Freightos Limited — FY 2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone Q4 earnings release. Financial statements are audited and prepared under IFRS in U.S. dollars; the filing does not provide a clear standalone Q4 income statement or cash flow statement. Q4 operating indicators are disclosed below.
Business context
Freightos operates Freightos.com and WebCargo, digital platforms for freight quoting, booking and payments, alongside subscription software and data products. Revenue comes from two segments: Platform transactions and Solutions subscriptions and services. The January 2023 SPAC business combination occurred after the reporting period; Freightos began Nasdaq trading as CRGO and CRGOW in January 2023.
Key financial and operating metrics
| Metric | FY 2022 | FY 2021 | Change |
|---|---|---|---|
| Revenue | $19.1 million | $11.1 million | +72% |
| Gross profit / margin | $11.2 million / 58.8% | $6.5 million / 58.7% | Margin broadly flat |
| Operating loss | $(24.3) million | $(16.3) million | Loss widened |
| Net loss | $(24.7) million | $(16.4) million | Loss widened |
| Adjusted EBITDA, non-IFRS | $(14.6) million | $(12.4) million | Loss widened |
| Cash used in operating activities | $(14.9) million | $(17.3) million | Cash use declined |
| Cash and cash equivalents at year-end | $6.5 million | $25.1 million | Down $18.6 million |
FY 2022 revenue comprised $12.4 million from Solutions, up 59%, and $6.7 million from Platform, up 103%. Acquisitions contributed materially: Clearit added about $3.2 million to Platform revenue, while Clearit and 7LFreight together contributed about $2.5 million to Solutions revenue. Gross margin was reported as 58.8% under IFRS; management also cited a 65.2% non-IFRS gross margin.
Q4 Platform indicators were 210,765 transactions, $170.0 million GBV, 15,646 unique buyer users and 35 carriers. Versus Q4 2021, transactions rose from 96,863, GBV from $112.6 million, buyer users from 11,412 and carriers from 28. FY GBV was approximately $610.8 million pro forma, up 102% from $302.7 million in 2021; the pro forma figures include acquisitions and are not reported revenue.
At December 31, 2022, total assets were $41.8 million, current liabilities $17.1 million and equity $21.7 million. Current liabilities included $3.3 million of user accounts, matched by $3.3 million of user funds. Short-term bank debt was $2.5 million and was repaid in January 2023. Contractual undiscounted lease liabilities were $1.1 million. The company reported no positive operating cash flow to date.
Material changes and unusual items
- Revenue grew substantially, but operating and net losses increased as operating expenses rose to $35.5 million from $22.9 million. Research and development, sales and marketing, and general and administrative expenses all increased.
- FY 2022 included $2.9 million of business-combination transaction costs and $0.7 million of redomicile costs. The company also recorded $2.6 million of share-based marketing expense relating to airline participation in its Digital Air Cargo Council and a $0.9 million gain from changes in contingent consideration fair value.
- Acquisitions increased goodwill to $15.6 million and intangible assets to $9.5 million at year-end. Clearit was acquired in February 2022; 7LFreight was acquired in December 2021.
- The business combination closed January 25, 2023. The company reported raising approximately $82.4 million in the transaction and related financings. Shares outstanding were 36.1 million at December 31, 2022 and 47.4 million after the closing, reflecting subsequent transaction-related issuance and recapitalization.
Outlook, management commentary and risks
Management intends to prioritize transaction and GBV growth over near-term net revenue, profitability and cash flow, while continuing to invest in platform development, sales and marketing. It stated that it did not expect annual free-cash-flow burn to exceed $25 million and anticipated 2023 would be the peak year for cash burn. These are forward-looking statements, not reported results. Management concluded that liquidity, including the subsequent business-combination proceeds, would be sufficient for at least 12 months from authorization of the financial statements.
Management described freight as cyclical and reported downward trends in volumes and prices, including a sharp decline in ocean rates, as consumer spending shifted away from goods and capacity increased. Risks include exposure to freight rates and global trade, continued losses and potential financing needs, and dependence on platform adoption and carrier connections. Seller concentration is notable: the top seller generated about 19% and the top five about 58% of pro forma GBV in 2022. Other disclosed risks include competition, cyber and platform disruptions, payment and credit losses, regulatory and sanctions compliance, geopolitical conditions affecting Israel and other operating locations, and foreign-exchange movements.
The filing reports effective disclosure controls as of year-end, but does not include management’s internal-control effectiveness assessment or auditor attestation, citing the transition period for newly public companies and emerging-growth-company status. The company also disclosed no material legal proceedings then pending, while noting ordinary-course litigation risks.
Important facts for investors to verify
- Review the audited financial statements and notes for cash restrictions, acquisition accounting, goodwill impairment assumptions, contingent consideration and the composition of liabilities.
- Confirm the amount of business-combination proceeds actually retained after redemptions, transaction costs and other uses, and assess subsequent cash burn against management’s outlook.
- Reconcile reported revenue with pro forma GBV and Q4 operating metrics; note that trucking bookings were included in transaction counts beginning in Q3 2022.
- Assess freight-rate sensitivity, seller concentration and the extent to which growth in transactions and GBV converts into revenue, margin improvement and cash generation.
- Review post-combination share dilution, warrants, equity-plan authorizations and lock-up expirations, as well as the company’s progress in strengthening public-company controls.