Overall Summary

WiseTech delivered a structurally transitional 1H FY26 result reflecting:

• First consolidation of e2open (five months)
• Implementation of the CargoWise Value Packs (CVP) commercial shift
• Acceleration of an AI-led transformation program
• Early-stage rollout of the CTO (Container Transport Optimisation) platform - ACFS only

In the numbers that follow, US$, and formating is: (% change to pcp; CC % change)

Headline Financials

Total revenue: $672.0m (+76%; CC +74%)

Gross profit: $529.9m (+61%; CC +59%)

EBITDA: $252.1m (+31%; CC +29%)

Underlying NPAT: $114.5m (+2%)

Statutory NPAT: $68.1m (-36%)

Margin compression reflects e2open consolidation and integration costs, not deterioration in core CargoWise performance.

Management reaffirmed FY26 guidance and reiterated its historical pattern of restoring margins above 50% post-acquisition cycles.

Key messages

1. Core CargoWise remains double-digit CC growth.
2. e2open margin dilutive but improving.
3. CVP structurally modernises monetisation.
4. AI provides dual revenue and cost leverage.
5. CTO remains early-stage with limited FY26 impact.
6. FY26 is structurally transitional; recovery phase likely FY27 onward.

1. Financial Performance Details

1.1 Revenue

Total revenue: $672.0m (+76%; CC +74%)

Organic revenue growth +7%

Revenue breakdown:

• (i) CargoWise: $372.4m (+12%; CC +10%)
• (ii) Non-CargoWise: $50.2m (+2%; CC flat)
• (iii) e2open: $249.4m (five-month contribution)

Commentary

CargoWise (+12%; CC +10%)

Organic revenue growth +9%

Drivers:

• LGFF rollouts
• Increased usage
• Price increases
• Limited CVP contribution (effective 1 December 2025)

Application suite attrition remains <1%, sustained over >13 years.

Non-CargoWise (+2%; CC flat)

Reported growth offset by expected organic contraction of older acquisitions.

e2open ($249.4m)

Predominantly subscription, but with a meaningful professional services component.

Recurring revenue mix: 95% (down 3pp) due to e2open services mix.

1.2 Gross Profit

Gross profit: $529.9m (+61%; CC +59%)

Gross margin: 79% (-7pp)

Segment-style split

$WTC legacy

• Gross profit: $365.9m
• Gross margin: 87%

e2open:

• Gross profit: $164.0m
• Gross margin: 66%

Dilution reflects lower structural gross margin in e2open.

1.3 EBITDA

EBITDA: $252.1m (+31%; CC +29%)

EBITDA margin: 38% (-13pp)

WTC Legacy:

• EBITDA: $201.4m
• Margin: 48%

e2open:

• EBITDA: $54.9m
• Margin: 22%

Unallocated corporate:

• EBITDA: ($4.2m)

Organic EBITDA (company definition): $208.4m (+7%), margin 51% (flat).

Management reiterated long-term margin recovery >50%.

2. Operational Performance

CargoWise: CVP transition slowed large contract signings temporarily but velocity has improved post-transition. (From Q&A)

• Revenue: $372.4m (+12%; CC +10%)
• Attrition: <1%
• Top 300 customers: >70% of CargoWise revenue
• Broad geographic diversification

Non-CargoWise: Organic decline consistent with portfolio rationalisation.

• Revenue: $50.2m (+2%; CC flat)

e2open: Integration progressing ahead of plan.

• Revenue: $249.4m
• EBITDA margin: 22% reported
• ~34% excluding restructuring/break costs
• ~6pp margin improvement vs FY25 pro forma baseline

2.1 Progress on Integration of e2open: Management characterises integration execution risk as declining.

• Two operating segments now reported:

1. WTC ex-e2open
2. e2open

• $50m annualised run-rate synergies achieved 18 months early.
• Sales and marketing integrated under single leadership.
• Strategic shift toward WiseTech’s product/content-led model.

2.2 Implementation of New Commercial Model (CVP)

• ~95% of customers migrated.
• Remaining ~5% are largest customers on legacy long-term commitment agreements (~30% of CargoWise revenue).
• CVP shifts monetisation from seat-based to transaction/value-based.
• Post-transition, contract signings have accelerated.
• Billing complexity reduced versus prior pricing model.

Management frames CVP as structurally future-proofing monetisation in an AI-driven world.

Management also appeared to state that revenue growth in FY25 has been reduced because new features in development has been held back, pending the implementation of the CVP.

$WTC are using the inclusion of new features, including AgenticAI modules, as an incentive to encourage the outstanding 5% of customer (30% of revenue) on contracts to move across to the CVP model.

Encouragingly two new LGFF have signed up since 1-Dec on the New Commercial Model.

2.3 CTO Program – Status and Implications

The Container Transport Optimisation (CTO) platform is:

• Currently in implementation with launch partner ACFS Port Logistics
• Not yet broadly rolled out across the customer base
• Undergoing continued Australian product and model maturation into FY27 and beyond

There is no indication of large-scale commercial deployment at this stage.

Implications

• FY26 financial contribution likely minimal
• CTO should not be treated as a near-term revenue driver.
• Validation phase underway
• Operational success with ACFS is the key milestone before broader scaling.
• Contribution timing uncertain
• Meaningful revenue and margin contribution more likely FY27+.
• Strategic significance remains high
• CTO represents a potential adjacency into landside container optimisation but remains early-stage.

2.4 Exploitation of AI

AI is positioned as both:

1. A customer productivity multiplier
2. A structural internal cost lever

Customer-side thesis: Management suggested it is “entirely possible” within ~2 years for customers to remove a very large proportion of operational and line management labour via AI-enabled automation. (From Q&A)

Internal program

• 500 roles already reduced
• Broader program ~2,000 roles across FY26–FY27
• FY26 guidance excludes AI savings impact
• Near-term P&L effect expected to be neutral (restructuring offsets)

AI use cases:

• Agentic workflows
• Automated code review
• Automated testing
• Customs automation
• Embedded AI (“Ace”)

Management positioned AI as reinforcing the moat vs in-house builds by customers,

3. Guidance

WiseTech reaffirmed FY26 guidance. Key parameters:

• e2open fully consolidated
• AI cost-out program excluded from FY26 earnings (costs in year will offset benefits)
• Integration costs incorporated per prior communication

No change to previously stated earnings range.

Guidance – Key Insights

3.1 FY26 is a Transition Year

Margin compression reflects:

• e2open dilution
• Restructuring costs
• Commercial transition

Management reiterated expectation of margin recovery trajectory similar to prior acquisition cycles. (From Q&A)

3.2 AI Benefits Back-End Weighted

Savings not materially impacting FY26.

Implication: Margin uplift likely FY27+.

3.3 CVP Transition Risk Largely Behind

• Signing slowed during transition
• Now normalising
• Larger customers engaging early due to AI functionality gating

3.4. e2open Integration Ahead of Plan

• Synergies early
• Margin improving
• Go-to-market rationalisation underway

Execution risk declining.

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OK, that was  a lot to unpack, but so what?

4. My Assessment

There is a lot to unpack in this result. I will pick on two selected items, and pick up a few other when I talk about valuation.

4.1 Cargowise Organic Growth

From my perspective, the most important metric for $WTC is the organic growth of Cargowise.

The 1H FY26 result extends a now maturing trend over the last 7 half-year results of:

46% → ~30% → 19% → 19% → 20% → ~15% → 9% (all organic % growth to PCP)

Now in the Q&A management made clear that growth of Cargowise slowed, as the rollout of new features was held back in anticipation of the change to the New Commercial Model (CVP).

They are holding to guidance for FY26 of 14% - 21%, indicating a skew to H2 (as happened in FY25), and indicated that growth will reaccelerate into FY27.

Clearly, once CVP’s are fully implemented, $WTC has the means to very effectively pull the pricing lever achieving phenomenal control over its short-term revenues.

I am, however, cautious as to what the medium-term revenue growth trajectory will be – there now being a significant likelihood that it falls below the lowest cases I have modelled in my valuation. Time will tell.

4.2 Impact of Cost Reductions

With the $50m cost synergies from E2Open delivered “18 months ahead of schedule” it is clear that $WTC have indeed been able to scale up their acquisition integration capabilities – albeit this time with significant consulting support, which – from own first-hand experience – I can understand.

But now what of the 2,000 headcount reduction?

By my quick estimation, the FY2027 EBITDA uplift could be anywhere from US$100m to >$US200m, although it depends on the capitalisation rates etc.

In the context of FY26 guided EBITDA of US$550m - $585m, this is very material On its own it has the potential to restore EBITDA margin back to anywhere from 46% to 52%, within 2 years of acquiring E2Open. That would be a phenomenal achievement if they can deliver it.

So, for FY27, cost reduction is likely the biggest EPS driver by far!

5. My Overall Takeaways

The scale and pace of change that $WTC is undertaking is immense and must not be under-estimated. If they can pull it off, then it is a testament to the quality of the management team – far beyond just Richard, Zubin and Caroline.

Essentially, they have enforced a change to the commercial model to 95% of customers accounting for 70% of revenue. They now need to convince the remaining 5% of customers (30% of revenue) – including the LGFFs to come onboard. These are big companies with slower board and management-governed decisions. So, there is a big focus now required – one likely ongoing for the next couple of years.

They are rolling out embedded agentic AI capabilities into their platform, at pace, rapidly harnessing the new AI capabilities as they become available.

They are continuing to integrate E2Open – an organisation larger than legacy @WTC! While the early signs are positive, the early cost out wins are pretty easy to get. Successful integration can only be judged over the next couple of years.

There is now no timeline for the rollout of CTO. The focus is converting the ACFS Port Logistic pilot into commercial implementation. Again, on their own, the changes involved in CTO are very, very significant. We got some sight of this at the last Investor Day – and management have now started to more clearly convey the huge human change management involved. (Algorithms, optimisations, code – that’s easy. Getting people to change – that’s hard.) There now cannot be any concrete, confident assumptions for the scale and medium revenue and earnings contribution of CTO – and I believe we will (or should) see this fall out of the analysts’ projections.

6. Valuation - In Conclusion

Coming in to this year, my $WTC valuation was $103 ($92 - $123).

However, given all of these moving parts, I no longer have a clear sense of what fair value for $WTC is. And certainly, the range around that value is wider... much wider.

Now make no mistake, I still believe that in the long run, if any business will be a winner as AI unfolds, then $WTC will be right up there among the survivors/winner. They have always been proactive using ML/AI, and I believe they will use it to deepen and widen their moat.

But there is a LOT of execution risk, and I have to be honest and say that I am struggling to evaluate it.

Valuations can just be numbers in a spreadsheet, whatever approach you follow. But for me, a valuation is a thoughtful quantitative articulation of everything I know and believe about a business and its future.

It would be all too easy for me to plug some updates in my $WTC model, but it is a more honest thing for me to say that, as of today, I any not sure how to quantitatively express everything I have learned.

I look forward to posting an update valuation for WTC in due course. But I am not sure it will be this side of FY26 results.

7. Investment Implications

While I still hold a small allocation of $WTC (and also $XRO --- topic for another day), the simple fact is that given the disruption to share prices across the board over recent weeks and months, the market has presented me with many compelling propositions.

In response, I have:

·      SOLD DOWN positions in $WTC and $XRO, I still hold both

·      Added new positions in $PME, $NWL, $CAR

·      Increased positions in $TNE, $RMD, and $BRG

My top 6 RL ASX positions are now: $TNE (12.6%), $PME (10.4%), $RMD(10.4%), $BRG (9.9%), $SPZ (9.7%), $CAT (9.4%).

I hold a much small position in $WTC because - considering risk and reward – I prefer to hold larger positions elsewhere.

I am only writing this because, while I try to make sure my SM portfolio reflects all the companies I hold, their RL weights can differ materially.

Disc: Held