Freightos (NASDAQ:CRGO) reported a softer-than-expected first quarter as disruptions in Middle East trade corridors weighed on transaction activity, even as the company said it continued to expand its carrier network and build its solutions pipeline.
Chief Executive Pablo Pinillos, who stepped into the CEO role after joining Freightos as CFO a little more than a year ago, opened the call by acknowledging the leadership transition and saying the company has begun a search for a permanent CFO. Pinillos said the quarter fell short of expectations but that Freightos made progress on strategic priorities including carrier expansion, solution sales, and workflow integration across procurement, pricing and execution.
“While Q1 was softer quarter than we expected, we continue making important progress across several strategic priorities,” Pinillos said.
Middle East Disruptions Pressure Transactions
Freightos processed 425,000 transactions in the quarter, up 15% from a year earlier but below its target of more than 20% growth. Pinillos said the shortfall was driven primarily by Middle East disruptions, where capacity was unavailable for extended periods across important trade corridors.
Outside the region, transaction growth was healthier, supported by activity in other markets and increased use of alternative routing, Pinillos said. April improved compared with March, but activity tied to the Middle East remained below prior-year levels. The company expects conditions to improve gradually through the rest of the year but does not expect to fully recover the shortfall incurred in the first quarter.
Gross booking value was $343 million, up 24% year-over-year. Freightos said GBV has limited direct impact on revenue because much of its transaction monetization is fee-based, but it remains an indicator of platform scale, liquidity and customer relevance.
The carrier network reached a record 79 active carriers in the quarter, up from 77 in the fourth quarter. Pinillos also said Freightos secured a major carrier addition shortly after quarter end that is expected to strengthen its position in Asia-Pacific, though the company has not yet formally announced the carrier.
Revenue Rises 3%, EBITDA Loss In Line With Expectations
First-quarter revenue was $7.2 million, up 3% from a year earlier. Pinillos said WebCargo by Freightos remained healthy, but results were partly offset by software activity within freightos.com and Clearit, the customs transaction segment, along with lower-than-expected transaction activity tied to the Middle East.
Within solutions, data products performed well while SaaS solutions underperformed relative to expectations. Pinillos said customers are showing growing demand for benchmarking and forecasting, procurement intelligence, and index-linked purchasing strategies as they seek to manage volatility across air and ocean freight.
Non-IFRS gross margin was 73.5%, within the company’s long-term target range of 70% to 80%. Adjusted EBITDA was negative $2.8 million, which management said was in line with expectations.
Freightos ended the quarter with $23.5 million in cash and short-term bank deposits. Pinillos said the company believes that provides sufficient liquidity to support its operating plans.
Cost Optimization Plan Expected To Deliver Savings
Freightos began executing a cost optimization plan in the final week of the quarter. Pinillos said the actions are intended to align the organization with strategic priorities, improve execution focus, reduce complexity and support the company’s path toward adjusted EBITDA breakeven by the end of 2026.
“Importantly, this is not just a cost reduction initiative,” Pinillos said. “It is about building a more disciplined organization capable of executing in a more predictable way and scaling more efficiency over time.”
The company expects the plan to generate approximately $4.5 million in annualized savings beginning in the fourth quarter of 2026. In response to an analyst question, Pinillos said the company saw little benefit in the first quarter because the plan was implemented late in March. He said benefits should begin in the second quarter, with the majority coming in the second and third quarters and the full run-rate savings materializing in the fourth quarter.
Pinillos also said first-quarter cash burn was affected by upfront cash costs tied to the cost optimization plan. Excluding those actions, he said cash burn is expected to track closely with adjusted EBITDA.
Solutions Pipeline Doubles As Enterprise Decisions Slow
Pinillos said Freightos’ solutions pipeline is approximately double what it was a year ago, even though the enterprise spending environment remains cautious. He said some customers are delaying decisions amid uncertainty, but the company is working to tighten sales execution and gain better visibility into sales cycles.
Freightos said customers that adopt its solutions transact about three times more, retain at higher levels and expand usage over time. Pinillos said that dynamic supports the company’s strategy of building recurring customer value first while allowing transactions to scale from a more durable foundation.
Management said the company continues to focus research and development spending on integrating procurement, pricing, quoting, booking and market intelligence into a more connected operating environment. It is also expanding multimodal capabilities, including ocean and procurement management.
Predictive Risk Forecasting And Long-Term Targets
Ian, speaking on the call, said global freight customers increasingly need to compare alternatives, reroute freight, adjust sourcing decisions and execute procurement decisions dynamically across air and ocean networks. He said Freightos is building a platform that connects procurement, pricing, quoting, execution and market intelligence across transportation modes and participants.
He also discussed Freightos’ recently launched predictive risk forecasting, which uses data that may affect global freight capacity and pricing. Ian said the company has been using AI to combine that information with customer inputs, such as key risk factors and operating regions, to forecast pricing, capacity and disruption risks.
Looking ahead, Freightos updated its full-year outlook to reflect the softer first quarter, continued Middle East disruption and a more cautious enterprise spending environment. Management said transaction growth expectations and revenue expectations have been lowered, but the company remains committed to achieving adjusted EBITDA breakeven during the fourth quarter of 2026.
For the longer term, Pinillos said Freightos continues to expect a return to a growth trajectory of more than 20% in 2027 and beyond. In response to an investor question, he outlined a 2027-to-2030 framework that includes transaction and gross booking value growth of 20% to 30% annually, revenue growth above 20% and potentially in the 25% to 30% range, non-IFRS gross margin of 70% to 80%, and adjusted EBITDA improvement of 8 to 12 percentage points annually.
About Freightos (NASDAQ:CRGO)
Freightos, trading under the symbol CRGO on Nasdaq, operates a digital booking platform designed to streamline international freight logistics. The company's core offering, the Freightos Marketplace, allows shippers and freight forwarders to compare and book air, ocean and trucking services online, providing rate transparency and live booking capabilities. By aggregating quotes from a global network of carriers and forwarders, Freightos enables customers to secure competitive prices and manage bookings through a single interface.
In addition to its marketplace, Freightos offers a suite of SaaS solutions for logistics professionals.
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