Why TradeWindow Is Lowering FY26 Revenue Guidance Despite Strong ARR Growth

Steady Growth Despite Market Headwinds

TradeWindow, the trade and logistics software provider recently listed on the ASX, has delivered a solid performance in the first nine months of its fiscal year 2026. The company reported trading revenue of NZ$7.0 million, marking a 22% increase year-to-date compared to the previous year. Annual Recurring Revenue (ARR), a key metric for subscription-based businesses, also rose 17% to NZ$9.3 million, reflecting strong momentum in its core recurring revenue streams.

These gains were underpinned by a notable increase in Average Revenue Per Customer (ARPC), which climbed 20% for shippers and 23% for freight forwarders. This improvement was driven by a combination of higher-value contracts and targeted pricing strategies, particularly focusing on mid-market freight forwarders who value transparent pricing and offer greater growth potential.

Guidance Revision Reflects Softer Transactional Volumes

Despite these encouraging signs, TradeWindow has revised its FY26 trading revenue guidance downward to a range of NZ$9.6 million to NZ$9.9 million, from the previous NZ$10 million to NZ$11 million. The revision stems from softer-than-expected transactional revenue in Q3, attributed to weaker export volumes from major primary industry exporters and a delayed export season for many customers. This near-term softness introduces some uncertainty, although the company remains optimistic that transactional activity will recover in the final quarter.

Gross margin declined slightly by two percentage points to 59%, a marginal drop largely explained by customer mix effects and the costs associated with migrating remaining on-premise customers to a cloud-hosted platform. While this migration increases short-term implementation expenses, it is expected to streamline future updates, enhance security, and reduce operational complexity over time.

Investment in Innovation and Market Expansion

TradeWindow continues to invest heavily in research and development, with R&D and commercialisation expenses accounting for 33% of total costs. This includes capitalising NZ$450,000 in development costs related to its next-generation Freight.AI platform, which aims to accelerate automation and expand the company’s addressable market globally. The platform is positioned as a key growth driver, enhancing freight forwarder capabilities and supporting the company’s ambition to become a global leader in trade and logistics technology.

Looking ahead, TradeWindow’s management remains confident in the underlying demand, particularly in the Australian market, and is focused on winning market share and driving cross-sales to meet the revised revenue targets. The company’s strong customer retention rate of 91%; up four percentage points from the prior year; underscores the stickiness of its solutions and the value it delivers to clients.

As TradeWindow navigates the remainder of FY26, investors will be watching closely to see if the transactional revenue rebound materialises and how effectively the company leverages its Freight.AI platform to sustain growth and improve margins.