Descartes Announces Fiscal 2026 Third Quarter Financial Results

Executive Summary

• Descartes reported Q3 FY26 revenue of $187.7 M, up 11% YoY and 4% sequentially, with adjusted EBITDA of $85.5 M (46% of revenue).
• Net income rose to $43.9 M (23% of revenue) and diluted EPS increased to $0.50, both up ~20% YoY.
• The company filed a notice to commence a Normal Course Issuer Bid (NCIB) that could allow repurchase of up to 10% of public float over the next 12 months.
• CFO transition: Edward Gardner will succeed Allan Brett as CFO effective March 2026; Brett will move to an advisory role.

Key Details

• Revenue Breakdown (Q3 FY26): Services $173.7 M (93%), Professional services & other $12.1 M (6%), License $1.9 M (1%).
• Operating Metrics: Cash provided by operating activities $73.4 M (+22% YoY); Income from operations $56.6 M (+24% YoY).
• Adjusted EBITDA: $85.5 M, up 19% YoY; Adjusted EBITDA margin 46% (up from 43% YoY).
• 9‑Month Results (9MFY26): Revenue $536.2 M (+11% YoY), Net income $118.2 M (+12% YoY), Adjusted EBITDA $240.8 M (+15% YoY).
• Cash Position: Cash balance $278.8 M at 31 Oct 2025, up $38.2 M in Q3 and $42.7 M for the nine‑month period.
• Acquisition Update: Finalized acquisition of Finale, Inc. (Aug 1 2025) for approx. $39.2 M cash plus contingent consideration up to $15.0 M based on revenue targets.
• NCIB Application: Intends to seek TSX approval to repurchase up to 10% of public float within 12 months; purchases would be made in the open market under applicable rules.
• CFO Succession Plan: Edward Gardner (EVP, Corporate Development) will become CFO; Allan Brett will remain as senior advisor post‑transition.
• Conference Call: Management call scheduled for 5:30 p.m. ET, Dec 3 2025; webcast available on company website; replay until Dec 10 2025.

Notable Quotes

“Our business performed ahead of our plans in Q3FY26… we continue to add more solutions and content to our Global Logistics Network.” – Edward J. Ryan, CEO
“Allan’s financial leadership has been key to shaping Descartes’ ability to deliver for customers… I’m grateful Allan will stay on as an advisor during the transition.” – Edward J. Ryan, CEO

Materiality: Material – Positive (significant revenue and earnings growth, strategic acquisition, CFO succession, and potential share repurchase program).