DSGX Earnings Prediction
The chart below shows how DSGX performed 10 days before and after its earnings report, based on data from the past quarters. Typically, DSGX sees a -0.04% change in stock price 10 days leading up to the earnings, and a +0.21% change 10 days following the report. On the earnings day itself, the stock moves by +0.17%. This data can give you a slight idea of what to expect for the next quarter's release.
DSGX Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
148.23M
18.45%
2.44%
Gross Margin
65.46%
0.20%
-0.43%
Operating Margin
22.64%
-11.25%
-2.79%
Net Margin
21.48%
-9.63%
16.87%
EPS
0.37
8.82%
19.35%
No Data Available
DSGX Earnings Analysis
Descartes Systems Group Inc Corporation (DSGX.O) Earnings Conference Call
Positive
Revenue Increase Overview: Total revenues increased by 13% year-over-year, with services revenues up 15%.
Net Income Increase: Net income rose by 27% compared to the previous year, indicating strong profitability growth.
EBITDA Growth and Margin: Adjusted EBITDA increased by 14%, with the adjusted EBITDA margin climbing to 45%.
Cash Flow Performance: The company generated almost $61 million in cash from operations in Q4, representing 81% of adjusted EBITDA.
Financial Performance Highlights: For the fiscal year, revenues were up 14%, net income increased by 24%, and adjusted EBITDA grew by 15%.
Strong Cash Position: The company ended the year with over $235 million in cash and was debt-free, with a $350 million undrawn line of credit.
Logistics and Supply Chain Growth: Strength in domestic logistics and supply chain solutions contributed significantly to growth, particularly in truck route scheduling and last-mile delivery.
Real-Time Visibility Enhancement: The MacroPoint solution provided real-time visibility and was a key growth driver, enhancing tracking efficiency.
Global Trade Intelligence Demand: Strong demand for global trade intelligence solutions was noted, particularly due to changes in tariffs and sanctions.
Acquisition Impact on Q4 Results: Recent acquisitions, including MyCarrierPortal and Sellercloud, contributed positively to Q4 results and were well integrated into the business.
Consistent Gross Margin: The company maintained a strong gross margin of 76% for both the fourth quarter and the fiscal year.
Operational Efficiency Amid Expenses: Operating expenses increased primarily due to acquisitions, but adjusted EBITDA growth outpaced these increases, demonstrating operational efficiency.
Negative
Organic Growth Concerns: Despite a 13% increase in total revenues, the growth in services revenue was only approximately 6% when excluding the impact of recent acquisitions and foreign exchange rates, indicating potential underlying weaknesses in organic growth.
Revenue Decline in Services: Professional service and other revenue, including hardware revenue, decreased slightly from the previous year, suggesting challenges in this segment.
License Revenue Decline: License revenue dropped significantly from $1.4 million in Q4 last year to only $300,000 this quarter, highlighting a concerning decline in this revenue stream.
Operating Expenses Increase: Operating expenses increased by just under 12% for the year, primarily due to the impact of acquisitions, which may indicate rising costs associated with integration and expansion efforts.
Workforce Restructuring Impact: The company completed a restructuring plan that resulted in a reduction of approximately 45 personnel, or just under 2% of the workforce, which may reflect challenges in maintaining operational efficiency.
Operational Efficiency Decline: Cash flow from operations decreased from 96% of adjusted EBITDA in Q4 last year to 81% this quarter, indicating a decline in operational efficiency and cash generation capabilities.
Amortization Expense Impact: The company anticipates a potential increase in amortization expenses for fiscal 2026, which could impact future profitability.
Business Environment Uncertainty: The uncertain business environment, characterized by rapid changes in tariffs and trade policies, is causing paralysis among customers, making it difficult for them to make decisions, which could negatively affect Descartes' future growth prospects.
DSGX FAQs
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DSGX Earning Call Sentiment
The Descartes Systems Group Inc. (DSGX) Q4 2024 Earnings Conference Call Transcript
DSGX.O
-2.53%Positive
The earnings call reflects strong financial performance with record revenues and EBITDA growth. Despite some concerns about acquisition integration and foreign exchange impacts, the company maintains a solid cash position and has a clear growth strategy. The Q&A session revealed optimism about AI opportunities and resilience in uncertain markets. However, cautious margin projections and unclear responses on specific issues slightly temper the outlook. Overall, the positive financial results and strategic focus on growth indicate a likely positive stock price movement over the next two weeks.
