Descartes reports another record-breaking quarter

Descartes Systems Group reported another record-breaking quarter, with consolidated revenue rising 12% year-over-year to $201 million in its fiscal quarter ending July 31. Services revenue grew 13% y/y to $189 million, driven by a 9% organic growth. Earnings per share increased 14 cents year-over-year to 57 cents, just above analysts' unadjusted estimate.

Adjusted EBITDA rose 18% y/y to $94.4 million, with a margin of 46.9%. CEO Ed Ryan emphasized the need for agile supply chains and logistics in a dynamic global trade environment. The company generated $81 million in cash flow from operations, up 28% y/y, and ended the quarter with $401 million in cash, a $24 million increase. Descartes has no debt and an available $350 million line of credit.

The company used $220 million to fund acquisitions of Extensiv and Tai, and announced a share repurchase plan to buy back up to 10% of its public float. Management indicated they would take on up to 3 times annual EBITDA leverage for more significant deals. DSGX shares rose 1.7% in after-hours trading.