News / Freightos a year on: big plans, new ideas and targeting profitability in 2026

© Andrii Yalanskyi

It’s now a year into Freightos’s listing on Nasdaq, and the platform company has been busy – but not necessarily making money, however.

Revenues were up 6%, to $20.3m, but adjusted ebitda fell from a loss of $14.6m to a loss of $19m. And the operating loss worsened to $77.8m, compared with $24.3m for 2022 – but included the huge one-time, non-cash $46.7m share listing expense.

It’s a race to see which of the airfreight booking platforms will turn a profit first – word on the market is that Cargo.AI maybe ahead of the pack.

But for now, all continue to grow, and Freightos does not seem to be out of ideas yet.

The earnings call, as they always do whatever the company, noisily flagged big numbers and high growth, while the less-exciting reality was somewhat dimmed.

However, several interesting points came up. The company now offers the ability to get an estimate for trucking costs from a US airport to final destination. CEO Zvi Schreiber said: “We expect that in the near future, we will integrate the actual booking of such tracking services into the platform alongside the airline bookings.”

He added that more third-party services would be offered this year, on top of payments, insurance and customs brokerage, which forwarders can now “co-brand and embed in their own systems”. It has also introduced interlining options for airlines, and is developing a ‘white label sales portal’ for forwarders.

But the problem of money, or lack thereof, persists. As Dr Schreiber noted: “Our upcoming initiatives to increase utilisation of our data are targeted at improving the monetisation of these data assets.”

Revenue from Freightos’s platform business came in at nearly half that of its Solutions division, which provides software to forwarders, and data via Freightos Terminal. Fees associated with specific freight-service transactions booked between buyers and sellers on the platform came in at $7m, impacted by low freight rates, while Solutions booked $13.2m.

Twice noted on the earnings call was the “largest SaaS contract ever”, of some $1m, but the revenue is not yet recognised – “it’s a complicated deal”.

The plan, said CFO Ran Shalev, was to be profitable in two years. He said: “We think that adjusted ebitda margins, that is the ratio of adjusted ebitda over revenues, can grow by 8%, to 12% points annually, bringing us to profitability by the end of 2026 and leading Freightos to become a highly profitable company in the later years.”

This is based on what appears to be huge market opportunities.

“In air cargo, the market size, which also represents our potential gross booking value, or GBV, was estimated at $134bn last year,” said Dr Schreiber. “It will take many years to capture this huge market, but we are already a clear market leader and we do have strong growth momentum.

“The carrier market for Ocean is even bigger, at an estimated $250bn, but digitalisation here is really in its infancy.

“Finally, the market for multimodal services, air, ocean, and first- and last-mile … has a market size of $208bn at current prices. We have a tiny fraction of this, but we are recognised leaders in digitalisation and here we already enjoy a healthy take-weight, in some cases 10%.”

But Dr Schreiber also noted the limits to this near-$600bn market, something of an elephant in the room.

“Now admittedly, some of these markets are tied up in long-term contracts, but data suggests that 30% to 50% of the international freight markets are transactional in their nature and have potential for ‘platformification’.”

So the market could be as small as $180bn, and Freightos does have competitors – although there is currently a tendency for airlines and forwarders to sign up with multiple booking platforms. Dr Schreiber conceded.

“The assumptions I’ve just shared imply that the total addressable market for our platform business, which over time will be the dominant segment of our business, is of the order of magnitude of $10bn.”

One analyst focused on the potentially competitive threat of WiseTech, which has integrated its TMS into its airline booking platform.

“WiseTech has a big market share as an operational sort of transport management system for freight forwarders. And has been doing some form of e-booking for a few years. And now they’ve announced the more modern version of that. But it’s not news that they’re in that business,” said Dr Schreiber.

“And also their market share so far has been very, very small. We’re much bigger in e-booking. We’ve also done, I think, a good job of making sure [that] many of the freight forwarders that use WebCargo by Freightos are also using WiseTech as their operational system. So we play nice with them.”

(Let’s hope WiseTech is also ‘playing nice’ with Freightos)

“Our products complement each other and they’re not directly taking market share from us in the e-booking.”

Dr Schreiber said the plans, as ever, were to decrease costs where possible, put up prices where possible and get more parties on the platforms. Full-year 2024 guidance sees transaction numbers growth of between 26% and 34%, revenue growth of between 11% and 18%, and adjusted ebitda of a $15.3m to $13.8m loss.