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Freight Technologies, Inc. (FRGT)·Q4 2024 Earnings Summary

Executive Summary

  • Freight Technologies reported FY 2024 results (which include Q4 2024) with gross margin rising to 9.8% (+1.8pp YoY), net loss narrowing to -$5.6M, and cash flow from operations improving by $1.6M; however revenue declined 19.5% YoY to $13.7M .
  • Management introduced 2025 annual guidance: revenue $20–$25M, gross profit $2–$3M, and operating loss -$4.0 to -$5.5M, reflecting a pivot toward software and AI-powered solutions (Fleet Rocket and AI Tendering Bot) .
  • Balance sheet remains constrained: cash ended FY 2024 at $0.20M and stockholders’ equity turned negative (-$0.65M), with a going-concern warning in the 10-K .
  • Stock reaction catalyst: Nasdaq deficiency notice (Jan 2025) due to negative equity, with the company submitting a plan to regain compliance .

What Went Well and What Went Wrong

What Went Well

  • Gross margin improved to 9.8% in 2024 (from 7.9% in 2023) driven by more profitable routes and operational efficiency in dedicated services: “Gross margin percentage increased 1.8% year-over-year to 9.8%” .
  • Operating discipline: cash flow from operations improved $1.6M YoY (to -$4.2M vs -$5.8M), aided by faster collections and working capital management .
  • Dedicated capacity growth: Fr8Fleet revenue rose 42% YoY, aided by expanded enterprise agreements (e.g., Kimberly-Clark de México) .
  • CEO tone (quote): “2024 was a transformative year… improvements across gross margins and cash flow from operations… successful launch of Fleet Rocket… and AI Tendering Bot” .

What Went Wrong

  • Revenue pressure: FY 2024 revenue fell 19.5% YoY to $13.73M as management prioritized margin over volume (spot -36% to $8.6M), partly offset by Fr8Fleet growth .
  • Liquidity tightness and equity deficit: year-end cash was $204k; equity was -$0.65M; short-term borrowings rose (ending FY 2024 at $3.34M), triggering Nasdaq deficiency notice .
  • Going-concern disclosure: management determined liquidity conditions raise substantial doubt about the ability to continue as a going concern .
  • Customer concentration: Kimberly-Clark de México represented 48% of FY 2024 revenue and 88% of year-end receivables .

Financial Results

FY 2024 vs FY 2023

MetricFY 2023FY 2024
Revenue ($USD)$17,060,753 $13,728,922
Gross Margin %7.9% 9.8%
Operating Loss ($USD)$(8,261,198) $(6,490,251)
Net Loss ($USD)$(9,327,606) $(5,601,227)
Net Loss per Share ($USD)$(194.87) $(6.14)
Cash from Operations ($USD)$(5,790,684) $(4,206,168)
Cash & Equivalents ($USD, year-end)$1,560,105 $204,032
Short-term Borrowings ($USD, year-end)$2,819,620 $3,343,710
Stockholders’ Equity ($USD)$2,626,981 $(654,760)

H1 2024 vs H1 2023 (trend context)

MetricH1 2023H1 2024
Revenue ($USD)$7,619,322 $8,125,602
Cost of Revenue ($USD)$6,936,855 $7,170,071
Gross Margin %9.0% 11.8%
Operating Loss ($USD)$(3,475,550) $(3,788,697)
Net Loss ($USD)$(4,233,807) $(4,211,006)
Cash & Equivalents ($USD, period-end)$1,837,713 $460,576

Segment breakdown (FY 2024)

SegmentFY 2024 Revenue ($USD)
Spot (Freight Transportation Brokerage)$8.6M
Fr8Fleet (Dedicated Capacity)$5.1M
Total$13.7M

KPIs and Balance Sheet Quality (FY 2024)

KPIFY 2024Context
Gross Margin %9.8% +1.8pp YoY
Cash from Operations ($USD)$(4.2)M +$1.6M YoY improvement
Cash & Equivalents ($USD)$0.20M Year-end balance
Short-term Borrowings ($USD)$3.34M Year-end balance
Equity ($USD)$(0.65)M Deficit
Customer ConcentrationKCM 48% of revenue; 88% of A/R Elevated concentration

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY 2025—$20M–$25M Introduced
Gross Profit ($USD)FY 2025—$2M–$3M Introduced
Operating Loss ($USD)FY 2025—$(4.0)M–$(5.5)M Introduced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1 context)Current Period (Q4 2024/FY 2024)Trend
AI/technology initiativesEmphasis on digital brokerage; stable GM in H1 2024; product platform evolution Launch of Fleet Rocket (TMS) and AI Tendering Bot; ISO 9001:2015 certification Expansion from platform to SaaS/AI products
Supply chain, tariffs/macroDemand supported by USMCA/near-shoring; US/Mexico trade strength Management focused on “automation-driven service offerings” to navigate macro trade environment Lean positioning to manage macro swings
Product performanceFr8Fleet growth in H1; segment mix Fr8Fleet +42% YoY; Waavely launched (ocean) Diversifying mix toward higher-margin/contracted routes
Regulatory/listingShift to domestic SEC filer; begin filing 8-K/10-Q/10-K Nasdaq deficiency notice re equity; plan to regain compliance Higher disclosure cadence; listing risk management
Customer concentrationSingle customer 46% revenue; 79% A/R in H1 2024 KCM 48% revenue and 88% A/R in FY 2024 Concentration increased modestly

Management Commentary

  • “2024 was a transformative year… improvements across several key metrics including gross margins and cash flow… we launched Fleet Rocket and introduced our AI Tendering Bot.” — Javier Selgas, CEO .
  • Strategy focus: “Expansion and adoption of our innovative and cost-effective solutions… automation-driven service offerings and lean corporate positioning enable… navigating macroeconomic trade environment.” .
  • FY 2024 drivers: Gross margin uplift from more profitable routes in cross-border and domestic spot markets and operational efficiency in dedicated services .

Q&A Highlights

  • No earnings call transcript was identified for Q4 2024; management communications were provided via press releases and the 10-K. Clarifications include: margin uplift from mix/efficiency , focus on higher-margin customers and lanes even at the expense of volume , and dedicated capacity expansion with key enterprise accounts .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 and FY 2024 was unavailable; therefore beats/misses vs estimates cannot be assessed. Values retrieved from S&P Global were not accessible for this company in our query window.

Key Takeaways for Investors

  • Margin-first pivot is working: gross margin improved to 9.8% and net loss narrowed, but revenue fell 19.5% as low-margin volume was deemphasized—expect continued mix optimization over volume growth .
  • 2025 guidance implies topline recovery (to $20–$25M) with controlled operating losses as SaaS (Fleet Rocket) and AI automation scale; monitor product adoption velocity .
  • Liquidity risk remains elevated: cash ended at $0.20M and equity negative; the Nasdaq deficiency notice underscores urgency to execute the compliance plan or raise capital .
  • Customer concentration is high (KCM 48% of revenue; 88% of receivables); diversification progress will be a key determinant of cash collections and margin sustainability .
  • Dedicated capacity (Fr8Fleet) is a proven growth lever (+42% YoY) and should support margin stability; watch for large enterprise contract renewals/expansions .
  • Operational leverage potential exists if volumes recover in higher-margin lanes; improved collections and working capital management already aided CFO by $1.6M YoY .
  • Trading implications: headlines around compliance (Nasdaq), capital raises, and new product/customer wins are likely near-term catalysts; medium-term thesis hinges on successful monetization of SaaS/AI offerings and reduced concentration risk .