Shares of Descartes Systems Group (NASDAQ: DSGX) tumbled 8.30% in after-hours trading on Wednesday following the release of its fiscal 2026 first-quarter earnings report and announcement of cost-cutting measures. The logistics software provider's results fell short of analyst expectations, despite showing year-over-year growth.
For the quarter ended April 30, 2025, Descartes reported earnings per share of $0.41, missing the analyst estimate of $0.44. Revenue came in at $168.7 million, up 12% from the same period last year but below the expected $170.08 million. While the company's services revenues reached a record high of $156.6 million, up 14% year-over-year, it wasn't enough to meet market expectations.
Adding to investor concerns, Descartes announced plans to reduce its global workforce by approximately 7% and eliminate various other operating expenses. The company cited the current economic and global trade uncertainty as the reason for these cost reduction initiatives. These measures are expected to result in restructuring charges of about $4 million in the second quarter but are anticipated to generate annualized cost savings of approximately $15 million once completed. This move, while potentially beneficial in the long term, appears to have spooked investors in the short term, contributing to the sharp after-hours decline.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.