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Segmented Information

12 Months Ended

Jan. 31, 2025

Segmented Information

Segmented Information

Note 22 - Segmented Information

We review our operating results, assess our performance, make decisions about resources, and generate discrete financial information at the single enterprise level. Accordingly, we have determined that we operate in one reportable business segment providing logistics technology solutions.

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The Company has determined that it has a chief operating decision maker (“CODM”) comprised of the Company’s chief executive officer and president & chief operating officer. The CODM assesses performance for the Company and makes operating decisions based on consolidated net income and Adjusted EBITDA. The term “Adjusted EBITDA” refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes) and other charges (for which we include restructuring charges, acquisition-related expenses, and contingent consideration incurred due to better-than-expected performance from acquisitions). Management considers these non-operating expenses to be outside the scope of Descartes’ ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period. Adjusted EBITDA is a non-GAAP financial measure and may not be comparable to similarly titled measures reported by other companies. The CODM uses net income and adjusted EBITDA to assess overall performance of the Company and to evaluate whether to reinvest profits or invest in acquisitions. Asset information is not regularly provided to the CODM and as such the CODM does not make decisions based on assets.

The following table provides a breakdown of the measures of profit regularly provided to the CODM:

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​	​	​	​	​	​	​
​	​	January 31,	​	January 31,	​	January 31,
Year Ended		2025		2024		2023
​	​	​	​	​	​	​
Revenues		651,000		572,931		486,014
Less:
Headcount-related costs, including stock compensation expense		249,887		226,897		195,261
Cost of revenues and network charges (exclusive of other items presented separately)		67,212		53,797		33,996
SaaS software and maintenance		23,066		19,908		16,476
Other segment items		54,723		63,505		44,445
Depreciation		5,589		5,474		5,225
Amortization of intangible assets		69,399		60,501		60,177
​		469,876		430,082		355,580
Income from operations		181,124		142,849		130,434
Interest expense		(1,004)		(1,363)		(1,167)
Investment and other income		11,513		9,666		4,461
Income before taxes		191,633		151,152		133,728
Income tax expense		48,360		35,245		31,492
Net income, as reported on Consolidated Statements of Operations		143,273		115,907		102,236
​	​	​	​	​	​	​
Adjustments to reconcile to Adjusted EBITDA:
Interest expense		1,004		1,363		1,167
Investment and other income		(11,513)		(9,666)		(4,461)
Income tax expense		48,360		35,245		31,492
Depreciation expense		5,589		5,474		5,225
Amortization of intangible assets		69,399		60,501		60,177
Stock-based compensation and related taxes		21,098		17,005		13,920
Other charges (Note 20)		7,466		21,649		5,441
Adjusted EBITDA		284,676		247,478		215,197

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Other segment items includes travel expenses, reseller fees, contractors, corporate cars, bad debt expense, occupancy, insurance, marketing, employee administrative costs, professional fees, board of director fees, foreign exchange gains and losses, and other expenses.

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The following tables provide our disaggregated revenue information by geographic location of customer and revenue type:

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​	​	​	​	​	​	​
​		January 31,		January 31,		January 31,
Year Ended	​	2025	​	2024	​	2023
Revenues
United States		439,103		382,176		307,102
Europe, Middle-East and Africa		153,004		137,164		126,942
Canada		39,254		35,422		34,547
Asia Pacific		19,639		18,169		17,423
​		651,000		572,931		486,014

​

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​	​	​	​	​	​	​
​		January 31,		January 31,		January 31,
Year Ended	​	2025	​	2024	​	2023
Revenues
License		5,715		5,326		8,385
Services		590,243		520,930		435,734
Professional services and other		55,042		46,675		41,895
​		651,000		572,931		486,014

​

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License revenues are derived from perpetual licenses granted to our customers to use our software products. Services revenues are comprised of ongoing transactional and/or subscription fees for use of our services and products by our customers and maintenance, which include revenues associated with maintenance and support of our services and products. Professional services and other revenues are comprised of professional services revenues from consulting, implementation and training services related to our services and products, hardware revenues and other revenues.

The following table provides information by geographic area of operation for our long-lived assets. Long-lived assets represent property and equipment and intangible assets that are attributed to geographic areas.

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​	​	​	​	​
​		January 31,		January 31,
​	​	2025	​	2024
Total long-lived assets
United States		246,048		178,843
Europe, Middle-East and Africa		49,737		26,298
Canada		31,007		47,072
Asia Pacific		6,959		10,386
​		333,751		262,599

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The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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