Descartes Systems Group Inc (NASDAQ:DSGX), a Canadian cloud-based SaaS provider, stock rose 5.65% (As on September 4, 11:19:47 AM UTC-4, Source: Google Finance) after the company announced earnings for its second quarter that Increased, from last year but missed the Street estimates. Revenues were comprised of services revenues of $166.8 million (93% of total revenues), professional services and other revenues of $12.8 million (7% of total revenues) and license revenues of $0.2 million (less than 1% of total revenues). Services revenues were up 14% from $146.2 million in Q2FY25 and up 7% from $156.6 million in Q1FY26. Cash provided by operating activities of $63.3 million, up 82% from $34.7 million in Q2FY25 and up 18% from $53.6 million in Q1FY26. Income from operations of $48.2 million, up 5% from $45.9 million in Q2FY25 and up 4% from $46.2 million in Q1FY26. Net income of $38.0 million, up 10% from $34.7 million in Q2FY25 and up 5% from $36.2 million in Q1FY26. Net income as a percentage of revenue was 21%, consistent with Q2FY25 and Q1FY26. At July 31, 2025, Descartes had $240.6 million in cash. Cash increased by $64.2 million in Q2FY26 and increased by $4.5 million in 1HFY26.
DSGX in the second quarter of FY 26 has reported the adjusted earnings per share of $0.43, missing the analysts’ estimates for the adjusted earnings per share of $0.51. The company had reported the adjusted revenue growth of 10 percent to $179.82 million in the second quarter of FY 26, beating the analysts’ estimates for revenue by $3.5 million. Adjusted EBITDA of $80.2 million, up 14% from $70.6 million in Q2FY25 and up 7% from $75.1 million in Q1FY26. Adjusted EBITDA as a percentage of revenues was 45%, compared to 43% and 45% in Q2FY25 and Q1FY26, respectively.
On the other hand, on June 18, 2025, Descartes acquired all of the shares of PackageRoute Holdco, Inc., a leading provider of final-mile carrier solutions. The purchase price for the acquisition was approximately $1.9 million, net of cash acquired, which was funded from cash on hand. In addition, on August 1, 2025, Descartes acquired all of the shares of Finale, Inc., a U.S.-based provider of cloud-based inventory management solutions designed to support ecommerce businesses across their growth lifecycle. The purchase price for the acquisition was approximately $40.0 million, net of cash acquired, which was funded from cash on hand, plus potential performance-based contingent consideration of up to $15.0 million based on Finale achieving revenue-based targets over the first two years post-acquisition.