WiseTech - A high-quality compounder with structural competitive advantages

When assessing potential portfolio companies, we look for a combination of structural advantages that support long-term compounding: industry-leading products that are difficult to replicate; strong barriers to entry reinforced by proprietary data and network effects; and exposure to large, under-penetrated markets where reinvestment can drive sustained growth.

WiseTech Global exhibits these characteristics. It operates the leading global operating system for logistics, serves the largest participants in global trade, and continues to deepen its competitive moat through scale, proprietary data, technology and disciplined reinvestment. Recent share price weakness has been driven largely by macro-driven risk aversion and sector rotation, rather than any deterioration in the underlying quality of the business, creating an opportunity to invest in a structurally advantaged company at a more attractive valuation.

WiseTech: the operating system for global logistics

WiseTech operates a global software platform providing mission-critical logistics execution software to freight forwarders, customs brokers and logistics service providers. CargoWise is the cloud-based, end-to-end operating system that sits at the heart of customers' daily operations, managing regulatory compliance, documentation, billing, and real-time shipment execution across over 180 countries.

WiseTech's competitive advantage stems from systemic scale and complexity rather than any single feature. The platform is deeply embedded in critical workflows with switching costs that are extremely high, evidenced by 99%+ customer retention over more than a decade. The company serves over 17,000 logistics customers across 193 countries, including 47 of the top 50 global third-party logistics providers and 14 of the 25 largest global freight forwarders.

This advantage is reinforced by global regulatory and data scale: WiseTech maintains ~74 million compliance updates annually, ~5.6 million product classification records, and ~7,500 trade and customs documents. This creates a reinforcing feedback loop—as transaction volumes grow, the platform becomes more valuable and accurate, strengthening its moat over time.

Industry-leading product and hard-to-replicate advantage

WiseTech’s competitive advantage is not derived from any single feature, but from the cumulative complexity of its platform.

CargoWise incorporates:

• Extensive trade, customs and regulatory content across nearly every trading jurisdiction

• Deep functional coverage across logistics execution workflows

• Continuous real-time updates to compliance rules, tariffs and documentation

• A unified data architecture supporting global standardisation

Replicating this platform would require many years of sustained investment, global regulatory expertise, deep customer relationships and the ability to maintain accuracy at scale. This creates meaningful barriers to entry, particularly in enterprise logistics software where operational risk tolerance is low.

Critically, WiseTech’s advantage compounds over time. As more customers transact through the platform, CargoWise processes increasing volumes of real-world operational data. This data improves automation, accuracy and workflow efficiency, making the platform more valuable to existing customers and less replicable for competitors.

Proprietary data, network effects and software economics

A defining feature of WiseTech’s moat is the scale and quality of its proprietary operational data. Through CargoWise, WiseTech processes tens of millions of transactions annually and maintains millions of product classifications, compliance updates and trade documents across jurisdictions.

This data underpins a powerful feedback loop:

1. Higher transaction volumes generate more operational data

2. More data improves automation, compliance accuracy and workflow efficiency

3. Improved functionality increases customer reliance and platform usage

4. Deeper usage drives further transaction growth

In software, network effects are often associated with consumer platforms. In WiseTech’s case, network effects arise from data density and operational scale, embedded within mission-critical enterprise workflows. This is particularly powerful in logistics, where accuracy, compliance and standardisation matter more than user interface alone.

Large and under-penetrated addressable market

WiseTech operates in a structurally attractive market characterised by fragmentation, complexity, and significant digitisation tailwinds. The addressable market for global logistics software is estimated by Morgan Stanley at approximately $40 billion by 2030, compared to WiseTech's FY2026 revenue guidance of $1.4 billion. This represents a substantial runway for organic growth as digitisation accelerates and market consolidation favours standardised global platforms.

Global trade remains fragmented, with many logistics providers still operating legacy systems, regional software or manual processes. As industry consolidation continues and regulatory complexity increases, demand for globally standardised, compliant platforms is expected to grow.

WiseTech’s strategy is not to maximise short-term monetisation, but to steadily increase platform adoption, geographic coverage and functional depth, allowing revenue to scale over time as customers expand usage across workflows, regions and transaction volumes.

e2open: deepening market leadership and expanding the ecosystem

The acquisition of e2open represents a strategically significant extension of WiseTech’s platform beyond logistics execution into supply-chain planning, global trade management and end-to-end visibility. The combined platform connects hundreds of thousands of enterprises across manufacturers, suppliers, logistics providers and end customers.

Through e2open and its partnerships (particularly INTTRA, the leading ocean carrier platform), WiseTech gains visibility into nearly 40 million additional container movements annually. This data density creates new opportunities for optimisation, analytics and AI-driven insights across the entire trade ecosystem.

From a strategic perspective, e2open:

• Expands WiseTech’s addressable market across the broader supply chain

• Embeds CargoWise within a larger ecosystem of connected enterprises

• Increases switching costs through deeper workflow and data integration

• Reinforces network effects across a much broader base of trade participants

While integration will occur over multiple years, the long-term logic is consistent with WiseTech’s strategy of building a single, globally connected operating system for trade.

Container Transport Optimisation (CTO): A Structural Market Expansion

WiseTech believes that e2open will accelerate the delivery and take up of new innovations such as Container Transport Optimisation (CTO), a software driven approach to container management.

Today's container transport is remarkably manual and fragmented. A typical import shipment involves up to seven separate "legs": terminal pickup, staging, delivery to importer, empty container return, empty park delivery, and final terminal handoff. Each leg represents a separate transaction, often coordinated across multiple transport providers with limited visibility into optimisation opportunities. The result is significant "dead leg" distance, empty trucks and containers traveling routes that serve no productive purpose, and substantial underutilisation of assets.

Wisetech’s CTO applies advanced optimisation algorithms to this fragmented process, combining real-time data on container positions, transport availability, and customer locations. By consolidating multiple legs into optimised routes, WiseTech can deliver material cost reductions with early partnerships demonstrating savings of AUD $200-500 per container, not insignificant when multiplied across millions of container movements globally.

CTO represents a market expansion opportunity comparable to CargoWise's original evolution from customs software to end-to-end logistics execution. The global container transport addressable market is large, fragmented, and ripe for digital transformation. Initial launch partnerships are progressing toward volume deployments in 2026, signaling what could be a multi-year penetration.

R&D, AI and compounding advantage

WiseTech is consistently reinvesting a significant proportion of revenue into product development. Over the past five years, WiseTech has invested approximately $1 billion in R&D, delivering more than 5,700 product enhancements and the continuous expansion of CargoWise’s functional and geographic coverage. This scale advantage allows WiseTech to out-innovate smaller competitors while amortising development costs across a growing global customer base.

This sustained investment is increasingly evident in the integration of AI-enabled automation directly into core workflows, including three early deployments that demonstrate material impact:

• AI Classification Assistant: Customs classification achieves 90% accuracy versus 20-80% industry baseline. For a major customs broker processing millions of annual declarations, this translates into substantial labour cost reduction and risk mitigation.

• ComplianceWise: Export control compliance agents achieve 96% precision in risk detection. A single customs broker fine can range from tens of thousands to millions of dollars, making this material to customer bottom lines.

• Document Processing: AI-powered extraction eliminates manual data entry of millions of commercial invoices annually, delivering near-zero error rates and freeing up labour across the industry

Importantly, WiseTech’s AI capabilities are trained on high-quality, proprietary operational data generated within the platform itself. This matters. AI deployed on generic datasets or as bolt-on tools offers limited differentiation. AI embedded within a system of record, trained on real transaction data, enhances productivity while reinforcing the underlying platform moat. As usage grows, the quality of data improves, making WiseTech a potential long-term beneficiary of applied AI in enterprise software rather than a disruptor victim.

Pricing Model Evolution: Reinforcing the Flywheel

Effective 1 December 2025, WiseTech introduced CargoWise Value Packs, transitioning the platform from a per-seat licence plus transaction fees to a pure per-transaction pricing model. This represents a strategically important evolution in WiseTech’s commercial model rather than a simple pricing change.

By aligning revenue with customer throughput rather than user seats, the model more closely reflects the value delivered as automation, AI and workflow integration drive higher productivity. The structure removes friction to broader product adoption, simplifies billing, and encourages customers to utilise more of CargoWise’s capabilities across their operations.

Key characteristics include:

• A single, all-inclusive transaction fee (approximately $2–$19 per transaction, typically less than 0.1% of total landed shipment cost)

• Removal of per-seat licences and separate hosting fees

• Bundling of more than 200 features and modules previously licensed separately, including AI features.

• Ability for customers to treat CargoWise fees as disbursements and pass costs through to importers and exporters

The new pricing model reinforces a powerful flywheel: higher usage drives greater customer value; greater value supports retention and adoption; deeper adoption enables continued reinvestment and innovation; and reinvestment further strengthens WiseTech’s competitive moat.

An attractive entry point for long term investors

WiseTech possesses many of the qualities we look for in portfolio companies: an industry-leading product that is difficult to replicate; strong barriers to entry reinforced by proprietary data and network effects; and exposure to a large, under-penetrated addressable market.

Market volatility, governance headlines and acquisition-related uncertainty have created short-term noise, but the underlying business continues to strengthen. CargoWise remains deeply embedded in global logistics workflows, e2open expands the ecosystem, sustained R&D investment compounds advantage, and the evolving pricing model aligns long-term value creation between WiseTech and its customers.

For long-term investors, WiseTech represents a high-quality compounder with durable competitive advantages and a long runway for growth, precisely the type of business we seek to own through market cycles.