WiseTech rallies 10% on earnings beat, AI-driven job cuts steal the spotlight

I spoke with William Taylor of ETF Shares to unpack the results and what investors should focus on in the latest announcement.

1H26 results

WiseTech has been under significant pressure in recent months. What was your initial reaction to the result?

The share price has had a tough 12–18 months, particularly more recently, with the software sector under pressure from perceived AI disruption. The difference here is that AI is a positive for WiseTech. Management views it as an enhancer rather than a disruptor.

The company has invested around US$1 billion in R&D over the past five years, so this is not new to them. They’ve been preparing for this shift for some time and are staying firmly in their lane. Like Apple, they’re not trying to compete with everyone - they’re focused on their strength: network effects. WiseTech operates in nearly 200 countries, has decades of operating history, and is building what is effectively an operating system for global trade.

They are partnering with leading AI providers to embed these tools into their platform rather than compete with them. Freight forwarding and logistics are ideal use cases for AI given the volume of manual, repetitive processes and data handling. Automating these workflows reduces errors and improves efficiency, which makes this evolution structurally positive.

The announced job reductions reflect a pivot toward higher-value work as automation takes over routine tasks. 

What mattered most in this result? What are the key metrics investors should focus on?

First is revenue. Growth was in line with first-half guidance and expectations, and full-year guidance remains unchanged. For a stock priced on growth, it’s critical that top-line momentum continues in the right direction.

Second is customer retention, which remains around 99% for CargoWise, WiseTech’s core product. This is especially important because the company has shifted from a per-seat pricing model to a transaction-based model. That’s a significant commercial change, so seeing retention remain strong is a very positive sign.

Third is adoption of that new pricing structure. Around 95% of customers have transitioned with minimal disruption. The remaining 5% represent roughly 30% of revenue - larger customers on longer-term contracts - so converting them over time will be an important watch point.

They’ve also signed two additional large global freight forwarders and now service 11 of the top 25 globally, which validates industry acceptance of the model.

Finally, on integration, WiseTech has delivered approximately $50 million in cost savings from the e2open acquisition about 18 months ahead of schedule. That suggests strong execution.

How do these outcomes shape the medium-term outlook?

We see a J-shaped acceleration. The company has spent the last 18 months investing heavily in products and integration, and we’re now entering the phase where that investment begins to translate into growth.

CargoWise’s shift to transaction-based pricing simplifies billing and should support increased adoption and revenue scalability.

The second driver is container transport optimisation, which is being rolled out locally with partners as a proof point before expanding into larger markets like the US.

The third pillar is the e2open integration, moving from bespoke solutions toward a more standardised product model. Over the next 6–12 months, these initiatives will be rolled out and absorbed by customers, followed by a scaling phase that should lift revenue growth.

What should investors watch from here? Where are the biggest risks and upside drivers?

The main risk is how the new pricing philosophy is received by the entire industry. WiseTech wants software fees to be viewed like any other logistics cost, such as port or freight charges, which is a new concept for the industry. Adoption risk remains.

There’s also the possibility that some customers internalise certain AI-driven capabilities themselves, particularly as AI tools become more commoditised.

However, WiseTech’s competitive advantage isn’t just software - it’s the network, integrations, and decades of proprietary trade data. AI models are only as good as the data behind them, and WiseTech has a significant edge there.

On the upside, automation creates what we’d call labour arbitrage. The reduction in headcount should drive structural cost savings over time. There’s also upside if large customers transition to the new pricing model sooner than assumed in FY26 guidance.

Integration risk remains around e2open - moving customers from customised solutions to a standardised platform can take time and may face resistance.

The FY26 guidance excludes the impact of workforce reductions. Will investors see material improvement in earnings as early as August 2026 or beyond? 

Likely not immediately. In the short term, restructuring costs will offset savings. Over the longer term, though, margins should improve. EBITDA margins are currently around 38%, versus historical levels in the 50% range. That’s where we could see them trend again over time.

Finally, where could you be wrong? 

The biggest blind spot would be AI becoming fully commoditised - if the industry starts to see these capabilities as something that should be effectively free or universally available, reducing willingness to pay for software.

But even in that scenario, WiseTech’s value lies in its embedded position across the global trade ecosystem. Its platform connects participants in a way that fragmented tools cannot. The strategy is to make CargoWise the central system everyone uses, which is far more efficient than multiple disconnected solutions.

Disclosure: Will Taylor is a shareholder in WiseTech Global. This discussion reflects his personal views and is not intended as investment advice or a recommendation.