Descartes Systems Group (DSGX) is expected to report fiscal Q1 results ahead of consensus, driven by contributions from its recent $115 million acquisition of 3GTMS, RBC Capital Markets said in a note Friday.

The company is scheduled to report fiscal Q1 results on June 4.

RBC estimates revenue of $172 million, slightly above the $170 million consensus, with roughly $2.6 million in revenue attributed to one month of contribution from 3GTMS, which is not yet factored into consensus estimates.

Organic growth could also exceed expectations, supported by a rebound in global trade volumes and strong demand for Descartes' global trade intelligence solutions. US import volumes rose 11% year over year in March and 9% in April, up from 5% in February, the basis for Descartes' prior baseline outlook.

For fiscal Q2, the brokerage believes Descartes may provide a baseline implying results above consensus, reflecting the full-quarter impact of 3GTMS and continued strength in trade activity.

The 3GTMS acquisition, completed in March, marks Descartes' third-largest to date and highlights the company's continued focus on M&A as a growth strategy. The brokerage estimates the $115 million deal adds about $25 million in annual revenue.

RBC maintained an outperform rating on the stock with a $130 price target, noting the company's consistent capital deployment through acquisitions and organic growth

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