Descartes Systems Group Inc. · TSX:DSG
Descartes Systems — Investor Presentation (December 2024)
22 slides from Descartes Systems's investor presentation, December 2024
Slide 1: Descartes – Uniting Business in Commerce
Descartes – Uniting Business in Commerce December 2024 Proprietary and Copyright of The Descartes Systems Group Inc. All rights reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements to be made today and in this presentation, and that may be made in response to questions, constitute forward-looking information for the purposes of applicable securities laws (“forward-looking statements”), including, but not limited to: statements using the
Slide 3: Investment Highlights
Investment Highlights World’s Largest Multi-Modal and Neutral Logistics Network Cloud-Based Software Applications and Data Content Automating and Optimizing the Increasingly Complex Logistics Market Strong Market Position with Significant Competitive Barriers Industry-Leading Solutions Help Customer
Slide 4: Descartes at a Glance
Descartes at a Glance Revenues (US$ millions) 573 ▪ Leader in providing SaaS solutions for logistics- 486 425 intensive businesses ▪ Proven ‘Total Growth’ model supported by disciplined acquisition strategy ▪ High-recurring revenue profile FY22 FY23 FY24 Net Income & Adj. EBITDA (US$ millions)(1) ▪
Slide 5: Global Logistics Network
GLOBAL LOGISTICS NETWORK CARRIERS SHIPPERS LO G I S T I C S Ocean Air Ground Rail Retailers Manufacturers Service & Distributors Providers L ERCIA PRODUC T MM DESCARTES CO GOVERNMENTS INTERMEDIARIES GLN CO MPLIANCE Customs Regulators Associations Customs Freight Forwarders Brokers Brokers & 3PLs 5
Slide 6: Solutions
SOLUTIONS Ecommerce, Shipping Global Trade Transportation & Fulfillment Intelligence Broker & Forwarder Routing, Mobile Management Enterprise Systems Customs & & Telematics Regulatory Compliance DESCARTES GLN B2B MESSAGING & CONNECTIVITY 6
Slide 7: Industry-Leading Customers
Industry-Leading Customers AIR OCEAN TRUCK INTERMEDIARIES R E TA I L E R S M A N U FA C T U R E R S D I S T R I B U TO R S 7
Slide 8: Customer Case Studies
Customer Case Studies Leverages Descartes’ Advanced Home Leverages many Descartes solutions Descartes’ solutions help Delta Airlines Delivery solution for: across multiple DHL operating groups: meet a growing number of logistic challenges across the globe: ▪ Real-time delivery appointment ▪ Global F
Slide 9: Why We Win
Why We Win Global Multi- Neutral modal Network Pure play logistics technology provider with compelling combination of network, applications and data content 9
Slide 10: Market Drivers and Opportunities
Market Drivers and Opportunities Cloud Enables Global Logistics Network offers operational excellence, increased digitization of freight and higher precision through Automation cloud integration and automation G l o b a l Tra d e Heightened regulatory compliance requirements and shifting global trad
Slide 11: M&A is a Core Competency for Descartes
M&A is a Core Competency for Descartes Descartes’ acquisition strategy is a key enabler of its ‘Total Growth’ model ▪ Has completed 31 acquisitions since 2016 for a total consideration of ~US $1.3 billion ▪ Disciplined approach that is focused 2016 2017 2018 2019 2020 2021 2022 2023 2024 on compleme
Slide 12: Recent Acquisition Success
Recent Acquisition Success Acquired Sellercloud (October 2024) for Acquired OCR (March 2024) for ~$83mm Acquired GroundCloud (February 2023) for ~$110mm + up to ~$20mm earn-out ~$138mm + up to ~$80mm earn-out ▪ Sellercloud is a leading provider of ▪ OCR is a leading provider of global trade ▪ Ground
Slide 13: Industry-Leading Solutions Help Customers Reduce Environmental Footprint
Industry-Leading Solutions Help Customers Reduce Environmental Footprint Descartes’ Annual Environmental Impact – We Helped our Customers Save >2 million >3.6 billion >941 million metric tons of CO2 sheets of paper liters of fuel *Infographic Calculations Were Made Using The Paper Calculator From En
Slide 14: Financial Overview
Financial Overview DESCARTES
Slide 15: Financial Highlights
Financial Highlights Strong and consistent revenue growth Highly-recurring subscription and transaction-based revenue model High-quality and diverse revenue profile Continued margin expansion through cost control and operating efficiency Robust cash generation and high conversion rates Proven acquis
Slide 16: Strong and Consistent Growth
Strong and Consistent Growth Revenue Cash Flow from Operations $573 $208 $486 $192 $176 $425 $169 $60 $145 $56 FY22 FY23 FY24 Q3-24 Q3-25 FY22 FY23 FY24 Q3-24 Q3-25 Net Income and Net Income as a % of Revenues Adjusted EBITDA(1) and Adjusted EBITDA as a % of $140 100.0% Revenues(1) $116 90.0% $120 $
Slide 17: Efficient and Disciplined Operating Model
Efficient and Disciplined Operating Model Gross Margin Sales and Marketing 76% 77% 76% 77% 75% 74% 12% 12% 12% 12% 11% 11% FY22 FY23 FY24 Q1-25 Q2-25 Q3-25 FY22 FY23 FY24 Q1-25 Q2-25 Q3-25 Research and Development General and Administrative 15% 15% 15% 15% 15% 14% 10% 10% 10% 10% 10% 10% FY22 FY23 F
Slide 18: Capital Structure – October 31, 2024
Capital Structure – October 31, 2024 • Common shares • 85.5 million – Basic (current) • 87.3 million – Fully diluted (current) • Mixed-Shelf filed in July 2024 (no limit – currently unused) • Expiring August 2026 • Cash and cash equivalents • $US 181.3 million • Acquisition line of credit • $US 350.
Slide 19: Baseline Calibration
Baseline Calibration Figures per Quarter Baseline Actual Actual % of Baseline ▪ Baseline revenues = visible, contracted and Q4’24 Revenue $127.0 $148.2 117% recurring revenues at the beginning of each Net Income $31.8 quarter1. Baseline revenues is not a revenues Net Income as a % of Revenues 21.5%
Slide 20: Investment Highlights
Investment Highlights World’s Largest Multi-Modal and Neutral Logistics Network Cloud-Based Software Applications and Data Content Automating and Optimizing the Increasingly Complex Logistics Market Strong Market Position with Significant Competitive Barriers Industry-Leading Solutions Help Customer
Slide 21: Reconciliation of Non-GAAP Financial Measures – Q3-25
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – Q3-25 We prepare and release quarterly unaudited and annual audited financial statements prepared in The table below reconciles Adjusted EBITDA and Adjusted EBITDA as a percentage of rev
Slide 22: Reconciliation of Non-GAAP Financial Measures – FY24
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – FY24 We prepare and release quarterly unaudited and annual audited financial statements prepared in The table below reconciles Adjusted EBITDA and Adjusted EBITDA as a percentage of reve
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