Trade Window Holdings Limited (TWL) Earnings Call Transcript & Summary

[Foreign Language] Good afternoon, and welcome to Trade Window's 2026 Annual Meeting of Shareholders. My name is Alasdair MacLeod. I'm the Chair of Trade Window. Today is Tuesday, 29th September 2026, and the meeting is being conducted as a virtual meeting through the Computershare meeting platform. The presentation accompanying today's meeting will be released to the NZX and ASX and made available through Trade Window's investor channels. Before we proceed, I draw your attention to the important notice on the slide. It should be read together with Trade Window's financial statements, annual report and market releases. Any forward-looking statements are subject to risks and uncertainties and actual outcomes may differ materially. A few housekeeping points before we begin. [Operator Instructions] Voting will be conducted by poll on all 5 resolutions. If you're eligible to vote, select the vote tab and choose your voting direction for each resolution. Your vote is recorded when a tick appears, and you may change it until I declare voting closed. I now declare voting open on all items of business. I will give you notice before voting closes. Let me introduce the directors joining me today. Phil Norman, Kerry Friend, our recently appointed Australian independent directors, Susan Beling and Brodie Collins; and our former Chief Strategy Officer, Andrew Balgarnie, who has also been appointed as an Executive Director. Also joining us are representatives of our auditor, UHY Haines Norton Sydney, our legal advisers and members of Trade Window's senior management team. The company's constitution requires a quorum of 10 shareholders. I confirm that this requirement has been met and declare the meeting formally open. The business of the meeting is set out in the notice of meeting. I'll provide a brief chair's address and a recap of FY '26, then Dewald Janse Rensburg, our new Chief Executive, will then update shareholders on customers, product, strategy and the FY '27 outlook. We will take shareholder questions before moving to the 5 formal resolutions and other business. Turning now to our performance. I don't want to dwell too long on the FY '26 result as it was reported to the market in May, but I did want to highlight what's driving this success. This chart shows our track record of organic revenue growth alongside the financial discipline moving us toward near-term profitability. The violet columns on the left show trading revenue increasing from $8 million to just under $10 million, with our FY '27 guidance implying a midpoint of $11.1 million for the year ending 31 March 2027. Why are we growing? We're growing because we deliver trade solutions that respond to customers' core business needs and give them real productivity gains. We see the impact of this in the revenue growth in each of our customer segments. Average revenue per shipper customer is up 20% in the first quarter of FY '27. And average revenue per freight forwarder customer is up 19%, both continuing to be driven by our focus on mid-market and enterprise customers and the ongoing recontracting of customers onto our refreshed pricing plans. We see it in recurring revenue, too. Annual recurring revenue has compounded at 28% a year, the most durable measure of growth in this business. We're also well placed to capture the opportunity ahead of us, particularly in Australia. And in contrast to our competitors, we're nimble and we don't carry the weight of technical debt carried by our largest competitors. As Dewald will cover in more detail, in contrast to the new entrants into the market, we have a large and growing base of installed customers who value what we deliver and rely on us to deliver increasing productivity. Customer retention at 90% and the strong increases in average revenue per customer are the proof that we are meeting those needs. We, meanwhile, continue our march towards profitability. The teal columns show EBITDA loss narrowing from $1.5 million to $1.2 million. And as the chart shows, we continue to expect to approach breakeven in FY '27 and achieve profitability thereafter. Thanks to the capital raising last year, we're confident that we have the resources to execute on our growth plan and drive towards breakeven and profit. Net cash at 30 June 2026 was just under $4 million, a minimal reduction in the year-end figure, and we have no bank debt. This sum is sufficient on our plan to carry us through to profitability. As announced to the market in 21 August, we intend to pursue a primary listing on the ASX. We've not yet launched a formal application and the ASX has given no indication as to whether it would approve one. So I'm not going to put a date on completion today. What I can tell you is that the preparatory work is well advanced. Australia offers a much deeper pool of capital and an established network of investors who already understand the sector, know how to value it and have the mandates to invest in early-stage growth companies such as Trade Window. The listing also follows the business. Australia is now approximately 50% of customer numbers and our fastest-growing market. The listing should set where the growth is. Susan Beling and Brodie Collins have joined as Australian resident independent nonexecutive directors, which satisfies ASX listing requirements, but I want to stress that they are not compliance appointments. Both of them offer Trade Window, the expertise to help the company through to its next phase of growth, and we are delighted that they've agreed to join the Board. They share our excitement, our vision and our confidence in the future. Susan spent 11 years as Chief Executive of efm Logistics, and Brodie is Group Chief Strategy Officer at Mondiale VGL. Both of them know our customers, the challenges they face and what they need from us to drive business growth. At the same time, Andrew Balgarnie has stepped down from his full-time executive role and joins the Board as an Executive Director bringing us capital markets and M&A experience to the Board, and we're also delighted to have him on the Board. We recognize that these appointments and the move to the ASX add costs to the business and expand the Board, but we believe this is a necessary cost to ensure that we can access the capital we need to realize the significant potential we see for the business. All of these new directors are standing for election at this meeting, and you will find these resolutions later in the agenda. They have the unanimous support of the existing Board, and I would encourage you to support them. Finally, I want to spend a moment on the share price. Shareholders will be disappointed with where it's traded and so is your Board. But I would ask first that you look at what that price now implies. At 30 June, we held approximately $4 million in cash and no bank debt, as I said earlier, against a market capitalization of around $20 million, that implies an enterprise value roughly $16 million in the operating business, less than 2x revenue. Part of the answer to the share price is exposure and as noted above, it is one of the key reasons we're moving or seeking to move our primary listing to the ASX, as I outlined earlier. We've stepped up our investor outreach and we expect that together with continued delivery on the numbers, this will go a long way towards closing this gap. We must also continue to deliver. And ultimately, this is the only thing that will shift the dial sustainably. On behalf of the Board, we thank you for your continuing support for the company, and we look forward to taking your questions later on in the meeting. I'd now like to hand over to our Chief Executive, Dewald Janse Rensburg, who will take you through our market position, customers, recent financial performance, product strategy and the outlook for FY '27.

Thank you, Alasdair, and good afternoon, everyone. As this is my first AGM as Chief Executive, I want to start with briefly introducing who I am, but more importantly, how I intend to lead Trade Window. I joined this business in 2019 as Chief Legal Officer, after more than 20 years experience in both corporate and commercial law, in public as well as private sector. I became the Chief Operating Officer in 2023, so I come with nearly 7 years of experience inside Trade Window itself. I know this business. I know our customers, our people and our technology. And importantly, I understand both the opportunities in front of us and areas where we need to do better in. My approach as Chief Executive is centered on 4 things. Firstly, our customers, we need to make it easier for our customers to use our products, realize value from them in order for them to want to grow with us. Secondly, execution. We have a strategy in place that priority now is disciplined execution against that plan. Thirdly, capital. Our responsibility is to deploy our capital discipline and ensure that every dollar is directed towards priorities that create real value. And last but not least, accountability. We will measure what matters, deliver against commitments and hold ourselves accountable for results. Those 4 principles will underpin how I will lead Trade Window. And with that context, let me explain why I believe the opportunity in front of us is so significant and why I believe we are well positioned to capture it. On the next slide, you will see that we have carved out a strong foundation for which we can grow. In New Zealand, we are the clear leader in the shipper segment, serving businesses at the heart of our import and export economy. In Australia, our assessment is that we are ranked second behind WiseTech. Importantly, the competitive field still remains narrow. Expedient is the only other provider with meaningful established traction whilst the remaining competitors are relatively recent entrants that have yet to establish a customer base at scale. But market position is only part of the story. Trade Window supports the freight transaction end to end. For customers and freight forward -- from customs to freight forwarding through warehousing, accounting and job costing to reporting and invoicing, our product supports the core workflows, which our customers rely on every day and that breadth matters. But much of our technology underpinning it was built in a different era. There are still too many manual processes, too much complexity and significant opportunity to still do things better. That is why we are building the next generation of Trade Window, our FreightAI platform. We are taking the capability, customers and deep industry knowledge, which we already have and combine them to create modern technology and AI to remove manual work, automate workflows and fundamentally improve how our customers operate. And importantly, and this is critical. We are not starting from scratch. We already have the customers. We have the market position, and we have the domain expertise. As Alasdair highlighted, ARR has compounded at 28%. Customer retention is approximately 90%, and average revenue per customer continues to grow strongly. Our opportunity now is to turn that foundation into the next phase of Trade Window's growth. On Slide 11, we serve 546 customers and the names which you see here are a representative selection across both shippers as well as forwarders. They include some of Australasia's largest exporters, importers and forwarders and importantly, our software sits in a critical path of the operations. Just over 250 of those customers are on our freight platform today, running live transactions and freight operations. And that makes the point from the previous slide tangible. These are not peripheral relationships. Our software is embedded in the day-to-day operations of these businesses. And that matters for 2 reasons. It creates deep customer relationships and it gives us an understanding of how freight actually moves. That has been built over many years and millions of transactions. That installed customer base is one of Trade Window's strongest assets. It's also secondly, where our revenue comes from, where our product insights come from and importantly, it is the foundation from which we can introduce the next generation of FreightAI. On Slide 12, our growth strategy is clear. My focus is execution. Our strategy is built around 5 priorities: first, increasing value of our existing customers. We have a significant installed customer base, as mentioned. The opportunity is to deepen those relationships through greater usage, cross-sell and upsell; second, expanding our product offerings, this is where FreightAI becomes so important. We are investing in modern modular AI-first platform that will progressively transform how freight and logistics businesses operate, and I will come back to that shortly. Thirdly, increasing market penetration. We have strong positions in New Zealand as well as Australia, but there is considerably more opportunity in both of those markets. Our focus is converting that position into further growth through disciplined sales, marketing and industry partnerships. Both international expansion. Over time, we see opportunities beyond Australasia, particularly the U.S. and the U.K. But we will approach that expansion carefully and in a capital-efficient way. Our immediate priority is executing the organic opportunity in front of us, and we will retain the option to consider acquisitions where they are strategically compelling and the economics for them makes sense. But our strategy does not depend on acquisitions. And fourth, improving the efficiency of our existing business. Growth needs to translate into better financial performance. That means simplifying how we operate, improving operational leverage and maintaining discipline around every dollar that we spend. The diagram on the right brings those elements together. Innovation drives greater usage. Greater usage deepens our customer relationships, strong products, bring new customers and over time, creates opportunities to ensure new markets. Each reinforces the other, with financial sustainability at the center. For shareholders, the message I want to leave you with is simple, we understand that value has to be demonstrated, not asserted. Our job is to execute the strategy, deliver improving financial performance and demonstrate the value of trade window through our results. I'm now on Slide 13. Execution requires capability and most of that capability is now in place. We have appointed our AI personnel and our product owner and the development team is executing against our existing road map. The remaining key leadership appointment is our CTO, and recruitment is currently underway. I want to be clear about that. We are not waiting for a CTO before progressing FreightAI. The program has technical leadership today, defined architecture and milestones, and we are tracking delivery against those milestones. The CTO appointment adds dedicated executive ownership of our technology architecture, technical decisions and economics of FreightAI as we scale. Customers remain at the center of what we built. Delivery is measured against our road map. And capital is being managed against clear priorities and milestones, which brings me back to the principle that I've set out in the beginning. We have told shareholders what we intend to deliver and my responsibility is to make sure that we deliver that. Turning now to AI. AI represents an enormous opportunity for Trade Window. But equally, if we fail to execute, it presents a competitive threat. For me, this is a company-defining moment. And our approach is to lean into our strengths, which we already have and those are our customers, our freight expertise, our data and our understanding of the transaction. FreightAI is our next-generation freight forwarding platform and it's central to our long-term strategy. This is not simply a rebuild of Trade Window freight. We are building a platform designed to run the work of a freight forwarder end-to-end with intelligent automation embedded directly into the workflows. The economics of freight forwarding have traditionally been constrained by people. More shipments require more operational staff contributing to industry net margins typically around 3% to 5%. FreightAI is designed to change that equation. Documents arrive, the platform reads them, validates them against the shipment and then moves the work through to the appropriate workflows. The objective is to remove key entering, automate repetitive work and allow customers to progress materially greater volumes without equivalent growth in head count. That creates value for our customers, and it creates an opportunity for Trade Window to participate in that value. But there's another important part of this strategy. FreightAI has been built as a scalable jurisdiction-agnostic platform. Australia and New Zealand are where we start, not where the opportunity ends. Initial commercial delivery still targeted for September 2027. If we execute successfully, FreightAI gives us the platform from which to pursue a much larger addressable market beyond Australasia. But I also want to be clear about what that means between now and September 2027. Building the platform properly requires significant work and full functionality will be delivered progressively. So that raises 2 obvious questions for shareholders. Number one, what drives revenue growth now and -- between now and the initial commercial release, and two, how do we protect our competitive position whilst we build FreightAI. On Slide 15, firstly, to growth. There are no shortage of opportunities before the launch of FreightAI. Now onboarding pipeline for shippers is full until March 2027. Our sales pipeline on freight is nearly full. Meanwhile, we are introducing AI now through our freight desktop, the product, our customers already use every single day. That will open significant revenue growth opportunities. The first capability is focused around document processing and customs, one of the most manual parts of the freight transaction. Documents will come in. The system will read them, create the job, prepare the customs entry, support HS classification and identifies exceptions for the broker to review. The objective is simple: move the customer from data entry to exception management. Our first release is targeted for the end of this year. And from there, we will progressively introduce further AI capabilities into desktop. This offers opportunities for incremental revenue growth while we continue to build the full AI capability. But there is a more important reason for doing this now. The AI we built to proof in desktop will also transition into FreightAI. That means that between now and the initial commercial release of our FreightAI in September, our customers will already be using elements of AI capability in their day-to-day operations. They will be testing it on real transactions, give us real-time feedback and becoming familiar with more automated way of working. So when we begin moving customers to the FreightAI, neither the technology or the experience of using AI will be entirely new to them. For us, that reduces execution risk. For our customers, it creates a more natural path to the new platform. And it also answers the competitive question I raised on the previous slide. We are continuing to improve the product our customers use today. while simultaneously building the platform, which they will use tomorrow. That is the connection you see at the bottom of the slide, build on what works in desktop, prove the AI in production and carry the capability into FreightAI. And that is how we protect the customer base today while preparing for the future. The second part of the road map is FreightAI itself. The foundation is now complete. We have reengineered the existing platform into a modern technology stack while preserving the freight and customs logic that has been built around that for many years. Importantly, this is not simply a front-end rebuild. We have fundamentally redesigned underlying architecture including consolidating infrastructure that was previously duplicated across individual customers. The next phase is core freight, import and export, air and sea targeted for completion this month, and we are on track. From there, we move into billing and accounting integrations and customs connectivity. That phase is critical. A freight platform is not complete until the customer can run the transaction end to end, invoice the client, understand the cost of the job and see their margin. It also needs to connect into the wider freight ecosystem, including accounting platforms, customs, carriers and other third parties. The final phase is testing, controls and implementation which will lead into the initial commercial release in September 2027. And that is why we are not releasing FreightAI earlier. There's also an important practical consideration around migration. In Australia, custom certification means customers cannot simply split their customs operations between desktop and FreightAI. Migration requires a controlled cutover, means that getting the platform right before migration is essential. And it connects directly to the previous slide. While we build FreightAI, we continue to improve desktop and introduce AI capabilities there. So our customers gets value now. We proved the AI in production, and we carry both the capability and the learning into freight AI ahead of migration. Before I close, I want to bring you up to date on our most recent trading performances for the first quarter in FY '27. The headline for me is straightforward. Our customers are staying and they are spending more with us. Our trading revenue was $2.7 million, which is up 18% on the same quarter last year and annual recurring revenue reached $10.4 million, which is up 17%. Customer retention improved to 90%, but perhaps the most important number on this slide are increases in average revenue per customer. Average revenue per shipper increased by 20% and average revenue per freight forward increased by 19%. That is exactly what our strategy calls for, deeper relationships and greater value from the customer base, which we already have. Importantly, we are maintaining that growth without sacrificing margin. Gross margin remained at 63%. And the revenue base remains diversified with no single customer accounting for more than 4.6% of revenue. So we are entering this next phase from a position of growing recurring revenue, strong customer retention and increasing value per customer. and we intend to build on that. So to summarize, let me take you through to the outlook -- through our outlook for the remainder of this financial year. The Australian market continues to present a significant long-term opportunity for Trade Window, and we remain focused on expanding our customer penetration in that market. Our pipeline remains healthy and we continue to see opportunities for both new customers and increased spend from our existing customer base. At the same time, we continue to invest in the new future and new features, workflows, enhancements and capabilities across our existing products, supporting customer retention and growth while we build the FreightAI. As I have outlined today, FreightAI remains on track with initial commercial release targeted for September 2027. From a financial perspective, we expect FY '27 revenue growth of 13% to 18% Importantly, we are tracking against our plan to approach EBITDA breakeven in FY '27 while continuing to fund the development of FreightAI. We expect to have sufficient capital to fund our business operations and execute the plan, which we outlined today. So as we look at the remainder of FY '27, our priorities are clear: continue growing revenue, convert opportunities in our pipeline, maintain discipline around cost and capital, progress towards EBITDA breakeven and deliver against the FreightAI road map. We have made good progress, but there is still a great deal to execute on. Thank you for your continued support in Trade Window. I also look forward to your questions. And with that, I would now like to hand back to Alasdair.

Thanks, Dewald. We'd now be pleased to take shareholder questions specifically on the chairs address and the annual meeting presentation. Richard, have we got questions?

Yes, the first question, Alasdair, as New Zealand as part of the Digital Economy partnership. How are you taking advantage of this? This is coming from Mr. [ Yoh ], a shareholder.

I might throw that one to Dewald.

Look, we are always looking at ways to enhance and entertain certain partnerships because we are in that market of software development, that's significant for us. And we will obviously develop with that in mind.

That is the end of the questions -- or is there any comment on the downside effects from the Iran-U.S. war upon the likes of Trade Window. This is from [ John O'Brien ], a shareholder.

Dewald?

Yes, we haven't seen any side effects on Trade Window currently, and that's reflected in our financials. No negative downside.

There was another question from the management accounts for July and August 2026. What was the year-on-year revenue and EBITDA changes?

Deidre, can you maybe assist on that one? You're on mute Dei.

Sorry, Richard, could you repeat that question?

Yes. It's just a question and I'm not sure whether we'll disclose it, but it's just management accounts July and August 2026, what was the year-on-year revenue and EBITDA changes?

So yes, Richard. We haven't disclosed those publicly yet. But what I can say is that we are on track to guidance, and that's the revenue growth, the improvement in EBITDA and the cash flow management and cash on the bank. We'll be releasing our half year update dashboard towards the end of October and the financial statements at the end of November.

The rest of the resolution -- the rest of the questions relate to the resolutions, Alasdair. So -- well, there's one other question that's just come in. It concerns whether there's any indication of potential share sell-downs from A.J. Smith.

Look, the A.J. transferred the majority of the shareholding to his ex-wife as part of a relationship property settlement and that was reported to the NZX in August. And I'm not going to comment any further on that.

There's another question here. Given the repeated capital raises and dilution, A.J.'s loan default and significant share sales, what evidence can you give shareholders that the Board has exercised effective control and oversight?

The -- we're doing everything we can, I can assure you of that. There is no question that the continued selling down has depressed the share price more than anything else. I would just point out that default is possibly a strong word to use in the context of the loan. But I'm not going to go any further than that.

That appears to be the last of general questions, Alasdair, and we can probably move on to the resolutions.

Okay. Thank you for that, Richard. So we now move to the formal resolution set out in the notice of meeting. Each resolution is an ordinary resolution and will be decided by a simple majority of votes cast by shareholders entitled to vote. Resolution 1 relates to the auditors' remuneration, and I propose that in accordance with Section 207S of the Companies Act 1993, the Board will be authorized to fix the remuneration of the company's auditor, UHY Haines Norton Sydney for the ensuing year. Are there any questions or comments on Resolution 1?

We've got one question, Alasdair, questioning the identity of the auditors, Haines Norton. The question is, what other public companies do they audit? What is Trade Window's history with the firm? Why is a New Zealand domicile company like Trade Window audited out of Sydney? And finally, there's a lot of questions here. Also, when we last tender the external audit and when is Trade Window likely next tender it?

Okay. So in terms of the -- when were they appointed. We're now on the third audit with UHY Haines Norton. So we went to the market 3 years ago. In terms of rotation, certainly, there is a requirement for the partner to rotate as a minimum every 5 years. And I think we have, [ Matt ], from UHY, Haines Norton online. So perhaps, Matt, you might like to talk a bit about UHY Haines Norton listed company experience.

And we have, at the moment, 10. So we've got 6 ASX-listed companies and 4 NZX listed companies, and they range from small market cap, $10 million to $20 million, all the way up to $400 million. So we are experienced in doing listed companies and companies with complex accounting matters. So yes, that's what I would comment on that.

Thank you, Matt. Did that cover at it, Richard?

Yes. That's the last question on resolution 2. So I believe we're ready to move to the next resolution.

Well, we'll move to Resolution 2, which is that, in accordance -- well Resolution 2 seeks approval to increase the maximum aggregate annual remuneration payable to nonexecutive directors from NZD 500,000 to NZD 700,000. The increase provides for the appointment of 2 Australian domiciled independent directors and allows the fees paid to the 2 existing independent directors to be brought towards the market rate for comparable ASX-listed companies, and I propose that in accordance with NZX Listing Rule 2.11.1, the maximum aggregate annual remuneration payable to nonexecutive directors be increased from NZD 500,000 to NZD 700,000 and directors and their associated persons disqualified from voting in favor of this resolution. And as Chair, I intend to abstain from voting any undirected proxies on resolution 2. Are there any questions or comments?

The first question comes from Stephen Mayne asking, given the recent share price fall and the reduction in the market capitalization, NZD 700,000 seems a lot in terms of the non executive fee cap. Has there been much pushback on the proposed 40% increase in the fee cap from individual investors and what is the proxy position?

So the first point I'd make is that we are still within our existing fee cap. So this is simply trying to give ourselves some headroom for future increases in, either the size of the Board, depending on what happens with a primary listing in Australia. And it just gives us a bit of breathing space over the next 2 to 3 years. So that's where we're at. Sorry, what was the rest of the question?

It was really the proxy position, Alasdair, but I'd point out the proxy position is detailed at the end of the meeting as well.

Yes, yes. We can -- these will go up on a slide once you're all asked to vote.

There's outstanding proxies from the New Zealand Shareholders' Association in relation to director resolutions. I suppose it can come here. The strategic direction of the company is likely to be well served by the location of the directors -- actually, I'm sorry, Alasdair, I'm going to delay that question for the moment. Returning to directors' fees. Why should shareholders approve higher director remuneration after such poor shareholder returns rather than refresh the board with directors who bring the capabilities now required.

Well, I think we have significantly refreshed the Board. And it will be an ongoing process. There's virtually nothing that the Board can do around the behavior of some shareholders and that has the biggest impact on share price. We're focused on what we can control and determine to continue to grow the business successfully by being absolutely indispensable to our customers.

There's another -- there's a question from the New Zealand Shareholders Association, why did Trade Window not publish a benchmarking report to support this resolution?