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OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2023

NOTE 8: — OPERATING SEGMENTS

General:

The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated and assess their performance. Accordingly, for management purposes, the Group is organized into two operating segments based on the products and services of the business units and has operating segments as follows:

Solutions segment. Freightos provides software tools and data to help the freight industry participants automate their pricing, sales, and procurement processes. Revenue includes recurring subscriptions for SaaS or data and certain non-recurring revenue from professional services that enable a user to implement and use the SaaS solution.

Platform segment. Freightos provides digitized price quoting, booking and payments while considering actual capacity among global freight participants (the users). The transactional platforms enable freight forwarding companies to procure capacity from carriers, and enable importers and exporters to procure services from freight forwarders, or occasionally, directly from carriers. Revenue is transactional type fees generated from specific freight-service transactions booked between buyers and sellers on Freightos’ Platform.

Each segment’s performance is determined based on operating loss reported in the financial statements. The results of a segment reported to the CODM include items attributed directly to a segment, as well as other items, which are indirectly attributed using reasonable assumptions and exclude share-based compensation charges as they are not considered in the internal operating plans and measurement of the segment’s financial performance.

NOTE 8: — OPERATING SEGMENTS (continued)

b.The following table presents revenue and operating loss per segment:


	Solutions		Platform		Unallocated		Total
For the period of six months ended June 30, 2023 (unaudited)
Subscriptions	$	6,179	$	—	$	—	$	6,179
SaaS-related professional services		272		—		—		272
Transactional Platforms fees		—		3,465		—		3,465
Total revenue		6,451		3,465		—		9,916
Operating income (loss)	$	1,324	$	(5,936)	$	(59,254)	$	(63,866)
For the period of six months ended June 30, 2022 (unaudited)
Subscriptions	$	5,864	$	—	$	—	$	5,864
SaaS-related professional services		615		—		—		615
Transactional Platforms fees		—		3,069		—		3,069
Total revenue		6,479		3,069		—		9,548
Operating income (loss)	$	871	$	(4,927)	$	(5,993)	$	(10,049)

Unallocated includes corporate expenses and share-based compensation.

For the periods of six months ended June 30, 2023 and 2022, no single Solutions customer or Platform user accounted for 10% or more of the Company’s consolidated income.

c.The Company’s geographic information on revenue is as follows:


	Solutions		Platform		Total
For the period of six months ended June 30, 2023 (unaudited)
Europe	$	2,465	$	—	$	2,465
Hong Kong		236		1,541		1,777
United States		3,337		1,165		4,502
Other		413		759		1,172
	$	6,451	$	3,465	$	9,916


	Solutions		Platform		Total
For the period of six months ended June 30, 2022 (unaudited)
Europe	$	2,524	$	—	$	2,524
Hong Kong		161		3,069		3,230
United States		3,459		—		3,459
Other		335		—		335
	$	6,479	$	3,069	$	9,548

NOTE 8: — OPERATING SEGMENTS (continued)

The Company’s revenue from its Solutions segment is classified based on the location of the customers.

The Company’s revenue from its Platform segment is classified to its business in Hong Kong except for revenue earned by Clearit or 7LFreight which is classified based on the location of the billing entity. This classification is independent of where the user resides or where the user is physically located while using the Company’s services.

As of June 30, 2023, the carrying amounts of non-current assets (property and equipment, right-of-use assets, and intangible assets) are mainly in Canada due to the purchase of digital customs brokerage business assets and in the US, Hong Kong, Israel, and Spain. As of December 31, 2022, the carrying amounts of non-current assets (property and equipment, right-of-use assets, and intangible assets) are mainly in Canada and US due to acquisitions (see note 1) and also in Israel, Hong Kong and Spain.