WiseTech Global Ltd (ASX: WTC) shares are crashing down to earth again on Friday.
In morning trade, the logistics solutions company's shares are down almost 20% to $112.12.
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Why are WiseTech Global shares crashing?
Investors have been hitting the sell button today after the company released a trading update ahead of its highly anticipated annual general meeting.
According to the release, since his appointment on 24 October, interim CEO Andrew Cartledge and the board, in consultation with ex-CEO Richard White, have reviewed the progress of its breakthrough products, CargoWise Next, Container Transport Optimization, and ComplianceWise.
It notes that ComplianceWise was released in the first quarter as expected, and the release of CargoWise Next is broadly on track.
However, as a result of distractions flowing from the recent media attention over ex-CEO Richard White's behaviour and the organisational changes that have subsequently been implemented, the commercial launch of Container Transport Optimization has been delayed.
WiseTech Global revealed that Container Transport Optimization is now expected to launch in the second half of FY 2025, resulting in a delay to anticipated revenue.
In light of this, WiseTech considers it appropriate to update its FY 2025 guidance.
Previous guidance
As a reminder, WiseTech Global was guiding to FY 2025 revenue of $1,300 million to $1,350 million. This represents year on year revenue growth of 25% to 30%.
It was also expecting its EBITDA to come in at $660 million to $700 million, representing annual growth of 33% to 41%. The company's full year EBITDA margin was expected to be 51% to 52%.
Downgraded guidance
Today's update reveals that the company now anticipates FY 2025 revenue of $1,200 million to $1,300 million, which represents revenue growth of 15% to 25% versus FY 2024.
WiseTech Global's EBITDA is now expected to be $600 million to $660 million. This represents EBITDA growth of 21% to 33% and a full year EBITDA margin in the range of 50% to 51%.
At the midpoint of these guidance ranges, this is a downgrade of 5.7% and 7.4%, respectively.
This arguably makes the sizeable decline in WiseTech Global shares today a bit of an overreaction. Particularly with management remaining very positive on the outlook of its new offering. It said:
Importantly, the Company's expectations of the long-term value these products will create for WiseTech customers remain unchanged. An update on all the breakthrough products will be provided at WiseTech's Investor Day on 3 December 2024. In addition, WiseTech is seeking to mitigate the revenue delay through other significant initiatives which are also expected to have long-term benefits for WiseTech and its customers.
