The WiseTech Global Ltd (ASX: WTC) share price is trading lower on Wednesday.
In morning trade, the logistic solutions company's shares are down 2.5% to $54.29.
This follows the release of the company's half-year results.
WiseTech share price drops on half-year results
- Revenue up 35% to $378.2 million
- Earnings before interest, tax, depreciation and amortisation (EBITDA) up 36% to $187.3 million
- Underlying net profit after tax up 40% to $108.5 million
- Free cash flow up 53% to $137.8 million
- Interim dividend increased 39% to 6.6 cents per share
What happened during the half?
For the six months ended 31 December, WiseTech reported a 35% jump in revenue to $378.2 million. This was underpinned by a 50% increase in CargoWise revenue to $289.2 million, which was driven by growth from existing and new customers.
This means that recurring revenue now makes up 96% of the company's revenue, which is up 3 percentage points since this time last year.
Thanks to enhanced operating leverage, pricing, new product releases, and ongoing financial discipline, WiseTech overcame inflationary pressures to deliver modest margin expansion during the half.
This ultimately led to its underlying net profit after tax increasing by 40% to $108.5 million.
Management commentary
WiseTech Founder and CEO, Richard White, was pleased with the company's strong first half. He said:
Our strong first half performance highlights the continued resilience of our business model and progress of our 3P strategy. Our ability to deliver strong growth in revenue, earnings and free cash flow, in a softening global macroeconomic climate, is the result of a tremendous effort by our teams around the world and we're immensely proud of the progress we are making towards our vision of being the operating system for global logistics.
We continue to see strong demand for our products from the world's largest freight forwarders, having secured four new global rollouts and three organic global rollouts since July last year. CargoWise is rapidly becoming the industry standard. Importantly, in January this year, we also secured our first global customs rollout with Kuehne+Nagel, the world's largest global freight forwarder. This is a testament to the success of our foothold acquisition strategy and our customs product development, as we build out a global customs engine.
Outlook
WiseTech has updated its FY 2023 guidance and now expects stronger revenue growth but slightly softer EBITDA growth. The latter could be weighing on the WiseTech share price today. Its guidance is now:
- Revenue of $790 million to $822 million (growth of 26% to 30%)
- EBITDA excluding M&A costs of $380 million to $412 million (growth of 19% to 29%).
This compares to previous guidance of 20% to 23% revenue growth and 21% to 30% EBITDA growth.
Mr White concluded:
WiseTech is a business that continues to grow and create value. Our unique CargoWise offering, which we expand and enhance through our own product development and our acquisition program, is enabling us to drive considerable momentum. This is underpinned by our global rollouts, stemming from an investment of over $775 million in research and development over the last five years.
We have a strong track record of delivering on our strategy, demonstrating the strength and resilience of our business model. Our strong balance sheet and cash generation provide us with significant financial firepower to fund our future growth. I am excited by the opportunities ahead of us and the future growth team WiseTech will deliver.
