1、Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companiescovered in its research reports.As a result,investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report.Investors should consider thisreport as on

2、ly a single factor in making their investment decision.Please see analyst certifications and important disclosures beginning on page 11.Descartes Systems GroupLargest Services Beat in Two Yearsas Organic Growth StabilizesWe think DSGXshares could see some relief in the near term,with Services postin

3、g its largest beat since FY24 and margincreeping increasingly towards the top of managementsstated range.Against a challenging macro backdrop,we thinkthese results should warrant a positive reaction.While not perfect,Q2 was largely an improvement for DSGX in our view,with all headlinemetrics in-line

4、 or ahead of consensus and commentary around the macro moderately better vs.Q1.Yes,organic growth remains muted at 4%y/y,but management noted this creeped higherthroughout the quarter as volumes improved,while inorganic contribution is running ahead ofschedule(primarily due to 3GTMS strength).Other

5、solutions including MacroPoint,Global TradeIntelligence Broadly,and new filing systems following the ruling against De Minimis(Type 86being replaced by Type 1 and Type 11),were cited as strengths and management continues tobelieve that greater trade complexity should drive increased demand for its s

6、olutions over time.From a profitability perspective,the company continues to control what it can with EBITDAmargin creeping towards the high-end of the 40-45%guided range,and we would not besurprised to see this inflect further with the full-benefit from the cost savings initiatives in Q1coming into