On track to deliver monthly EBITDA breakeven

TradeWindow Investor Update
Quarter 3 - FY25
ON TRACK TO DELIVER MONTHLY EBITDA BREAKEVEN
Financial Performance
Market Developments
Product Development
22 JANUARY 2025
Dear Shareholders,
I’m pleased to report that TradeWindow has maintained strong momentum from the first half of the year. We have delivered
our strongest ever quarterly performance for the period ended 31 December 2024.
Our financial and operational metrics demonstrate continued growth:
Trading revenue: $5.8 million, up 26% on the prior year.
Annual Recurring Revenue (ARR): up 35% on 31 December 2023 to $7.9 million.
Customers: up 49 on the prior year to 562.
Customer Retention Rate: 93%, no change on FY24.
This strong performance was driven by two key factors: successful customer acquisition and activations; and the
anticipated seasonal uplift from horticultural exports and e-commerce imports. Despite ongoing global geopolitical
uncertainties, the Australasian export sector's focus on consumer staples continues to provide stable and predictable
demand for our solutions.
Looking ahead, we see significant growth potential. Global demographic trends and increasing demand for high-quality food
products position Australian and New Zealand exporters favourably for sustained growth. This aligns well with our strategic
focus, as we continue to enhance our software solutions to better serve this expanding market.
In the near term, we remain focused on two strategic priorities:
Achieving EBITDA breakeven during March 2025.
Continuing self-funded investments in our software platform to drive future growth.
We are only at the start of digitalising global trade, it’s exciting to consider the gains that could be delivered across the
supply chain with new and emerging technologies such as artificial intelligence (AI). Technology is the lever which
businesses both big and small can use to access global markets.
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22 JANUARY 2025
Key Performance Indicators - nine months ended 31 December 2024 (Q3 FY25)
(Unaudited)
Note, all comparisons are against year to date 31 December 2023 (YTD24) unless otherwise indicated.
ARR is calculated using subscription revenue for December 2024 and the monthly average of transaction revenue for Q3 FY25 annualised.
Trading
revenue
Up 7 ppt on FY24
Up 26% on YTD24
Annual
Recurring
Revenue
Customers
Up 49 on FY24
Up 35% on YTD24
Customer
retention rate
No change on FY24
Up 16% on FY24
Up 38% on FY24
61%
$5.8m
562
$7.9m
93%
$1,976
36%
$879
ARPC (Freight
Forwarders)
% of expenses
R&D and
Commercialisation
Down 11 ppt on FY24
ARPC
(Shippers)
REVENUE GROWTH
We carried momentum into Q3 FY25 with consecutive monthly growth capped off with a record-breaking December. This
achievement was driven by our operations team's outstanding execution in accelerating customer onboarding. Based on
this strong performance, we remain confident in our full-year FY25 revenue guidance of $7.5 million to $8.3 million, leading
up to our 31 March 2025 year-end.
Our 35% growth in ARR demonstrates the successful onboarding of multiple enterprise-scale customers who have now
deployed our solutions across their operations. Customer demand remains strong with our onboarding pipeline booked up
to the end of May.
The freight forwarder segment achieved a significant 38% increase in Average Revenue Per Customer (ARPC), primarily
driven by heightened e-commerce shipment volumes during the holiday season. This substantial growth reflects the
accelerating shift toward online retail consumption and our customers' critical role in servicing this expanding market.
The strong performance demonstrates both our platform's scalability in handling peak seasonal demands and our freight
forwarding customers' success in capturing the growing e-commerce logistics opportunity.
Gross
Margin

HIGH QUALITY CUSTOMERS
We power the trade operations of Australia and New Zealand's essential export, import, and logistics enterprises. Our
software solutions serve industry leaders who supply vital food commodities to global markets, including premier producers
of dairy, meat, fruit, vegetable, and seafood products. These businesses form the backbone of the A/NZ economy, delivering
essential products to millions of consumers worldwide.
Our exceptional 93% revenue retention rate demonstrates both the quality of our customer base and the mission-critical
nature of our solutions in managing their international trade operations. Our technology has become integral to our
customers' core business processes, enabling them to efficiently manage their vital trading activities.
The uptick in customer numbers over Q3 was primarily driven by pay-as-you-go sign ups for Speedi and Origin in line with
historical seasonal trends.
GROSS MARGINS
Our gross margins remain strong at 61%, maintaining last quarter's performance and representing a significant 7 percentage
point improvement year-over-year. As we advance toward profitability, we're executing several strategic initiatives to further
enhance our gross margins:
Value-Based Pricing Optimisation: We are aligning our pricing structure to reflect the enhanced value delivered through
our continued improvements and new feature releases.
Strategic Cross-Selling: Our Customer Success team are expanding revenue opportunities within our existing customer
base by promoting additional value-add solutions, with a particular focus on our Certificates of Origin service.
Customer Success: We are intensifying our customer engagement to ensure users are fully trained and extracting
maximum value from TradeWindow solutions across their operations.
Operational Excellence: We continue to refine our sales and onboarding processes to improve efficiency and reduce
delivery costs.
This comprehensive approach to margin improvement builds upon our proven track record while establishing a strong
foundation for sustained profitability growth.
COSTS & PROFITABILITY
Our path to profitability continues to strengthen, with monthly cash burn steadily decreasing as we approach EBITDA
breakeven. This trajectory toward self-sustaining operations is strategically crucial, particularly in the current challenging
capital markets environment.
Achieving profitability will enhance our operational autonomy and planning capabilities, while reducing our reliance on
external funding requirements.
22 JANUARY 2025

PRODUCT DEVELOPMENT
In the past quarter, we have made significant strides in our product development efforts, introducing enhancements across
our entire product lineup. One of our key achievements is the launch of Freight v4.07, an updated version that integrates
workflow and task management functionalities—features that were previously lacking but are essential for medium to large-
sized freight forwarders and customs brokers.
Additionally, we have rolled out an upgraded e-commerce API, which further strengthens our offerings in the Freight and
Speedi products. This enhancement comes in response to the booming e-commerce sector, exemplified by the rapid growth
of platforms like Temu and others. We expect to capture a substantial share of this growth in 2025 through our continuously
refined e-commerce API.
Our cornerstone product, Cube, has also advanced significantly over the past quarter. We have enhanced our events and
tracking capabilities, enabling real-time container tracking with predictive ETA and ETD functionalities, powered by AI,
machine learning, and various integrated algorithms. This empowers our clients with unparalleled precision in visibility, risk
management, and decision-making related to trade movements.
Furthermore, our Origin solution has been updated to include TAFTA (Australia/Thailand) and AIECTA (Australia/India) Free
Trade Agreements (FTAs).
HOSTED INFRASTRUCTURE ENHANCEMENTS
We are in the process of upgrading our hosting options, transitioning our hosting services to Microsoft Azure Cloud for all
Freight clients. Migrations for over 300 freight forwarders have commenced, which will enhance control and quality
management while improving response times facilitated by our in-house team. This offering will not only add efficiency, but
also deliver a new revenue stream.
22 JANUARY 2025

R&D, AI & MACHINE LEARNING ADOPTION
Our Research and Development team has experienced incremental and sustainable growth in both team size and capabilities,
with plans to attract top talent for our development centre in the Philippines. As part of our commitment to innovation, we
have embarked on our AI adoption journey within our development tools. Beginning January 1, 2025, all development teams
will gain access to advanced AI tools, aimed at accelerating our development processes.
According to a joint survey by OutSystems and KPMG, 75% of software executives have reported a reduction of up to 50% in
development time due to AI implementation . At TradeWindow, we are already witnessing substantial improvements in
development efficiency and speed. We will continue to explore additional use cases for AI and machine learning and
anticipate providing quarterly updates on our progress.
Moreover, we are leveraging machine learning and AI within our internal data lakes to enhance decision-making, with ongoing
exploration of use cases for predictive analytics across our business functions. This refined update captures the essence of
our recent advancements while providing clarity and insight into our ongoing initiatives.
OUTLOOK
The current currency environment, with relatively weak New Zealand and Australian dollars, continues to support export trade
volumes. Looking ahead, anticipated interest rate cuts in both markets should further enhance the competitive position of
A/NZ exporters.
The enduring global demand for high-quality Australian and New Zealand products, combined with favourable exchange
rates, provides a strong foundation for sustained trade volumes with our key international trading partners. We believe that
this provides fertile grounds for our continued growth in 2025.
Thank you for your ongoing support.
Kind regards
AJ Smith,
Executive Director & CEO
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22 JANUARY 2025
Investors
Andrew Balgarnie
Chief Strategy Officer
+64 27 559 4133
Media
Richard Inder
The Project
+64 21 645 643
Source: https://www.outsystems.com/news/ai-software-development-survey/