Descartes Systems Group reports 11% revenue growth for the Q3 of FY26
The growth was driven by demand for its logistics solutions as global trade participants grapple with increasing complexity.
Descartes Systems Group reported a consolidated revenue of US$188 million, an 11% increase year-over-year, alongside a 16% jump in services revenue to US$174 million. According to the press release, double-digit revenue growth for the third quarter of fiscal year 2026, driven by demand for its logistics solutions as global trade participants grapple with increasing complexity.
The results, which executives noted were ahead of internal plans, reflect both organic growth of approximately 7% in services revenue (excluding foreign exchange impacts) and contributions from recent acquisitions.
CEO Ed Ryan attributed the strong performance to the continued expansion of the company’s global logistics network, a critical resource for customers navigating a challenging macro environment.
"Our business performed ahead of our plans in Q3FY26, as we continue to add more solutions and content to our Global Logistics Network," Ryan said.
He highlighted that customers are currently struggling with forecasting due to continued tariff volatility and heightened levels of changes to sanctioned and restricted trading parties. “These geopolitical factors are driving incremental demand for Descartes' services, as the logistics community relies on the network for timely and accurate data to manage shipment lifecycles”, he added.
Profitability metrics also showed improvement, with adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) rising 19% year-over-year to US$86 million. The adjusted EBITDA margin expanded by 3 percentage points to 46%. Operational efficiency was further evidenced by cash flow from operations, which increased 22% to US$73 million for the quarter.
Descartes ended the period with a robust balance sheet, holding Us$279 million in cash and an untapped US$350 million line of credit. Leveraging this financial strength, the company has filed an application to repurchase up to 10% of its stock on the open market.
