- Fourth-quarter 67% increase in y/y revenue to $13 million
- SONAR is now the largest source of revenue for FreightWaves
- FreightWaves targets SONAR subscriptions to be more than 80% of revenue by 2025
- SONAR hits high-gross margin record at 83%
- SONAR NPS at 50
- Liquidity at $28 million, with no plans to raise capital in 2023
FreightWaves, the leading price reporting agency (PRA) to the North American freight market and provider of high-frequency global supply chain data, boosted year-over-year (y/y) revenue growth in the fourth quarter by 67% and by 59% for the full year.
For the fourth quarter ending Dec. 31, 2022, FreightWaves reports that the company ended the quarter with $13 million in GAAP revenue, up from just under $8 million in the same quarter of 2021. The 67% y/y increase is attributed to growing demand for freight pricing benchmarks and high-frequency freight demand data that are an integral part of the company’s SONAR freight data intelligence platform.
For the full year, the company grew revenues by 59% y/y, led primarily by the growth of subscriptions to SONAR, which provides an array of pricing and high frequency freight data to global supply chain decision-makers, as well as the return of the company’s industry-leading live events.
However, the return of live events impacted growth in the media segment, as advertising clients often treat live events and media as fungible expenditures.
SONAR is now the largest source of revenue for FreightWaves
FreightWaves saw accelerating bookings in its enterprise segment as the year closed, more than offsetting the slowdown in the small business segment stemming from the freight recession.
During the last two months of the year, revenue grew by 82% y/y as the company hosted “F3: The Future of Freight Festival” and enterprise clients — shippers and 3PLs — purchased SONAR subscriptions to help prepare for a hectic freight bid season. December was one of the strongest months on record for new SONAR enterprise bookings in FreightWaves history.
SONAR is now the largest source of revenue for FreightWaves. It marks the first time that the benchmark pricing and data subscription platform has been the company’s primary revenue generator. If these trends continue over the next three years, data subscriptions will make up more than 80% of FreightWaves’ total revenue.
SONAR’s Net Promoter Score (NPS) was above 50 and marked the eighth quarter of sequential improvement, a testament to the quality of SONAR’s advanced signals, accurate price information, and guidance provided by FreightWaves’ team of supply chain market experts.
NPS is a metric used in customer experience programs and measures the loyalty of customers to a company. FreightWaves tracks NPS scores for SONAR clients each quarter.
FreightWaves beats EBITDA and cash targets; revenues up 230% since 2019
For the 12th consecutive quarter the company handily beat its EBITDA and cash targets, with EBITDA up more than $1 million and cash up $2 million more than forecasted. SONAR finished the year with gross margins of 83%, a new high. However, FreightWaves Media’s gross margin dropped to 43% from 61%, due largely to the fact that in-person events generate lower gross margins than virtual events and the company’s investments in new audience development products.
Since 2019, FreightWaves revenues have grown by 230%, while cash expenditures have grown only by 53%. This metric validates the sustainable growth orientation that the company implemented in early 2020.
The company has more than $28 million in liquidity and does not anticipate raising additional capital in 2023. However, the company’s management remains open to potential acquisitions and would consider bringing on a new capital partner for highly accretive opportunities.
FreightWaves’ unparalleled platform of high-frequency data, backed by a team of supply chain experts, will play a more critical role in supply chain operational planning and execution over the coming years as companies respond to volatile pricing, capacity, and demand.
About FreightWaves
As a Price Reporting Agency (PRA), FreightWaves is focused on the global freight market and is the leading provider of high-frequency data for the global supply chain. FreightWaves’ price, demand, and capacity data allow customers to benchmark, analyze, monitor, and forecast the global physical economy.