I'm not sure if HotCopper is the best forum for such a discussion but I'll try in good faith... I'm interested in understanding people's views on how Trump's Tariff wars may (or may not) affect CargoWise earnings. For disclosure I don't (yet) hold WTC and I was skeptical of it for many years - in part because I badly misunderstood how the acquisitional roll-up strategy was actually working here (where in many cases it is simply to disguise poor organic growth). Over the past year or so I've had my mind changed and am now a great admirer of the company and its product suite.
That said, whilst the recent sell-off looks like an opportunity I'm trying to determine how the disruptions to global trade through tariff wars may flow through to CargoWise earnings (good Reuters article on impacts to global trade linked below). I note that the Goldman Sach's report (dated 26 Feb, PT: $128) lists "weaker global trade volumes" as their second key risk, after further product delays. This to me implies that CargoWise billing may be volume-based pricing, i.e. rather than paying for 50 user subscriptions, product payment is based on user volumes going through the software platform. Is this understanding correct? I can see a situation where CargoWise earnings are potentially weaker due to global trade volumes falling, yet at the same time the software will be more important than ever to clients as global supply chains become more complex.
There's obviously still plenty of growth runway, i.e. additional products coming online (CTO) as well as getting >20% of their contracted LGFF expected users onto the platform. However, for CargoWise I think the outlook might be a bit challenged... if the payment plans work as assumed above.
Would welcome any input from those better versed in the company than I. Thanks
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