Back to top

Image: Bigstock

Descartes (DSGX) Q3 Earnings And Revenues Top Estimates

Read MoreHide Full Article

The Descartes Systems Group Inc (DSGX - Free Report) reported third-quarter fiscal 2022 earnings of 30 cents per share, which surpassed the Zacks Consensus Estimate by 30.4% and increased 100% on a year-over-year basis.

Revenues of $108.9 million increased 24% year over year, topping the Zacks Consensus Estimate by 2.4%. The upside was driven by increasing contribution from acquisitions as well as new and existing customers.

In the past year, the stock has surged 30.5% compared with the industry’s rally of 42.9% on a year-to-date basis.

The Descartes Systems Group Inc. Price, Consensus and EPS Surprise

 

The Descartes Systems Group Inc. Price, Consensus and EPS Surprise

The Descartes Systems Group Inc. price-consensus-eps-surprise-chart | The Descartes Systems Group Inc. Quote

 

Top-Line Details

Services revenues of $97.2 million (89% of total revenues) were up 25% on a year-over-year basis.

Professional services and other revenues of $10.3 million (10%) increased 11% from the prior-year quarter’s levels.

Licensed revenues came in at $1.4 million, contributing approximately 1% to total revenues.

Operating Details

Gross margin was 76%, which expanded 200 basis points (bps) from the year-ago quarter’s levels.

The company reported adjusted EBITDA of $48.2 million, up 32.4% year over year. Adjusted EBITDA, as a percentage of revenues, stood at 44%, up 200 bps from the year-ago quarter’s levels.

Operating expenses increased 24% on a year-over-year basis in the fiscal third quarter.

Operating income increased 47.9% year over year to $27.8 million. Operating margin expanded 400 bps to 25.5%.

Balance Sheet & Cash Flow

Descartes exited the quarter ending Oct 31, 2021, with $171.1 million in cash compared with $128.4 million as of Jul 31, 2021.

The company generated net cash from operations of $43.3 million during the reported quarter compared with $46.4 million in the prior quarter and $33.1 million reported in the year-ago quarter.

For the nine months ended Oct 31, 2021, the company reported cash from operating activities of $130.6 million compared with $94.8 million reported for the nine months ended Oct 31, 2020.

Zacks Rank and Stock to Consider

Descartes currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .

While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics’ shares have gained 27.6% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.

Alphabet’s shares have surged 54.9% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.

Monolithic’s shares have rallied 71.3% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.

Published in