WiseTech Global reports 28% revenue surge in FY24

WiseTech Global, the logistics software developer, has reported significant growth in its financial performance for the fiscal year ending 30 June 2024 (FY24). The company's financial results disclosed a 28% increase in total revenue, reaching a value of AUD $1,041.7 million, up from AUD $816.8 million in FY23. This growth includes a 33% increase in revenue for its CargoWise segment.

In tandem with revenue growth, WiseTech reported earnings before interest, tax, depreciation, and amortization (EBITDA) of AUD $495.6 million, reflecting a 28% rise from the previous year. The EBITDA margin stood at 48% for FY24, surpassing expectations, with a run rate of 50% for the fourth quarter.

The company also revealed a strong free cash flow of AUD $333.0 million, a 14% increase compared to FY23, and declared a final dividend of 9.2 cents per share, up 10% from FY23, representing a payout ratio of 20% of underlying net profit after tax (NPAT). WiseTech's underlying NPAT for FY24 was AUD $283.5 million, representing a 15% rise from the previous financial year.

Richard White, WiseTech's Founder and CEO, commented on the company’s performance, stating, "I am pleased to announce a strong full-year financial performance, driven by the focused execution of our 3P strategy by WiseTech’s passionate and dedicated global team of almost 3,500 people." He highlighted the robust EBITDA margin achieved in the fourth quarter, which was "over a full year ahead of expectations."

The CargoWise segment continued to show promising progress, with a number of new agreements signed with large global freight forwarders (LGFF). Key additions this year included Sinotrans, APL Logistics, Yamato Transport, TIBA Tech, and Grupo TLA Logistics, with Nippon Express joining post year-end. This brings the total number of large global rollouts to 52, covering over 50% of the Top 25 global freight forwarders.

Looking ahead, WiseTech introduced three new products slated for release in FY25: CargoWise Next, Container Transport Optimization, and ComplianceWise. These products are expected to enhance the company’s service offerings, providing substantial productivity benefits to customers and impacting commercial models within the logistics sector.

WiseTech's growth strategy, known as the 3P strategy—Product, Penetration, and Profitability—played a significant role in their sustained growth. The company has increased its investment in research and development (R&D) by 41%, reaching AUD $368.2 million for FY24, which represents 35% of total revenue. This investment enabled the release of 1,135 new product enhancements, adding to over 5,600 enhancements delivered over the past five years.

WiseTech's market strategy focuses on securing relationships with the top 25 global freight forwarders and the top 200 global logistics providers. This approach has allowed the company to benefit from large-scale global rollouts and consolidation within the logistics sector, contributing to the company's notable performance in FY24.

The financial discipline of WiseTech is underscored by a cost efficiency program, which has already delivered AUD $40 million in annual run rate savings with a net cost out of AUD $14 million in FY24. The program's target has been revised upwards to AUD $50 million annual run rate savings, indicating further improvements in financial efficiency.

In light of the strong performance, WiseTech's board has declared a final dividend of 9.2 cents per share, which is scheduled for payment on 4 October 2024. This reflects the company's confidence in its business performance and future outlook.

The FY24 results also include guidance for FY25, projecting revenue between AUD $1,300 million and AUD $1,350 million, representing a 25%-30% growth, and EBITDA between AUD $660 million and AUD $700 million, reflecting a 33%-41% increase. The projected EBITDA margin for the full year is expected to be between 51% and 52%.