Descartes Closes Two Acquisitions and Reports Steady Results; FVE Up to $68

Descartes reported solid fourth-quarter results, with revenue and adjusted EBITDA margin that matched our expectations. Management noted improving macroeconomic factors within the shipping industry paired with a strong demand environment, even with increasing tone of caution from customers entering the next fiscal year. Management announced its acquisitions of Supply Vision, a ship management solutions provider and GroundCloud, a final-mile carrier solutions provider, which is the firm’s largest acquisition to date. With expected acquisition integration efforts as well as persistent currency headwinds, management provided a conservative outlook and maintained the 40% to 45% adjusted EBITDA margin outlook for the fiscal year. We view current obstacles as transitory and expect the improving shipping industry to act as a tailwind for results in the near-term. We hold our long-term view that Descartes is well-positioned to address the heightening complexity of global transportation networks, especially as the firm's portfolio expands.