Yahoo Finance Descartes (DSGX) Q1 Earnings Miss, Revenues Increase Y/Y
Descartes Systems DSGX reported first-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 40 cents, which missed the Zacks Consensus Estimate of 42 cents. The bottom line increased 18% year over year.
Revenues in the quarter totaled $151.3 million, beating the Zacks Consensus Estimate by 0.9%. The top line grew 11% year over year. Synergies arising from the acquisition of OCR and Thyme ASD in the fiscal first quarter, along with healthy momentum in services revenues, led to the expansion. Also, acquisitions settled in fiscal 2024, including GroundCloud and Localz favorably impacted revenue growth.
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
Segmental Details
Services revenues (contributed 91% to total revenues) in the reported quarter amounted to $137.8 million, up 11% year over year. The uptick was primarily attributable to an increase in sales to an expanded customer base of global trade intelligence, routing and transportation management solutions.
License revenues (less than 1% of total revenues) were $0.5 million, down from $1.4 million in the prior-year quarter. Changes in customer preferences led to the decline.
Professional services and other revenues (9%) were up 17% year over year to $13 million, driven by contributions from fiscal 2024 acquisitions, primarily GroundCloud.
Revenues from the United States, the EMEA region, Canada and Asia Pacific region were $101.5 million, $35.1 million, $10 million and $4.7 million, respectively, contributing 67%, 23%, 7% and 3% of total revenues.
Other Details
Gross margin for the quarter under review were 77% compared with 76% in the prior-year period, driven by operating leverage from business growth.
Total operating expenses for the quarter were $54.6 million, up from $50.6 million. The uptick was due to rising stock-based compensation costs and the partial period of costs from the fiscal 2025 acquisitions.
Income from operations was up 16% year over year to $42.4 million.
Cash Flow & Liquidity
In the quarter under review, DSGX generated $63.7 million of cash from operating activities compared with $48.9 million in the prior-year quarter. The growth was driven by healthy cash receipts from customers and an increase in net income adjusted for non-cash items.
As of Apr 30, 2024, the company had $238.9 million in cash, down $321 million as of Jan 31, 2024, due to the utilization of cash in acquisition processes.
Zacks Rank
DSGX currently has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Performance of Other Companies
BlackBerry’s BB fourth-quarter fiscal 2024 adjusted earnings of 3 cents per share beat the Zacks Consensus Estimate by 200%. The bottom line improved from the prior-year quarter’s non-GAAP loss of 2 cents per share.
BB has lost 48.6% in the past year against the sub-industry’s growth of 27.2%. In the last quarter, it delivered an earnings surprise of 200%.
Blackbaud BLKB reported first-quarter 2024 non-GAAP earnings per share of 93 cents, which surpassed the Zacks Consensus Estimate by 9.4%. The bottom line increased 29.2% year over year.
Shares of BLKB have gained 5.6% compared with the sub-industry’s growth of 27.2% in the past year. In the last quarter, it delivered an earnings surprise of 9.4%.
Cadence Design Systems CDNS reported first-quarter 2024 non-GAAP earnings per share of $1.17, which beat the Zacks Consensus Estimate by 3.5%. However, it decreased 9.3% year over year.
In the past year, CDNS has gained 26.3% compared with the Zacks sub-industry’s growth of 27.2%. It currently has a long-term growth expectation of 17.8%.
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