Descartes Systems Group Inc. (DSGX) has launched a Normal Course Issuer Bid that will allow the company to repurchase up to 8,568,582 common shares—about 10 % of its public float—beginning on December 11, 2025 and continuing through December 10, 2026 or until all shares are bought. The program will be funded entirely from existing cash reserves, and each share purchased will be cancelled, reducing the outstanding share count and potentially boosting earnings per share.
The announcement follows a record‑setting Q3 FY2026 earnings report in which Descartes generated $187.7 million in revenue, up 11 % year‑over‑year, and $43.9 million in net income, a 20 % increase. Diluted earnings per share rose to $0.50, beating the consensus estimate of $0.4563 by $0.0437 (9.6 %). The revenue lift was driven by a 16 % rise in services revenue, which now accounts for 93 % of total sales, and a modest 2 % increase in hardware sales. Gross margin expanded to 77 % from 74 %, and the adjusted EBITDA margin grew to 45.6 % from 42.7 %, reflecting a shift toward higher‑margin SaaS contracts and disciplined cost management.
Management highlighted the company’s strong cash position and its commitment to shareholder returns. CEO Edward J. Ryan said the company’s “financial strength and expertise” enable it to invest in growth while returning excess cash to shareholders. CFO Allan Brett noted that the cash‑rich balance sheet and efficient cash‑flow conversion provide the flexibility to fund the buyback without compromising future investment plans.
The market reacted positively to the NCIB announcement, with analysts upgrading the stock and citing the company’s robust margins and earnings beat as key drivers. Raymond James raised its rating to “Outperform” and set a price target of $118, while Scotiabank maintained an “Outperform” rating with a target of $115. The upbeat reaction reflects confidence in Descartes’ ability to sustain high profitability and generate free cash flow to support the buyback.
The share repurchase program is expected to reduce the share count, which, combined with the strong earnings growth, could lift future earnings per share. The program also signals management’s confidence in the company’s valuation and its belief that the stock is undervalued relative to its earnings potential. With a solid balance sheet, expanding services revenue, and a clear focus on high‑margin SaaS offerings, Descartes is positioned to continue delivering shareholder value while pursuing strategic acquisitions and technology investments.
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