The stock was flat today and has drifted slightly lower this week, though it remains within 4 percent of its recent high. We think this is just ordinary movement because there was no news today and the whole market was quiet.
Our view
The company continues to grow its network and add new services that make it harder for customers to leave. If you already own it, there is nothing to do here but sit tight and let the growth continue.
New AI tool launched to help companies find lower trade costs
Descartes introduced a new tool called Free Trade Intelligence that uses AI to help manufacturers and importers find ways to pay less in duties and taxes. Many companies use software that lacks deep data on global trade rules, which means they often miss out on savings from free trade agreements.
This launch is a practical example of the company's shift toward using its massive data library to offer more than just messaging. By helping customers actively save money on their supply chains, Descartes makes its platform more essential and harder to replace.
Forefront Global Logistics picks Descartes for AI-driven brokerage
Forefront Global Logistics is moving its operations onto the Descartes platform to build a digital brokerage. The goal is to use automation to handle the execution of freight moves and better vet the security of the carriers they hire. While a single customer win is routine, it shows that Descartes is successfully selling its newer AI and automation features to existing players in the logistics market. This helps the company grow its revenue from current users while deepening its network of data.
Analysts have maintained a steady, positive outlook following the company's strong first-quarter earnings report in June. Fourteen of 15 analysts rate the stock a buy, and the average target price of $97 suggests a 25% upside from today.
Average target$96.67+25%vs $77.24 today
TodayAvg price
Low $82High $118
Strong Buy15 analysts
0Bearish
1Neutral
14Bullish
FirmRatingPrice TargetDate
CIBC
Outperform
$116→$118
6/4/2026
Redburn Partners
Buy
$90
4/16/2026
BMO Capital
Market Perform
$82
3/12/2026
Scotiabank
Sector Outperform
$115→$95
2/4/2026
Barclays
Overweight
$105
1/12/2026
Wolfe Research
Outperform
$112→$102
1/8/2026
Morgan Stanley
Overweight
$100→$110
12/9/2025
BMO Capital
Market Perform
$113→$95
12/4/2025
Raymond James
Outperform
$118
12/4/2025
Scotiabank
Sector Outperform
$115
12/4/2025
Barclays
Overweight
$108→$106
12/4/2025
RBC Capital
Outperform
$126
12/1/2025
The Descartes Systems earnings
The company has a very reliable track record, beating analyst expectations in seven of the last eight quarters. This suggests management is conservative with its forecasts and consistently over-delivers.
Earnings history
EstimateBeatMiss
The Descartes Systems past earnings results
Expected
Actual
Surprise
EPS
$0.53
$0.55
+3.8%
Revenue
$194M
$198M
+2.3%
Key highlights
Services revenue steady: Services revenue, which is the recurring money from subscriptions and transactions, reached $180.5 million and stayed at 93% of the total business. This consistency is important because it shows the company is successfully keeping customers on long-term plans rather than relying on one-time software sales.
US market leading growth: Revenue from United States customers grew by $21.5 million to reach $134.9 million this quarter. This expansion was driven by a mix of new customer wins and $5.3 million in contributions from businesses the company recently bought.
Acquisitions adding scale: The company spent $25.3 million to buy Idelic, a firm that uses artificial intelligence to help manage driver safety. This deal, along with the smaller $2.3 million purchase of OrderMine, shows the company is using its $273.1 million in cash to buy niche technology that can be sold to its existing global customer base.
Profitability remains high: The gross margin for services, which is the profit left after paying the direct costs to run the systems, improved to 80% from 79% last year. Maintaining these high margins while growing the business suggests the company can handle more traffic on its network without its costs spiraling out of control.
Share buybacks accelerating: The company spent $20.8 million to buy back and cancel 305,000 of its own shares during the quarter. Taking these shares off the market is a way to return value to long-term owners by making each remaining share represent a larger piece of the company.
Baseline spending outlook: Management expects to keep operating expenses for the second quarter at roughly $73.0 million, which is its calibrated baseline for the next period. This forecast helps owners see that the company plans to keep its costs at about 37% of its expected revenue, protecting its profit margins even as it integrates new acquisitions.
Our take: A very strong quarter that shows the business is growing efficiently without sacrificing its high profit margins. The 15% revenue growth was fueled by both new customers and smart, small acquisitions that fit perfectly into the global network. This result strengthens the case for the company as a steady, reliable grower.
The Descartes Systems’s next earnings date
Q2 2027
SEP
10
Expectation
EPS
$0.58
Revenue
$198M
Metrics we are tracking
Metric
Expectations
Status
Service Revenue Mix
Maintaining at least 90% of total revenue from services
93% in Q1 FY2027
Adjusted EBITDA Margin
Staying above 40% over the next two fiscal years
46% in Q1 FY2027
Revenue Growth
Sustaining double-digit growth of at least 10% annually
15% YoY in Q1 FY2027
Cash from Operations
Growing in line with or faster than net income
$75.1M in Q1 FY2027
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