Freightos Limited — FY 2023 Form 20-F
Reporting period: Year ended December 31, 2023. This is an annual report, not a standalone Q4 filing. Financial statements are audited and prepared under IFRS in U.S. dollars. The filing provides Q4 operating metrics, but not a clear set of Q4 financial results.
Business context
Freightos operates digital freight-booking platforms, including Freightos.com and WebCargo, and sells freight software and data subscriptions. It reports two segments: Platform and Solutions. The company completed its business combination and began Nasdaq trading in January 2023 (CRGO ordinary shares; CRGOW warrants).
Key financial and operating metrics
| Metric | FY 2023 | FY 2022 |
|---|---|---|
| Revenue | $20.3 million | $19.1 million |
| Platform revenue | $7.1 million | $6.7 million |
| Solutions revenue | $13.2 million | $12.4 million |
| Gross profit / IFRS gross margin | $11.8 million / 58.2% | $11.2 million / 58.8% |
| Net loss | $65.5 million | $24.7 million |
| Adjusted EBITDA (non-IFRS) | $(19.0) million | $(14.6) million |
| Cash used in operating activities | $27.1 million | $14.9 million |
Revenue grew 6% year over year in both segments. The company reported a 67.4% non-IFRS gross margin for 2023. Net loss included a $46.7 million one-time, non-cash share-listing expense and was partly offset by a $9.4 million non-cash gain from the change in fair value of warrants.
Q4 operating indicators: Transactions were 286,938, versus 210,765 in Q4 2022; GBV was $187.5 million, versus $170.0 million; unique buyer users were 17,586, versus 15,646; and carriers numbered 45, versus 35. These imply year-over-year growth of approximately 36%, 10%, 12% and 29%, respectively. GBV for FY 2023 was $671.7 million, up 10% from $610.8 million on a pro forma basis.
Liquidity, debt and financial position
At year-end, cash and cash equivalents were $20.2 million. Including a $20.0 million short-term bank deposit and $11.5 million of short-term investments, management reported cash, cash equivalents, deposits and short-term investments of $51.7 million. Cash flow from investing activities was $(32.2) million, largely reflecting investment of funds in deposits and short-term investments; financing activities provided $73.2 million, including proceeds from the business combination. Total assets were $87.7 million and equity was $72.0 million.
The $2.5 million short-term bank loan outstanding at year-end 2022 was repaid in January 2023; no bank loan was outstanding at December 31, 2023. Year-end lease liabilities were approximately $1.3 million. Management stated that available liquidity was sufficient to meet business needs for at least the next 12 months. User funds held for platform customers are matched by user-account liabilities and should not be treated as unrestricted company cash.
Changes, outlook and material risks
- The 2023 net loss increased substantially, primarily because of the listing expense, higher operating costs and other transaction-related items. Excluding certain items through its non-IFRS measure, Adjusted EBITDA loss also widened to $19.0 million from $14.6 million.
- Freightos said it is prioritizing transaction and GBV growth over near-term revenue, profitability and cash flow, while continuing investment in product development, sales and marketing. It described 2023 as the expected peak year for cash burn and said it did not anticipate annual free-cash-flow burn exceeding $20 million. Actual operating cash outflow was $27.1 million; the filing’s stated free-cash-flow outlook and reported operating cash flow are different measures and merit reconciliation.
- Management cited a cyclical freight market: 2023 shipping rates fell amid easing demand and increased capacity, while Red Sea disruptions late in the year contributed to rate increases. Freightos is exposed to freight volumes and rates, which can affect GBV and revenue.
- Seller concentration is notable: the top five Sellers generated approximately 56% of 2023 GBV. Other central risks include competition, ability to attract and retain marketplace users, dependence on platform adoption and carrier digital connections, customer credit and payment risks, cybersecurity and regulatory compliance.
- Geopolitical risks include the Israel-Hamas conflict, impacts on employees and operations in Israel and the Palestinian Authority, and Red Sea shipping disruptions. The company reported workforce reductions of approximately 50 employees (about 13%) in July 2023, with $0.9 million of reorganization expense.
- No material legal proceedings were reported. Contingent commitments include potential shares tied to acquired technology and airline booking targets, and up to $1.0 million of Clearit consideration subject to 2024 milestones. The filing reports that no Clearit milestone payments had been made through year-end.
Most important facts for investors to verify
- Reconcile the $27.1 million operating cash outflow with management’s cash-burn and free-cash-flow outlook, and review the company’s cash runway assumptions.
- Assess whether Q4 transaction growth translated into sustainable revenue and improving platform monetization; Q4 revenue and profit are not clearly provided in the filing text.
- Monitor Seller concentration, especially the top-five share of GBV, and any changes in major carrier and freight-forwarder participation.
- Evaluate the effect of freight-rate volatility, Red Sea disruptions and Israel-related operational risks on bookings, staff availability and liquidity.
- Review dilution exposure from outstanding options, RSUs, warrants and contingent share awards; 47,894,688 ordinary shares were outstanding at December 31, 2023, and 14,850,000 warrants were outstanding.
- Confirm the terms and availability of unrestricted liquidity, distinguishing company funds from customer user funds, deposits and investments.