WiseTech Global shares crashed 11.9% on Wednesday after the Aussie logistics software company missed analyst expectations despite posting record EBITDA margins, with investors spooked by weak FY26 guidance following its $2.1 billion e2open acquisition.
- Total revenue: $778.7 million, falling short of consensus at $796.9 million
- Net profit: $200 million, below analyst predictions of $220.6 million
- EBITDA margins: Expanded to 53% excluding e2open costs, up 5 percentage points YoY
- CargoWise revenue: Grew 18% to $682.2 million, driven by existing customer expansion and Large Global Freight Forwarder rollouts
- Cash generation: Operating cash flow jumped 25% to $436.5 million, with free cash flow climbing 31% to $287 million
The company declared a final dividend of 7.7 US cents per share, up 24% YoY
"WiseTech's FY25 results reflect a solid financial foundation and demonstrate the resilience and scalability of our business model," Chief Executive Zubin Appoo said.
E2open deal creates near-term pain
WiseTech's completion of the e2open purchase on 4 August expands its addressable market but comes at a hefty near-term cost as the deal was fully debt-funded through a new $3 billion syndicated facility, raising leverage concerns.
E2open brings 500,000+ connected partners tracking over 18 billion transactions annually across its supply chain platform.
Management warned that FY26 EBITDA margins will drop to 40-41% - a pretty sharp drop from the current 53% rate.
The integration challenges prompted analysts to slash earnings forecasts, with the margin compression catching markets off guard.
Boardroom drama continues despite strong operations
The results came during months of corporate upheaval that has engulfed the company in controversy.
Founder Richard White returned as executive chairman after almost every board member resigned in February over his disputed future.
White had stepped down as CEO in October 2024 following multiple allegations of inappropriate behaviour involving women.
The governance crisis saw Australia's biggest pension fund, AustralianSuper, dump its entire WiseTech stake earlier this year, and Professional investors remain split on whether White's return represents stability or continued reputational risk.
"The potential danger for WiseTech shareholders was a potential loss of talent," Wilson Asset Management portfolio manager Matthew Haupt said.
Weak outlook dampens sentiment
Management's FY26 EBITDA guidance of $550-585 million fell well short of analyst consensus expectations of $651 million.
Revenue guidance of $1.39-1.44 billion includes the full-year e2open contribution but failed to excite investors focused on margin compression.
The company backs its breakthrough products, with Container Transport Optimisation expected to launch in 1H26.
WiseTech's new commercial model for CargoWise promises deeper market penetration through AI-powered workflow capabilities.
But analyst sentiment remains cautious, with the stock trading down 13% year-to-date before today's earnings-driven selloff.
WiseTech Global (ASX: WTC) shares closed down 11.9% at $102.02 on the Australian Securities Exchange.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
