At first glance the first half results for Wisetech seem to be overwhelmingly positive. Revenue up 22%, NPAT up 74%, free cash flow up 85%. The fruits of the cost reduction program really seem to be flowing through to increased operating leverage, and the company continues to sign major deals with global freight forwarders. EBITDA guidance increased by $10-$15m.

If there was any justice in the world, this would lead to a pop in the share price today, but the market seems to be in an exceptionally bad mood these days. Other companies that I own in RL have reported good results but still suffered falls in share price, e.g. CDA, NWL.

Holding for the long term.

These are the figures I picked out from today's results.

Revenue $507.5m, 18% increase on FY20.
Underlying NPAT $105.8m, 101% increase on FY20
Free cash flow $139.2m, 149% increase on FY20
Cost of sales only increased 2%, showing operating leverage coming into play, and gross margin increased from 82% to 85%
Guiding 30%-40% revenue growth for FY22, with $40m run rate from the ongoing cost reduction program
90% of revenue is recurring
31% CAGR revenue growth from FY16 to FY21
Every customer cohort going back to 2006 and earlier is spending more each year, but the largest part of the revenue growth is due to growth in users and transactions from large global freight forwarders
<1% customer attrition per year for the past 9 years
Most of the growth in revenue is in the core CargoWise platform (26%) rather than acquired products (6%).
This reinforces the messaging that the numerous acquistions made in the past few years have been made to aquire complementary technology that can be at first bolted on and later integrated into the CargoWise platform, not simply to roll-up the revenue of these acquisitions. These acquisitions have also provided Wisetech with logistics specialists in many local markets around the world, which is helping them to work towards the goal of CargoWise functionality providing customs coverage to 90% of global manufactured trade flows.

I've held Wisetech in my RL portfolio for 3 years. My confidence was shaken a bit with the J Capital short report in 2019, which received a lot of air play, but I'm glad to say that I stayed the course. It is becoming increasingly clear that WiseTech is a wonderful business, and the structural shifts in its market - consolidation, integration and digitalisation of logistics providers - will provide tailwinds for continued growth for many years to come.