Management from supply chain software-as-a-service provider Descartes noted several headwinds in the market currently but said it was confident the company will continue to perform.
Descartes (NASDAQ: DSGX) reported earnings per share of 32 cents for the 2024 fiscal second quarter, ended July 31, after the market closed Wednesday. The result was a penny light of the consensus estimate but a nickel higher year over year (y/y).
CEO Ed Ryan said softer consumer demand and elevated retail inventories may weigh on fall replenishment cycles. Currently, shipment volumes are tepid, largely tracking pre-pandemic trends, and reduced volumes through the Panama Canal could impact freight flows in the near term.
“We’ll see what happens but we like our chances either way,” Ryan said.
![](https://www.freightwaves.com/wp-content/uploads/2023/09/06/Descartes-key-performance-indicators.jpg)
The Canada-based company reported record revenue of $143 million, which was 17% higher y/y and exceeded management’s guidance of $120.5 million. Adjusted earnings before interest, taxes, depreciation and amortization totaled $61 million, which was 12% higher y/y and within management’s long-term annual guidance range of 10% to 15% growth. The company previously guided to $44.5 million in adjusted EBITDA for the quarter.
Cloud-based acquisitions fueled the growth.
Descartes acquired final-mile solutions provider GroundCloud in February, and in May it added Localz, an order management service.
The company guided fiscal third-quarter revenue of approximately $124 million with adjusted EBITDA of $46 million.
Descartes generated $52 million in operating cash flow during the quarter, ending the period with $227 million in cash and no debt. The company’s cash position increased $38 million from the year-ago period.
More FreightWaves articles by Todd Maiden
NOVEMBER 7-9, 2023 • CHATTANOOGA, TN • IN-PERSON EVENT
The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.
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