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.
"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
Recent business highlights
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 [email protected] 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
Contacts
Media:
Tali Aronsky
[email protected]
Investors:
Anat Earon-Heilborn
[email protected]
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, | December 31, | ||
(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 | - | - | - | 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 | 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 |
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 | - | - | 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 | 47,591,775 | 8,112,059 | 43,839,445 | 7,844,521 |
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SOURCE Freightos
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