The Descartes Systems Group (DSG) Q3 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $187.7 million in Q3FY26, up 11% year-over-year, with strong growth in services and recurring revenues.

• Net income rose 20% year-over-year in Q3FY26 to $43.9 million, with income from operations and margins also improving.

• Adjusted EBITDA reached $85.5 million in Q3FY26, up 19% year-over-year, with margin expanding to 46%.

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

• Demonstrates a proven 'Total Growth' model, supported by disciplined M&A and a highly experienced management team.

Financial highlights

• FY25 revenue reached $651 million, up 14% year-over-year, with a 16% CAGR over three years.

• Q3FY26 revenues were $187.7 million, with services revenue comprising 93% of total.

• Net income for FY25 was $143 million, up 23% year-over-year, with a net income margin of 22%.

• Adjusted EBITDA for FY25 was $285 million, representing 44% of revenues.

• Cash from operations in Q3FY26 was $73.4 million, up 22% year-over-year; ended quarter with $278.8 million in cash and no debt.

Outlook and guidance

• Baseline Q4 revenues estimated at $161 million, with baseline adjusted EBITDA calibration of $62.5 million (39% margin).

• Target adjusted EBITDA margin remains at 40%-45%, with potential for upward adjustment.

• Management expects continued growth in logistics solutions demand, with ongoing focus on margin expansion and cash generation.

• Expect Q4 tax rate in the 24%-28% range.

• Continue to target 10%-15% annual adjusted EBITDA growth, with a strong track record of exceeding this range.