WiseTech profit soars as logistics operators turn to software solutions

WiseTech profit soars as logistics operators turn to software solutions

WiseTech founder and CEO Richard White

WiseTech’s (ASX: WTC) bottom line has surged as logistics companies replace legacy technology to get on top of the global supply chain crisis.  

In an ASX announcement released today, the company reported a net profit of $77.4 million, reflecting a 74 per cent jump year-on-year.

Revenue for WiseTech’s core CargoWise product grew by 29 per cent to $193 million, and accounted for 68 per cent of the company’s total income ($281 million).

The result was driven by increased use of the platform from existing users, customer growth and a price change introduced in the December half to offset increased investment in R&D.

The remaining 32 per cent of revenue was accrued from acquisitions.  

“We are seeing ongoing momentum in our market penetration with three new CargoWise large global rollouts secured since 1 July 2020 and continued strong CargoWise revenue growth demonstrating the appeal of our customer value proposition,” WiseTech founder and CEO Richard White said.

“Our top line revenue growth, coupled with our organisation-wide efficiencies and acquisition synergies extraction program, enabling us to drive operating leverage, as evidence by our strong 1H22 financial performance.”

“The ongoing growth of e-commerce and strong demand for goods, coupled with the challenges posed by outbreaks of new COVID variants, has resulted in continued capacity restraints, port congestion, supply chain labour shortages and higher freight rates.”

Since WiseTech's IPO in FY16, it has completed 39 acquisitions and progressed towards integrating the intellectual property from those purchases into the CargoWise ecosystem.  

The Sydney-based company invested $83.9 million in R&D in the December half, equating to 30 per cent of total revenue.

As it looks ahead, WiseTech said it will focus on smaller ‘tuck-in’ acquisitions and “larger strategically significant acquisition opportunities.”

Two purchases include Swedish-based data integration system Inobiz and US-based Hazmatica, which provides hazardous materials compliance and management capabilities.

WiseTech believes “supply chain disruption, capacity constraints and the outbreak of new COVID-19 strains in key markets will likely continue to impact global trade in FY22.”

As a result, the company has upgraded its FY22 EBITDA growth guidance from 26 per cent to 38 per cent, jumping to an anticipated result of $295 million.

“We expect to continue to benefit from the acceleration in structural shifts from legacy systems to integrated global software solutions, and from industry consolidation, as large customers acquire businesses and add them to their CargoWise rollouts,” said White.

“Looking ahead, we remain focused on continuing to deliver breakthrough products that enable and empower those that own and operate the supply chains of the world.”

Shares in WTC are up 2.78 per cent at $43.98 per share at 2.34pm AEDT.

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