Descartes Systems Group's (DSGX) Q2 results "slightly exceeded" expectations, while recent acquisitions and artificial intelligence investments should support stronger growth, RBC Capital Markets said in a note Friday.

Revenue rose 12% from a year earlier to $201 million, ahead of RBC's $200 million estimate. Meanwhile, adjusted EBITDA increased 18% to $94 million, also ahead of expectations, according to the note.

RBC said organic growth remained healthy at about 9%, supported by trade content, e-commerce, freight visibility and routing and scheduling products. Descartes expects organic growth to remain strong in the coming quarters, the note added.

For Q3, RBC said contributions from the Drivin, Tai and Extensive acquisitions could push revenue and adjusted EBITDA above consensus. It raised fiscal 2027 and 2028 revenue and EBITDA estimates to reflect those deals.

Descartes is increasingly investing in AI agents across its "product portfolio," which could improve customer efficiency, support "stronger organic growth" and eventually lift the stock's "valuation multiple," the report said.

RBC said the risk-reward remains "attractive" and maintained an outperform rating on Descartes Systems Group, with a price target of $126.

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