Hello, and welcome to Freightos' Q3 2025 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, freighters.com/investors. My name is Anat Earon-Heilborn, and I'm joined today by Dr. Zvi Schreiber, the CEO of Freightos; and Pablo Pinillos, CFO. Following the prepared remarks, we'll 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. 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 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. Before we begin, I'd like to note our upcoming investor events. In December, Freightos will participate in the AGP Electric Vehicle and Transportation Conference and [indiscernible] year-end investor conference. In February, the company will participate in the Oppenheimer Emerging Growth Conference. Links to webcast when applicable and other event updates can be found on our website. Today's earnings call will begin with an overview of Q3 performance and overall progress by Zvi. Next, Pablo will present the financial results and the guidance for Q4 and full year 2025. We'll conclude with Q&A. Questions can be submitted in writing during the call by using the Q&A feature in Zoom. Zvi, please go ahead.

Thanks, Anat, and welcome, everyone. And today, I'll cover 3 topics. I'll start with the quarter's highlights and what they mean. Next, I'll discuss the product and network progress that will power our next phase of growth. Lastly, I'll share how the digital transformation of ocean carriers is creating a significant midterm opportunity for Freightos, particularly as we expand our multimodal capabilities. First, let's start with the quarter. In Q3, we processed 429,000 transactions, up 27% year-on-year. It's our 23rd consecutive quarter of record transactions. Unique buyer users were about 20,600, and the number of carriers with more than 5 bookings from our platform during the quarter increased to 77%. Most major airlines are already connected to our platform. So new airline additions are often regional or niche airlines at this point. We're focused on expanding airline coverage in Asia and expect further global expansion as smaller carriers look to leverage our digital channel. These metrics tell a consistent, more buyers and more sellers are using Freightos more frequently, driving short-term revenue growth and long-term scalability of our business. This gives us both breadth and depth on the platform, more opportunities to monetize transactions and to deepen relationships with higher frequency users. Now, let's put this performance in context of the market. During Q3, air cargo volumes increased 4% compared to Q3 2024, reflecting growth in many markets, even as transpacific e-commerce volumes faced headwinds from tariffs and changes to U.S. import regulations. According to our Freightos' Index, FCX, average global air cargo rates decreased 6% compared to Q3 last year. The bigger picture in the freight market, given tariffs and macro uncertainty, is that of volatility and nervousness. Such conditions make speed, transparency and automation in logistics more important. When customers need to move faster and make decisions with…

Thank you, Zvi, and good morning, everyone. I will now go through how the quarter's operating progress translated to the P&L, cover cash and liquidity and then walk through our near-term outlook and priorities. Revenue for the quarter was $7.7 million, up 24% year-over-year. Platform revenue was $2.6 million, up 15% year-on-year, and Solutions revenue was $5.1 million, up 30% year-on-year. As Zvi we said, Solutions and Platforms support each other. The way solutions drive bookings is practical and proven. Our mission-critical SaaS solutions become embedded in a customer's day-to-day operations. Our customers centralized pricing and workflow on freighters and makes it far easier for them to go and then convert those quotes into bookings. Our data supports that dynamic, forwarders that adopt our tools tend to grow transaction volume materially over time. Looking to our cohort data, we see 3 to 4x growth in transaction volumes for cohorts over their initial 2 years using our platform. Put it simple, solutions creates the stickiness that enables more frequent platform bookings because we're still early in the industry's transition to platform model, solutions today represents the majority of our revenue. Over the long term, we target Platform revenue to scale faster and ultimately outpace solutions revenue. Now, let's take a closer look at Platform revenue. You will notice that platform transaction volume and GBV are growing faster than our platform revenue. This is purely due to our business mix. Take rates are not going down in any segment. Our WebCargo platform, which connects freight forwarders with carriers, consistently grows at a faster rate than Freightos.com, which serves importers and exporters. WebCargo operates mainly on a fixed fee model with a lower implied take rate compared to Freightos.com higher take rate structure. As the fastest-growing web cargo continues to outpace Freightos.com, the…

Our first question will come from the line of Jason Helfstein.

So when I look at the contribution margin, it's basically year-to-date, it doubled year-over-year, so clearly, you're seeing efficiency and the sales cycle. I think your OpEx, excluding sales and marketing, is up 9% against revenue up, I don't know, some 27% or 29%. And obviously, you called out the pressure of the FX. So you're doing everything you can do. I guess the question is, and you've now told us you're going to -- the plan is breakeven EBITDA by the end of next year. So I guess, is there anything you could do to grow faster organically or inorganically? And I guess, how much of the gating factor growth at this point is kind of the path to breakeven EBITDA and managing the cash balance? And then I have 1 quick follow-up.

Yes. Thanks, Jason. Well, that was a complicated question. So I'm thinking where to start from. The -- look, it's a constant balance. I mean, even now as we finalize our budget for next year, it's a constant balance between growth and breakeven. And we very much want to grow and break even by the end of next year. And so it's a balance between them. For sure, yes, we're doing what we can. Thank you for calling out. We have done a lot of work on efficiency. In fact, if you look back a bit, we've grown in the last -- 2 years, I think revenue has grown 40-something percent and the team hasn't grown at all. So we're certainly becoming more productive the whole time. And beyond that, we are, of course, now with AI, there may be further opportunities for efficiency. So we've been doing that the sort of the hard way, and now, there may be other ways to become more efficient. And Pablo mentioned, we're already seeing some improvements in the customer support using AI. So we're going to continue pushing on that side as well. And then, it's just the balance between how much do you want to spend in sales and marketing to grow, but also to break even. And we'll -- we're finalizing a budget, which will allow us to grow as fast as we can without compromising the target of breakeven.

And then just to follow up. I mean, where do you feel like we are with kind of the tariffs volatility? Like are we at a point where now you feel like you're seeing kind of normal shipping volumes? And I don't say normal, like the volatility has slowed down. Like are their patterns now that makes sense? Or it still feels like the ecosystem is still working through the kind of week-to-week changes around certain products and certain tariffs, et cetera? And I don't know if you want to call out China specifically, but any color how it's impacting your kind of thinking, your forecasting of the business.

Yes. It's a bit of both. I mean, certainly, there is not as much uncertainty as there was in April or something like that. But even so I just saw today a headline that President Trump canceled certain tariffs on food. And so it's still -- a, there's still some uncertainty, and you never know what you're going to -- what's going to happen tomorrow. And secondly, even if there's no uncertainty, the tariffs are higher, and that certainly creates some friction for imports to the United States. So in the market data, I presented actually that the overall global trade is up on the year, but trade with the U.S., if I'm not mistaken, was down a bit. So it's still an issue. The uncertainty is still an issue, the tariffs themselves still creates some friction, but it's not at the levels that it were and people are at least to some extent adjusting to the new normal. Like I said in my remarks, it affects us more. We don't feel it's affected. On the platform side, it can be good as well as bad because uncertainty drives the need for marketplaces and finding new opportunities to ship in different ways or from different sources. But solutions, yes, although things have somewhat stabilized, people are still -- freight forwarders, importers and exporters are still more nervous than they used to be to write big checks. We're now busy talking to customers about their plans for next year and getting a feel for whether things can get back to normal. But it was harder to get a big contract signed this year for sure, although we did several, but it was harder than expected, yes.

Next question from the line of George Sutton.

I wondered if we could just talk about penetration. You mentioned a lot of the growth will come from -- at least on the air cargo side, from just growing your penetration with the carriers. Can we talk about where we stand in terms of penetration? Any sort of cohort type analysis that you could suggest?

Yes. If you look at -- it sort of -- it varies quite a bit by geography. Our penetration in the European market from a supply perspective is very high. We've got virtually every airline in Europe turned on to the platform, at least for a lot of the capacity, not always for all their capacity. But in Europe, we have a very significant penetration. We have a very nice proportion of the freight forwarders in Europe. I don't know have exact numbers to hand. I don't know exact numbers at all because there isn't a very reliable list, but very significant in the U.S., we're growing nicely, but it's still smaller penetration. And in Asia, we reckon we're still sort of -- whether you look at supply or demand, we're still in the single digits of penetration. That's still a huge amount to do there.

So I wondered if you could explain the Visa link and how that might impact your opportunity? And just give us a sense of how it was occurring prior to that or separate from that.

George, you said Visa?

Yes.

Yes. Good. So 1 of our initiatives with airlines, both to add more value and to get -- to monetize more to get a better take rate with the airlines is handling payments. That's still a minority of the transactions, the vast majority of transactions on our platform or with airlines. And in most cases, the freight forwarder books on our platform and then pays through an off-line system. But we have a growing platform value add, where we handle the payments. And up to now, we've been doing that with other financial partners or through our own sort of bank accounts in certain cases, depending each country with its regulation, et cetera. Now, with Visa, obviously, we have a partner who's a worldwide name and who has credit lines and other sort of financial technology that we just don't have. So we definitely think that this will enhance our payment solution a lot, and we hope to see payments growing. And over time, really bringing up our average take rates with the airlines, which as you know is one of the issues is we have this fantastic amount of airline revenue being generated from our system. The monetization is still modest. Payments is definitely a way we increase that. and the partnership with Visa is a key way that we make our payments more attractive.

Last question for Ocean [indiscernible] midterm growth opportunity, but maybe how you define midterm?

George, you were pretty cut off there, but I think I got the question.

I'm just curious how you're defining midterm growth relative to the ocean carriers.

Okay. Yes, very good. That's what I thought you said. So how do I define midterm? Let's say only meaningfully contributing to revenue in 2028. Next year, I don't think Pablo is even going to budget at all for -- there'll be some, but I don't think there's -- it will be even in the budget, 2027. It will start growing. I think it's only in 2028 that we get significant revenue from that aspect. But, of course, just to remind you, and we've discussed this before, George, but once you become the leading platform, that can be a -- that can hold for decades. So this is a very strong long-term opportunity.

Yes, to double down on what you just said, and we will provide guidance for 2026, whenever we provide, but we will probably won't assume revenue for oceans bookings in 2026 at all, and really, really, really probably a small 2027. Any significant will come in 2028, as you said.

But on the solutions side, we did start to see -- I mentioned the deal with Nippon Express and a couple of others where I didn't give names, we will see a nice contribution from solutions to ocean in already in 2026.

Okay. I'm going to read a question from the chat. So as you've stated earlier that platform revenue will be driving the revenue in the future, what target do you have for the take rate by the end of 2026?

Pablo, you want to take that or do you want me to comment?

No, I can start. So we are finalizing the plan for next year. And of course, the -- we will be driving plan to increase the take rate. It will all depend, as we've been saying about the mix, the business mix and how the growth in the WebCargo platform versus the Freightos.com, and within that mix, what are the fasting growth carriers that will drive that mix. Right now, we are in the middle of addressing all of that, and -- but for sure, the take rate will not decline year-on-year, and we are expecting that to grow.

Next question is why is revenue growth slowing down in Q4 despite the addition of carriers and forwarders? How much do you expect FX headwind to affect the revenue? And if the FX stays at the same level as Q4, would it delay the timing of breakeven point?

Let me take this, Zvi. So this, again, for us, is the slowdown in Q4 revenues is related to slower revenue -- solution revenues coming in that we have seen a slightly delayed in being able to close business. It's important to say as well that the -- most of our revenue in Solutions revenue is recurring with a small piece of nonrecurring revenue, and the decline of Q4 that we see is specifically related to a competition of one of development that finished in Q3 that when we did plan, we expected to -- that the Solutions revenue will overcome that decline. But so far, we are -- due to the delays, we are not able to foresee that in the future. And the second question is, if FX stays at the same level as Q4, it won't -- from our point of view, it doesn't mean that it will delay our breakeven in 2026. As a guiding principle, we're going to manage expenses as needed to breakeven in Q4 2026 even if the Solutions revenue, it doesn't accelerate in the future.

And I think Pablo, the FX is mainly affecting us on the expense side, right? Our revenue is mostly dollars and less affected by FX.

Yes. But if the FX maintains the same in a 12-month cycle, everything at the end compensates.

Yes, because we'll budget for next year based on the exchange rates that we know now. And just to emphasize a point that Pablo made, the -- our solutions revenue is mostly recurring. And recurring revenue for solutions will be up, we believe, in Q4, not by as much as we hope for the reasons we discussed, but it will be up. And if you see a dip, it will be just, as Pablo said, because of a nonrecurring project, which has recently come to an end.

Okay. The next question, I think we answered part of it, but the second part -- of the first part, so you recently launched WebCargo Rate & Quote integrating Air and Ocean quoting into a single multi-model platform. What early traction have you seen with major forwarders? And how quickly do you expect Ocean to scale relative to Air in terms of transactions and platform revenue? So I think we answered to George about the second part, but maybe we can talk about the traction with forwarders?

Yes. So I want to separate when it comes to Ocean, which is obviously a major part of how we grow in the next few years. I want to separate Platform and Solutions. Platform, as we said, we are connecting 1 by 1 to some very big ocean carriers, which is exciting progress, but we're not yet at critical mass. We're not expecting for at least a few months to see real volume on the platform side. But Solutions, we mentioned Nippon Express, we mentioned a couple of others. I can also mention that we've just started selling ocean to some of our small forwarders. And so we expect to see good traction on the Solutions side. With Ocean, we have -- the great thing is it's existing customers. So we have 4,000 freight forwarders roughly using our solution for air using our software for air. And so it's just going back to the same freight forwarders and saying now we've got a modern solution to ocean, you can do air and ocean in 1 platform in a beautiful modern software. And so we expect that to be a major part of how we grow solutions revenue next year.

Okay. Our next question is about revenue share with partners. If partners like Meg cap Aviation bring 13 carriers to Freightos platform, what would make a benefit from the partnership? Would get the revenue share from this partnership?

It's not -- yes, interesting question. It's not really a revenue share scenario because they are resellers of the carriers. They're a general sales agent or whatever arrangement they have. So from our perspective, they're a carrier. They may be a virtual carrier, but we treat them as a carrier. They pay us a fee for bringing them a booking. And then, what's between them and the airline is between them and the airlines. So they're not a channel in that respect. They may be a reseller of the airline. But as far as we're concerned, they're a carrier or a virtual carrier. They're the ones selling the capacity on our platform.

Okay. Our last question, I believe. Could you please say how much proportion is recurring and nonrecurring among the solutions revenue?

I don't think we give numbers, but Pablo, I think it's fair to say that a very big majority is recurring of our solutions revenue, right?

Nonrecurring, it doesn't get up to 5%.

Yes. We only mentioned it this quarter because there was a big part of the nonrecurring came to an end. And that's actually not -- it's not our business model to do nonrecurring. We do it sometimes because we have to help the customer -- if we need to help the customer with a project and help them adopt our software, we do it sometimes. And we had 1 big project, which just came to an end on the nonrecurring, but yes, as Pablo said, that's not our model. Our model is selling SaaS and data subscriptions, and it's almost all recurring.

Okay. That was the end of the questions. Thanks, everyone, for joining. Have a good day.

Thanks.

Thank you.