DSGX's Q4 Earnings Match, Stock Gains on Solid Revenue Growth

Core Insights - Descartes Systems (DSGX) reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, meeting the Zacks Consensus Estimate, with a year-over-year increase of 16% and a sequential increase of 2% [1] - Revenues for the quarter reached $167.5 million, surpassing the Zacks Consensus Estimate by 0.5%, and reflecting a 13% year-over-year growth driven by strong domestic logistics and supply chain performance [2] - The company's MacroPoint solution, integrated into the Global Logistics Network, was a significant growth driver, alongside strength in global trade intelligence [2] Financial Performance - Services revenues accounted for 93% of total revenues, amounting to $156.5 million, a 15% increase year over year, despite foreign exchange challenges [5] - License revenues were $0.3 million, down from $1.4 million in the prior-year quarter, while professional services and other revenues fell 3.6% year over year to $10.7 million due to declining hardware sales [5] - The gross margin for the quarter was 76%, unchanged from the previous year, and adjusted EBITDA rose 14% year over year to $75 million, with an adjusted EBITDA margin of 45% [6] Cash Flow and Liquidity - DSGX generated $60.7 million in cash from operating activities during the quarter, compared to $50.8 million in the prior-year quarter [7] - As of January 31, 2025, the company had $236.1 million in cash, an increase from $181.3 million as of October 31, 2024 [9] Market Reaction - Following the earnings report, DSGX shares increased by 2%, closing at $110.92 on March 5, with a 21.1% gain over the past year compared to the Zacks Computer - Software industry's growth of 1.8% [4]