Latest news with #3GTMS
Yahoo
05-06-2025
- Business
- Yahoo
The Descartes Systems Group Inc (DSGX) Q1 2026 Earnings Call Highlights: Strong Revenue Growth ...
Total Revenue: $168.7 million, up 11.5% from $151.3 million in Q1 last year. Services Revenue: $156.6 million, representing 93% of total revenue, up 13.6% year-over-year. Adjusted EBITDA: $75.1 million, 44.5% of revenue, up 12.1% from $67.0 million in Q1 last year. Net Income: $36.2 million, up 4% from $34.7 million in Q1 last year. Cash Flow from Operations: $53.6 million, 71% of adjusted EBITDA, down from $63.7 million in Q1 last year. Cash Balance: $176 million at the end of April, down from $236 million at the end of January. Gross Margin: 76.4% of revenue, slightly down from 76.6% in Q1 last year. Operating Expenses: Increased by 10.4% year-over-year, primarily due to acquisitions. Acquisition Cost: $115 million plus restructuring costs for 3GTMS. Restructuring Charge: $4 million in Q2, with expected annual cost savings of $15 million. Debt Status: Debt-free with an undrawn $350 million line of credit. Tax Rate: 24.4% of pretax income, expected to trend between 24% and 28% for the year. Warning! GuruFocus has detected 3 Warning Sign with VRNT. Release Date: June 04, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Descartes Systems Group Inc (NASDAQ:DSGX) reported a 12% increase in total revenues from the previous year, with services revenues up 14%. The company achieved a 9% increase in income from operations and a 12% rise in adjusted EBITDA, with an adjusted EBITDA margin improvement to 45%. The acquisition of 3GTMS, despite requiring restructuring, is expected to enhance the transportation management portfolio and provide additional functionality to existing customers. The MacroPoint real-time visibility business experienced strong demand, contributing to growth despite a challenging domestic truck market in the US. The Global Trade Intelligence business saw significant growth due to increased demand for tariff and duty information amid changing trade environments. The broader macro environment remains challenging, with shipment volumes down in various transportation modes, particularly in US-China trade. The company had to undertake a restructuring, impacting about 7% of its workforce, to prepare for potential future economic challenges. Cash flow from operations decreased to $53.6 million, down from $63.7 million in the same quarter last year, partly due to acquisition-related charges. The US's removal of the de minimis tariff exemption for Chinese imports led to temporary disruptions in the company's small package import business. Uncertainty in global trade and economic conditions is causing decision-making paralysis among customers, impacting transaction volumes and growth. Q: Can you provide more details on the workforce reduction and its impact on the business? A: Edward Ryan, CEO: The reduction was across the board, affecting various functional areas and geographies, totaling just under 200 people. This decision was made to maintain healthy margins and prepare for market uncertainties. AI advancements have facilitated some of these cuts. Q: What were the headwinds affecting organic services growth this quarter? A: Edward Ryan, CEO: Uncertainty in the market led to fluctuations in transaction volumes, particularly in customs and security filings. Ocean and truck volumes were down, influenced by tariff uncertainties, causing customers to hesitate in decision-making. Q: Have you observed any changes in renewal rates or sales pipeline conversion? A: Edward Ryan, CEO: There hasn't been a significant change in renewal rates or sales pipeline conversion. Sales momentum remains strong, and there have been no major customer defections or contract renegotiations. The future depends on economic developments and tariff negotiations. Q: How does the current downturn compare to previous ones like 2022 or 2023? A: Edward Ryan, CEO: The current situation feels less severe but is marked by greater uncertainty. Unlike past downturns, it's unclear if we're in a recession. The uncertainty stems from unresolved tariff negotiations and geopolitical tensions. Q: What is the status of the 3GTMS acquisition and its integration? A: Allan Brett, CFO: The 3GTMS acquisition is reflected in the baseline calibration. The integration process is ongoing, with efforts to align cost structures and leverage cross-selling opportunities. The acquisition is expected to enhance Descartes' transportation management offerings. Q: How is the competitive environment evolving, especially with recent industry consolidations? A: Edward Ryan, CEO: The competitive landscape is shifting, with prices coming down and private equity firms less active. Descartes is well-positioned to capitalize on acquisition opportunities due to its strong cash reserves and debt capacity. Q: Can you elaborate on the impact of the de minimis rule change on your business? A: Edward Ryan, CEO: The removal of the de minimis exemption for China led to a temporary pause in shipments, but Descartes benefited by offering alternative filing solutions. The company gained business from competitors unable to handle the new transaction types. Q: What are the growth prospects for the Global Trade Intelligence (GTI) solutions? A: Edward Ryan, CEO: GTI solutions, particularly tariffs and duties, are experiencing strong growth, approaching 20% year-over-year. The demand for accurate tariff information is driving this growth, alongside increased interest in data mining tools. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
05-06-2025
- Business
- Yahoo
The Descartes Systems Group Inc (DSGX) Q1 2026 Earnings Call Highlights: Strong Revenue Growth ...
Total Revenue: $168.7 million, up 11.5% from $151.3 million in Q1 last year. Services Revenue: $156.6 million, representing 93% of total revenue, up 13.6% year-over-year. Adjusted EBITDA: $75.1 million, 44.5% of revenue, up 12.1% from $67.0 million in Q1 last year. Net Income: $36.2 million, up 4% from $34.7 million in Q1 last year. Cash Flow from Operations: $53.6 million, 71% of adjusted EBITDA, down from $63.7 million in Q1 last year. Cash Balance: $176 million at the end of April, down from $236 million at the end of January. Gross Margin: 76.4% of revenue, slightly down from 76.6% in Q1 last year. Operating Expenses: Increased by 10.4% year-over-year, primarily due to acquisitions. Acquisition Cost: $115 million plus restructuring costs for 3GTMS. Restructuring Charge: $4 million in Q2, with expected annual cost savings of $15 million. Debt Status: Debt-free with an undrawn $350 million line of credit. Tax Rate: 24.4% of pretax income, expected to trend between 24% and 28% for the year. Warning! GuruFocus has detected 3 Warning Sign with VRNT. Release Date: June 04, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Descartes Systems Group Inc (NASDAQ:DSGX) reported a 12% increase in total revenues from the previous year, with services revenues up 14%. The company achieved a 9% increase in income from operations and a 12% rise in adjusted EBITDA, with an adjusted EBITDA margin improvement to 45%. The acquisition of 3GTMS, despite requiring restructuring, is expected to enhance the transportation management portfolio and provide additional functionality to existing customers. The MacroPoint real-time visibility business experienced strong demand, contributing to growth despite a challenging domestic truck market in the US. The Global Trade Intelligence business saw significant growth due to increased demand for tariff and duty information amid changing trade environments. The broader macro environment remains challenging, with shipment volumes down in various transportation modes, particularly in US-China trade. The company had to undertake a restructuring, impacting about 7% of its workforce, to prepare for potential future economic challenges. Cash flow from operations decreased to $53.6 million, down from $63.7 million in the same quarter last year, partly due to acquisition-related charges. The US's removal of the de minimis tariff exemption for Chinese imports led to temporary disruptions in the company's small package import business. Uncertainty in global trade and economic conditions is causing decision-making paralysis among customers, impacting transaction volumes and growth. Q: Can you provide more details on the workforce reduction and its impact on the business? A: Edward Ryan, CEO: The reduction was across the board, affecting various functional areas and geographies, totaling just under 200 people. This decision was made to maintain healthy margins and prepare for market uncertainties. AI advancements have facilitated some of these cuts. Q: What were the headwinds affecting organic services growth this quarter? A: Edward Ryan, CEO: Uncertainty in the market led to fluctuations in transaction volumes, particularly in customs and security filings. Ocean and truck volumes were down, influenced by tariff uncertainties, causing customers to hesitate in decision-making. Q: Have you observed any changes in renewal rates or sales pipeline conversion? A: Edward Ryan, CEO: There hasn't been a significant change in renewal rates or sales pipeline conversion. Sales momentum remains strong, and there have been no major customer defections or contract renegotiations. The future depends on economic developments and tariff negotiations. Q: How does the current downturn compare to previous ones like 2022 or 2023? A: Edward Ryan, CEO: The current situation feels less severe but is marked by greater uncertainty. Unlike past downturns, it's unclear if we're in a recession. The uncertainty stems from unresolved tariff negotiations and geopolitical tensions. Q: What is the status of the 3GTMS acquisition and its integration? A: Allan Brett, CFO: The 3GTMS acquisition is reflected in the baseline calibration. The integration process is ongoing, with efforts to align cost structures and leverage cross-selling opportunities. The acquisition is expected to enhance Descartes' transportation management offerings. Q: How is the competitive environment evolving, especially with recent industry consolidations? A: Edward Ryan, CEO: The competitive landscape is shifting, with prices coming down and private equity firms less active. Descartes is well-positioned to capitalize on acquisition opportunities due to its strong cash reserves and debt capacity. Q: Can you elaborate on the impact of the de minimis rule change on your business? A: Edward Ryan, CEO: The removal of the de minimis exemption for China led to a temporary pause in shipments, but Descartes benefited by offering alternative filing solutions. The company gained business from competitors unable to handle the new transaction types. Q: What are the growth prospects for the Global Trade Intelligence (GTI) solutions? A: Edward Ryan, CEO: GTI solutions, particularly tariffs and duties, are experiencing strong growth, approaching 20% year-over-year. The demand for accurate tariff information is driving this growth, alongside increased interest in data mining tools. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
04-06-2025
- Business
- Yahoo
Descartes cutting 7% of workforce after earnings miss
Supply chain software provider Descartes announced Wednesday that it is cutting its workforce by 7%, or roughly 200 people. The action is in response to 'uncertain times for customers' as a rapidly changing trade landscape weighs on the freight industry. 'This is a challenging and uncertain economic and trade environment for shippers, carriers and logistics services providers,' CEO Ed Ryan said in a news release announcing fiscal first-quarter results. 'They face challenges on how, when, or if, to react to changes in global trade relationships, tariffs, sanctions and economic forecasts.' The head count reductions were an expansion of a restructuring plan announced a quarter ago, which involved trimming just 2% of the workforce. The recent actions along with other initiatives are expected to generate $15 million in annual cost savings. Descartes (NASDAQ: DSGX) reported earnings per share of 41 cents for its fiscal first quarter ended April 30. The result was 1 cent higher y/y but 19 cents light of the consensus estimate. Consolidated revenue increased 12% y/y to $169 million, largely due to prior acquisitions. The company said it's seeing 'strong interest' for global trade intelligence services given the quickly changing tariff environment. None of its customers are tripping minimum volume commitments, which are set at 85% to 90% of average volumes. Adjusted earnings before interest, taxes, depreciation and amortization of $75 million was 12% higher y/y, with the adjusted EBITDA margin improving 20 basis points to 44.5%. The company generated $54 million in cash flow from operations in the quarter, a 16% y/y decline. It ended the period with $176 million in cash and an untapped line of credit of $350 million. It plans to use capital to continue to make accretive acquisitions as valuation multiples are coming down. During the recent quarter, it acquired cloud-based transportation management solutions provider 3GTMS for $112.7 million. Ryan said the belt tightening has put the company 'in a position to live to fight another day.' He believes Descartes will be in a strong position to step in and make acquisitions if its peers become distressed. Shares of DSGX were off 0.5% in after-hours trading on Wednesday. More FreightWaves articles by Todd Maiden: XPO sees modest tonnage decline in May Old Dominion's May update in line with prior Q2 guide Transportation pricing grows faster than capacity again in May The post Descartes cutting 7% of workforce after earnings miss appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
25-03-2025
- Business
- Yahoo
Breaking: Descartes Systems acquires 3GTMS for $115M
Descartes Systems Group (NASDAQ: DSGX) has announced its acquisition of 3GTMS, a leading provider of cloud-based transportation management solutions. The deal, valued at approximately $115 million, marks a significant expansion of Descartes' capabilities in the North American logistics market. Waterloo, Ontario-based Descartes has long been a major player in logistics and supply chain technology, offering a suite of solutions that help companies optimize and digitize their operations. This latest deal builds on Descartes' strategy of growth through acquisitions, having bought companies like MacroPoint, Peoplevox and Kontainers in recent years to expand its product suite. 3GTMS, headquartered in Columbus, Ohio, built a TMS known for its ability to optimize domestic over-the-road shipments through advanced planning, rating, consolidation and routing tools. This functionality is particularly valuable for shippers, 3PLs and freight brokers looking to streamline operations and reduce costs. 3GTMS is a cloud-based, end-to-end solution tailored for shippers, brokers and 3PLs, emphasizing flexibility, scalability and user-friendliness. One key aspect is its single-platform architecture, which manages the entire transportation life cycle – from planning and optimization to execution and settlement – within one system, reducing the need for multiple, disjointed tools. Andrew Roszko, chief commercial officer at Descartes, highlighted the complementary nature of 3GTMS' solutions to Descartes' existing portfolio. '3G's solution footprint for freight in North America is highly complementary, bringing strong domestic transportation management functionality for truckload, less-than-truckload (LTL), and parcel modes,' Roszko stated. He also noted that the acquisition expands Descartes' carrier network in North America, including the addition of a network of API-integrated LTL integration of 3GTMS into Descartes' ecosystem is expected to create significant synergies. Combined with Descartes' existing transportation management tools and its Global Logistics Network, the acquisition positions Descartes to deliver more value to its combined customer base. This enhanced offering could prove particularly attractive to businesses grappling with the complexities of modern supply chain management and seeking more integrated, efficient solutions. 'Much like Descartes, 3G has been successfully building solutions that connect shippers, carriers and logistics services providers to efficiently digitize and manage the lifecycle of shipments,' said Descartes CEO Ed Ryan. This acquisition comes at a time when demand for advanced transportation management solutions is surging. The pandemic highlighted the critical importance of resilient, flexible supply chains, and many companies are investing in technology to enhance their logistics capabilities. By bringing 3GTMS into its fold, Descartes is well positioned to capitalize on this trend and offer more comprehensive solutions to clients. The transaction was facilitated by several advisory firms. Gibson, Dunn & Crutcher LLP served as legal counsel and Lincoln International LLC as financial adviser to 3GTMS, while Morgan, Lewis & Bockius LLP acted as legal counsel and Centerview Partners LLC as financial adviser to post Breaking: Descartes Systems acquires 3GTMS for $115M appeared first on FreightWaves. Sign in to access your portfolio
