WiseTech’s bumper 34% profit growth amid board chaos

Any way you cut it, WiseTech (ASX: WTC) has had an extraordinary year.

Looking just at the half year result for FY25, there’s double-digit growth in its total revenue, profit, cashflow and dividends. Its signature software, CargoWise saw 21% growth in recurring revenue and the business continues to grow its customer base, securing significant rollout contracts with Nippon Express and LOGISTEED. 

The logistics software business is also investing heavily in research and development, with 36% of total revenue dedicated in this way.

If only that was all that was interesting about WiseTech this year…

News headlines have been dominated by allegations against founder Richard White – who stepped down as CEO last year but remained in a consultancy board. 

More concerningly for investors was news this week that four members of the board had resigned over tensions around White’s ongoing role in the business. White has since been appointed Executive Chairman of the Board, while Mike Gregg joined as Lead Independent Director. These changes leave WiseTech unable to satisfy the ASX Listing Rules requirement for at least three non-executive directors on the Audit and Risk Committee.

Should investors be concerned about the board chaos? I spoke to Wilson Asset Management’s Hailey Kim about today’s results.

1H FY25 results

• Total revenue of $381.0 million (up 17%)
• EBITDA of $192.3 million (up 28%)
• Underlying NPAT of $112.1 million (up 34%)
• Operating cashflow of $202.7 million (up 24%)
• Interim dividend of 6.7cps (up 31%)
• Full year guidance:
• EBITDA $395-436m
• Revenue $792-858m

What was the key takeaway from this result in one sentence?

Solid results that exceeded market expectations and driven by the efficiency program exceeding its targets, and CargoWise delivering 21% growth year-on-year.

Were there any surprises in this result that you think investors need to be aware of?

There were no major surprises, and no changes to the revised guidance provided earlier in the week.

The company provided an update on the three new products; ComplianceWise went live from 1Q25, CargoWise Next will have a phased rollout starting 2H25, and Container Transport Optimisation now expecting an initial launch in 2H25.

CargoWise also continues to gain further traction with Large Global Freight Forwarders, and signed 2 further freight forwarders during the period including Logisteed and Nippon Express.

The company also made a separate announcement that the company’s founder Mr Richard White has been appointed as the Executive Chairman, and will continue to lead the company’s product development and growth strategy.  

Would you buy, hold or sell Wisetech off the back of this result? 

BUY

While the recent valuation pullback and share price are understandable given product delays and governance concerns, we see little impact on the underlying business quality and its offerings. 

WiseTech remains a global leader in logistics software, expanding its addressable market through innovation, which will underpin future revenue growth. We see a strong runway for both revenue and earnings growth as the company executes its strategy.

Are there any risks investors need to be aware of?

We remain positive on the outlook as we look forward to some stability in the business after today’s announcements and focus on execution through the critical phase of launching and rolling out these key breakthrough products. All eyes will be on the company to deliver on its promises in the near future.

From 1 to 5, where 1 is cheap and 5 is expensive, how much value are you seeing on the ASX today?

Rating = 4

While the market appears expensive overall, we continue to identify pockets of quality value across sectors. We expect volatility to persist as investors assess both short- and long-term implications for interest rates and inflation. Our focus remains on companies with multiple growth levers, less dependent on economic cycles.