Hello and welcome to Freightos Q3 2024 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 freightos.com/investors. 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 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 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. Please note that in December, Management will participate in A.G.P.'s Transportation & Electric Vehicles Virtual Conference and in January in the Needham Growth Conference also virtually. 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 Q3 performance by Zvi. Next, Ran will present the financial results and the guidance for Q4. We will 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.

Good morning and thanks for joining us to discuss Freightos' third quarter 2024 results. Before we start discussing the quarter, I wanted to mention that we just announced that Ran will be leaving Freightos at the end of this year to pursue another job opportunity. An active search is underway for a new CFO. Ran will remain engaged throughout Q1 to ensure a smooth handover. Ran has built a strong finance team that will keep everything working smoothly during the transition. We all thank Ran for his incredible contributions to the company over eight years. This quarter reflects another step forward in Freightos' mission to drive digital transformation in global freight with record transaction volumes, growth in unique buyer users and the successful integration of our recent acquisition of the Shipsta tender procurement solution, strengthening our position in the market. Our performance this quarter highlights the industry's growing reliance on digital solutions to bring transparency, efficiency, and resilience to global freight and Freightos remains at the forefront of the shift. Before diving into the results, let's briefly discuss how market conditions have influenced our performance this quarter. Air Cargo rates and volumes in Q3 remained at similar levels to Q2 and elevated compared to Q3 last year. Global Air Cargo volumes increased 11% year-on-year and rates were 30% higher on China US routes and 17% higher on China EU routes, in part due to an accelerated international direct-to-consumer e-commerce trend. Meanwhile, ocean rates remained elevated, given the ongoing Red Sea crisis, although they have recently begun to ease as the peak season of shipping for the holidays comes to an end. Against this backdrop, let's turn to see how Freightos has performed this quarter. In my comments this quarter will focus on our progress across three areas. One is platform, two, solutions and three, network. Platform and solutions are of course the two main ways we deliver our valuable products to our customers and these are also the segments in which we report revenue. Network effects are how we ensure continued long-term capital efficient growth. Let's start by discussing our platform growth. Our most important platform KPI remains the number of transactions. This quarter, we achieved 339,000 transactions, a 26% increase compared to the same period last year and marking at least our 19th consecutive quarter of record transactions. As a reminder, transactions are digital bookings placed between a buyer of freight services and a logistics service provider, a carrier or freight forwarder on our platform. This consistent growth reflects the increasing adoption of Freightos digital platform as an essential tool for global freight operations. We're a leader in digital, but digital is still only a small percentage of the total addressable market. So we expect to keep this consistent growth momentum going for many years to come. On the sell side of the platform, in Q3, we reached 55 carriers. Among new airlines are Qantas, which adds transpacific capacity with both passenger planes and freighter services across key US and Australian hubs. We also added Air India via their General Sales Agent or GSA Euro Cargo Aviation. Progress is ongoing with a couple of big carriers whose integration timelines were delayed earlier this year due to IT challenges on their side, as we discussed on our last call. I think those carriers remain on track to contribute to transaction volumes in 2025. And despite those delays, the transaction volume exceeded guidance in Q3. On the buy side of the platform, we increased unique buyer users to 19,700 in Q3, an increase of 14% year-over-year. This increase in both sellers and buyers contributed to a 35% year-over-year growth in the gross booking value of GBV, which reached $217.5 million for the quarter. Higher freight prices driven by the ongoing Red Sea crisis and international e-commerce also supported the strong GBV performance. Freightos has continued to focus on expanding the scope of transactions by integrating additional services such as trucking to provide a seamless door-to-door freight experience. In Q3, our less than truckload or LTL offerings performed well, enhancing first mile and last mile solutions and highlighting the value of our multimodal capabilities. We continue to expand our integration to third-party solution providers as well. Last week, we announced an integration with e2open. e2open, ticker symbol ETWO, is a large provider of supply chain software. This partnership embeds our Air Cargo pricing and booking directly into e2open's own transportation management system or TMS offering freight forwarders instant access to dynamic air freight rates and real-time booking capabilities. This drives real customer value, as you can see from this quote from Megan Kelley VP of Enterprise Solutions at a large freight forwarder customer, Crane Worldwide Logistics. Platform transactional revenue experienced strong growth in Q3, reflecting growth in each part of our platform WebCargo, Freightos.com and Clearit where cargo continued its rapid expansion with high transaction volumes of freight forwarders booking with airlines. Freightos.com is where imported and exporters book with service providers. And although we're not investing in growing it this year, it still had its best quarter in some time, contributing a higher take rate per transaction by serving small importers and exporters seeking efficient freight solutions. Clearit, our digital customs broker also had a good quarter. Together, these platforms highlight Freightos' ability to capture value from digital bookings across diverse segments of the freight ecosystem. The second pillar of Freightos' strategy is solutions. Here, we focus on growing recurring subscription revenue through SaaS and data products. Our subscription-based solutions empower freight forwarders and importers and exporters to improve operational efficiency and make data-driven decisions through cutting-edge digital tools. Solutions revenue in Q3 continued to grow steadily, supported by the integration of Shipsta, a leading procurement and tender management platform which we acquired in August. As a reminder, Shipsta's capability aligned closely with Freightos' mission to digitalize freight operations, enabling enterprise customers, primarily large shippers to streamline complex procurement processes for long-term freight contracts. We've started to introduce Shipsta's capabilities to Freightos' customer base and covering significant cross-selling opportunities, further validating the strategic fit between the two solutions. Meanwhile, Shipsta continued to grow its customer base in Q3, winning deals with a global leader in elevator and escalator manufacturing, a top five pharma company and a leading cosmetics brand. Sorry, I don't yet have permission to share the customer names. In addition to Shipsta, Freightos introduced other new features to improve our data offering, Freightos terminal. This included broader rates benchmarking capabilities and experimenting with AI to automatically provide sophisticated actionable insights for logistics decision-making. Now the third pillar of Freightos' strategy focuses on network or network effects, in which every customer strengthens the value of our network for all the other customers. A great example is interlining where airlines buying from airlines and therefore each new airline brings new value to other airlines on our network. Some big airline partners tell me that 15% of their bookings are interlining with other airlines. Just a few days ago, I visited a user who was the first to complete 1,000 interlining bookings. So we think that the underlining offering is finally set to really take off in 2025. Repeat usage amongst both freight forwarders and carriers remained high in Q3. Cohort analysis again proves that both freight forwarders and carriers who joined the platform not only stay, but continue to grow their engagement over time. This growth is driven by expanding network coverage and new platform features. The ongoing growing engagement from both buyers and sellers proves the buyer brings seller brings buyer network effects that drives that growth. As an example of growing supply over the 60 business days, the last 60 business days in Q3 or the total 60 business days in Q3, we communicated over 50 launches and expansions of airline supply to our customers ranging from expanded geographies to new services from existing airlines. In other words, new airline capacity was added to our network almost every day even if there wasn't a brand-new airline. On another note, during Q3, Freightos again hosted our very own annual FreighTech Conference near Barcelona. It's exciting to see that Freightos can bring together leaders across the logistics industry to align on the industry vision and roadmap for digitalizing international freight. This event, of course, also fosters closer engagement with our customers at a top executive level. And now to provide more detail on our financial performance in Q3, I'll hand over to Ran.

Thank you, Zvi. Our third quarter results surpassed expectations across all metrics. We exceeded our guidance for transaction and outperformed on gross booking value driven by high transaction volumes and elevated market rates. Revenue grew at the fastest pace since going public, highlighting the adoption of our platform and the strength of our execution. Operational improvements and lower cost of goods sold also resulted in significantly better-than-expected adjusted EBITDA, continuing the previous trend and keeping us on track to achieve positive adjusted EBITDA by the end of 2026 and to get there with cash at hand. Revenue for Q3 '24 was $6.2 million, reflecting a 21% year-over-year increase driven by strong performance across both transactional and subscription revenue. Platform revenue grew by 29% year-over-year to $2.3 million, with WebCargo continuing to lead growth through high transaction volumes. Solutions revenue increased by 17% year-over-year to $3.9 million, supported by the steady expansion of SaaS offerings and early contribution from the Shipsta integration. These results reflect the growing adoption of the Freightos platform and our ability to scale effectively while meeting the diverse needs of our customers. Gross margins in Q3 again showed significant improvement with IFRS gross margins rising to 65% compared to 54.9% in Q3 of '23 and non-IFRS gross margins reaching 72.7% up from 69.5% last year. These gains reflect Freightos' focus on scaling efficiently while maintaining a disciplined approach to cost management. Adjusted EBITDA in Q3 '24 improved significantly to negative $2.8 million, outperforming our guidance range of negative $3.4 million to negative $3.3 million and representing a $1.3 million improvement year-over-year compared to negative $4.1 million in Q3 of '23. This improvement was driven by a combination of revenue growth, improved gross margins, and disciplined expense management. These results highlight the scalability of our platform and our ability to maintain cost efficiency as we grow. During the quarter, we paid approximately $3.4 million in cash for the acquisition of Shipsta, as well as some shares, reflecting the acquisition consideration after closing adjustment but before holdbacks. Therefore, as of September 30, 2024, Freightos held $41.3 million in cash and short-term deposits, providing a solid foundation to continue execution on our growth strategy. This strong cash position gives us the confidence to achieve positive adjusted EBITDA by the end of '26 without acquiring additional funding. Our Q4 '24 guidance reflects continued strong momentum as we close out the year with several metrics adjusted upwards. Transactions are now expected to range between 338.5 and 348.5. This guidance is narrowing upwards compared to previous expectations and reflecting year-over-year growth of 18% to 21%. Gross booking value guidance has been increased to $257 million to $265 million, representing year-over-year growth of 37% to 41%. Revenue guidance has been narrowed upwards to $6.4 million to $6.5 million, indicating year-over-year growth of 21% to 24%. Finally, adjusted EBITDA guidance has been improved to a range of negative $3.2 million to negative $3.1 million reflecting further operational efficiencies and disciplined cost management. We are very pleased to be able to improve the guidance on adjusted EBITDA despite the fact that we will be consolidating Shipsta for the full quarter for the first time, together with some hiring done to support the year to come. We're now finalizing budget planning and business spending for 2025 and we expect to continue to grow the momentum of Q3 and Q4 throughout 2025. As Zvi mentioned, having built the Freightos financial operations to be a well-oiled machine and ensuring that the company is on a strong growth path and fully funded to breakeven. I feel it is an appropriate time for me to leave and pursue new opportunities. It's been a privilege to work with Zvi and the talented Freightos team and I look forward to remaining a true supporter and shareholder of the company. With that, I'll turn it back to Zvi.

Thanks, Ran. I want to take a moment to recognize Ran's contributions to Freightos. Since joining in 2016, Ran has been instrumental in shaping Freightos' financial operations including our public listing on NASDAQ, strategic acquisitions, and consistent growth. His leadership has left Freightos financially strong and well positioned for continued growth. Ran, thanks for your dedication and the impact you've had on Freightos' success. We wish you all the best in your next chapter. A search is underway for a replacement and we have a strong finance team who will continue managing all operations during the transition. Ran's committed to be available and engaged as needed throughout Q1 as well. I'm excited to bring some fresh talent and new ideas under the executive team. We're in the midst of 2025 planning and budgeting and I can tell you that the team is very excited about the product roadmap and commercial initiatives we're planning for 2025. And we look forward to sharing those during upcoming investor calls. And now we'll be happy to take your questions.

Okay. So for the Q&A session, please use the raise hand feature in Zoom. In the meantime, I will read a question that came in the chat. So I guess it goes to Ran. Why is EBITDA guidance down for Q4 over Q3 despite increased revenue?

Yes. Thanks, Anat. So it drives mainly from two things.

Ran we can't hear you.

I hear you, Ran.

Can you hear me, okay?

Yes, I hear you Ran.

Okay. Good. So I'll start from the beginning. So it mainly drives from two things. One is we are, for the first time, we are consolidating Shipsta for the whole quarter. I may remind you that we closed the deal middle of August. So in Q3, we only consolidated them for half a quarter. This time, it's a full quarter. As you all know, they are still burning some cash and we are helping them, but they are supposed to be breaking even in 2025 and also giving us some free cash flow already in 2025. So the support that the Freightos Group gives them for Q4, together with the fact that we are doing some staffing, some hiring to support the growth expected in 2025 in sales and marketing mainly. Those are the two elements that kind of slightly increases the EBITDA in Q4.

Okay. Our next call will come from the line of Jason Helfstein. Just a minute.

Thanks. Can you hear me okay?

Yep. All good.

Okay. So a few questions. First, just can you just give us some broad perspectives like what does the Trump administration in your mind mean for the industry? So kind of just broadly. Second, I know it's early, but if you have any initial thoughts about next year from a growth and a margin standpoint, obviously, you've given us the commentary on EBITDA. And then third, specifically around the guide, basically, you're increasing this year's GBV by 8%, but you're keeping revenue guidance unchanged. So just maybe talk about the dynamics there. Thank you.

Thanks, Jason. I noticed that Mike asked a similar question regarding the Trump administration. To address that, we don't have complete clarity on the situation, but I can share some context. During the first Trump administration, there were significant tariffs imposed, which did not reduce trade with China or other countries at that time. Our previous experience indicates that even if tariffs are higher now, they may not have a substantial impact on trade or freight. It is also important to consider that we are in the early stages of digitizing our industry. While we lead in digital for Air Cargo, the Ocean segment is just beginning, and a large portion of the industry, around 98%, is still offline. This presents a significant opportunity for growth. If international trade and freight increase slightly, that’s positive; if they decrease slightly, it’s not a major concern since there’s so much to digitalize regardless of any temporary downturns. Historically, World Trade has shown strong growth over decades. While Trump’s policies may have some impact, I’m not inclined to bet against World Trade in general, even with minor declines in the short term. Regarding your second question, we will provide guidance for 2025 next quarter, but we are optimistic about 2025 and anticipate faster growth compared to this year. We aim to break even in terms of EBITDA by the end of 2026, so you should see a trend towards that goal in 2025. However, we’ll share specific guidance during the Q1 call. Jason, I apologize, but I didn’t catch your third question. Could you repeat it?

Sure. So you raised the full year gross bookings. I think it's by 8%, but you're not changing the guidance or the revenue guidance. So maybe just talk about the dynamic there?

Yes. I mean the reason is, Ran, tell me if you want to add anything to this, but I'll say that a lot of, as you probably know, Jason, the GBV sort of went up a) because transactions were performing strongly and b) because the prices in the market are a little higher than we expected. As I said earlier, that's partly due to the fact that the Suez Canal, believe it or not, has been virtually closed for more than a year and is still not functioning plus some demand from e-commerce like Temu and Shein taking up some capacity on air. So the rates are a bit higher. But a fair proportion of our transactional revenue of our platform revenue is, in fact, flat fees per transaction. So a lot of it is not actually tied to the price. Some of it is. But that's why when prices in the market are higher than we expected, it only to a limited extent flows through to our platform revenue.

And just maybe one quick follow-up. If the canal was to reopen, how do you think that impacts next year?

I believe it would ultimately be beneficial for us. It would likely lead to a decrease in ocean prices, which could have a slight negative impact, but there would also be positive effects. It may potentially increase volumes in the industry to some degree and alleviate some pressure on Air Cargo. We've faced challenges due to a lack of spot capacity in Air Cargo from Asia, stemming from both e-commerce demands and the Suez Canal situation. Therefore, we would welcome a normalization of Air Cargo patterns. Overall, it would be beneficial for the world, and for us, it would probably result in a mixed effect but likely a slight net positive.

Appreciate it. Thank you.

Sure.

Okay. Thanks. The next question will come from Logan Lillehaug. Please unmute.

Hey, good morning, guys. This is Logan on for George. Zvi, my first question is on Shipsta. I'm just wondering if you can give us a little more information on kind of what the early takeaways are as you try to kind of go cross-sell that with your existing customers. I'm just curious kind of what the response has been? And then the follow-up to that would be I think you guys had said 800,000 was kind of the contribution you expected in the remainder of this year. Is that still a good number to use for Shipsta?

So regarding your second question, I'll hand it over to Ran. I'm not sure we want to provide an update on that since Shipsta is being quickly integrated into our solutions segment. Going forward, we won't be breaking out Shipsta revenue as the products are increasingly getting connected, and we'll be engaging in more and more joint deals, making it less meaningful to separate them. Overall, it's going well. We only closed the deal in August, so it's been three months, and these enterprise deals take time. However, Shipsta has already secured several purchase orders since the acquisition, which is positive momentum. We have also initiated discussions about cross-selling in both directions, introducing our products to their customers and vice versa. The cross-selling opportunities are starting to take shape. Given that these are enterprise deals, it will take time to finalize purchase orders. So far, everything is progressing as we expected, and the customers, particularly the large importers and exporters, see the value in how these products complement each other.

Okay. Understood. And then just one other for me on the e2open integration last week. I'm just curious kind of what you think that maybe does to your pipeline of carriers. I know you've talked about it being delayed a little bit with some of the internal projects that they have going. But do you think it could speed up the pipeline, I guess, at all?

Yes. To clarify, e2open offers products for freight forwarders and shippers, including importers and exporters, and we have partnered with them in that area. As far as I know, they won't assist us specifically with airlines. However, airlines are performing well. We recently launched with Qantas, which is a significant partner. We're continuously launching new products and expanding into new countries almost every day, although we don't always announce these developments publicly. Even with some major airlines experiencing delays in their IT projects, progress is being made. e2open is a notable player in supply chain software, particularly for some of the major freight forwarders we collaborate with, one of which, Crane, has publicly acknowledged using their services. This partnership aligns with our strategy, and we've completed integrations with various leading software systems. Our goal is to ensure that our Freightos product works seamlessly with our customers' other software solutions. This is an essential part of our ongoing strategy, and I believe we are succeeding in enabling our customers to utilize our software alongside their existing tools.

Got it. Thank you.

Thanks, Logan.

Okay. That concludes the Q&A session. Thanks, everyone. Have a good week.