Executive Summary / Key Takeaways

• Freightos is at the forefront of digitalizing the vast, largely offline international freight industry, leveraging its vendor-neutral platform and network effects to drive consistent transaction and revenue growth.
• The company's proprietary technology, including AI-powered dynamic pricing (Skyway) and an integrated enterprise suite (Freightos Enterprise Suite, incorporating Shipsta), offers quantifiable benefits like a 70% revenue increase in airline tests and millions in potential savings for large shippers.
• Freightos has demonstrated robust financial performance, achieving its 22nd consecutive quarter of record transactions in Q2 2025 and strong revenue growth, with non-IFRS gross margins consistently around 74%, showcasing scalability.
• Management is firmly committed to achieving breakeven adjusted EBITDA by the end of 2026, supported by ongoing growth, margin expansion, and disciplined cost management, with a strong cash position of $34 million as of Q2 2025.
• While facing competition from established logistics giants and specialized software providers, Freightos' comprehensive multimodal platform (air, ocean, ground) and deep network effects create a significant competitive moat, positioning it for long-term market leadership in digital freight.

The Digital Transformation of Global Freight

The international freight industry, a cornerstone of global commerce, remains remarkably antiquated, with an estimated 98% of bookings still conducted offline. This vast, fragmented, and conservative market presents a monumental opportunity for digitalization, a mission Freightos Limited, founded in Barcelona in 2011, has aggressively pursued. The company's vision to become the "Booking.com of international freight" is underpinned by a strategic focus on building a vendor-neutral digital booking and payment platform that connects carriers, freight forwarders, importers, and exporters across air, ocean, and increasingly, land transportation. This foundational strategy, validated by an early investment from FedEx (FDX) in 2018, positions Freightos as a critical enabler of efficiency, transparency, and agility in global supply chains.

Freightos operates through two primary revenue segments: Platform and Solutions, both designed to leverage powerful network effects. The Platform segment, encompassing WebCargo for carrier-to-forwarder bookings and freightos.com for direct shipper-to-forwarder connections, is the engine of transaction growth. The Solutions segment provides recurring SaaS and data subscriptions, empowering logistics players with advanced tools. This dual approach, combined with continuous technological innovation, forms the core of Freightos' competitive strategy in an industry ripe for disruption.

Technological Edge and Innovation Driving Value

Freightos' competitive advantage is deeply rooted in its differentiated technology, which aims to streamline and optimize complex freight operations. The company's core platform provides instant digital pricing and booking capabilities, a significant leap from traditional, manual processes. This technological foundation is continuously enhanced through strategic R&D and new product introductions.

A prime example of this innovation is Skyway, Freightos' AI-powered airline dynamic pricing tool. This proprietary machine learning solution analyzes millions of past freight bookings to predict customer behavior and optimize pricing for airlines in real-time with high accuracy. During a test, one airline experienced a remarkable 70% revenue increase using Skyway, demonstrating the tangible financial benefits of this advanced technology. For investors, this highlights Freightos' ability to develop high-value tools that directly impact customer profitability, fostering deeper platform engagement and potential for increased revenue share.

The Freightos Enterprise Suite, launched in April 2025, further exemplifies the company's commitment to end-to-end digitalization. This integrated suite, which incorporates the capabilities from the August 2024 acquisition of Shipsta, unifies freight procurement, rate benchmarking, and shipment execution for large importers and exporters. A key feature within this suite is the contract benchmarking tool in Freightos Terminal, which leverages data from Freightos Enterprise to help global enterprises compare their contract rates against market benchmarks. For a Global 1000 retailer or manufacturer spending hundreds of millions on international shipping, the ability to sharpen rate negotiations with this data can be worth millions, directly contributing to customer cost savings and Freightos' value proposition.

Freightos is also making significant strides in modernizing the historically offline ocean freight sector. In Q2 2025, the company achieved a major milestone by completing a fully integrated contract and spot booking connection with one of the world's largest ocean container carriers. This comprehensive integration, facilitated by modern APIs, covers an end-to-end workflow for rate and booking management, bringing ocean freight closer to the digital connectivity already seen in air cargo. This expansion into ocean freight significantly broadens Freightos' addressable market and long-term growth potential.

Internally, Freightos is consolidating its software under a new Fusion architecture, a major initiative launched in 2024. This modern, scalable stack will unify all software, with new products like the next-generation ocean SaaS for freight forwarders already developed on it. Furthermore, the company is rolling out an airline interlining solution, enabling airlines to book with each other and eventually allowing freight forwarders to instantly book multi-carrier routes, significantly expanding network reach. Some airline partners report that 15% of their bookings are interlining, indicating the substantial value this feature brings. These technological advancements, from AI-driven optimization to comprehensive platform integrations, are not merely features; they are foundational elements that deepen Freightos' competitive moat, enhance its financial performance through higher transaction volumes and recurring revenue, and solidify its market positioning as a leader in digital freight innovation.

Robust Performance and Clear Path to Profitability

Freightos has consistently delivered strong financial and operational results, underscoring the effectiveness of its strategy and the growing demand for digital freight solutions. In Q2 2025, the company reported record revenue of $7.4 million, a 31% increase year-over-year. This growth was fueled by a 23% year-over-year increase in Platform revenue to $2.5 million, marking the fourth consecutive quarter of over 20% growth, and a robust 36% year-over-year surge in Solutions revenue to $4.9 million. These figures demonstrate the scalability and increasing adoption of Freightos' offerings.

Operational momentum is equally compelling, with Freightos achieving its 22nd consecutive quarter of record transactions in Q2 2025, facilitating 397,000 transactions—a 26% increase from the prior year. The platform's reach expanded to 75 carriers, including key additions like China Airlines and Air Europa, and unique buyer users grew 6% year-over-year to 20,200. This consistent growth in transactions and network participants highlights the powerful network effects at play, where more buyers attract more sellers, creating a virtuous cycle.

Profitability metrics are also showing a positive trend. Non-IFRS gross margin improved to nearly 74% in Q2 2025, up from 72% in Q2 2024, reflecting the inherent scalability of the platform and disciplined cost management. While adjusted EBITDA remained negative at $2.5 million in Q2 2025, this represents an improvement from negative $3.1 million in Q2 2024. Foreign currency fluctuations, particularly the appreciation of the Euro and Shekel, partially mitigated these improvements, though effective hedging strategies have largely protected the company's cash position.

Looking ahead, Freightos has provided clear guidance for Q3 2025, anticipating transactions between 419,000 and 425,000 (24-25% YoY growth), GBV between $329 million and $333 million (51-53% YoY growth), and revenue between $7.6 million and $7.7 million (23-25% YoY growth). The company has also narrowed its full-year 2025 revenue guidance to $29.5 million to $30 million and projects an adjusted EBITDA loss between $10.9 million and $10.5 million. Crucially, Freightos remains firmly on track to achieve breakeven adjusted EBITDA by the end of 2026. This target is supported by continued revenue growth, improving gross margins, and a disciplined approach to operational expenses, with management expressing "very high" confidence in reaching this milestone without requiring additional funding, given its strong cash position of $34 million as of Q2 2025.

Competitive Landscape and Strategic Positioning

Freightos operates in a dynamic competitive landscape, contending with both traditional logistics behemoths and specialized technology providers. Its primary competitive advantage, or "moat," stems from its robust network effects and the comprehensiveness of its vendor-neutral digital platform. While competitors exist for specific services, Freightos' ability to offer air, ocean, and increasingly ground transportation, serving both freight forwarders and direct importers/exporters, creates a unique, defensible position.

Compared to traditional logistics providers like C.H. Robinson Worldwide (CHRW) and Expeditors International (EXPD), Freightos distinguishes itself as a pure-play digital innovator. Freightos offers greater efficiency in digital interactions, such as instant pricing and e-commerce integration, making it particularly attractive to digital-native businesses. While CHRW and EXPD benefit from vast established networks and broader operational scale, Freightos leads in innovation speed and product performance for digital tools. Its growth trajectory appears more dynamic in emerging digital freight areas, potentially outpacing the more steady expansion of these incumbents.

Against software-focused competitors like Descartes Systems Group (DSGX), Freightos' marketplace model fosters direct connections between buyers and sellers, leading to superior user engagement and network effects. Freightos' platforms, particularly the Enterprise Suite, provide intuitive interfaces for freight-specific tasks, potentially offering a more integrated and user-friendly experience than some of DSGX's enterprise solutions. While DSGX holds advantages in the depth of its enterprise integrations and established SaaS model, Freightos' agility and focus on an end-to-end marketplace ecosystem could drive better market share capture in digital segments.

Even against integrated logistics giants like UPS (UPS), Freightos carves out its niche by offering specialized freight solutions that can be more efficient for international shipments. While UPS possesses a massive global network and brand recognition, Freightos positions itself as a nimble digital disruptor, potentially offering faster processing for niche freight tasks. Freightos' ability to attract and retain customers is evident in its cohort data, which shows that both freight forwarders and carriers consistently increase their engagement and transaction volumes over time once they join the platform. This growing engagement reinforces the "buyer brings seller brings buyer" network effect, solidifying Freightos' competitive standing.

Risks and Outlook

Despite its compelling growth story, Freightos faces several pertinent risks. Market volatility and rapidly changing trade conditions, such as the U.S. de minimis exemption changes and the ongoing Red Sea crisis, can create uncertainty. While these dynamics sometimes increase the need for Freightos' transparency and agility, they can also lead to temporary dips in platform transactions on affected lanes or cause enterprise customers to delay large contract decisions. However, management views the impact of trade wars as "minor when compared to the secular trend of digitalization," which remains the primary long-term growth driver.

Foreign currency fluctuations also pose a risk, as over half of Freightos' operating expenses are in Euros and Shekels. The appreciation of these currencies against the dollar has negatively impacted adjusted EBITDA, though effective hedging strategies have largely mitigated the effect on the company's overall cash position. The company's reliance on technology development also means continuous investment in R&D is necessary to maintain its competitive edge, which could impact short-term cash flow.

Despite these challenges, Freightos' outlook remains positive. The company's strategic initiatives, including reinvesting in freightos.com, scaling its interlining solution, and pursuing further ocean carrier integrations, are designed to expand its addressable market and deepen its competitive moat. The continued integration of AI across its platform is expected to further enhance product offerings and operational efficiency. With a clear path to breakeven adjusted EBITDA by the end of 2026 and a strong balance sheet, Freightos is well-positioned to capitalize on the vast opportunity presented by the digitalization of global freight.

Conclusion

Freightos is not merely participating in the digitalization of international freight; it is actively leading it. By consistently expanding its platform, enhancing its solutions with cutting-edge technology like AI-powered dynamic pricing, and leveraging powerful network effects, the company is transforming a historically opaque and inefficient industry. Its robust financial performance, marked by continuous transaction and revenue growth and improving gross margins, underscores the effectiveness of its strategy.

The journey towards breakeven adjusted EBITDA by the end of 2026 is a critical milestone, demonstrating a commitment to financial discipline while continuing strategic investments in growth. Freightos' comprehensive multimodal platform and technological differentiators provide a significant competitive advantage against both traditional logistics providers and specialized software companies. For discerning investors, Freightos represents a compelling opportunity to invest in a company with a clear vision, strong execution, and a vast, underserved market, poised for long-term market leadership in the digital era of global trade.