Trade Window Holdings Limited Analysis

Overview

TradeWindow is a software company serving organisations working on the front line of global trade. TradeWindow provides digital solutions for exporters, importers, freight forwarders, and customs brokers to drive productivity, increase connectivity, and enhance visibility.

Performance

The following information was extracted from Trade Window Holdings Limited's half year results, released 28 November 2024:

FINANCIAL RESULTS FOR THE HALF YEAR TO 30 SEPTEMBER 2024

TradeWindow on-track to deliver monthly EBITDA breakeven in March 2025

TradeWindow (NZX: TWL), the global trade software business, today announces interim financial results demonstrating a successful first half of the 2025 financial year (1H 25).

Strong revenue growth, underpinned by a focus on securing new large enterprise customers with significant recurring revenues, provided the confidence in late October for the company to revise revenue guidance upwards to $7.5 million to $8.3 million. Today, TradeWindow re-affirms it is on track to deliver monthly EBITDA break even in March 2025.

HIGHLIGHTS

• Revenue guidance for FY25 - narrowed upwards to $7.5 million to $8.3 million.
• Trading revenue - $3.7 million, up 22% on the prior year.
• Annual Recurring Revenue (ARR) $7.2 million, up 14% on FY24.
• Average Revenue Per Customer (ARPC) - $1,944 per month and $824 per month for shippers and freight forwarders, up 14% and 29% respectively.
• Gross margin - 61%, up 7ppt driven by a focus on continuous improvement in the sales and onboarding processes.
• Total operating expenses - $5.0 million, down 35% from $7.7 million in 1H 24.
• EBITDA loss - $1.3 million, down 73% from the prior year’s $4.7 million.
• Net loss after tax - $2.4 million from a $4.8 million loss in the prior year.
• Cash and cash equivalents - $0.5 million with $0.3 million in delayed settlement from the capital raise due 30 November 2024.

FINANCIAL UPDATE

Trading revenue was $3.7 million, up 22% from $3.0 million in the first half of FY24. Sustained growth has been underpinned by a tactical focus on winning new customers and upselling existing customers to additional value add solutions.

ARR increased by 14% to $7.2 million, illustrating TradeWindow’s healthy onboarding pipeline and customer retention rate of 97%. Recurring revenue as a proportion of trading revenue was 95%, up from 94% in FY24.

TradeWindow’s monthly ARPC was up 14% to $1,944 for exporters and importers, and up 29% to $824 for freight forwarders. The strong growth in the freight forwarder segment reflected several large enterprise freight forwarders in Australia adopting our improved TW Freight e-commerce module.

Total expenses are down 35% on the prior year due to the restructure. The largest contribution to cost savings was the reduction in salary and wages down 14% due to staff numbers being trimmed to 56, down from 79 in the prior year.

The half year EBITDA loss was $1.3 million, down 73% from $4.7 million, and the net loss after tax reduced to $2.4 million from $4.8 million. Monthly average cash burn reduced from $0.3 million in 2H 24 to $0.2 million in 1H 25.