Descartes Systems (DSGX) is expected to report fiscal Q4 revenue and earnings ahead of consensus estimates, supported by stable organic growth and increased contributions from acquisitions, RBC Capital Markets said in an earnings preview on Friday.

The brokerage forecasts Q4 revenue of $173 million, up 17% year-over-year, slightly above consensus, and GAAP earnings per share of $0.46, exceeding consensus of $0.43.

Adjusted Earnings before interest, taxes, depreciation and amortization is projected at $77 million, also up 17% year over year, surpassing Descartes' long-term target of 10%-15% annual growth. Organic growth is expected to hold steady at 7%, with acquisitions such as Sellercloud and MyCarrierPortal adding $15 million in revenue, according to the note.

RBC noted that uncertainty surrounding US tariffs may have pulled forward trade volumes and increased demand for Descartes' tariff-related services, providing a potential tailwind. The freight market showed signs of improvement in Q4, with record US import volumes in January and strong air cargo activity, though trucking remained weak.

Looking ahead, the brokerage expects the company's Q1 baseline guidance to slightly exceed consensus, with historical trends implying Q1 actuals of $176 million in revenue and $79 million in adjusted EBITDA, above the Street's forecast of $172 million and $76 million, respectively.

The brokerage reiterates its outperform rating on Descartes' stock, with a price target of $133.

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