Australia | 1:52 PM
Interim results were well received against a backdrop of multiple moving parts and changes, while WiseTech's growth and strategy update has boosted analysts' confidence .
- CargoWise shifts from seat pricing to a transaction-based model, as AI threats heat up
- Workforce changes a positive and potential challenge to business as usual
- Customer adoption of CVP and the pace of CTO rollout remain key growth drivers
- DSV risks weighed up; valuations diverge on timing uncertainties
By Danielle Ecuyer
Re-orientatation of the business model for AI resilience
If investors needed reminding, the current Middle East war again highlights covid-style disruptions and just how dependent and interconnected global supply chains have become.
Rising geo-political risks only serve to make supply chains more fragile.
While the war’s impact is being felt across the oil, gas, fertiliser and plastics markets, the adjacent price rises ripple through economies.
Logistics and supply chains are literally the global arteries that regulate trade and keep economies running.
Enter WiseTech Global ((WTC)), considered the leading software provider for the global industry, which, to the relief of investors, delivered better than expected 2026 interim results, with the share price having been swept up in the 'SaaSpocalypse' narrative.
While the earnings update itself was considered a positive, investor attention has shifted to a broader set of strategic changes underway at the company. For context, management has been busy transitioning the software solutions platform to new models.
CargoWise Value Pack (CVP) is the new pricing model introduced in late November 2025 as WiseTech transitions away from the traditional seat-based SaaS structure.
Under the new model, customers no longer pay per user license but instead pay a fee linked to each logistics transaction processed through the CargoWise platform.
Alongside this shift sits CargoWise Transactional Operations (CTO), which measures the volume of transaction-driven activity processed through the platform.
In simple terms, CTO represents the operational throughput flowing through CargoWise, while CVP is the pricing mechanism applied to those transactions.
WiseTech is replacing its historical pricing model of seat fees with customers moving to pay a single fee per logistics transaction or job.
The rationale for the change is straightforward, de-risking the AI-disruption challenges to seat-based SaaS models while deepening the software applications into customers' businesses.
Are proposed Job cuts part AI and part necessity as growth tempers?
For Jarden, the most significant information to be announced in the 1H26 results was the reduction in Product & Development and customer service headcount by up to -50% or some -2000 employees.
The reduction correlates to almost -29% of total headcount of 7000-plus. It was framed as part of the platform's AI transformation program.
The headcount reduction will begin in 2H26 and continue into FY27, raising the question of whether the downsizing reflects AI-driven efficiencies or the integration of e2Open, which added around 3,700 employees in 2025, RBC Capital suggests.
While management framed the cuts as part of AI-related cost savings, RBC suspects both factors are in play.
UBS notes WiseTech has more than tripled its workforce over the last three years due to the retention of “tech talent” from acquisitions, particularly Blume and Envase, due to the intense competition for talented tech staff over the last couple of years.
A conservative estimate of cost outs stands at around US$200m for FY27 including opex and capex, boosting earnings margins to 41% against UBS' prior forecast of 39% for FY29.
Macquarie estimates run-rate savings of US$235m before the cost of AI, which would temper net run-rate savings to a forecast of around US$150-US$200m.
Importantly, the redundancies are not expected to impact the speed of new product rollouts or future product developments.
Citi also question marks the announcement, pondering if the cuts are related to the more subdued revenue outlook or whether it is a “strategic step” to leverage AI more effectively and become a “leaner” business.
Scope for the introduction of agentic AI capabilities is viewed positively by Citi, which believes these can assist with improved automation and better customer workflows.
But product execution could be hampered by the loss of workforce. RBC makes a similar observation, noting initial “skepticism” on management’s ability to sustain business as usual for its customers with such large full-time employee reductions.
Countering the possible challenges, RBS analyst believe selective rehiring post wage expectations being reset is likely as more clarity around the operational needs becomes apparent.
2026 interim results confirmed AI moat strengths
Looking at the interim results, UBS viewed them positively, emphasising management’s comments around its AI moat amid intense scrutiny in markets that agentic AI models from majors like OpenAI, Gemini and ChatGPT have the capacity to erode the business case for SaaS companies like WiseTech.
This topic was recently addressed by FNArena in early February (https://fnarena.com/index.php/2026/02/10/treasure-chest-wisetech-global/)
Management explained data and deep integration with ecosystem partners is a moat, enabling the facilitation of agentic AI workflows while transaction-based pricing keeps customers involved with the CargoWise platform rather than a pure seat-based model.
One industry observer with informed knowledge of the company went one step further in a recent conversation, stating WiseTech is more akin to an infrastructure business than a SaaS business in terms of its end-point offering to customers.
Other positives from the interim results included the initial feedback and conversion of existing customers to CargoWise Value Pack, with two large global freight forwarders signing up post December, identified by Morgans as Water Shipping and XPD Global.
During 1H26, two large global freight forwarders were also signed, Sankyu and CJ Logistics.
Second half outlook and guidance
Around 5% of mostly long-term customers by number, representing circa 30% of revenue, are currently on CVP trials for specific capabilities/modules with specific end dates, as highlighted by RBC.
Management is emphasising the automation/AI “carrot” to encourage uptake of CVP, with failure to do so posing a competitive risk of falling behind peers who are adopting AI-friendly pricing models.
Financially, Citi queried whether the Transitional Pricing Protection was limiting the growth of CargoWise Value Packs as a limiter on revenue growth extrapolated from expected revenue growth for CargoWise over 2H26.
Macquarie noted management’s comments around 30% of CargoWise revenues using the new Value Packs are subject to short-term deals.
Management’s FY26 guidance is viewed as conservative by Macquarie, with further transitions to CargoWise Value Packs expected. This broker estimates for every 7.5% of revenues transitioned, CargoWise revenue rises by around US$15m.
Morgans notes management reconfirmed CargoWise growth guidance of around 14-20% with 2H26 growth expected to be stronger than 1H.
The key question remains the deferred uptake in CargoWise Transactional Operations (CTO) and the residual customers yet to move to Value Pack.
This analyst also flagged the cost synergy for e2Open was ahead of schedule, with annualised run-rate savings of US$50m targeted for FY27 achieved some 18 months sooner in January 2026.
UBS believes a faster take-up of CTO could generate earnings upside with four factors driving CargoWise revenue growth at an 18% compound average growth rate over the next three years.
UBS articulated 4% volume growth for new and existing customers; 6% price growth; an uplift from CVP of 4% on the remaining 5% of large global freight forwarders (outstanding); and 4% contribution from CTO.
The central “swing” factor is the uptake in CTO, with a large revenue total addressable market estimated previously at US$4bn-US$20bn.
Management’s explanation is the complexity and newness of the product concept is a limiter on the speed of adoption.
WiseTech is currently focusing on ACFS (Australian Container Freight Services) in Australia as an early implementation, effectively using it as a proof of concept to demonstrate how the model works in practice before broader global rollout.
Because of the slower expected adoption, UBS has cut its medium-term CTO revenue forecast, now expecting around US$270m by FY30 instead of US$600m, previously.
Despite this downgrade, UBS still believes CTO will remain an important long-term growth driver for CargoWise, helping support mid to high teens revenue growth for the platform over time.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE