Core Insights - Descartes Systems (DSGX) reported first-quarter fiscal 2026 non-GAAP EPS of 41 cents, missing the Zacks Consensus Estimate by 10.9%, with a year-over-year growth of 2.5% but a sequential decline of 4.7% [1][11] - Revenues for the quarter reached $168.7 million, reflecting an 11.5% year-over-year increase, driven by acquisition synergies and growth in global trade intelligence, although it fell short of the consensus estimate of $170 million due to macroeconomic volatility [2][11] Financial Performance - Services revenues, which accounted for 93% of total revenues, were $156.6 million, up 13.6% year over year, while license revenues were $0.3 million, down from $0.5 million in the prior year [8] - The gross margin for the quarter was 76.4%, slightly down from 76.6% in the previous year, with adjusted EBITDA rising 12% year over year to $75.1 million, resulting in an adjusted EBITDA margin of 45% [12] Strategic Developments - The acquisition of 3GTMS, valued at approximately $112.7 million, was a key strategic move, enhancing DSGX's capabilities in transportation management solutions [3][4] - In response to customer challenges, the company initiated a cost-reduction plan targeting a 7% reduction in the global workforce, with expected annualized savings of $15 million [5][6] Market Reaction - Following the mixed performance and concerns over tariffs, DSGX's shares fell by 8.3% in after-hours trading on June 4, 2025, although shares have increased by 24.4% over the past year compared to the Zacks Computer - Software industry's growth of 13.8% [7][11] Cash Flow and Liquidity - DSGX generated $53.6 million in cash from operating activities, down from $63.7 million in the prior year, primarily due to one-time costs associated with the 3GTMS acquisition [13] - As of April 30, 2025, the company had $176.4 million in cash, a decrease from $236.1 million as of January 31, 2025, largely due to the acquisition expenditure [13]