we are we are so much at how can we win now and how can we win in future. So with these changes, three and the management team can fully focus on driving the full value that we have of Freitas.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

And then I can work with the board, but also bring in new expertise into the board like Rotem, which helps us to accelerate. So how we really look at this business, we want to win now. And I think, Pablo, we are very clear. Winning now shows these tremendous growth rates, but then also delivering on our breakeven in regards to EBITDA. But then even more important, we also want to win in the future, win this race towards booking.com and deliver tremendous shareholder value.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

So how do we do this? We really look at our portfolio as part of our annual strategy process, and we just went through this. And we go through our solutions, and we look at what is the maturity of solution that we have and what is the hyper growth potential that each of these solutions have. And based on that, we then decide where do we allocate resources to drive even value faster.

[George Sutton, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Perfect. Thank you, guys. Nice job.

[Zvi Schreiber, CEO at Freightos]

Thanks, George.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Okay. Next are a couple of questions from Ablai Zumano. The first one is with the appointment of a new Chairman and additional Board expertise, are you evaluating any strategic changes or new growth areas that could further diversify and accelerate revenue growth?

[Zvi Schreiber, CEO at Freightos]

Well, you know, we thanks for the question, Abli. We review that the whole time because the world is dynamic. Right now, we've not decided and not necessarily expecting to to decide on any major changes. As Udo mentioned, we're always fine tuning where we put, you know, where we prioritize resources. So we do that often.

[Zvi Schreiber, CEO at Freightos]

Certainly, as we budget for next year, we'll do that again and fine tune the the resource allocation, but not having decided and not necessarily expecting to make any dramatic changes. One thing, of course, that is horizontal is that we're looking at AI in every aspect of the business internally and within the that's something which we do anyway. But otherwise, we're really, you know, expecting to carry on largely on the same business plan, which is working well for us.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Another question from Able is you mentioned FX headwinds moderating adjusted EBITDA. Can you quantify how much FX impacted Q2 profitability? And what portion of that is structurally hedged versus still exposed in half two?

[Pablo Pinillos, CFO at Freightos]

Sure. So thank you for the question. So as as I said, the FX fluctuations were significant in the quarter. And with more than half of our operating expenses in euro and shekels, the dollar depreciation affected our adjusted EBITDA to the point that we we landed in the bottom of the expectations instead of exceeding them. So, yes, we quantify that, and we would have exceed our expectations of our adjusted EBITDA.

[Pablo Pinillos, CFO at Freightos]

And to the second part of the question about what portion of that is structurally hedged, I can tell you, and you can see in the financial result results that the from a finance interest in the under adjusted EBITDA, we have been able to cover almost 100% of the hedging.

[Zvi Schreiber, CEO at Freightos]

Yes. I think Pablo's really done Pablo and the team have really done a great job on this. You know, this doesn't affect our cash or our strength as a company in any way. It's just a cosmetic thing that the fluctuations appear over the EBITDA line and the hedging appears below. So it affects our EBITDA number, but doesn't actually weaken our business in any way whatsoever, except perhaps marginally. But really, it's mostly covered.

[Anat Earon-Heilborn, Investor Relations at Freightos]

A question. I'll switch to a question that came over e mail. With two point five years after you've gone public, you have two point five years left on the warrants until they expire. Do you plan to do anything about that structure?

[Zvi Schreiber, CEO at Freightos]

About the warrants? No. I think the warrants I mean, there's a bunch of warrants out there, but the strike price is high. I think it's 11 and a half dollars, isn't it? Which is unfortunately far from our market price.

[Zvi Schreiber, CEO at Freightos]

So I don't think it's an overhang that actually bothers anyone. So at this time, we've got no plans to spend time and money dealing with that.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Okay. The next question is from Scott Buck. With the introduction of tariffs, are you seeing any change in the booking schedule? Are customers booking earlier or waiting longer to make their booking decisions?

[Zvi Schreiber, CEO at Freightos]

Yeah. I mean, certainly in in the second quarter, tariffs were driving a lot of decisions. Now tariffs have kind of settled down to some extent. So The US has done has signed trade agreements with a bunch of countries. The tariffs are very high.

[Zvi Schreiber, CEO at Freightos]

They're higher than they've been for a hundred years, and I don't think that's actually good for anyone. But at least the fact that that it's settled down is definitely helpful. So there's the uncertainty was worse than the uncertainty is even worse than having high tariffs. But in q two, certainly, there were as announcements came from the White House in rapid succession, people tried to quickly ship ahead or wait for the agreement. So that was definitely driving behavior.

[Zvi Schreiber, CEO at Freightos]

Now I think less because not all, but most of the tariffs are there's there's a lot more the the the most of them seem to have settled down. So now people are are trying to get back to long term planning and trying to do less sort of, you know, whiplash shipping.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Okay. Next question. Why do you think the international freight shipping is not fully digitalized until now?

[Zvi Schreiber, CEO at Freightos]

Well, that's a great question. And I I don't fully know the answer. It's clearly a very, you know, it's a very fragmented industry, very international industry, a very conservative industry. And but but even so, there's no excuse. It should have been digitalized by now.

[Zvi Schreiber, CEO at Freightos]

But the good news is good news is is it isn't giving giving us the opportunity that we have. So I'm grateful for the fact that there's this one non digitalized industry left for us all to digitalize.

[Udo Lange, Chairman & CEO - Stolt-Nielsen Limited at Freightos]

And maybe I can add something there out of my experience with customers. I think what is very interesting right now in these times of supply chain complexity, customers are actually even stronger leaning into digitalization. And as part of that, including solutions that Fratos has, is actually becoming more front and center. And that helps them also in interfacing with the airlines, with the ocean liners, and the rest of the ecosystem. So I think these these changes in the overall from a trade perspective and and this VUCA environment actually playing nicely into our growth story and showing that now it's even more important to digitalize with the Frito's capabilities.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Thanks, And now our last question. Can you please expand on how you expect to be breakeven by the end of next year? Would it require the same 2025 revenue growth and margins, or would you need further improvements?

[Zvi Schreiber, CEO at Freightos]

I think, Pablo, largely on the same trends we get there. Right? We're not making Yeah.

[Pablo Pinillos, CFO at Freightos]

I can I can answer that? The first thing that I want to say is that the confidence to breakeven in q four twenty twenty six is 100%. You know? And we if you look if you look at the long term model that

[Zvi Schreiber, CEO at Freightos]

we Very high. I I don't like to say a 100%.

[Pablo Pinillos, CFO at Freightos]

If you look at the long term model that we that we put out there with the same growth ratios that we are delivering right now and and improving in the in the gross margins, we will we will get to breakeven in q four twenty twenty six. Remain getting the operational expenses as as we plan from a flat investment perspective for minimal growth.

[Zvi Schreiber, CEO at Freightos]

Yeah. So if there's any, you know, inflection point in the industry or or other accelerant, that would be even better. But we're planning to get there even without assuming any sort of extra tailwind.

[Anat Earon-Heilborn, Investor Relations at Freightos]

Okay. I believe that concludes all the questions. Always, you can answer you can send us more questions to IR@freighters.com. Have a good day, everyone.

[Zvi Schreiber, CEO at Freightos]

Thanks, everyone.

[Pablo Pinillos, CFO at Freightos]

Thank you.

Participants

Executives

• Anat Earon-Heilborn, Investor Relations
• Zvi Schreiber, CEO
• Udo Lange, Chairman & CEO - Stolt-Nielsen Limited
• Pablo Pinillos, CFO

Analysts

• Analyst
• George Sutton, Senior Research Analyst at Craig-Hallum Capital Group LLC