Mr. Edward Ryan reports

DESCARTES ANNOUNCES FISCAL 2024 FIRST QUARTER FINANCIAL RESULTS

The Descartes Systems Group Inc. has released its financial results for its fiscal 2024 first quarter (fiscal Q1 2024). All financial results referenced are in United States (US) currency and, unless otherwise indicated, are determined in accordance with U.S. generally accepted accounting principles (GAAP).

"The global logistics network (GLN) continues to help shippers, carriers and logistics services providers benefit from more efficient supply chains and logistics operations," said Edward J. Ryan, Descartes chief executive officer. "Our customers' successes with the GLN have put us in a strong position to continue to invest in our business for the future. We continue to add more services for our customers to manage the complete life cycle of shipments, such as our recent acquisition of Localz."

fiscal Q1 2024 financial results

As described in more detail herein, key financial highlights for fiscal Q1 2024 included:

• Revenues of $136.6-million, up 17 per cent from $116.4-million in the first quarter of fiscal 2023 (fiscal Q1 2023) and up 9 per cent from $125.1-million in the previous quarter (fiscal Q4 2023);
• Revenues comprised services revenues of $124.1-million (91 per cent of total revenues), professional services and other revenues of $11.5-million (8 per cent of total revenues), and licence revenues of $1.0-million (1 per cent of total revenues). Services revenues were up 21 per cent from $102.8-million in fiscal Q1 2023 and up 9 per cent from $113.4-million in fiscal Q4 2023;
• Cash provided by operating activities of $48.9-million, up 10 per cent from $44.4-million in fiscal Q1 2023 and down from $50.6-million in fiscal Q4 2023;
• Income from operations of $36.5-million, up 19 per cent from $30.6-million in fiscal Q1 2023 and up 9 per cent from $33.6-million in fiscal Q4 2023;
• Net income of $29.4-million, up 27 per cent from $23.1-million in fiscal Q1 2023 and down from $29.8-million in fiscal Q4 2023. Net income as a percentage of revenues was 22 per cent, compared with 20 per cent in fiscal Q1 2023 and 24 per cent in fiscal Q4 2023;
• Earnings per share on a diluted basis of 34 cents, up 26 per cent from 27 cents in fiscal Q1 2023 and consistent with 34 cents in fiscal Q4 2023; and
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $57.7-million, up 13 per cent from $51.2-million in fiscal Q1 2023 and up 4 per cent from $55.4-million in fiscal Q4 2023. Adjusted EBITDA as a percentage of revenues was 42 per cent, compared with 44 per cent in both fiscal Q1 2023 and fiscal Q4 2023.

The attached table summarizes Descartes's results in the categories specified herein over the past five fiscal quarters (unaudited; dollar amounts, other than per-share amounts, in millions).

Cash position

At April 30, 2023, Descartes had $182.2-million in cash. Cash decreased by $94.2-million in fiscal Q1 2024. The attached table provides a summary of cash flows for fiscal Q1 2024 in millions of dollars.

Acquisition of GroundCloud

On Feb. 14, 2023, Descartes acquired all of the shares of Windigo Logistics Inc., doing business as GroundCloud, a cloud-based provider of final-mile carrier solutions and road safety compliance tools. The purchase price for the acquisition was approximately $136.8-million, net of cash acquired, which was financed from cash on hand, plus potential performance-based contingent consideration of up to $80.0-million based on GroundCloud achieving revenue-based targets over the first two years postacquisition.

Acquisition of Localz

On April 20, 2023, Descartes acquired substantially all of the assets of Localz Pty. Ltd., a cloud-based customer engagement platform for day-of-service interaction and order management. The purchase price for the acquisition was approximately $5.9-million, net of cash acquired, which was financed from cash on hand.

Conference call

Members of Descartes's executive management team will host a conference call to discuss the company's financial results at 5:30 p.m. ET on Wednesday, May 31. Designated numbers are 1-416-764-8658 for North America and 1-888-886-7786 for international, using conference ID 95079934 followed by the pound key.

The company will simultaneously conduct an audio webcast on the Descartes website. Phone conference dial-in or webcast login is required approximately 10 minutes beforehand.

Replays of the conference call will be available until June 7, 2023, by dialling 1-416-764-8692 or toll-free for North America using 1-877-674-7070 with playback pass code: 079934 followed by the pound key. An archived replay of the webcast will be available on the company's website.

About The Descartes Systems Group Inc.

Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, security and sustainability of logistics-intensive businesses. Customers use its modular, software-as-a-service solutions to: route, track and help improve the safety, performance and compliance of delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world's largest, collaborative multimodal logistics community. Descartes's headquarters are in Waterloo, Ont., Canada, and it has have offices and partners around the world.

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