Refinements are forever

FY26 result (12 months ended 30 June 2026). Reporting currency: US$

In simple terms consensus estimates generally need to be going up for a stock to perform. And growth stocks generally do better when the rate of growth is accelerating. And WiseTech estimates have been coming down and growth has been decelerating.

But are we at the bottom of that cycle? Definite maybe. Let’s get into it.

The CargoWise pricing model change obviously wasn’t as smooth as I’m sure management hoped, and so a lot of the deceleration seems to be flow-on from that (eg needing to make some ‘refinements’ to the model, transitional pricing for some customers, a lack of 1 July price rise this year). Plus Container Transport Optimisation was supposed to be one of the growth bridges which has not yet materialised.

But is this the low point of organic sales growth? There are reasons to think so, and management’s fiscal 2H skew on their new FY27 earnings guidance suggests as much. But the question is what really powers the next leg of growth?

On CTO, management had been very upbeat on this product and had been pushing it to investors as one of those next legs. But timing is clearly pushed to the right. I fundamentally don’t understand why ACFS is the right type of customer for this product. Please enlighten me, dear readers.

My head spins thinking through all the important moving parts in the business right now. Normally I think a stock call can be distilled into getting just 1 or 2 key deltas correct. I don’t think that’s the case here. Let’s run through some of the pieces.

On balance I don’t think the market is paying for the upside scenarios, which could be very relevant on both AI and e2open integrations.

That said, these are huge moving parts while having instability with HQ leadership. Not to mention that I shudder to think what internal morale would be like right now post the redundancies.

It’s not for the faint of heart, but for ASX investors I think it’s one of the more interesting growth stocks right now.

FY27 is the first WiseTech guidance struck on an Underlying EBITDA basis; FY24 to FY26 were guided on reported EBITDA.

Range mechanics. "At the lower end of guidance we are assuming growth in line with FY26 and modest adoption of new initiatives, and at the upper end assumes accelerated adoption."

Skew. A 45/55 1H/2H CargoWise revenue skew on three second-half levers: STL to CVP (ie to the new volume based pricing model) conversion of the remaining ~5% of customers, monetising AI-delivered customer efficiency, and the VerifyWise launch.

CargoWise. ~12% to 20% growth, including FRDM.ai. Against a 2H26 exit rate of about 10%, the midpoint implies around 9% in 1H27. The STL uplift is deferred: "after those transitionary arrangements are over, yes, there is a significant revenue uplift."

No 1H price increase. No increase went through for many CVP customers on 1 July 2026, which holds back 1H27.

e2open. Flat, with subscription attrition continuing and professional services reducing. FY27 adds a twelfth month of consolidation, less ~$5m from the Expedient divestment.

Margin shape. FY26 group exit rate "essentially at 47%", "with the pickup in the second half, about 7 to 8 percentage points at the top end of the range". A group 50%+ Underlying EBITDA margin in 2H27 requires accelerated adoption.

Costs. ~$115m of annualized run rate savings carry in from FY26; a further ~$40m targeted by end FY27, ~$10m net. Capitalized development ~45%. AI investment rises; the cost-out now reaches beyond product and development and customer service.

VerifyWise. "Revenue will begin in FY '27", and the guidance "assumes an initial contribution from VerifyWise with a larger long-term opportunity".

Container Transport Optimization (not a guidance driver). Live from July 2026. "It isn't necessarily a material driver of FY '27... But it is a medium- and long-term growth lever for us."

New Zealand Tariff Management Portal. On track to be live in production in the first half of the 2027 calendar year.

Deleveraging — upgraded at both points. 2.7x against ~3.0x guided; FY27 to ~2.2x from ~2.5x; sub-2.0x moves into FY28 from 31 August 2028.

AI Transformation headcount. ~1,200 roles removed, about 50% of product and development and customer service, against the ~2,000 announced at 1H26. The balance is now BAU, and a large number of those 2,000 were actually made up of e2open professional services teams.

Final dividend. 8.8cps fully franked, up 14%, 17% of Underlying NPAT; record 14 September 2026, payable 9 October 2026.

FY26 guidance was set at FY25 and reaffirmed unchanged at 1H26, excluding the AI Transformation restructuring and the Expedient divestment. No guided item was revised.

The guidance basis is the only like-for-like comparison. Reported EBITDA plus the $20.2m net AI Transformation cost and the $7.2m Expedient loss gives $585.8m. Reported EBITDA also landed inside the range, so the beat does not depend on the exclusion.

CargoWise revenue growth missed. 11% growth against ~14% to 21%, on second-half refinements to the CargoWise Value Packs model made after guidance was last reaffirmed. "These weren't financial incentives." They are permanent, not a timing effect that unwinds.

Revenue. e2open contributed $541.2m from eleven months. Of CargoWise's $74.7m increase, $56.6m was organic — $38.5m from existing customers, $18.1m from new.

Gross margin. e2open carries a higher mix of professional services, putting more headcount into cost of revenue. Statutory gross profit was $1,080.9m at 77%, $20.9m below the presentation's.

Underlying EBITDA — a new measure. Three EBITDAs to navigate this result. Underlying EBITDA is a new metric and the go-forward number management guides to.

Costs and the savings against them. G&A was 19% of revenue, up 2pp, on $67.1m of restructuring and the Expedient loss; underlying G&A was 13%, flat, carrying the shareholder class action defence. Against those, ~$115m of run-rate savings — $34m AI Transformation, $17m efficiency, and $64m from e2open against a $50m target set for FY27, reached nearly 18 months early.

Earnings. Statutory NPAT fell on e2open interest and acquired amortization, with D&A up 127%. The underlying effective tax rate was 24.0% against a restated 28.0% — the 19.1% flagged at 1H26 did not persist.

Cash and leverage. Underlying operating cash flow conversion was 100%, down 7pp on "large one-off working capital changes due to commercial contract arrangements". Leverage closed at 2.7x against ~3.0x guided.

Customer attrition remained below 1%, as in each of the last 14 years.

The organic business grew sales 6%. Stripping e2open, acquisitions and FX, revenue went from $772.3m to $821.0m and Underlying EBITDA from $412.8m to $445.6m before unallocated costs, at a margin that moved from 53% to 54%. CargoWise grew 8% organically; Non-CargoWise fell 8%.

The margin gap is structural. A 67% e2open gross margin against 87% WiseTech, and $56.4m of non-recurring revenue against $14.0m for all of WTG ex. e2open.

Integration — three horizons, one delivered. "The first horizon was very much about cost synergies and integration, which we achieved earlier than target." Horizon two is product synergies, three monetising them. Commercial alignment runs slower than CargoWise's — many e2open contracts are fixed-price and multiyear, so retention comes first.

e2open standalone. Subscription attrition continued and professional services reduced, as expected. Expedient was divested on 1 June 2026 for $8.3m and a $7.2m loss.

Organic revenue growth halved to 6%, partly impacted by pricing model refinements. The 6% is the pre-e2open business — CargoWise up 8% organically, Non-CargoWise down 8% — against 13% in FY25. Appoo: "these are refinements that will live with the commercial model for as long as we stay with this model." The forward looking offset sits with the last 5% of customers not on the new model, and only "after those transitionary arrangements are over."

More than 90% of WiseTech's code is now written or assisted by AI. Engineering productivity rose 45% on the company's own measure and support tickets close 22% faster. The $34m AI Transformation saving and ~1,200 role reductions are its P&L expression.

WiseTech has sized the customer-side AI prize but not its own take. CargoWise AI targets up to ~50% labour cost savings for logistics service providers; for a larger customer a 10% reduction alone is $180m to $300m a year. WiseTech takes "a small slice of that value". Realisation is undisclosed; the 50% target is dated 18 months to two years out.

Trade receivables more than 60 days past due rose to $13.3m from $2.3m. The provision closed at $9.8m against $2.5m, though $6.4m of that arrived with e2open. Impairment loss of $6.5m was recognised and $5.6m written off.

WiseTech installed an independent Board Chair, a new Audit and Risk Chair and three new independent directors during FY26, and the CFO remains interim. Raelene Murphy became Chair on 7 July 2026 and Tim Ebbeck joins on 1 September 2026, taking the board to five independent non-executive directors and two executives. Class action defence costs sit inside underlying G&A.

Twelve large global freight forwarders are contracted and in progress with more than 75% of their expected volume not yet live. Blue Water Shipping and XPD Global signed on CVP, Sankyu and CJ Logistics pre-CVP, and Neptune Pacific, CTS International Logistics and ClearFreight reached In Production.

Q: Monetising the customer cost benefit in 2H27?
A: "we are seeing more customers pass on the CargoWise Value Pack fees to their customers...whether they pass it on or not really isn't a driver of growth. What is a driver of growth is that the CVP model makes it far easier for customers to adopt CargoWise."

Q: Is TPP removal assumed in guidance?
A: "Transitional Pricing Protection or TPP, it's not really a driver when we talk about growth...that transition can take 2 to 3 years for all customers to move across...TPP is entirely at our discretion...it's not really a factor when you consider CargoWise growth."

Q: What were the second-half refinements?
A: "we landed at 11% growth for CargoWise, and we had put an assumption in we'd land at 14% to 21%...we did land within the revenue guidance range...the refinements that we made to the model in the second half really drove that slightly lower CargoWise growth...based on customer usage and feedback as we rolled out the CVP model to the 95% of customers."

Q: Do the refinements unwind in 2H27?
A: "No, these are refinements that are part of the commercial model...that will live with the commercial model for as long as we stay with this commercial model. These were important changes to really ensure that CVP was a medium- and long-term success for all of our customers."

Q: Rebates or price changes?
A: "These are not rebates or incentives or anything like that. These were changes to how the commercial model actually works in terms of timing of billing and operationalizing...These weren't financial incentives that we gave to customers."

Q: Will the larger forwarders pay more?
A: "there are 3 building blocks for that second half skew...VerifyWise, AI efficiency, STL to CVP conversions...After those transitionary arrangements are over, yes, there is a significant revenue uplift for us from moving those 5% of customers across...a lot of the volume discounts and so on fall away."

Q: How is AI efficiency monetised?
A: "how we monetize that is ultimately by taking a small slice of the value that we deliver to our customers...for some of our larger customers, even a 10% labor saving could be $180 million to $300 million saving for those customers. Even if we took a tiny slice of that, you can see how meaningful that would be for WiseTech."

Q: Timing of the standard price increase?
A: "we've not disclosed the timing of the price increase, but I think most people will be aware that we did not put a price increase through for a number of customers on CVP on 1 July. And so that obviously had an impact on the CargoWise growth rates in the first half."

Q: Does 50%+ in 2H27 imply 1H below 50%?
A: "it's really dependent on our ability to accelerate the delivery and adoption of new initiatives...at the bottom end of the range, it does require some adoption of the new initiative and getting to the top end essentially requires us to accelerate that time line."

Q: Reconciling the FY26 exit rate to the FY27 guide?
A: "if you look at the exit rates coming out of the group for FY '26, it was essentially at 47%. And that's the EBITDA margin rate that we're going to carry with us into the first half of FY '27. And you'll see the pickup in the second half, about 7 to 8 percentage points at the top end of the range."

Q: Cost-out beyond product and customer service?
A: "we were first focusing on product and development and customer service because those are the functions where we have seen the most success with AI...some of the savings that we're expecting in FY '27 are in other teams that are not just product and development or customer service."

Q: CargoWise exit rate into FY27?
A: "the exit rates for FY '26 in the second half are about 10%...in the first half of '27, if you look at the, I guess, the midpoint of the guidance, it is coming down slightly at around 9%, but it's essentially the same growth rate."

Q: Is FRDM.ai inside CargoWise?
A: "yes, we are including FRDM in CargoWise growth going forward."

Q: Any CTO contribution in FY27?
A: "we are now live with CTO, and the product has been complete for some time...We already own Matchbox Exchange and through the e2open acquisition, we own Avantida...It isn't necessarily a material driver of FY '27, which is why we talked about the 3 very specific levers. But it is a medium- and long-term growth lever for us."

Q: Is the FY27 cost guidance conservative?
A: "a decent portion of that obviously came from e2open, which was carried out much earlier in the year. And so therefore, the run rate savings get to '27 is a bit lower for those ones...the AI transformation program...happened at the end of FY '26. So that's where a lot of the momentum is going to come into FY '27...the investment in '27 is going to be higher than FY '26."

Q: Where is TradeWise in this deck?
A: "Nothing has changed in terms of our strategy with our product strategy with e2open...TradeWise continues to be the vision for our orchestrated supply chain solutions...How we brand that, we'll work on that and announce that at the right time, but that product strategy has not changed at all."

Q: Applying CVP learnings to e2open?
A: "Charging by seats was simply not a proposition that we could manage to do anymore. The idea of charging based on value or based on transactions is very aligned with our thinking, and that's exactly what we intend to do with the e2open really great products and assets." "Many of the e2open businesses still bill in the traditional sense...the move to the commercial model can happen a bit later."

Q: Are the AI agent releases delayed?
A: "I wouldn't say that we're delayed at all on the CargoWise AI agents. We talked about having 4 agents in very early release the last time we spoke at the half year. We have rolled out 2 quite significant additional agentic capabilities...We are not in a rush to just put more and more agents out into the product."

Q: Customers lined up for VerifyWise revenue?
A: "we do have all of the building blocks. And yes, we do have customers. The FRDM.ai acquisition, obviously, they have customers as part of their platform that we can further monetize...there is risk here. There's always risk when we're innovating."

Q: 1,200 roles against the 2,000 announced?
A: "we've removed 1,200 roles from WiseTech globally. And that's about 50% of product and development and customer service...we're doing that more as a BAU focus on high-performance teams...a large number of those 2,000 were actually made up of e2open professional services teams."

Q: Labour savings customers see today?
A: "we aren't disclosing the percentage savings that we're at now...there is substantially more work to be done here to really make those agents robust and work in a very regulatory and compliance-driven industry...our target of 50% remains our target over the next sort of 18 months to 2 years."