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Descartes sees record results in fiscal Q2

Consolidated revenue increases 14% in quarter

Descartes beat the consensus earnings-per-share estimate by 3 cents. (Photo: Jim Allen/FreightWaves)

Supply chain software provider Descartes reported record quarterly results for its fiscal quarter ended July 31. The Canada-based company noted weak truck volumes and revenue pressure on parcel carriers as headwinds, which were offset by higher ocean import volumes.

Descartes (NASDAQ: DSGX) reported earnings per share of 40 cents in the period, 8 cents higher year over year and 3 cents better than the consensus estimate.

Consolidated revenue increased 13.9% y/y to $163.4 million. Organic growth was up roughly 9% y/y in the period.

“Our Global Logistics Network is designed to help shippers, carriers and logistics services providers navigate an increasingly complex global trade landscape,” said CEO Ed Ryan in a news release. “Supply chains and logistics operations continue to struggle to manage a myriad of factors, including military conflicts, disruptions to trade routes, government sanctions, economic impact on shipping demand and material changes to taxes and tariffs.”


Table: Descartes’ key performance indicators

Adjusted earnings before interest, taxes, depreciation and amortization of $70.6 million was 16.5% higher y/y. The company reiterated a goal to grow the business by 10% to 15% annually through organic initiatives and acquisitions.

It acquired shipment management solutions provider BoxTop Technologies for $12.1 million in the quarter. The deal was funded with cash on hand.

Descartes generated $34.7 million in cash flow from operations in the period, a 33% y/y decline. The decline was tied to $25 million in earnout payments for better-than-expected financial performance at companies it previously acquired. It ended the quarter with $252.7 million in cash and an untapped $350 million line of credit, which it will use to pursue future acquisitions.

The company’s baseline calculation calls for $53.5 million in EBITDA in its fiscal third quarter.


More FreightWaves articles by Todd Maiden

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.