The Descartes Systems Group (DSG) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly and Q2FY26 revenue of $179.8M, up 10% year-over-year and 7% sequentially, with record net income and adjusted EBITDA, reflecting strong operational execution in a challenging environment.

• Operates the world's largest multi-modal, neutral logistics network with a strong SaaS focus and high recurring revenue profile, serving customers in 160+ countries.

• Maintains a disciplined M&A strategy, completing 34 acquisitions since 2016 for ~$1.4 billion, including PackageRoute and Finale Inventory in 2025.

• Business recalibrated through restructuring to address revenue fluctuations and economic uncertainty, with $2M in quarterly savings realized.

• Solutions help customers reduce environmental footprint, saving over 2.7 million tons of CO2 annually.

Financial highlights

• FY25 revenue reached $651M, up from $573M in FY24, with a 16% CAGR; Q2FY26 revenue was $179.8M.

• Net income for FY25 was $143M (22% margin), and for Q2FY26 was $38M (21% margin), up 10% year-over-year.

• Adjusted EBITDA for FY25 was $285M (44% margin); Q2FY26 adjusted EBITDA was $80.2M (44.6% margin), up 14% year-over-year.

• Gross margin improved to 77% in Q2FY26, up from 75% a year ago.

• Cash balance at July 31, 2025, was $240.6M, debt-free, with a $350M undrawn credit facility.

Outlook and guidance

• Baseline revenues for fiscal 2026 estimated at $157.5M, with baseline adjusted EBITDA of $61M (39% margin) as of August 1, 2025.

• Adjusted EBITDA margin expected to remain in the 40–45% range, with cash flow from operations at 80–90% of adjusted EBITDA.

• High visibility and predictability due to contracted and recurring revenues.

• Management expects continued uncertainty in global trade, with customers facing challenges in pricing and investment decisions.