Hello, everyone. Welcome to Freightos Q4 and Full-Year 2023 Earnings Conference Call. A press release with detailed financial results for Q4 ‘23 was released earlier today and is available on the Investor Relations section of our website freightos.com. My name is [Anati Ron-Halborn] (ph) and I'm joined today by Zvi Schreiber, the CEO of Freitas and Ran Shalev, CFO. Following the prepared remarks, we will open the call for questions. We are sharing slides during the call, so we recommend using Zoom on a computer instead of dialing in by phone. The slides, as well as recordings of this earning call will also 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. 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. In discussing the results of our operations, we will be providing and referring to certain non-IFRS financial measures. You can find reconciliations to the most directly comparable IFRS financial measures, along with additional information regarding those non-IFRS financial measures in the press release on our website at freightos.com/investors. The company undertakes no obligation to update any information discussed in this call at any time. Questions can be submitted in writing during the call using the Q&A feature in Zoom. Please note that in May, management will participate in three investor events; the Virtual Investor Summit by the Investor Summit Group; the Wolfe Research Global Transportation Conference, and the Oppenheimer Annual Israeli Conference. Participation in investor conferences and events may be updated from time-to-time, and upcoming events are listed on Freightos investor website. Today's earnings call will begin with an overview of Q4 and the full-year performance by Zvi, who will also discuss Freightos long-term strategy and the 2024 plan. He will then provide insights into the current freight market trends using Freightos terminal data, including the impact of the Red Sea crisis. Next, Ron will present the financial results, offer guidance for Q1 and the full-year of 2024, and will share our long-term financial targets. We will conclude with Q&A. Zvi, please go ahead.

Thanks a lot and thanks to everyone who joined. 2023 was a year of significant achievement for Freightos. It was our first year as a publicly traded company and we take pride in having been able to raise money during a challenging year for tech investment and for the freight industry. We believe this underscores our investors' faith in our mission to digitalize international freight, bringing efficiency and transparency to one of the world's most crucial economic infrastructures. Now, the growth of any platform centers around growing transaction volumes. Q4 was the 16th consecutive quarter of record transactions with 287,000 transactions, up 53% year-on-year. Transaction growth throughout the fiscal year has been remarkable with over a million transactions processed on our platforms during 2023. This consistent and strong growth, even in a tough market, highlights our resilience and the benefits that our users, freight buyers and sellers alike, gained from the marketplace we have built for them. In addition to this resilience, in 2023 we demonstrated sound financial management. Having raised approximately $65 million net of expenses last January, we ended the year with about $52 million in the bank, which positions us to continue to execute our growth plans and reach profitability using available funds, while continuing to carefully control spend. Ran will speak more about our growth plans and expense controls. While the transaction growth is strong and consistent, we're only scratching the surface of the vast market potential that is available to us. And I will discuss the overall market potential in more detail a bit later. In the fourth quarter, we again successfully increased the number of both buyers and sellers on our platform. The number of buyers saw a year-over-year increase of 12% reaching approximately 17,600 unique buyer users. This growth not only demonstrates our…

Thanks, Zvi. I'm pleased to share our fourth quarter and full-year results, which surpasses our expectations in transactions, GBB and adjusted EBITDA, and reach the upper end of our revenue forecast. As we conclude our first year as a public company, we are striking a healthy balance between growth and a clear path to profitability. Revenue for Q4 of 2023 was $5.3 million, up 8%, compared to Q4 of ‘22, and total revenues for full-year 2023 was $20.3 million, up 6% compared to the previous year. Total platform revenues in the fourth quarter was $1.9 million, up 1% compared to the fourth quarter of ‘22, as the gains in volumes were offset by drop in prices. Solution revenue were $3.4 million, up 13% from Q4 last year. Solution revenue growth reflects solid growth in revenues generated by software solutions for freight forwarders and strong uptake of our data solution Freighters Terminal, which Zvi mentioned. We also closed our largest SaaS contract ever, although that revenue is not yet recognized. Looking at our full-year, the picture is more balanced, with platform revenues and solution revenues both increasing 6% from 2022. Profitability measures continues to improve with IFRS gross margins at 62.2%, up from 59.2% in Q4 of ’22 and non-IFRS gross margin reached 70% for the quarter, up from 65.8% in Q4 of 2022. For the full-year, non-IFRS gross margins was 67.4%, up from 65.2% in 2022. As we mentioned in our last call, the improved efficiency that supports our gross margin expansion should continue as we scale, and we therefore anticipate non-IFRS gross margins will remain at approximately 70% going forward. Adjusted EBITDA in Q4 ‘23 was negative $3.8 million, marking a sequential improvement from the $4.1 million loss in Q3 and continuing the progress seen from Q2 to Q3.…

Thank you, Zvi and Ran. We’ll start with the Q&A session now. And the first question will comes from Jason Helfstein from Oppenheimer. Jason, you can now unmute your line.

Thanks, two questions. First, about the first quarter, obviously you're guarding for slower gross bookings gross, but you're still [Indiscernible] but revenue will still be growing pretty consistent with what you saw in the fourth quarter. So maybe just talk about kind of, I think you alluded to the fact that, you know, you have some comps on the -- some tough comps still on the gross booking side, but then you're offsetting that with other factors such as take rate or solutions revenue growth. So maybe just unpack how you're able to kind of turn kind of like more modest GBV growth into still like solidly revenue growth? And then second question on the slide, we talked about the four different areas you're looking to kind of improve the product. When could we start to see that like actually flow through like the financials? Is that like back after ‘24? Is that more ‘25? Just maybe elaborate a little more when some of those initiatives actually flow through the model? I guess, and then just one more, I think the EBITDA guidance is a little better than we expected on kind of more muted revenue. Are you purposely kind of doing anything to reduce expenses that might be impacting growth in ‘24 to get the EBITDA faster? Thank you.

Thanks, Jason. Okay, three interesting questions there. Let me do my best to address them and then Ran, if you want to add anything. Q1 revenue, you're sort of asking that the growth in revenue is in some ways better than the growth in GBV. You've got to remember when you look at GBV that’s Q1 is really, you know, the prices are quite low compared to Q1, the prices in the market are quite low compared to Q1 of last year. Later this year that will be less of an impact, because by the second-half of 2023, the rates were low anyway, so if they're low this year that will be like-for-like. But in Q1 you're still seeing GBV depressed by the fact that when you compare to last year, the rates in the market are lower. And then also, as you'll appreciate, we're still in a situation where most of our revenue is from solutions. We're definitely projecting that will change over time and that platform will grow faster and eventually become a dominant business. But in the end, still the majority of our revenue is solutions and it's growing, you know, unrelated to the -- it's not directly related to the transactional growth at all. Second of all, those areas of improvement, that's a great question. I think we talked about new types of transactions like interlining, we talked about new services. I think, you know, the material effect, of course, there'll be some small effect this year, because those are all things that have started to happen. But I think you won't see any of those materially affecting this year's results. You know, interlining is a great example where we've got these new transactions, we've got transactions every day, it's growing, but it's still at this point a teeny fraction and it will take certainly a year, maybe even two years for it to really have a substantial impact, but it's something which can be very, very significant for the long-term because it creates new combinations, it creates stickiness, it creates value for our customers. We think it's really, really important for the long-term. But yes, don't if -- don't affect -- don't expect any visible impact on this year's results and even next year it will still be modest in my opinion. And then your third question was about 2024 guidance and you're sort of saying we're guiding a little bit better in EBITDA, little bit less in revenue. Look…

Who wants to be I can answer that?

Okay, yes, well I was just going to say generically and then I'll let you answer, Ran. But just say generically, yes, there's always a trade-off between growing more aggressively, but burning more money and growing less aggressively. So it's always a trade-off that we're making a judgment call on and maybe Ran can discuss, you know, how we looked at that for this year.

So I think that we have -- were able to reach to a good balance between growing our gross margins to around the 70% level, together with the fact that we were able to control our OpEx, mainly the part relating to being public expenses where we were able to lower them. So we're not anticipating any slowdown with new product release that might impact the growth in the future. I think that all in all, we are controlling the OpEx, which eventually falls directly to the bottom line. And therefore, our adjusted EBIDTA is looking batter.

But I guess the question is more like, are you doing it on purpose or it’s just the way the numbers are playing out?

No, no, no, that's how the numbers are playing out, the savings that we have not relating to employees or any kind of savings relating to growth. It's mainly around, you know, flat expenses relating to G&A and stuff like that.

Okay, thank you. I appreciate all the color.

Sure.

Thanks, Jason. The next question will come from George Sutton from Craig Hallam. George, will you? Yes.

Thank you. So I noticed you called out twice the largest SaaS deal ever. Can you just walk through what that means, how significant that is? Is that something we should start to see eclipsed in further transactions?

Yes, so that was a SaaS deal. We don't have permission to say the details of the customer, but it was a single SaaS deal of over a million dollars. I believe, Ran correct me if I'm wrong, but I believe given the rollout, it's a complicated deal. I believe very little of that will actually be recognized this year. So that's already some, you know, building up a book of revenue for next year more than anything. But I think it's also a good sign that our customers are seeing our product as the kind of product, which can get a seven-digit sort of price tag. And that's why we wanted to call it out. And I hope in time we'll have permission to give you more details of that particular deal.

So it would seem that take rates obviously the big opportunity in front of you and you know we've talked for a while now about payments and you know insurance and customs have been added since. Can you just walk through what the expectations are for attachments there? Give us an update in terms of how you think it's been going thus far and is there any change in your anticipated opportunity there?

So, yes, I mean, George, as you know, we've still got an interesting mix with the take rate. We've discussed that I think before a little. And the take rate, if you look, for example, at our two platforms, Freightos and WebCargo, Freightos again is between the end customer and the forwarders, WebCargo is between the forwarders and the carriers. And you're actually seeing the take rates on Freightos is high and it's stable. Take rate on WebCargo is much lower, but the growth is much faster and it’s -- the take rate is increasing. But what -- you never see that in the overall numbers because of the mix. So although the WebCargo take rate is increasing, it's a lot less and then the lower take rate becomes more of the mix. You've got this funny sort of mix effect, which hides the great progress that we're making on, at least the consistent progress we're making on take rate. Eventually you'll see that. I don't know exactly, I don't remember in the model when, but eventually, you know, WebCargo becomes big enough that you can really see that takeaway increasing even in the total numbers. But again, you know, clearly for us, take away is all about adding value. You know, the key for us is to work really hard to provide in those four areas that I talked about, you know, provide new types of transactions and new services and more data. And we're seeing the customers respond well. We're seeing that as we provide more value, they're willing to pay a fair price for those richer platform services.

One other question, if I could, relative to your geographic strengths and weaknesses, you talked about adding Japan Airlines, which is great. I know you added some Chinese carriers last year as well. So you know Europe had been your strength. I believe the far East is becoming stronger. Can you just talk about other parts of the world where there are big open-ended opportunities as you see them?

Yes, I mean, I think you put your finger on it. Asia is the big one for us. I mean, Europe, When it comes to WebCargo, Europe is already very strong. We've got pretty much all the major airlines and a very high proportion of the freight forwarders. You know, North America is certainly growing and partly because of an acquisition that we made and because of organic of 7L freight a couple of years ago, and partly because of, you know, just the organic growth that we have there. So North America is doing well. On freighters actually North America's slightly reversed. North America's stronger, Europe's a bit of a growth area. But in both cases, Asia has been the weak spot, not through any fault of our own, but just because for some reason the Asian carriers, the Asian airlines were a lot slower to digitize. So we've always considered Asia important, but it took us longer. And I don't know why, but it took us longer to get major Asian airlines. But as you said correctly, we have now got a few. Japan Airlines is the most recent. So we now have -- we're starting to get a good, you know, approaching a good critical mass of Asian airlines as well, plus of course the European and American airlines fly to Asia also. So yes, so Asia is definitely going to be a big growth area for us. It's such a huge market and we have a team there distributed around Asia. So I hope we're in a strong position to grow in Asia.

Thank you very much.

Okay, so we have a number of questions that came in writing. The first one is from Greg Pendy from Chardan. Can you talk about the trucking market? And how should we expect you to roll out in the space?

Sure. So, look, trucking is not a primary market. We really focus on air and ocean and the domestic trucking on its own, you know, if someone is selling, for example, in the U.S. from zip code to zip code or someone's trucking something from France to Italy, we don't at this time consider that part of our market. And there are several other companies, who are creating platforms for that area. So that's a more competitive space. It's a little bit simpler than air and ocean. And so it's not a focus for us. We focus on international shipping. We did -- I mentioned in the comments, we definitely look at trucking when it's part of the international. So if someone's shipping something internationally by air or by ocean, we are interested in the first mile and the last mile, we're interested in that whole trip end-to-end. And that’s -- but that's part of the value added service around air and ocean. When it comes to trucking on its own, we do, as it happens, we have some, through our 7L subsidiary, we do have some database of less than truckload rates in the U.S., but that's really secondary for us. You know, we picked that up through an acquisition, but we're really competing in air and ocean and in the trucking in as much as it's part of international freight and domestic trucking or trucking on its own is really a separate industry, an adjacent industry but not one that we're addressing.

Okay the next question is for you Ran, I guess, why is EBITDA guidance lower for Q1 than it was in Q4?

Yes. So indeed Q4, we were able to close at $3.8 million adjusted EBITDA loss and we are guiding for $3.9 million to $4.2 million. Those are mainly seasonal expenses that are added at the beginning of the year. It's mainly around some salary adjustments, some hirings in order to support the growth going forward, but those will balance out as we continue with the growth in revenues as per the guidance that we gave.

Okay. Another question. WiseTech has launched their new airline e-booking platform fully integrated with their TMS? Is the impact already taken into account in the revenue projections?

Well, in a way, yes, because it's not new. I mean, WiseTech have got a big market share as an operational sort of transportation management system for freight forwarders. And they've 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. And also their market share, you know, so far has been very, very small. We're much, much bigger than them in e-booking. We've also done, I think, a good job of making sure, you know, many of our, many of the freight forwarders who use WebCargo by Freightos are also using WiseTech as their operational system. So we play nice with them. And we think that our customers are happy to use the combination you use us for, what we could at, which is the e-booking, and they use WiseTech as the operational system. So this is something which has been around for a while, it hasn't slowed our growth in any way. The customers have been happy to use the combination of the two products. Again, I can't say for sure what will happen in the future. You know, we don't know exactly as they update their product if it will become more of an impact or not. But we can just go on what we're seeing so far, which is that, you know, they're a good, our products complement each other and they're not directly taking market share from us in the e-booking.

Okay, and the last question that we will take is, can you increase your rates this year with existing contracts, carriers and freight forwarders to increase revenue?

To some extent, you know, we're always looking every time contracts come up for renewal, we try to see if we can add more value, improve our product, improve our services, improve the richness of our platform, and then use that as a way to persuade the customer to pay a higher price. So that's something we're doing on a continuous basis. And again, we have to, you know, we have to earn the higher prices. We can't just impose them. And I think we're doing that quite well. We do see most often when booking contracts renew, when SaaS contracts renew, many times we're able to justify price increase by improving the product. And that's something we do on a continuous basis. And I think that's built into the projections that we made for 2024.

Okay, that concludes today's call. Thank you everyone for listening in. Have a good day.