WiseTech caps off a volatile FY25 with a post-results sell off, but what’s next

What a volatile FY25 it as for WiseTech. Just look at all that it went through:

• Richard White was going to depart, but he ultimately prevailed over his enemies,
• The company unveiled one of the biggest buys in its history, only to see customers of its target company not like the deal,
• Shares plunged due to the chaos Trump’s tariffs caused the market only to rebound,
• There was a >15% sell off after releasing its FY25 results.

Will FY26 see more chaos or a more normal year?

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Introduction to WiseTech

WiseTech’s main product is CargoWise One, a Cloud-based end-to-end logistics execution platform that freight forwarders and other logistics companies can use to manage their businesses. The product is sold in a subscription model and is customisable to meet customer needs. It also has the Xtrade messaging solution, that lets suppliers and customers share information as well as transport management solutions for truckload shippers.

The company was founded in 1994 and operated privately for over two decades before its listing. CEO Richard White has been there all the while and is still the largest shareholders. It is truly a global company with less than a third of its revenues coming from Australia and its 17,000 customers hailing from 150 countries. These include all of the Top 5 Global Freight Forwarders and 45 of the Top 50 Global Third-Party Logistics Providers (3PLs).

WiseTech listed in 2016 at $3.35 per share, so investors who’ve been in for the long term have been sitting on some pretty good gains. But shares have been particularly volatile in the last 12 months, and a lot of it has to do with what’s been going on at HQ.

The good, the bad and the ugly of FY25

Lets look at WiseTech’s results for FY25. It delivered $778.8m revenue (up 14%) of which $682.2m came from CargoWise. It made $409.5m EBITDA excluding $27.9m in M&A costs. It made an underlying profit of $241.8m (up 30%) and a statutory profit of $200.7m (up 17%). It paid a dividend of 7.7cps, representing a payout of 20% of its profit.

Unfortunately, it missed consensus estimates by a long way, these called for $797.6m in revenue and $403.9m EBITDA – so in our view that would be the key reason for the decline.

The saga over Richard White is well known. He was forced to resign as CEO in October 2024 after allegations of inappropriate conduct, but was permitted to return after a short period of leave as a $1m per year consultant on a 10-year term. But in February 2025, four of the five directors on the board (Lisa Brock, Richard Dammery, Michael Malone and Fiona Pak-Poy) departed.

Apparently they determined it was ‘in the best interests of the company to stand aside’.

And ‘This followed intractable differences in the Board and differing views around the ongoing role of the Founder and Founding CEO, Richard White’. They were not so keen on him coming back as a $1m-per year consultant.

And so King Richard returned as Executive Chairman and so did company veteran Mike Gregg who was Lead Independent Director’, to have carriage of governance related matters and a Board renewal process. Remaining on the board is Maree Issacs, who co-founded the company. Investors expecting more board departures due to ‘intractable differences’ on Richard White’s role.

Looking to the future

WiseTech spent US$3.2bn in buying e2open to add its software to CargoWise – a deal announced in May but closed in August. e2open also has platforms used to create documents needed for customs officials but has some features WiseTech’s software lacks in supply chain planning, procurement, trade compliance and channel management. e2open has too many software parts to name as it has made more than a dozen but some include direct competitors to CargoWise – one being BluJay.

Before this buy, WTC’s biggest acquisition was US$414m for Blume which specialises in railway software. WiseTech thought it was a win-win situation as it could buy the business at a discounted price as it was struggling to keep clients. The company funded the buy completely with debt.

Some like it, some don’t

Richard White declared the deal was,’ a strategically significant step in achieving our expanded vision to be the operating system for global trade and logistics’.

‘E2open brings to WiseTech several well established complementary products. This will enable WiseTech to create a multi-sided marketplace that connects all trade and logistics stakeholders to efficiently offer and acquire services, removing complex disconnected processes and driving visibility, predictability and cost savings through the value chain,’ he said.

‘E2open also expands WiseTech’s product capabilities with an experienced team of people with industry expertise and innovative product development skills that will further accelerate our organic growth capability.

‘In bringing the two companies together, we see tremendous opportunity for synergies, efficiencies, economies of scale and enhanced customer benefits, which unlocks the potential in e2open’s suite of products’.

Certain analysts hated the deal as the company had lower margins. And some customers went to the point of lobbying the ACCC to block the deal on the basis that it would lessen competition. As the ACCC did not, it seemed our regulator was wooed by WTC’s arguments that there were several existing providers avaliable – a list the Australian Border Force had avaliable to would-be importers.

Buying WiseTech shares is a gamble

If you’re buying WiseTech shares, you’re betting that this acquisition would pay off. This isn’t too unreasonable to assume, although it would be naive to think nothing can go wrong for the company.

Consensus estimates calls for $1.4bn revenue, $651.9m EBITDA and $0.99 EPS. Then in FY27, $1.8bn revenue, $880m EBITDA and $1.33 EPS. These figures suggest significant growth. The mean target price is A$132.56, drawn from 15 analysts, which likewise suggests upside. But even so, the company is at high multiples – at 76x P/E, 38x EV/EBITDA and >2x PEG.

So, at these valuations…we’d still tell WTC buyers to caveat emperor – or as it is said in English: Beware!