Canada's Descartes Q2 operating income jumps; revenue slightly beats driven by services growth

Descartes Systems group

10/09/2026 23:15

Overview
Canada logistics software firm's fiscal Q2 revenue up 12% yr/yr, slightly beating analyst expectations
Adjusted EBITDA for fiscal Q2 beat analyst expectations
Diluted EPS for fiscal Q2 rose 33% yr/yr to $0.57

Outlook
Descartes did not provide specific financial guidance for future quarters or the full year

Result Drivers
SERVICES REVENUE GROWTH - Services revenue, which comprised 94% of total revenue, rose 13% yr/yr, supporting overall revenue growth
RESTRUCTURING BASE EFFECT - YoY gains in operating income, net income and cash flow were amplified because the prior-year Q2FY26 was depressed by the fiscal 2026 restructuring plan 
OPERATING LEVERAGE – Income from operations rose 36% to $65.5 mln as gross profit increased $18.5 mln while operating expenses rose $1.2 mln, aided by lower other charges

Company press release: ID:nGNX6Fb1JJ

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Slight Beat*
$201.10 mln
$199.15 mln (7 Analysts)
Q2 EPS
 
$0.57
 
Q2 Net Income
 
$50 mln
 
Q2 Adjusted EBITDA
Beat
$94.40 mln
$91.57 mln (8 Analysts)
Q2 Gross Margin
 
78.00%
 
Q2 Operating Income
 
$65.50 mln
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
The stock recently traded at 29 times the next 12-month earnings vs. a P/E of 30 three months ago

Reuters Recommended Reads
Sept 10 - Canada's Tecsys Q1 revenue beats analyst estimates on SaaS-first strategy strength 
Sept 10 - Canada's Enghouse Q3 revenue slightly misses estimates amid evolving economic conditions
Sept 9 - Canada's Currency Exchange International Q3 revenue rises driven by Payments growth

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)