Freightos Limited Ordinary shares Sidoti Micro-Cap Investor Conference

Thank you, Anna, and thank you, everyone, for joining us today. I'm Pablo Pinillos, and as Anna said at the beginning, I have been appointed CEO in the month of March this year, and I was the previous CFO of the company. Let's get into the presentation and the disclaimers. Before I step back and introduce Freightos and the broader opportunity, let me briefly touch on the results we reported this week. We delivered record revenues of $7.7 million, above our expectations, and improved adjusted EBITDA loss to a record of negative $2 million. Platform revenue grew 90% year-over-year, demonstrating the resilience of the transaction business despite disruptions in some freight corridors. Solutions revenue declined 4%, and improving execution and conversion in that business is an important focus for the second half.

Overall, the quarter showed continued progress on profitability alongside areas where we still need to execute better. With that context, let me step back and explain the business and the opportunity we are addressing. Global freight remains a massive industry that is still largely offline and fragmented. Procurement and booking workflows often still rely on emails, spreadsheets, phone calls, and disconnected systems across the counterparties, which are air, ocean, and land carriers on one side, importers and exporters on the other side, and freight forwarders between them. This fragmentation becomes increasingly problematic as supply chains become more dynamic and operational decisions need to happen faster. We believe this creates a significant long-term opportunity for digital infrastructure in freight. When we say that the industry needs operational decisions to happen faster, we look at the past few years and see that operations are becoming increasingly complex.

Rate volatility, supply chain disruptions, capacity shifts, and geopolitical events increasingly require real-time adjustments. At the same time, forwarders and shippers need faster and more connected procurement and execution workflows. Carriers increasingly seek better utilization, pricing control, and low-cost digital distribution. Structurally, all participants in the ecosystem are moving towards greater digital connectivity. The Middle East conflict is a current example. Disruptions across key air and shipping corridors constrained capacity and kept Q2 air freight rates roughly 25% above pre-conflict levels. In that environment, digital connectivity helped customers shift volumes across alternative carrier route combinations more quickly. This is where Freightos operates. We provide software supporting digital freight transactions across pricing, quoting, booking, and procurement workflows.

On top of these software solutions, we also enable real-time digital freight transactions in a three-side marketplace where freight forwarders book capacity from the carriers, and importers and exporters book freight services from forwarders. Strategically, this matters because software adoption drives transaction activity and increase platform liquidity over time. The more deeply customer integrates Freightos into operational workflows, the more transaction activity tends to move through the platform. In fact, solution customers book around 3 times to 5 times more transactions than non-customers. Once transaction activity scales, the platform itself begins generating valuable operational data. That data supports smarter pricing, benchmarking, indexing, and execution decisions. We believe this becomes increasingly important in freight because customers are operating in environments that are constantly changing and increasingly require real-time operational intelligence. This creates a reinforcing cycle across solutions, transactions, and data. Importantly, this reinforcement dynamic becomes stronger with the scale.

The network itself becomes more valuable as more workflows and more transactions activity moves through the ecosystem. We first demonstrated this model successfully in air cargo spot bookings. Over the last several years, Freightos helped pioneer digital real-time air cargo transactions at scale. Today, we believe that our share of international spot air cargo bookings is somewhere in the mid-teens, clearly leading the digitalization of the segment of the industry. We are now applying the same playbook to ocean freight. Ocean is structurally a significantly larger player, but also one that remains earlier in the digitalization process. In many ways, it resembles where air cargo was several years ago, with limited real-time connectivity and no commercial readiness for the platform model. We believe the same combination of software adoption, workflow integration, and transaction liquidity can gradually develop there as well.

Moreover, the pressure from freight forwarders for more efficiency and increasingly pushing ocean freight forwarders through digitalization. So far we have discussed the spot market, which is less than 50% of all freight. The majority of international freight is done based on annual contracts. Our procurement management solution addressed this part. We are extending the model into procurement and tendering workflows as well, and our vision is to enable enterprise shippers to access their contracted capacity via a platform and book transactions digitally. Even before we execute on this bold vision, we continuously work on making freight workflows more efficient for our customers. For example, in Q2 this year, we enhanced the experience within Freightos Procure by bringing key stages of the tender process into a more intuitive end-to-end environment. A concrete use case is a major U.K. enterprise shipper we recently worked with.

Its global procurement team was manually consolidating land requirements from regional logistics leader across emails and spreadsheets. By enabling those regional teams to enter requirements directly into Freightos Procure, the entire tender process, from land collection through carrier ranking to final award, now takes place within a single platform. That's the kind of end-to-end workflow integration we are building. Let's summarize the broader strategic logic behind the company. First, we're embedding Freightos deeper into daily freight workflows. Second, we are increasingly connecting procurement, pricing, booking, and execution into more unified operational process. Third, this creates growing operational intelligence across fragmented freight networks. Over time, our objective is to become the neutral infrastructure layer supporting digital freight workflows across the ecosystem. Importantly, we think the value increasingly comes not only from enabling transactions, but from being connected to the systems where freight decisions are actually made.

Although we are still in the early days of realization of our bold vision, we are widely adopting and also well-known across the ecosystem. Today, the platform includes, as of Q2, a total of 75 active carriers, including 20 of the top 20 air carriers. These 75 carriers represent around 80% of global air cargo capacity. This capacity is being rolled out gradually into our platform, so we have plenty of room for growth within the network we already have. In the last 12 months, we processed approximately 1.8 million transactions in our platform with an aggregate gross booking value of about $1.5 billion. While our revenue is not directly derived from GBV, this number highlights the liquidity that we have in the platform. Thousands of freight forwarders and importers and exporters use our solutions or our platform, with 21,000 individual users.

You can also see some of the enterprise importers and exporters among our customers. This scale strengthens both the network effect and the quality of the operational data generated across the ecosystem. In Q2, our platform facilitated 458,000 transactions, up 15% from Q2 last year. Excluding routes involving Middle East origin, destination, or airspace, transactions grew year-over-year at a rate well in line with the company's long-term model of 20%-30% transactions growth. We announced the addition of Korean Air to the Freightos network. We have said for some time that expanding airline participation in Asia is a strategic priority for us, so confirming Korean Air as part of the network is an important milestone. As we continue adding leading carriers across key geographies, we strengthen network connectivity, increase the depth of the network, and increase the data flow through the network.

The cumulative effect of building a larger, more connected network over time is truly the bigger story here. This cohort analysis chart demonstrates the importance of liquidity and connectivity by showing how forwarders and carriers cohort deepen their usage of the platform over time. Each pair of bar represents a cohort, a group of forwarders and carriers that joined the platform in a given quarter, and shows how many bookings they placed in Q2 2026 relative to their first quarter on the platform. What you can see is a consistent pattern. The longer forwarders and carriers are in the platform, the more they transact. Even our most recent cohorts, just four quarters, are already transacting at roughly two times their initial levels. This shows how the network flywheel spins. As forwarders use the platform more, carriers receive more bookings, which in turn attracts more forwarders activity.

Despite the progress we are seeing, we still believe digital freight penetration remains at a relatively early stage. The addressable market across air cargo, ocean cargo, freight forwarding, and software solutions remains very large. You can see that we are only scratching the surface. The annual gross booking value of a spot freight is approximately $300 billion. Out of that, $1.5 billion is booking through our platform. At the same time, the software opportunity around procurement, pricing, and workflow management also remains significant. Over the past several years, Freightos has built multiple products serving different parts of the freight ecosystem. As those capabilities have become increasingly integrated, we recently unified them under our single Freightos identity and are currently migrating them onto a new common technology foundation. This is not just a rebrand exercise. It reflects how our portfolio is evolving. Customers don't think in terms of individual applications.

They think about getting work done. Whether that is moving from market intelligence into procurement into bookings, or bookings into shipment management, our goal is to make those transactions seamless across air, ocean, and eventually land freight, all within a single platform. A unified architecture allows us to deliver that experience while accelerating innovation and enabling AI-assisted workflows built on trusted freight data. We believe this makes Freightos easier to adopt, easier to expand across customer organizations, and ultimately, more valuable as customers rely on us for a broader portion of their freight operations. We believe that our scale, neutrality, workflow integrations, and ecosystem connectivity together creates a durable, competitive position that becomes increasingly difficult to replicate over time. Our monetization model reflects the dual nature of the platform. On one side, we generate recurring SaaS and data revenue through software solutions.

On the other side, we monetize transaction activity occurring across the platform. Let me come back to solutions because this is one of our most important execution priorities for the second half. Q2 solutions revenue was $4.8 million, down 4% year-over-year. At the same time, our pipeline grew approximately 30% quarter-over-quarter, on top of a 50% growth year-on-year at the end of last quarter, and continues to progress through the sales cycle. Pipeline itself is not the outcome we are targeting. Bookings, implementation, and recurring revenue are. Our focus in the second half is on improving deal velocity and conversion, getting customers live more quickly, and translating the demand we see into revenue. We believe a stronger solution execution is important both for the near-term revenue performance and over time, because deeper software adoption drives more transactions activity through the Freightos platform.