40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 40-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2020

Commission File Number: 000-29970

THE DESCARTES SYSTEMS GROUP INC.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant's name into English (if applicable))

Canada

(Province or other jurisdiction of incorporation or organization)

N/A

(Primary Standard Industrial Classification Code Number (if applicable))

N/A

(I.R.S. Employer Identification Number (if applicable))

120 Randall Drive, Waterloo, Ontario, Canada N2V 1C6

Tel: (519) 746-8110

(Address and telephone number of Registrant's principal executive offices)

Descartes Systems (USA) LLC

Powers Ferry Business Park

2030 Powers Ferry Road SE

Suite 350

Atlanta, GA 30339-5066

Tel: (678) 247-0400

(Name, address (including zip code) and telephone number

(including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Shares, no par value	DSGX	Nasdaq
Rights to purchase Common Shares, no par value	N/A	Nasdaq

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

N/A

(Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

☒  Annual information form     ☒  Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

84,156,316 common shares as of January 31, 2020

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes   ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes   ☒    No ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging growth company    ☐               

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

CERTIFICATIONS

See Exhibits 99.4, 99.5 and 99.6 to this Annual Report on Form 40-F.

CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Registrant, under the supervision and with the participation of the Registrant’s management, including the Registrant’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of January 31, 2020 (the “Evaluation Date”), pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, the Registrant’s Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Registrant’s disclosure controls and procedures were effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Management's Report on Financial Statements and Internal Control Over Financial Reporting

Management’s Report on Financial Statements and Internal Control Over Financial Reporting is contained in the Registrant’s 2020 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.

Report of Independent Registered Public Accounting Firm

The report of KPMG LLP with respect to the effectiveness of the Registrant’s internal control over financial reporting is contained in the Registrant’s 2020 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

During the period covered by this Annual Report on Form 40-F, there have been no changes in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

NOTICES PURSUANT TO RULE 104 OF REGULATION BTR

None.

AUDIT COMMITTEE FINANCIAL EXPERT

The Registrant’s Audit Committee of the Board of Directors currently consists of three members. The Registrant’s Board of Directors has determined that John J. Walker and Eric Demirian are “audit committee financial experts” (as defined in paragraph 8(b) of General Instruction B to Form 40-F). All members of the Audit Committee are independent within the meaning of the Nasdaq Stock Market’s (“Nasdaq”) director independence standards.

CODE OF ETHICS

The Registrant has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is posted on the Registrant’s corporate website at www.descartes.com and is also available at www.sedar.com. The Registrant intends to disclose through its website any waivers or amendments to its Code of Ethics that apply to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES

The aggregate fees billed in respect of the fiscal years ended January 31, 2020 and January 31, 2019 for professional services rendered by KPMG LLP, the Registrant’s Independent Registered Public Accounting Firm for 2020 and 2019, are as follows (all amounts in table are in US dollars — amounts that were billed in Canadian dollars are converted to US dollars at the applicable exchange rate on the last day of the applicable fiscal period):

	Fiscal Year Ended January 31, 2020		Fiscal Year Ended January 31, 2019
Audit Fees	$	708,217	$	579,606
Audit-Related Fees	$	2,430	$	2,430
Tax Fees	$	Nil	$	Nil
All Other Fees	$	Nil	$	Nil

AUDIT FEES— Audit fees consist of fees for professional services rendered for the audit of the Registrant’s annual consolidated financial statements and services provided in connection with statutory audits and regulatory filings or engagements including fees for statutory audit of the Registrant’s foreign subsidiaries.

AUDIT RELATED FEES— Audit related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Registrant’s financial statements and are not reported as Audit Fees.

 

PRE-APPROVAL POLICIES AND PROCEDURES

The Registrant’s audit committee is responsible for overseeing the work of the independent registered public accounting firm and has adopted a policy requiring its pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. The Registrant’s Pre-Approval Policy and Procedure for Engagements of the Independent Auditor is filed as Appendix B to the Registrant’s Annual Information Form dated April 14, 2020 filed as Exhibit 99.1 hereto and incorporated by reference herein.

OFF-BALANCE SHEET ARRANGEMENTS

The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table presents, as of January 31, 2020, the Registrant’s known contractual obligations in respect of operating lease obligations (in millions of U.S. dollars):

	Less than 1 year	1-3 years	4-5 years	More than 5 years	Total
Operating lease obligations	4.3	5.8	3.2	1.1	14.4
Total	4.3	5.8	3.2	1.1	14.4

Lease Obligations

The Registrant is committed under non-cancelable operating leases for business premises, computer equipment and vehicles with terms expiring at various dates through 2029.  The future minimum amounts payable under these lease agreements are outlined in the table above.

Other Obligations

Deferred Share Unit and Cash-Settled Restricted Share Unit Plans

As described in Note 2 to the Registrant’s audited consolidated financial statements, the Registrant maintains Deferred Share Unit (“DSU”) and Cash-Settled Restricted Share Unit (“CRSU”) plans for its directors and employees. Any payments made pursuant to these plans are settled in cash. For DSUs and CRSUs, the units vest over time and the liability recognized at any given consolidated balance sheet date reflects only those units vested at that date that have not yet been settled in cash. As such, the Registrant had an unrecognized aggregate amount for unvested CRSUs and unearned DSUs of $1.1 million and nil, respectively, at January 31, 2020. The ultimate liability for any payment of DSUs and CRSUs is dependent on the trading price of the Registrant’s common shares.

IDENTIFICATION OF THE AUDIT COMMITTEE

The Registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the audit committee as of the date of the filing of this 40-F are: Mr. John J. Walker (Chair), Ms. Deborah Close and Mr. Eric Demirian.

MINE SAFETY DISCLOSURE

Not applicable.

DISCLOSURE PURSUANT TO THE REQUIREMENTS OF NASDAQ

The Registrant was granted an exemption from Nasdaq Stock Market Rules requiring each issuer to provide for a quorum at any meeting of the holders of common stock of no less than 33 1/3% of the outstanding shares of the issuer’s common voting stock. This exemption was granted because Nasdaq’s requirements regarding the quorum required for meetings of the holders of common stock are contrary to generally accepted business practices in Canada. In particular, Section 139(1) of the Canada Business Corporations Act provides that a company’s by-laws may set the quorum requirements for a meeting of shareholders. The relevant provisions of the Registrant’s by-laws state that “Subject to the Act in respect of a majority shareholder, a quorum for the transaction of business at any meeting of shareholders shall be persons not being less than two in number and holding or representing by proxy not less than 20 percent of the issued and outstanding shares of the Corporation for the time being enjoying voting rights at such meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the shareholders present or represented may adjourn the meeting to a fixed time and place but may not transact any other business.”

UNDERTAKING

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

THE DESCARTES SYSTEMS GROUP INC.
By:	/s/ Michael Verhoeve
Name:	Michael Verhoeve
Title:	EVP Legal, General Counsel and Corporate Secretary
Date:	April 14, 2020

EXHIBIT INDEX

Exhibit Number	Description
99.1	Annual Information Form for the fiscal year ended January 31, 2020
99.2	2020 Annual Report (incorporated herein by reference to Exhibit 99.2 of the Registrant’s Form 6-K furnished with the SEC on March 5, 2020)
99.3	Consent of KPMG LLP
99.4	Certification of the Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.5	Certification of the Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.6	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	XBRL Financial Statements

EX-99.1

EXHIBIT 99.1

APRIL 14, 2020

Table of Contents

ITEM 1	GENERAL	3
ITEM 2	CORPORATE STRUCTURE	4
2.1	The Company	4
2.2	Intercorporate Relationships	4
ITEM 3	GENERAL DEVELOPMENT OF THE BUSINESS	5
3.1	Profile	5
3.2	History and General Development	7
3.3	Trends / Business Outlook	10
ITEM 4	NARRATIVE DESCRIPTION OF THE BUSINESS	14
4.1	Company Overview	14
4.2	Principal Products & Services	14
4.3	Revenue Sources	25
4.4	Customer Base	26
4.5	Sales and Marketing	26
4.6	Research and Development	27
4.7	Competition	28
4.8	Intellectual Property and Other Proprietary Rights	29
4.9	Contracts	30
4.10	Employees	30
4.11	Risks Associated with Foreign Sales and Exchange Rate Fluctuations	31
4.12	Risks Associated with Cyclical or Seasonal Aspects of Business	31
4.13	Reorganizations	31
4.14	Material Contracts	31
4.15	Code of Business Conduct and Ethics	32
ITEM 5	RISK FACTORS	32
ITEM 6	MARKET FOR SECURITIES AND RELATED SECURITYHOLDER MATTERS	33
6.1	Common Shares	33
6.2	Transfer Agent and Registrar	33
6.3	Dividend Policy	33
6.4	Market for Common Shares	34
6.5	Shareholder Rights Plan	34
ITEM 7	DIRECTORS AND EXECUTIVE OFFICERS	35
7.1	Summary Information	35
7.2	Committees of the Board of Directors	39
7.3	Certain Relationships and Related Transactions	40
ITEM 8	EXTERNAL AUDITORS	41
ITEM 9	LEGAL PROCEEDINGS	41
ITEM 10	ADDITIONAL INFORMATION	41

Appendix A – Audit Committee Charter	43
Appendix B – Audit Committee Pre-Approval Policy	56

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ITEM 1          GENERAL

Information contained herein is provided as at January 31, 2020 and is in United States (“US”) dollars, unless otherwise indicated.

Our Annual Information Form (“AIF”) contains references to The Descartes Systems Group Inc. using the words “Descartes,” “we,” “us,” “our” and similar words and the reader is referred to using the words “you,” “your” and similar words.

This AIF also refers to our fiscal years. Our fiscal year commences on February 1^st of each year and ends on January 31^st of the following year. Our fiscal year that ended on January 31, 2020 is referred to as “fiscal 2020,” “2020” or using similar words. Our fiscal year that ended on January 31, 2019 is referred to as “fiscal 2019,” “2019” or using similar words. Other fiscal periods are referenced by the applicable year during which the fiscal period ends. For example, 2021 refers to the annual period ending January 31, 2021 and the “fourth quarter of 2021” refers to the quarter ending January 31, 2021.

You should read the AIF in conjunction with our audited consolidated financial statements for 2020 and the management’s discussion and analysis thereon (“MD&A”). We prepare and file our consolidated financial statements and MD&A in US dollars and in accordance with US generally accepted accounting principles (“GAAP”).

We have prepared the AIF with reference to Form 51-102F2, which sets out the AIF disclosure requirements and which was established under National Instrument 51-102 “Continuous Disclosure Obligations” (“NI 51-102”) of the Canadian Securities Administrators.

Additional information about us, including copies of our continuous disclosure materials such as our MD&A, is available on our website at http://www.descartes.com, through the EDGAR website at http://www.sec.gov or through the SEDAR website at http://www.sedar.com.

Certain statements made in this AIF, as well as the MD&A referenced herein, constitute forward-looking information for the purposes of applicable securities laws (“forward looking statements”), including, but not limited to: statements in the “Trends / Business Outlook” section and statements regarding our expectations concerning future revenues and earnings, including potential variances from period to period; our expectations regarding the cyclical nature of our business; mix of revenues and potential variances from period to period; our plans to focus on generating services revenues yet to continue to allow customers to elect to license technology in lieu of subscribing to services; our expectations on losses of revenues and customers; our baseline calibration; our ability to keep our operating expenses at a level below our baseline revenues; our future business plans and business planning process; allocation of purchase price for completed acquisitions; our expectations regarding future restructuring charges and cost-reduction activities; expenses, including amortization of intangible assets and stock-based compensation; goodwill impairment tests and the possibility of future impairment adjustments; capital expenditures; acquisition-related costs; our liability with respect to various claims and suits arising in the ordinary course; any commitments referred to in the “Commitments, Contingencies and Guarantees” section of our MD&A; our intention to actively explore future business combinations and other strategic transactions; our liability under indemnification obligations; our reinvestment of earnings of subsidiaries back into such subsidiaries; our dividend policy; the sufficiency of capital to meet working capital, capital expenditure, debt repayment requirements and our anticipated growth strategy; our ability to raise capital; our adoption of certain accounting standards; and other matters related to the foregoing. When used in this document, the words “believe,” “plan,” “expect,” “anticipate,” “intend,” “continue,” “may,” “will,” “should” or the negative of such terms and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on assumptions that may cause future results to differ materially from those expected. The material assumptions made in making these forward-looking statements include the following: Descartes’ ability to avoid the impact of network failures, information security breaches or other cyber-security threats, or any significant disruptions in the movement of freight or a decline in shipment volumes including as a result of contagious illness outbreaks, a deterioration of general economic conditions or instability in the

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financial markets accompanied by a decrease in spending by our customers; Descartes' ability to successfully identify and execute on acquisitions and to integrate acquired businesses and assets, and to predict expenses associated with and revenues from acquisitions; global shipment volumes continuing to increase at levels consistent with the average growth rates of the global economy; countries continuing to implement and enforce existing and additional customs and security regulations relating to the provision of electronic information for imports and exports; countries continuing to implement and enforce existing and additional trade restrictions and sanctioned party lists with respect to doing business with certain countries, organizations, entities and individuals; our continued operation of a secure and reliable business network; the continued availability of the data and content that is utilized in the delivery of services made available over our network; the stability of general economic and market conditions, currency exchange rates, and interest rates; equity and debt markets continuing to provide us with access to capital; our ability to develop solutions that keep pace with the continuing changes in technology; and our continued compliance with third party intellectual property rights. While management believes these assumptions to be reasonable under the circumstances, they may prove to be inaccurate. Such forward-looking statements also involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements of, or developments in our business or industry, to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, the factors discussed under the heading “Certain Factors That May Affect Future Results” in the MD&A which is included in our Annual Report to the Shareholders for the fiscal year ended January 31^st, 2020, and in other documents filed with the Securities and Exchange Commission, the Ontario Securities Commission and other securities commissions across Canada from time to time. If any of such risks actually occur, they could materially adversely affect our business, financial condition or results of operations. In that case, the trading price of our common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Except as required by applicable law, we do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statements are based.

ITEM 2          CORPORATE STRUCTURE

2.1          The Company

Descartes was continued under the Canada Business Corporations Act on July 5, 2006. On July 31, 2006, Descartes was amalgamated under the Canada Business Corporations Act pursuant to an amalgamation between Descartes and ViaSafe Inc. On February 1, 2010, Descartes was amalgamated under the Canada Business Corporations Act pursuant to an amalgamation between Descartes and Scancode Systems Inc. (“Scancode”). On February 1, 2010, Descartes was amalgamated under the Canada Business Corporations Act pursuant to an amalgamation between Descartes and 7322267 Canada Inc. On February 1, 2012, Descartes was amalgamated under the Canada Business Corporations Act pursuant to an amalgamation between Descartes and 882976 Ontario Inc.

The Descartes Systems Group Inc. head office and registered office is located at 120 Randall Drive, Waterloo, Ontario, N2V 1C6 and our general corporate phone number is (519) 746-8110.

2.2          Intercorporate Relationships

We beneficially own, control and/or direct 100% of all voting, share or membership interests in our material subsidiaries. Our material subsidiaries, determined as at January 31, 2020, are as follows:

• PinPoint GPS Solutions Inc., a Canadian subsidiary;

• Descartes Visual Compliance Inc., a Canadian subsidiary;

• Descartes U.S. Holdings, Inc., a Delaware subsidiary;

• Descartes Systems (USA) LLC, a Delaware subsidiary;

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• MacroPoint, LLC, an Ohio subsidiary;

• Descartes Visual Compliance (USA) LLC, a Delaware subsidiary;

• Descartes Systems UK Limited, a United Kingdom subsidiary;

• InterCommIT BV, a Netherlands subsidiary; and

• Descartes Systems (Belgium) NV, a Belgian subsidiary.

ITEM 3          GENERAL DEVELOPMENT OF THE BUSINESS

3.1          Profile

We bring together networks, applications, global trade content, and collaborative multi-modal logistics communities in ways that improve the productivity, performance and security of logistics and supply chain operations. Customers use our modular, cloud-based and data content solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; comply with trade regulations, and complete numerous other logistics processes. Our pricing model provides our customers with flexibility in purchasing our solutions either on a subscription, transactional or perpetual license basis. We also occasionally act as a reseller of hardware devices from third party suppliers which are used by our customers in connection with their transportation and logistics operations and which provide data that may be relevant to our cloud-based solutions. Our primary focus is on serving transportation providers (air, ocean and truck modes), logistics service providers (including third-party logistics providers, freight forwarders, freight brokers, and customs brokers) and manufacturers, retailers, distributors, and business service providers. For these organizations, logistics is either a key or a defining part of their own product or service offering, or for which our solutions can provide an opportunity to reduce costs, improve service levels or support growth by optimizing the use of assets and information.

The Market

Logistics is the management of the flow of resources between a point of origin and a point of destination – processes that move items (such as goods, people, information) from point A to point B. Supply chain management is broader than logistics and includes the sourcing, procurement, conversion and storage of resources for consumption by an enterprise. Logistics and supply chain management have been evolving as companies are increasingly seeking automation and real-time control of their supply chain activities. We believe companies are looking for integrated solutions for managing inventory in transit, conveyance units, people, data and business documents.

We believe logistics-intensive organizations are seeking to reduce operating costs, differentiate themselves, improve margins and better serve customers. Global trade and transportation processes are often manual and complex to manage. This is a consequence of the growing number of business partners participating in companies’ global supply chains and a lack of standardized business processes.

Additionally, global sourcing, logistics outsourcing, imposition of additional customs and regulatory requirements and changes in day-to-day business requirements are adding to the overall complexities that companies face in planning and executing in their supply chains. Whether a shipment is delayed at the border, a customer changes an order or a breakdown occurs on the road, there are increasingly more issues that can significantly impact the execution of fulfillment schedules and associated costs.

These challenges are heightened for suppliers that have end-customers frequently demanding narrower order-to-fulfillment periods, lower prices and greater flexibility in scheduling and rescheduling deliveries. End-customers also want real-time updates on delivery status, adding considerable burden to supply chain management as process efficiency is balanced with affordable service.

In this market, the movement and sharing of data between parties involved in the logistics process is equally important to the physical movement of goods. Manual, fragmented and distributed logistics solutions are often proving inadequate to address the needs of operators. Connecting manufacturers and

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suppliers to carriers on an individual, one-off basis is costly, complex and risky for organizations dealing with many trading partners. Further, many of these solutions do not provide the flexibility, and real-time information exchange, required to efficiently accommodate varied processes for organizations to remain competitive. We believe this presents an opportunity for logistics technology providers to unite this highly fragmented community and help customers improve efficiencies in their operations.

As the market continues to change, we have been evolving to meet our customers’ needs. While the rate of adoption of newer logistics and supply chain management technologies is increasing, many organizations still have manual or antiquated business processes. We have been educating our prospects and customers on the value of connecting to trading partners through our Global Logistics Network (“GLN”) and automating, as well as standardizing, multi-party business processes. We believe that our target customers are increasingly looking for a single source, neutral, network-based solution provider who can help them manage the end-to-end shipment process – from researching global trade information, to the booking of a shipment, to the tracking of that shipment as it moves, to the regulatory compliance filings to be made during the move and, finally, to the settlement and audit of the invoice.

Additionally, regulatory initiatives mandating electronic filing of shipment information with customs authorities require companies to automate aspects of their shipping processes to remain compliant and competitive. Our customs compliance technology helps shippers, transportation providers, freight forwarders and other logistics intermediaries to securely and electronically file shipment and tariff/duty information with customs authorities and self-audit their own efforts. Our technology also helps carriers and freight forwarders efficiently coordinate with customs brokers and agencies to expedite cross-border shipments. While many compliance initiatives started in the US, compliance has now become a global issue with significantly more international shipments crossing several borders on the way to their final destinations.

Increasingly, data and content have become central to supply chain planning and execution. The review of people, goods, services and/or commodities against comprehensive lists of restricted or sanctioned parties published by governments and international organizations has become an essential compliance requirement as the penalties for doing business with sanctioned parties can be far-reaching and severe. Our content and compliance solutions help simplify and automate the screening processes.

Complex international supply chains are also affected by logistics service provider performance, capacity, and productivity, as well as regulatory frameworks such as free trade agreements, and trade and trade sanctions. We believe our global trade data, denied party screening, trade regulations and free-trade agreement and duty rate and calculation solutions help customers improve their sourcing, compliance, landed-cost, and transportation lane and provider selection processes.

Solutions

Descartes’ Logistics Technology Platform unites a growing global community of logistics-focused parties, allowing them to transact business while leveraging a broad array of applications designed to help logistics-intensive businesses thrive. Descartes’ Logistics Technology Platform is the simple, elegant synthesis of a network, applications, content and a community.

The Logistics Technology Platform fuses our GLN, an extensive logistics network covering multiple transportation modes, with a broad array of modular, interoperable web and wireless logistics management solutions. Designed to help accelerate time-to-value and increase productivity and performance for businesses of all sizes, the Logistics Technology Platform leverages the GLN’s multimodal logistics community to enable companies to quickly and cost-effectively connect and collaborate.

Descartes’ GLN, the underlying foundation of the Logistics Technology Platform, manages the flow of data and documents that track and control inventory, assets and people in motion. Designed expressly for logistics operations, it is native to the particularities of different transportation modes and country borders. As a state-of-the-art messaging network with wireless capabilities, the GLN helps manage business processes in real-time and in-motion. Its capabilities go beyond logistics, supporting common commercial transactions, regulatory compliance documents, and customer specific needs.

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The GLN extends its reach using interconnect agreements with other general and logistics-specific networks, to offer companies access to a wide array of trading partners. With the flexibility to connect and collaborate in unique ways, companies can effectively route or transform data to and from partners and deploy additional Descartes solutions on the GLN. The GLN allows “low tech” partners to act and respond with “high tech” capabilities and connect to the transient partners that exist in many logistics operations. This inherent adaptability creates opportunities to develop logistics business processes that can help customers differentiate themselves from their competitors.

Descartes offers a wide array of modular, cloud-based, interoperable web and wireless supply chain and logistics management applications. These solutions embody Descartes’ deep domain expertise, not merely “check box” functionality. These solutions deliver value for a broad range of logistics intensive organizations, whether they purchase transportation, run their own fleet, operate globally or locally, or work across air, ocean or ground transportation. Descartes’ comprehensive suite of solutions includes:

• Routing, Mobile and Telematics;

• Transportation Management and e-commerce fulfillment;

• Customs & Regulatory Compliance;

• Global Trade Data & Services;

• Global Logistics Network Services; and

• Broker & Forwarder Enterprise Systems.

The Descartes applications forming part of the Logistics Technology Platform are modular and interoperable to allow organizations the flexibility to deploy them quickly within an existing portfolio of solutions. Implementation is streamlined because these solutions use web-native or wireless user interfaces and are pre-integrated with the GLN. With interoperable and multi-party solutions, Descartes’ solutions are designed to deliver functionality that can enhance a logistics operation’s performance and productivity both within the organization and across a complex network of partners.

Descartes’ expanding global trade content offering unites systems and people with trade information to enable organizations to work smarter by making more informed supply chain and logistics decisions. Our content solutions can help customers research and analyze global trade movements, regulations and trends; reduce the risk of transacting with denied parties; increase trade compliance rates; optimize sourcing, procurement, and business development strategies; and minimize duty spend.

Descartes’ GLN community members enjoy extended command of operations and accelerated time-to-value relative to many alternative logistics solutions. Given the inter-enterprise nature of logistics, quick access to partners is critical. For this reason, Descartes has focused on growing a community that strategically attracts and retains relevant logistics parties. Upon joining the GLN community, many companies find that many of their trading partners are already members, with an existing connection to the GLN. This helps to minimize the time required to integrate Descartes’ logistics management applications and to begin realizing results. Descartes is committed to continuing to expand community membership. Companies that join the GLN community or extend their participation find a single place where their entire logistics network can exist regardless of the range of transportation modes, the number of trading partners or the variety of regulatory agencies.

3.2          History and General Development

Our origins were in providing logistics-focused software designed to optimally plan and manage routes for direct delivery and retail customers with private fleets. Supply chain management has evolved as companies across industry verticals have increasingly sought real-time control over their supply chain. We have established a network-based business model and are consolidating technology to provide our customers with a shared-services environment that assists our customers in gathering and exchanging source data for logistics. We have also designed value-added services that enable shippers, transportation companies and logistics intermediaries to use that information to make better business decisions and deliver better service to their own customers.

Key developments in our business over the last three fiscal years, described beginning with the most recent, are as follows:

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Fiscal 2020 and Part of Fiscal 2021 through to April 14, 2020

As of the date of this AIF, the world is experiencing a global pandemic related to the spread of the COVID-19 virus. Businesses in many countries around the globe have been required to close, or materially alter, their day-to-day operations due to government-ordered or recommended shut-downs and/or “shelter-in-place”, or equivalent, restrictions on individuals and businesses which may prevent many businesses from operating. Descartes has implemented measures that allow its employees to work remotely from home locations and for Descartes to continue to operate its business and service its customers. The impact of this pandemic and various public health protection measures, including travel restrictions, on the business of Descartes’ customers, and the ongoing demand of those customers for the products and services of Descartes, is still uncertain at this time, in part due the uncertainty of the duration of such restrictions on a geography-by-geography basis.  However, as of the date of this AIF Descartes has observed some customers with reduced shipment volumes across various modes of transportation and is aware of some customers who have reduced or temporarily suspended operations or are otherwise experiencing financial hardship in their business that may temporarily or permanently impact their demand for Descartes’ products and services.

On February 21, 2020, we acquired Peoplevox Limited (“Peoplevox”) a leading provider of cloud-based e-commerce warehouse management solutions (“eWMS”) based in London, England. Peoplevox’s web-based eWMS and e-commerce fulfillment solutions help customers around the world connect to webshop front ends, translate order information into a mobile-device driven pick and pack process within a warehouse and then feed parcel delivery systems for shipment execution. The total purchase price for the acquisition was approximately US$24.5 million, net of cash acquired, satisfied from a combination of cash on-hand and Descartes’ existing acquisition line of credit.

On August 20, 2019, we acquired BestTransport.com Inc. (“BestTransport”), an Ohio-based operator of a cloud-based transportation management system focused on flatbed-intensive manufacturers and distributors. By adding the BestTransport solution to the Descartes GLN, Descartes is better able to offer its additional solutions to the community of customers serviced by BestTransport, including Descartes’ visibility solutions and capacity matching solutions. The total purchase price for the acquisition was approximately US$11.2 million, net of working capital acquired, which was funded from Descartes’ existing acquisition line of credit.

On June 27, 2019, we acquired a group of companies comprising the business of STEPcom (“STEPcom”), a leading European business-to-business (“B2B”) supply chain integration network provider based in Switzerland. STEPcom services a community of more than 600 customers who use the STEPcom B2B platform to automate supply chain processes. The total purchase price for the acquisition was approximately US$19.6 million which was funded from Descartes’ existing acquisition line of credit.

On June 10, 2019, we completed a public offering of common shares in the United States and Canada at a price of $35.50 per common share pursuant to the short-form base shelf prospectus (described below under the “Fiscal 2019” heading) and related prospectus supplement filed in connection with the offering. The total offering of 6,900,000 common shares included the exercise in full by the underwriters of the 15% over-allotment option, for aggregate gross proceeds to Descartes of $244,950,000.

On May 10, 2019, we acquired Core Transport Technologies NZ Limited (“Core”), a New Zealand-based operator of an electronic transportation network that provides global air carriers and ground handlers with shipment scanning and tracking solutions. The Core acquisition adds to the breadth of solutions that Descartes can offer to its global air carrier customers and is complementary to Descartes’ previous acquisition of Velocity Mail. The total up-front purchase price for the acquisition was approximately US$21 million, which was funded from Descartes existing acquisition line of credit, plus potential performance-based consideration of up to an additional US$9 million over the next two fiscal years.

On February 12, 2019, we acquired the businesses run by the Management Systems Resources Inc. group of companies operating under the names “Visual Compliance”, “eCustoms” and “MSR” (collectively, “Visual Compliance”) pursuant to a Purchase and Sale Agreement (the “Purchase Agreement”) entered into on January 27, 2019 with MSR Customs & Commodity Tax Group, Management Systems Resources Inc, MSR

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International Inc. and MSR Customs Corporation (collectively, the “Sellers”). The Visual Compliance transaction involved a total purchase price of approximately $250 million, which was satisfied in part by way of approximately $9 million in common shares of Descartes and the balance of approximately $240 million paid in cash, primarily drawn from our amended and restated revolving credit facility as referenced below. The Company filed a Material Change Report in respect of the transaction on www.sedar.com on February 7, 2019 and a Business Acquisition Report on April 29, 2019.

Fiscal 2019

On January 28, 2019, we announced that we had amended and increased our existing US $150 million senior secured revolving credit facility to a US $350 million revolving operating credit facility pursuant to the Third Amended and Restated Credit Agreement dated as of January 25, 2019 among inter alia Descartes and certain parties advising Bank of Montreal (“BMO”) as Arranger, Sole Bookrunner and Administrative Agent (the “Credit Facility”), with BMO acting as sole lead and arranger for the increased credit facility. The Credit Facility is available for general corporate purposes, including the financing of ongoing working capital needs and acquisitions, including the Visual Compliance transaction. With the approval of the lenders, the Credit Facility can be further expanded to a total of US $500 million. The Credit Facility has a five-year maturity with no fixed repayment dates prior to the end of the five-year term ending in January 2024. Borrowings under the Credit Facility are secured by a first charge over substantially all of Descartes’ assets.

On August 21, 2018, we acquired PinPoint GPS Solutions, Inc. (“PinPoint”), a Toronto, Ontario based provider of fleet-tracking and mobile-workforce solutions. PinPoint is primarily a reseller of technology solutions that gather real-time location and performance information on trucks and other mobile assets, which information can be used in several other Descartes applications. The total up-front purchase price for the acquisition was approximately CAD $15 million, which was satisfied from a combination of cash on-hand and CAD $2 million in common shares of Descartes, plus potential performance-based consideration of up to an additional CAD $3 million.

On June 22, 2018, we acquired substantially all of the assets of Velocity Mail, LLC (“Velocity Mail”). Velocity Mail is a US-based operator of an electronic transportation network that provides global air carriers with mail and parcel shipment scanning and tracking solutions. The Velocity Mail acquisition added to the breadth of solutions that Descartes can offer to its global air carrier customers and prospects over the Descartes GLN. The total purchase price for the acquisition was approximately $25.5 million, which was satisfied from cash on-hand.

On June 6, 2018, we filed a final short-form base shelf prospectus, allowing us to offer and issue the following securities: (i) common shares; (ii) preferred shares; (iii) senior or subordinated unsecured debt securities; (iv) subscription receipts; (v) warrants; and (vi) securities comprised of more than one of the common shares, preferred shares, debt securities, subscription receipts and/ or warrants offered together as a unit. These securities may be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in one or more shelf prospectus supplements. The aggregate initial offering price of securities that could be sold by us (or certain of our current or future shareholders) pursuant to this base shelf prospectus during the 25-month period that the base shelf prospectus, including any amendments thereto, remains valid was limited to $750 million, of which $245 million has been used as of the date of this AIF leaving a remaining balance of $505 million.

On February 2, 2018, we acquired Aljex Software, Inc. (“Aljex”), a leading US-based provider of cloud based back-office transportation management solutions for freight brokers and transportation providers. Aljex serves approximately 400 customers in North America and supports the execution of nearly 3 million freight moves per year. The Aljex solution helps customers automate business processes and create electronic documents used in executing freight movements. The solution allows customers to manage the lifecycle of a shipment from order creation through execution. The total purchase price for the acquisition was approximately $32.4 million, net of cash acquired, which was funded from Descartes’ then-existing acquisition line of credit.

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Fiscal 2018

On August 15, 2017, we acquired MacroPoint, LLC (“MacroPoint”), the leading provider in North America of location-based truckload shipment visibility and predictive freight capacity data. MacroPoint operated a network of over two million connected trucking assets and drivers when acquired that provided data that helps transportation brokers, logistics services providers and shippers track the location and status of deliveries in trucks. MacroPoint connects to on-board electronic logging devices (ELDs), transportation management systems, and GPS-enabled smart phone applications to provide up-to-date and accurate status information on truck locations. The total purchase price for the acquisition was approximately $107 million, of which $87 million was satisfied in cash and $20 million was satisfied in common shares of Descartes. Of the $87 million cash component, $7 million was satisfied from cash on-hand and the balance from Descartes’ existing acquisition line of credit.

On June 2, 2017, we acquired substantially all of the assets of PCSTrac, Inc. and certain assets of a related company, Progressive Computer Services Inc., dba PCS Technologies (collectively “PCSTrac”). PCSTrac is a US-based provider of carton-level shipment visibility and management solutions for speciality retailers and their logistics services providers to manage shipments from distribution centers to retail stores. The PCSTrac acquisition complemented Descartes’ 2015 acquisition of BearWare Inc. and built upon Descartes’ expertise and footprint in the field of pooled distribution, which assisted retailers in reducing logistics costs and minimizing store disruptions through consolidated deliveries. The total purchase price for the acquisition was approximately $11.25 million, which was satisfied from cash on-hand.

On May 19, 2017, we acquired Z-Firm LLC dba ShipRush (“ShipRush”), a US-based provider of e-commerce multi-carrier parcel shipping management solutions for small-to-medium sized businesses. ShipRush helps e-commerce businesses and omni-channel retailers execute parcel shipments for last-mile delivery to customers. With existing integrations to over 60 different business systems, including ERP, e-commerce and supply chain platforms, the ShipRush platform helps customers streamline the shipping process by automatically importing orders from those systems, comparing carrier rates, printing shipping labels for all major carriers and supporting tracking through final delivery. The ShipRush acquisition added to the breadth of solutions Descartes can provide to omni-channel retailers and small-to-medium sized business customers to address their parcel shipping needs. The total purchase price for the acquisition was approximately $14 million, which was satisfied from cash on-hand, plus potential performance-based consideration of up to an additional $3 million.

3.3          Trends / Business Outlook

Please see our discussion elsewhere in this document related to the current COVID-19 global pandemic and the potential impact of the pandemic on both short-term and longer-term prospects of our business and industry.

Industry consolidation, rapid technological change and frequent new product introductions and enhancements continue to characterize the software, content and network services industries – particularly for logistics management technology companies. Organizations are increasingly requiring greater levels of functionality, more sophisticated product offerings and access to industry-specific data from their software and services providers.

Increased importance is being placed on leveraging cloud-based technology to better manage logistics processes and to connect and collaborate with trading partners on a global basis, as well as to reuse and share supply chain data in order to accelerate time-to-value. Cloud-based technology also enables business networks to more easily unite and integrate services provided by a broad range of partners and technology alliances to extend functionality and further enhance collaboration between business communities. As a result, we believe there is a trend away from using manual and paper-based supply chain and logistics processes and on-premises solution deployments towards electronic processes powered by the exchange of cloud-based electronic information between logistics and supply chain participants.

Accordingly, we expect that our future success will be dependent upon our ability to enhance current products or develop and introduce new products offering enhanced performance and new functionality at

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competitive prices. In particular, we believe customers are looking for end-to-end solutions that combine a multi-modal, multi-process network with business document exchange and wireless mobile resource management (“MRM”) applications with end-to-end global trade compliance and collaborative supply chain execution applications. These applications include freight bookings, contract and rate management, content solutions for trade research and classification of goods for tariff and duty purposes, sanctioned party screening, customs filings and electronic shipment manifest processes, transportation management, routing and scheduling, purchase order to dock door processes, e-commerce fulfilment, warehouse management and inventory visibility. Further, customers are increasingly seeking “big data” content and insight solutions for analyzing global logistics trends and activity.

We believe that there continues to be a growing acceptance of subscription pricing and cloud-based business models in the markets we serve that provide lower up-front cost and easier-to-maintain alternatives than may be available through traditional perpetual license pricing models.

TRENDS IN GLOBAL TRADE

The impact of the current COVID-19 global pandemic on global trade both in the short-term and over the longer-term is uncertain at this time.  As of the date of this AIF we have observed some reduced shipment volumes across various modes of transportation and are aware of some customers who have reduced or temporarily suspended operations or are otherwise experiencing financial hardship.  However, we don’t know what the impact of these events will be on overall global trade volumes and the use of Descartes’ products and services by its customers and whether an impact, if any, will only be temporary or may continue for an extended period of time.   It’s also not clear at this time whether, as a result of the events of this global pandemic, countries, companies and/or consumers will alter trading, manufacturing and/or buying patterns from the patterns we have observed in the global economy in the past.

With both global trade and counter-terrorism efforts on the rise over the past several years, the role of many customs agencies around the world has evolved far beyond statistical reporting and collection of import duties and excise taxes to a growing focus on the protection of society through augmented border security and much deeper cargo security. To that end, the World Customs Organization (“WCO”) is playing a leading role in helping member agencies enhance the efficiency and effectiveness of their operations through the development, promotion and implementation of modern customs systems and procedures. One of the WCO’s principal instruments is the SAFE Framework of Standards to Secure and Facilitate Global Trade (“SAFE Framework”) which the WCO adopted in 2005.

The SAFE Framework is a non-binding instrument that contains supply chain security and facilitation standards for goods being traded internationally. Its goal is to enable better visibility, improve capabilities to detect high-risk shipments, and facilitate more integrated supply chain management across all modes of transport through enhanced technology and data transmission practices, networking arrangements between customs administrations, and better cooperation between customs and the business community.

As more countries adopt and enhance SAFE Framework initiatives, importers, exporters and their trading partners must comply with new and stricter security and customs regulations, which often mandate the use of electronic logistics messaging. Descartes’ customs and regulatory compliance solutions connect importers, exporters, logistics providers and regulatory authorities to enable efficient data transmission, cargo security screening, customs declaration filings and compliance across multiple regulatory requirements and industry-sponsored initiatives affecting international transportation. As such, our business may be impacted as regulations affecting domestic and international trade are introduced, modified or repealed.

USA: The Automated Commercial Environment (“ACE”) was designed by US Customs and Border Protection (“CBP”) to enhance US national security through more accurate, readily available data to promote seamless trade processing. ACE is the “single window” or the primary system through which the trade community will electronically report all imports and exports and the government will determine admissibility and duties. In February 2018, CBP deployed the last of the major scheduled core ACE deployments.  The import manifest, cargo release, post release, export, and Participating Government

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Agency (“PGA”) integration functionality scheduled for delivery in ACE has been made available. CBP is continuing to work through ongoing demand for additional ACE enhancements emerging from industry, government agency, and congressional stakeholders.

One such initiative is export manifest that CBP is developing for air, rail, ocean and truck transportation modes. These export manifest functionalities are scheduled to be rolled out as pilot programs pending publication of Federal Regulation Notices (“FRNs”) announcing the pilot programs by transportation modes and allowing for electronic filing of export manifests. CBP’s stated goal of this initiative is to help close the loop between import and export process and bring more modernized standards to labor-intensive export procedures. CBP also hopes that an electronic export manifest will enable it to better identify potential security concerns earlier in the supply chain while speeding the flow of compliant shipments.

On June 12, 2018, the Air Cargo Advance Screening (“ACAS”) program went into effect. A previously voluntary process, it mandates the submission of advanced air cargo information on shipments arriving in the United States from a foreign location. Participating air carriers must submit a subset of required pre-arrival air cargo data to CBP at the earliest point practicable and prior to loading the cargo onto aircraft destined to or transiting through the United States.

On September 28, 2019, CBP opened a pilot testing program from ACE Entry Type 86 declarations. This program is designed to provide enhanced declaration information for shipments that currently fall under the de minimis value threshold of $800 USD, otherwise known as Section 321 shipments. The goal of the program is to capture enhanced information on duty-free eCommerce shipments for security purposes. Descartes is participating in this pilot with customers. The mandatory date for the program is not yet known.

Canada: The Canada Border Services Agency's (“CBSA”) Single Window Initiative (“SWI”) is intended to streamline the sharing of commercial data between the government of Canada and the trade community. The Advanced Commercial Information (“ACI”) electronic manifest (“e-Manifest”) program was launched by CBSA to provide more effective risk management processes and tools to identify threats to health, safety, and security prior to the arrival of cargo and conveyances in Canada. Compliance requirements extend to air, marine, highway and rail carriers, as well as, freight forwarders and warehouse operators.

Currently, a voluntary compliance period is in effect for ACI eManifest for forwarders. Freight forwarders must electronically transmit advance house bill data on consolidated freight to the CBSA, which receives and validates the data within time frames that differ by mode. CBSA is providing quarterly releases for eManifest with incremental enhancements.

The Canadian Export Reporting System (CERS) is replacing the Canadian Automated Export Declaration (CAED) with a pilot that began in December 2019 and a goal of all CAED filers moving to CERS by the end of 2020.

At the end of 2019, CBSA announced the time for the CBSA Assessment and Revenue Management (CARM) program. This program phase is expected to significantly revamp the systems and procedures associated with customs duty declaration and collection in Canada. Education of the trade via workshops and program documentation is taking place. The initial timeline for required cutover was April of 2021. This date has been delayed with new definitive timeframes not announced as of the date of this AIF.

European Union: In 2011, the EU launched advance manifest compliance initiatives similar to the US regime, called the Import Control System (“ICS”) and Export Control System (“ECS”). Then, in May 2016, updates to the Union Customs Code (UCC) were launched affecting customs legislation across the EU, which introduced significant changes to long-established procedures.

The UK left the European Union on January 31, 2020 and is now in trade negotiations with the EU. The transition period is set to finish on December 31, 2020. While the situation remains fluid, Descartes is making the necessary adjustments within our customs applications in the UK and across Europe to support the filing of customs declarations and other requirements that will likely come into effect in 2021.

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Other Countries Around the World: Many nations have or are in the process of adopting various forms of advance filing requirements for shipments destined for a port of that country, including, Angola, Argentina, Abu Dhabi, Bahrain, Bolivia, Brazil, Colombia, China, Cuba, Dubai, Ethiopia, Ghana, India, Israel, Jamaica, Japan, Kenya, Lebanon, Mexico, New Zealand, Nicaragua, Nigeria, Oman, Paraguay, and the United Arab Emirates.

TRENDS IN USE OF GLOBAL TRADE DATA

Another key trend is the growing importance of global trade data content to minimize duty spend, reduce the risk of transacting with denied parties, and utilize market research to better compete. Trade departments within international shippers and/or their brokers are being required to manage import/export compliance for a growing number of countries, covering everything from import (harmonized tariff) classifications, export classifications, Other government agency information and special trade programs and valuation methodologies going into the destination countries. Importers, exporters, and their logistics providers are using global trade data to better manage supply chain sourcing and risk, track products, monitor competitors, and discover new market opportunities.

Denied party screening (“DPS”) is the review of intellectual property, goods, services, and connectivity prior to an import, export or transaction. Governments and international organizations maintain a variety of lists of people, organizations and countries with whom it is illegal or restricted to transact business. Failure to comply can result in significant fines, loss of export privileges, negative media coverage and reputational damage. As sanctions policies are in constant flux, many businesses engaged in international trade are increasingly seeking access to affordable, flexible and configurable DPS services to remain in compliance while limiting operational disruption.

TRENDS IN MOBILE RESOURCE MANAGEMENT

The mobile resource management (“MRM”) market is also impacted by changing regulatory trends and limited driver availability. Several countries, including the United States, have adopted legislation that requires automated telematics device-based reporting on various information related to the operation of vehicle fleets, including monitoring drivers’ hours of service, distance travelled, speed and equipment inspections. We believe that these types of initiatives will continue to evolve and that customers in this field are increasingly looking for technology service providers to help them manage these complex compliance requirements. With aging driver workforces in North America and Europe, companies are looking for solutions that can improve their existing workforce productivity while complying with the increasing number of regulatory mandates.

We also believe there is a trend in the MRM market towards adoption of solutions that specialize in enabling home delivery, delivery reservations and delivery route optimization that leverages GPS and other real-time available information about a delivery resource in motion. With firms such as Amazon and Home Depot making home delivery a differentiating feature of the buying experience, more retailers and distributors are focusing on re-engineering their logistics processes to provide customers with cost-effective delivery alternatives, including home/job site delivery and value-added services, with tight delivery time windows. In addition, we believe there is an increased proliferation of real-time information that is available about delivery resources in motion and that customers are seeking delivery resource management solutions that can leverage this information for their customers’ benefit.

GENERAL TRENDS

Our business may be impacted from time to time by the general cyclical and seasonal nature of particular modes of transportation and the freight market in general, as well as the cyclical and seasonal nature of the industries that such markets serve. Factors which may create cyclical fluctuations in such modes of transportation or the freight market in general include ongoing developments in and changes to legal and regulatory requirements related to both international and domestic trade, timing of contract renewals between our customers and their own customers, seasonal-based tariffs, vacation periods applicable to particular shipping or receiving nations, weather-related or global health-pandemic events that impact shipping in particular geographies and amendments to international trade agreements. In particular, the

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uncertainties arising from a pandemic, such as the current COVID-19 global pandemic could adversely impact global shipment volumes in all modes of transportation in fiscal 2021 and potentially beyond.   Since some of our revenues from particular products and services are tied to the volume of shipments being processed, adverse fluctuations in the volume of global shipments or shipments in any particular mode of transportation may adversely affect our revenues. Declines in shipment volumes in the US or internationally likely would have a material adverse effect on our business.

ITEM 4          NARRATIVE DESCRIPTION OF THE BUSINESS

4.1          Company Overview

We are a global provider of cloud, device, and data content-based solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, cloud-based and data content solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in a large, collaborative multi-modal logistics community.

Our pricing models provide our customers with flexibility in purchasing our solutions either on subscription, transactional or perpetual license basis. Our solutions help transportation providers (air, ocean, rail and truck modes), logistics service providers (including third-party logistics providers, freight forwarders and customs brokers) and logistics-intensive manufacturers, retailers, distributors and mobile service providers reduce costs, improve operational performance, save time, comply with regulatory requirements and enhance the service that they deliver to their own customers.

4.2          Principal Products & Services

We believe that our customers prefer a technology provider that understands the unique requirements of logistics organizations and can provide a comprehensive set of solutions. Our customers are looking for collaborative solutions that help connect their enterprise to the multiple trading partners, logistics services providers and carriers that work with them. The Logistics Technology Platform helps our customers address those needs and provide a base for continuous innovation.

Logistics Technology Platform

The Logistics Technology Platform combines a network, applications, content and a community. It is a comprehensive technology infrastructure that Descartes customers and their trading partners use to extend the command of their logistics operations.

Network

Descartes’ GLN is the foundation on which our applications and community are built. It was designed with logistics operations in mind. It is differentiated by its management of data semantics, message delivery, transformation of data pertaining to regional or global operations and its ability to work across wired and wireless technologies.

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Content

Descartes’ global trade content solutions offer comprehensive access to market leading data and tools to research, analyze and act on import/export movements, trade regulations and market trends; reduce the risk of transacting with denied or sanctioned parties; increase trade compliance rates; optimize sourcing, procurement, and business development strategies; and minimize duty spend.

Community

Our global logistics community is a large, multi-modal network of logistics-intensive companies.  We have historically enhanced our current solutions and added additional applications and community members through both organic growth and acquisitions of similarly-focused complementary businesses to strengthen our Logistics Technology Platform.

Applications

With the GLN as the connectivity foundation, we have been expanding our logistics application functional footprint to offer a broad array of modular, interoperable web-based and wireless logistics management solutions.

We provide applications that help companies better manage their logistics book-to-bill process and purchase order-to-dock process, track inventory, meet regulatory requirements, optimize fleet performance, manage deliveries, and effectively communicate and collaborate with their logistics partners. These applications can be principally categorized as: (i) Routing, Mobile & Telematics; (ii) Transportation Management; (iii) Customs & Regulatory Compliance; (iv) GLN Services; (v) Broker & Forwarder Enterprise Systems, and (vi) Global Trade Content Solutions.

(i) Routing, Mobile & Telematics

Descartes’ Routing, Mobile & Telematics suite supports the closed-loop process associated with planning, tracking, measuring, delegating and optimizing the use of assets and people that are involved in the movement of goods. These solutions can improve productivity and reduce fuel, vehicle and labor costs. The suite helps address business challenges including the following: (1) strategic planning; (2) daily planning; (3) pickup/delivery reservations; (4) dispatch and vertical specific mobile solutions; (5) commercial fleet navigation; (6) reporting and measuring; (7) sales and merchandiser management; and (8) telematics and compliance.

(1)        Strategic Planning:  Descartes Sales & Territory Planner™ and Descartes Area Planner™

For strategic planning of recurring pickups or deliveries, Descartes Sales & Territory Planner performs complex service scheduling that simultaneously considers daily, weekly and multi-week deliveries, as well as holidays and other non-working days. It also evaluates geographic distribution and sales potential for each customer to help establish optimal territories and routes. Factors considered include minimizing travel time and related costs, and balancing opportunities across members of the sales team. Additional parameters such as stops, distance and sales volume can also be used to help determine routes and route schedules for sales, delivery or both.

For strategic planning of highly variable pickups and deliveries, Descartes Area Planner utilizes historical demand with algorithms to create models of demand density patterns.  Those patterns are used to create territory and route plans.  Descartes Area Planner takes into account service levels and delivery product types and is able to test the territory and route plan’s resilience to change. Descartes Area Planner typically is used to generate multiple plans to fit daily, seasonal or business cycle driven demand variability.

(2)        Daily Planning:Descartes Route Planner™, Descartes Route Planner RS™, Descartes Route Planner On-demand™ and Winroute™

Descartes provides a number of daily planning solutions to address the range of customer requirements from the most complex to simple needs. Descartes Route Planner^TM takes in new orders as they are placed, optimizes them in real-time, allocating resources to help maximize operating efficiencies, deliver priority service to the most profitable accounts and routes, and

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maintain overall customer service objectives. Our other daily planning solutions optimize orders in groups, balancing service with costs and operational constraints. Our daily planning solutions are designed to integrate with existing order management or transportation planning systems and can help companies reduce costs as a result of shorter routes, reduce fuel consumption and enhance fleet utilization. Descartes’ comprehensive offering addresses a broad range of operational environments that can vary across different industries.

(3)          Pickup/Delivery Reservations:  Descartes Reservations™

Descartes Reservations facilitates on-line scheduling of deliveries or service — either for self-service or as a decision support tool for customer service agents. It helps companies to effectively tailor service to the demands of key customers while helping to achieve internal profitability goals. Descartes Reservations also confirms that requests can be met and schedules in the appointment, making Descartes Reservations an effective capable-to-promise tool.

(4)          Descartes Execution and Mobile Solutions:  Descartes Route Planner Dispatch™, Descartes Route Planner OnDemand Dispatch, Descartes MobileLink™, Descartes Food Perform™, Descartes Distribution Perform™, and Descartes Transport Perform™

Descartes Execution solutions (Descartes Route Planner OnDemand Dispatch, Descartes Route Planner Automated Vehicle Locator™, Descartes Route Planner OnDemand AVL™) manage routes in progress, tracking their performance, addressing route exceptions as they occur and capturing delivery and pickup status updates. Descartes Execution Solutions facilitate the assignment and execution of pre-planned and same-day pick-ups and deliveries. Descartes Mobile solutions (Descartes MobileLink™, Descartes Food Perform™, Descartes Distribution Perform™, and Descartes Transport Perform™) provide integrated two-way wireless communication and supports active and passive monitoring capabilities for enhanced logistics execution. By combining route planning and a free flow of information between dispatchers and the field, Descartes Mobile solutions extend the traditional route planning process and provide real-time visibility into the execution of the plan. The combination of Descartes’ Daily Planning solutions with Descartes Execution and Descartes Mobile solutions form the core of plan versus actual performance evaluation and continuous logistics improvement.

Descartes Food Perform, Distribution Perform, and Transport Perform are cloud-based mobile solutions that automate traditional paper-based processes and help streamline complex ‘last mile’ logistics processes. These solutions have been tailored to support ‘last mile’ commercial processes unique to each industry. They provide configurable, feature-rich mobile technology and advanced electronic proof of delivery operating on a hand-held device carried by drivers and other field personnel.

(6)          Reporting and Measuring:Descartes Reporting Services™

Descartes Reporting Services helps companies create and distribute reports within an organization or to suppliers, vendors, sub-contractors or carriers. It provides a simple, secure way to create customized delivery statistics and metrics. It can help simplify the creation and management of supply chain scorecards and, as a byproduct, can help identify best practices.

(7)          Sales and Merchandiser Management:Descartes Sales and Merchandiser Management™

Descartes Sales and Merchandiser Management enables resource planning, route building and optimization, and tracking across delivery operations and mobile workforces, including sales representatives, territory managers and merchandisers. Descartes Sales and Merchandiser Management facilitates weekly activity planning, delivery status visibility for merchandisers and sales representatives, actual distance driven, in-store time calculation and work data collection, and consolidated performance reporting. Performance data can be uploaded to corporate payroll and expense reporting systems to ensure appropriate payments are being made for resource performance. Descartes Sales and Merchandiser Management helps our

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customers improve sales and merchandising productivity, cut costs and improve customer service.

(8)          Telematics and Compliance:Descartes Telematics and Compliance™, Descartes Smartanalysis, Descartes SmartLicence™, and Descartes Driver Vehicle Inspection Reports™

Descartes’ Telematics and Compliance solutions offer next generation mobile handheld devices that can continuously monitor performance of vehicles and drivers. Robust functionality for tracking vehicles, monitoring and scoring driving behavior and automation of driver logs and reporting on driver hours for “hours of service” regulatory compliance helps increase workforce productivity and safety, prevents “hours of service” violations and reduces or eliminates excess paperwork and processing times. Descartes’ 2018 acquisition of PinPoint adds depth, breadth and domain expertise to our offering by enhancing Descartes’ ability to implement, collect and leverage real-time vehicle and trailer information through reseller relationships with Geotab (for telematics devices) and SkyBitz (for trailer tracking devices).

In Europe, Descartes’ Smartanalysis product is a leading tachograph analysis and compliance management solution. It is used by road transport operators of all sizes to meet legal obligations and comply with Europe’s complex driver working time regulations. Descartes SmartLicence is a comprehensive online tool for fleet operators in the UK for electronically managing driving licenses and verifying license details with the UK’s Driver and Vehicle Licensing Agency.

Descartes’ Driver Vehicle Inspection Reports (DVIR) is a configurable, cloud-based, enterprise-class solution for assuring compliance with routine driver vehicle safety checks required or recommended by the United States Federal Motor Carrier Safety Administration, Canadian Provincial Ministries of Transportation, and the United Kingdom Driver and Vehicle Standards Agency.

(ii) Transportation Management

Descartes’ Transportation Management solutions provide robust, network-based, modular, end-to-end multimodal functionality that spans the entire shipment lifecycle. We streamline and support our customers’ ability to turn purchase or sales order fulfillment into transport orders, manage carrier contracts, optimize and execute transportation plans, execute cross-docked and pooled shipments, connect to trading partners, control the flow of prepaid freight, track shipments and inventory, audit freight and manage supplier/carrier performance. The suite of products addresses unique requirements across truck, air, ocean and parcel modes.

Descartes Transportation Manager™

Descartes Transportation Manager facilitates efficient planning and execution of shipping across air, ocean, truck and parcel modes at multiple touch-points in the distribution process. It helps logistics managers, shippers and third parties simultaneously evaluate shipment alternatives to find efficient shipping methods. It is a solution that scales from the loading dock to the enterprise, providing up-to-date rates that allow the customer to both make efficient shipment decisions and comply with carrier communications, manifesting and labeling requirements. The pick, pack and ship capability helps our customers manage small parcel shipments with postal services, a variety of small-package delivery carriers and over 150 less-than-truckload carriers. It evaluates and optimizes transportation purchases across modes for both operational effectiveness and cost efficiency, and helps answer tough questions such as: “How can I effectively use all of my carrier contracts?”; “Who is the most suitable carrier in this mode to handle my shipment?”; “What shipments can I combine to lower my costs?”; and, “What shipment consolidation should I use - aggregation, multi-stop routes or pooling to reduce costs while meeting service requirements?”.

Descartes Dock Appointment Scheduling™

Descartes Dock Appointment Scheduling is a collaborative solution that enables shippers, carriers and consignees to schedule dock door appointments. It streamlines the dock

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appointment process by distributing the responsibility for scheduling from the warehouse to carriers and suppliers. By ensuring all supply chain partners are involved in the process and have visibility into requested, scheduled and rescheduled dock orders and appointments, this solution is designed to optimize shipping and receiving operations at a warehouse.

Descartes Yard Management™

A module of Descartes Transportation Manager, Descartes Yard Management enables shipping and receiving staff, gate guards and yard jockeys to more effectively manage the movement of trailers and identify inventory in the yard. Designed to work seamlessly with Descartes Transportation Manager, Descartes Yard Management provides command and control of yards of all sizes.

Descartes Rate Builder™

Descartes Rate Builder is a solution that helps carriers and non-vessel owning common carriers (“NVOCCs”) manage global rates, contracts and rate agreements more efficiently and meet regulatory obligations. Descartes Rate Builder enables companies to create, revise, store and distribute rates via the Internet. Once they are generated, Descartes Rate Builder stores all rates in a central database with controlled access privileges. Carriers can designate a “contract owner” who can allow multiple users to contribute during the drafting of a new contract or amendment. NVOCCs can effectively manage a global rate network and help enable logistics service providers (“LSPs”) to create and manage both buy-side and sell-side rates digitally, enforce a standardized global pricing policy and implement a global rate request process.   Descartes Rate Builder also supports the audit of ocean bills of lading.

Descartes Retail Distribution™

The Descartes Retail Distribution portfolio provides visibility, reduces cost and removes bottlenecks as a retailer’s products move from a shipper’s Distribution Center (“DC”), consolidation point, or DC bypass facility through third-party transportation provider networks and ultimately to its stores. The portfolio includes:

(1) Descartes PCSTrac™ is an inventory control and management solution for retail distributors designed to manage multiple retailer accounts, varying label types, and specific requirements of each retailer – such as custom delivery bills of lading (“BOL”), pallet scanning, out-of-area return processes, store-to-store transfers and EDI overage, shortage and damage (OS&D) files.

(2) Descartes Retail Distribution System™ is a carton-level freight tracking system used by third-party specialty retail pool distributors for receiving, sorting, scanning, and delivering retail freight to a shipper’s stores.

(3) Descartes Retail Claims System™ is a claims management system integrated with the retail distribution tracking solution and the visibility tools in Descartes WebTMS. It also works in tandem with the payment cycles of the retail payment solution.

(4) Descartes Retail Payment System™ is a freight payment system for shippers to pay linehaul and pool distribution transportation providers.

(5) Descartes ScanTrac™ enables “smart scanning” at delivery with any mobile device. Drivers use a Bluetooth attachment or their mobile phone camera to scan against the delivery manifest. If no cellular or WiFi connection is available, the data is transmitted as soon as a connection is restored.

(6) Descartes StoreTrac™ allows users to create and maintain visibility, down to the item level, from the moment the inventory leaves the DC all the way through to receipt at the store.

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(7) Descartes WebTMS™ is a web-based visibility tool that allows a retailer to see its entire outbound distribution supply chain and reverse logistics operations.

Descartes Bookings and Reservations™

Descartes’ centralized booking portals provide visibility into rates, contracts, and shipment details from global locations to enable more informed decision-making and contract development. Carriers can distribute product, routing, capacity and rate information to forwarders 24/7 in real-time, while forwarders can access carrier information and make electronic bookings via a simple web browser. Integration of cost tables with contracts also allows for deeper analysis to improve asset utilization and overall margins. Additionally, our host-to-host service enables forwarders to execute bookings from within their own in-house systems. Descartes Bookings and Reservations services include the Descartes Global Freight Exchange and Descartes CargoBooker.

Descartes OzLink™

Descartes OzLink is a platform for integrating and extending ERP, accounting, e-commerce, and WMS systems to streamline order management, inventory control, and shipping. The solution functions as a complement to core business systems where gaps exist in the flow of data and/or system automation. Descartes OzLink’s standard integration modules and business process extensions can help seamlessly move data between systems and automate tasks to eliminate labor-intensive clerical work, error-prone data entry, lead time delays, and compromised customer service. The solution can flexibly connect systems that run in the cloud, operate on premise or within a hosted environment to address an extensive range of e-Commerce, warehousing, and shipping processes.

Descartes pixi eCommerce Fulfillment/ Warehouse Management

Descartes pixi eCommerce Fulfillment/Warehouse Management helps customers automate ecommerce processes originating from online orders. Integrated with hundreds of ecommerce sites in Europe, the solution enables small-to-medium sized businesses and large retailers looking to enhance their online presence to support the growing consumer demand for omnichannel deliveries. The solution collects order information from ecommerce websites, translates it into a scanner-driven pick and pack process within the warehouse, initiates the shipment to the customer, and synchronizes all of this information with the customer’s financial system for invoicing and shipment tracking.

Descartes Peoplevox™

Descartes Peoplevox is a cloud-based warehouse management and ecommerce fulfillment solution that helps online retailers connect to webshop front ends, translate order information into a mobile-driven pick and pack process, and then feed parcel delivery systems for shipment execution. With sales and implementation services that can be provided completely remotely, it’s rapid to deploy.

Descartes ShipRush™

Descartes ShipRush helps customers ship efficiently and cost-effectively by integrating with front-end commerce systems and parcel shipping providers for seamless package labelling, rating, tracking and postage processing. With integrations to over 70 business systems, including leading ERP, ecommerce and supply chain platforms, the ShipRush platform helps customers to streamline their supply chain and reduce transportation costs. Using the solution, companies can automatically import orders; compare carrier rates in real-time to get the best options every time; print shipping labels for FedEx, UPS, USPS, and other major U.S. and global carriers; and track shipments through to final delivery.

Descartes MacroPoint™

Descartes MacroPoint is a multimodal freight visibility platform for shippers, brokers and 3PLs to get real-time visibility and predictive analytics for in-transit freight. Our industry-leading visibility network is connected to over 100,000 carriers and millions of assets and drivers through integrations with on-board ELDs, GPS telematics devices, carrier transportation

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management systems (TMS), GPS-enabled smartphone applications and location-based mobile phone triangulation.

Descartes MacroPoint™ for Capacity Matching

Descartes MacroPoint™ for Capacity Matching provides freight brokers with greater visibility to the transportation capacity available within their network of carriers and cooperating brokers. By accessing previously unused freight capacity using advanced visualization and analytical capabilities, freight brokers can cover more loads, build stronger carrier relationships and reduce costs.

Descartes Aljex™

The Descartes Aljex solution provides back-office transportation management for freight brokers and transportation providers. These solutions help customers automate business processes and create electronic documents critical for executing transportation moves. In addition, customers can manage the lifecycle of a shipment from order creation through execution, including real-time tracking with connectivity to the Descartes MacroPoint network.

Descartes BestTransport™

Descartes BestTransport is a cloud-based transportation management system (TMS) tailored for flatbed-intensive manufacturers and distributors. It provides capabilities that address requirements from contract rate management through to load building, shipment execution and freight payment for flatbed transportation moves.

(iii)         Customs & Regulatory Compliance 

Our Customs & Regulatory Compliance solutionshelp companies meet regulatory requirements for international shipments and the necessary customs declarations and security initiatives. We offer different methods to transmit shipment information directly to customs authorities or to the carriers who may be compiling data for security filing, which helps to ensure the smooth delivery of cargo as it moves through ports and airports, and ultimately to the end customer.

Descartes Global Cargo Security ™

For carriers, freight forwarders, NVOCCs and shippers, Descartes Global Cargo Security Suite offers solutions which help customers comply with electronic manifest filing initiatives across a broad number of countries that have adopted various advance security filing requirements spanning different modes of transportation. To accommodate customers’ varying technical capabilities, we offer options that range from user-friendly web portals that permit manual entry of cargo manifest information through to tightly integrated system-to-system electronic data interchange (“EDI”) connections. Descartes’ offerings in this area include the Descartes Importer Security Filing™, Descartes ACI eManifest™, Descartes Advance Electronic Information (AEI)™, Descartes ACAS Solution™ and others.

Descartes Export Compliance™

Descartes Export Compliance suite offers denied party screening, license validation and audit for all international trading partners.  Screening parties for acceptability for receipt of product and the proper use of export licenses is essential to support compliance with the US and EU requirements for export.

Descartes Border Compliance™

Descartes Border Compliance provides customs compliance services to assist transportation providers and LSPs with imports and/or exports to Canada, the US, India and the Netherlands. Through our Viatrade Service, the GLN offers an enhanced range of services to help carriers and LSPs negotiate increasingly complex document exchange requirements brought about by international security initiatives and tightened borders. In addition, Descartes Border Compliance services enable customs brokers to receive electronic manifests and invoices from

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transportation carriers so that the manifest can be mapped to the Canadian and US customs release systems.

Descartes Ocean Tariff Compliance™

Descartes Ocean Tariff Compliance helps ocean carriers comply with US Federal Maritime Commission requirements, and also helps manage the rate information for cargo that moves according to the terms of a privately-negotiated service contract or NVOCC Service Arrangement rather than the public rates of a tariff.

Descartes Electronic In-Bond™

Specifically designed for transportation carriers, Descartes Electronic In-Bond helps transmit the necessary advance electronic cargo information to CBP regarding inbound shipments prior to their arrival in the US. Using approved EDI protocols for the transmission of advance cargo information, we help carriers complete the requirements for filing, and receive in-bond movement authorization within minutes instead of hours or even days.

Descartes Customs Warehouse Management™

Descartes Customs Warehouse Management solution can play an integral role in simplifying procedures associated with customs warehousing, while taking advantage of the maximum available benefits. This on-demand solution is specifically designed to allow users to manage goods stored under the customs warehouse procedure, by storing information on imported goods and accounts, tracking all movement and activity, and enabling more accurate and timely electronic declaration processing. Customs warehousing is used by many organizations as a means to suspend/defer import duties and/or value-added tax on goods entering the EU. It is an effective and efficient means of enabling importers to choose an optimum time to clear goods and pay duties or re-export them outside of the EU.

Descartes Global Customs & Transport™

Descartes’ Global Customs & Transport (“GCT”) suite provides its customers with European-centric customs declaration, security filing, transportation management and freight forwarding technology solutions on both a cloud-based basis and a deployed model. The GCT platform supports fiscal customs filings in 18 countries and security filings in all 28 EU member states.

Descartes Pentant™

Descartes Pentant™ is a Community System Provider (“CSP”) in the UK providing manufacturers, retailers, distributors and logistics service provider customers with a reliable and secure connection to both CDS (the UK’s central system for customs declarations) and the EU’s ICS to streamline declaration, cargo security and clearance processes. Pentant also helps customers meet UK Revenue & Customs requirements for imports and exports to be managed through a fully approved inventory control system for the ports of Dover, Portland, Poole, Plymouth, Teignmouth, Bideford, Scrabster, as well as London City and Warton airports.

Descartes e-customs™

Descartes e-customs™ is a modular, cloud-based solution offering that helps manufacturers, retailers, distributors and logistics service providers to cost-effectively comply with UK and fiscal security filing requirements. It is designed to reduce complexity, increase automation, and facilitate the end-to-end customs declaration process. Importers and exporters can leverage default and client-specific standing data, declaration templates, historical filings, on-screen tips and system validations to increase speed and accuracy in the filing process.

(iv)         Global Logistics Network Services

GLN services simplify cargo and freight management by providing electronic services to the cargo industry and to companies who engage in international and domestic transportation activities. GLN provides a secure and reliable transaction exchange plus connectivity services that include trading partner on-boarding programs, data standards and protocol conversion, transportation-specific document compliance, audit and error checking, and archiving. We offer several document management, connectivity and community services, including:

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Descartes CargoAssist™

Freight forwarders use Descartes CargoAssist to improve freight booking, send electronic waybills and ensure that consignments are handled quickly and efficiently at freight terminals around the world. We provide freight forwarders with access that connects them with their customers and logistics partners.

Descartes e-Pouch™

As part of the Descartes air cargo solution suite, Descartes e-Pouch integrates with applications for bookings, shipment monitoring, quality performance reporting and customs filing to provide a central repository that enhances electronic document exchange connections between back-office system and trading partners. Descartes e-Pouch provides users with the functionality to facilitate the sharing of information with approved parties, automate routine interactions, help flag problems at an early stage and provide a repository for retrieval of completed deliveries.

Descartes webDocs™

Freight forwarders use Descartes webDocs web forms to help improve air freight booking processes, send electronic waybills and distribute freight messages with the required information directly to the air carriers. Descartes webDocs gives forwarders access to electronic web forms that enables quick and easy creation of the various documents and electronic messages that are dictated by the industry, such as the International Air Transport Association’s (“IATA”) e-freight requirements. The solution also provides forwarders with the ability to easily create messaging documents such as master airway bill, house airway bill and labels and transmit these documents electronically to the air carrier.

Descartes Data Integrity Services™

Descartes Data Integrity Services continuously monitors messages and their delivery to trading partners to identify and report errors. Once an error is identified, we contact trading partners and coordinate the correction of inaccuracies and re-submission of corrected data. The service also provides periodic summary reports by trading partner, message type and error type.

Descartes Cargo iQ™ (formerly Cargo 2000™)

Descartes Cargo iQ allows customers to monitor shipments at a master air waybill level from airport to airport, assisting customers in complying with IATA Cargo 2000 certification process. Information provided by the system includes quality report compilation, shipment status, exception alerts, route map creation, and departure time reporting. This information enables better decision-making for fulfilling customer expectations and ensures standardized processes for improved service levels.

Descartes Carrier Portal™

Descartes Carrier Portal is a cost-effective and efficient solution designed to help carriers without EDI capabilities, shippers, and freight payment agencies (“FPAs”) realize all the benefits of EDI capabilities without the complexity of in-house solutions. The solution is a web-based information service that facilitates the collaboration and automation of load tendering and freight payment between highway carriers and shippers (or FPAs representing them). The carrier portal bridges the gap between EDI-enabled back office systems of shippers and FPAs and less automated carriers.

Descartes Supplier Portal™

Descartes Supplier Portal enables suppliers without EDI capabilities to electronically communicate and collaborate with EDI enabled carriers, logistics service providers and shippers by providing capabilities to schedule pick-ups, automate tendering, and track the status of shipments.

Descartes GLN eArchiving™

Descartes GLN eArchiving enables customers to store and archive electronic documents in an “electronic safe”. This electronic safe is accessible from the GLN via which relevant documents

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can be forwarded to customer’s data warehouse to comply with standards and document retention policies.

Descartes Port Community Services™

Descartes Port Community Services assist in improving cargo clearance and management operations for local port communities and their trading partners by connecting and streamlining information exchange between ocean carriers, inland carriers, forwarders, shippers, terminal operators, and port and customs authorities.

Descartes Global Data Catalog Connect™

Descartes’ Global Data Catalog Connect provides retail/supplier collaboration, product catalog management and electronic business-to-business messaging. It is a web-based application that helps in the upload, management and exchange of data. It offers the ability to integrate with industry standard data pools like GS1DAS for automation of electronic product catalogue functionality.

Descartes B2B Integration™

Descartes B2B Integration™ solution provides cloud-based supply chain connectivity capabilities to a wide range of systems and platforms using most any protocol or method. Our advanced solutions automate supply chain processes, enhance collaboration and add visibility among global trading partners. Users can benefit from cost-effective transaction management, automated purchase to pay capabilities, connectivity to multiple ERP systems and more.

Descartes STEPCom™

Descartes STEPcom connects B2B trading partners to enable the collaboration and exchange of electronic data, automation of supply chain processes and management of a wide array of complex, mission-critical documents used in procure-to-pay and order-to-cash processes.

Descartes Velocity Mail™

Descartes Velocity Mail is an air mail and parcel management and tracking solution that leverages mobile devices to automate the entire air mail process from route generation to accounting reconciliation with real-time tracking and delivery visibility.

Descartes COREInsight™

Descartes COREInsight is a suite of supply chain applications that provides transportation management and tracking capabilities for air cargo shipments and assets.

• COREInsight Postal manages the process of mail and postal product movement for domestic and international air mail. It provides airlines with operational visibility of mail moving in their network, as well as financial forecasting and performance insights.

• COREInsight ULD solution provides real-time tracking of unit load devices (ULD), a specialized container used for air cargo, as well as the freight contained in each ULD. The solution helps carriers better match capacity with ULD inventory, reduce ULD fleet losses, and reduce costs associated with misplaced equipment or the requirement to lease additional ULDs.

(v)         Broker & Forwarder Enterprise Systems

Descartes’ Broker & Forwarder Enterprise Systems are designed to help brokers and forwarders more efficiently run complex international operations. Our on-demand solutions enable large and small organizations to take advantage of robust capabilities for bookings, security filings and customs entries, shipment and financial management. They automate the collection of shared data and multi-party shipment processes as well as help brokers and forwarders extend the command of operations with their logistics partners to help meet their delivery performance objectives.

Descartes ITMR4™ Canadian Customs Brokerage Suite

Descartes ITMR4 Canadian Customs Brokerage Suite is an on-demand, enterprise level software solution that handles functions that a customs broker, freight forwarder or self-filing importer typically uses to manage its operations. Those operations include documentation

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filing, accounting, financial reports, imaging, e-billing and web tools for tracking and tracing, reporting and data entry related to Canadian customs declarations.

Descartes EDItrade™ Customs Link

Descartes EDItrade Customs Linkallows custom brokers and self-filing importers to collect data and prepare it for US customs ACE entries, including cargo release, remote location filing and post-entry compliance and supportive modules and the range of PGA documentation and data requirements to streamline the customs process and create accurate declarations.

Descartes European Brokerage and Declaration

Descartes European Brokerage & Declaration helps simplify the complexities of customs clearance in the European market. Descartes’ solution is Authorized Economic Operator compliant. It has a variety of modules to handle export management, import management, creation of the Single Administrative Document for normal or simplified procedures, incoming and outgoing transit declarations, connectivity to the New Computerized Transit System and facilitates compliance with different member state customs authorities’ requirements.

Descartes OneView™ Forwarder Enterprise & Customs House Brokerage Solution

Descartes OneView Forwarder Enterprise & Customs House Brokerage Solution allows freight forwarders, NVOCCs and third-party logistics service providers to effectively coordinate air, truck and ocean import/export shipments. It supports end-to-end planning and execution of international shipments, including leveraging system data to prepare and submit customs entries and cargo security filings to CBP.

Descartes ForwarderLogic™

Descartes ForwarderLogic is a cloud-based solution that provides comprehensive back-office functionality and real-time information exchange for LSPs handling all modes (air, ocean and land), inland/international import and export shipments from purchase orders all the way through to final delivery.

Descartes Shipment Portal™

Descartes Shipment Portal™ is a web-based portal that helps forwarders and shippers collaborate for shipment creation and status tracking throughout the shipment’s lifecycle. Powered by the Descartes GLN with extensive existing EDI connectivity, the solution aggregates information from these parties and enables forwarders and their customers to build dashboard views of their transportation portfolio for up-to-the minute information on a wide range of data points. The solution also features purchase order management tools that support extensive collaboration between shippers, suppliers and transportation providers, and centralizes transportation request processes so forwarders can offer their customers a single point for up-to-date information on their global shipments.

(vi)         Global Trade Content Solutions & Services

Descartes’ global trade content solutions help customers research and make informed supply chain decisions; monitor and evaluate potential growth opportunities, logistics partners, and competitors; classify goods appropriately to ensure compliance while minimizing duties and tariffs; and reduce the risk of transacting business with denied parties while establishing an audit trail of reasonable care practices. Global trade content from Descartes can also be used on a service basis, to directly populate ERP and global trade management systems to enhance automation and compliance processes.

Descartes Customs Info™

Descartes Customs Info helps customers research and make better classification decisions while providing a record of the process to support classification determinations. This robust global trade content offering provides various levels of access to millions of reference documents, including cross-referenced and searchable duty rates, customs rulings, regulations, WCO Explanatory Notes, WCO Opinions, Commodity Export Codes, Other Government Agency information, Customs Directives, Export Control Classification Number locators and more.

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Descartes Datamyne™

With a comprehensive database of accurate, up-to-date import-export information, Descartes Datamyne delivers actionable intelligence for market research, sales insight, supply chain management, enhanced security and competitive strategy. The Descartes Datamyne solution includes one of the largest searchable resources of trade activity. Manufacturers, shippers, wholesalers, transport and logistics service providers, management consultants, legal practitioners, industry analysts and others use this data and the analysis tools to evaluate growth strategies, explore new markets, benchmark performance, monitor commodity volumes and values, simplify trade data research, discover buyer-seller relationships and refine sourcing strategies.

Descartes MK Denied Party Screening™

Descartes MK Denied Party Screening provides easy-to-use options to quickly and efficiently screen customers, suppliers and trading partners against a comprehensive database of international restricted and denied party lists. Customers can tailor screening processes to fit their unique risk parameters and flag potential compliance issues for resolution.

Descartes Visual Compliance™

Descartes Visual Compliance offers more robust solutions for restricted and denied party screening, classification, automation, and export license management. These intuitive solutions to enhance compliance and mitigate risk include capabilities for integrated screening, visually-driven compliance workflow management, and robust export control and documentation.

Consulting, Implementation and Training Services

Our consulting team provide a variety of professional services to customers. These services include project management and consulting services to assist in configuration, implementation and deployment of our solutions. We offer a variety of site-specific technical and consulting services to assist in all phases of the implementation process. We also provide assistance in integrating our products with the customer's existing software. In addition, we offer training services that provide customers with a formalized program to ensure that applications are implemented and utilized in an efficient and cost-effective manner.

Customer Service and Support and Maintenance

We provide worldwide support to our customers through our central support system. Our customer support program is conducted via telephone, online customer portal and/or email and with our extended support options can be available 24-hours-a-day, 7-days-per-week.

4.3          Revenue Sources

We generate our revenues from sales of each of the services and products identified in the previous section, which are sometimes sold on a stand-alone basis and sometimes sold as bundles of services and products. As such, we do not measure our revenues by the particular services or products referenced above. Instead, we measure our revenue performance based on whether the customer is buying a license to our technology or is buying technology services or other services from us. Based on this, our revenues are measured in three categories: license revenues; services revenues; and professional services and other revenues. Services revenues are comprised of ongoing transactional and/or subscription fees for use of our services and products by our customers and maintenance fees, which include revenues associated with our provision of maintenance and support for 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.

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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 business segment providing logistics technology solutions. The following table provides revenue information by revenue source for fiscal 2020 and 2019:

Revenues	Fiscal year ended January 31
	2020		2019
	Amount (in millions)	Percentage of Total Revenues	Amount (in millions)	Percentage of Total Revenues
License	$7.5	2%	$5.9	2%
Services	284.7	88%	241.5	88%
Professional services and other	33.6	10%	27.8	10%
Total revenues	$325.8	100%	$275.2	100%

4.4          Customer Base

Our customers are globally diverse, located in the Americas, Europe, Middle East and Africa (“EMEA”) and Asia Pacific regions. Our customers range from small- and medium-sized enterprises to established “blue-chip” leaders across a variety of industry verticals. We have a large customer base of transportation carriers, third-party logistics providers, freight forwarders, NVOCCs and customs brokers. Other customers include government customs and census agencies, manufacturers, retailers, consumer products suppliers, wholesale distributors, and companies in industries such as healthcare, recycling/waste management, pharmaceuticals and oil and gas.

The following table provides revenue information by geographic region based on the location of our customers:

Revenues	Fiscal year ended January 31
	2020		2019
	Amount (in millions)	Percentage of Total Revenues	Amount (in millions)	Percentage of Total Revenues
United States	$202.8	62%	$165.1	60%
Europe, Middle-East and Africa	82.6	25%	80.1	29%
Canada	27.3	9%	18.2	7%
Asia Pacific	13.1	4%	11.8	4%
Total revenues	$325.8	100%	$275.2	100%

4.5         Sales and Marketing       

(a)          Sales Force

Our sales force is expected to sell across our solutions, targeting specific industry verticals and geographies. At present, we sell most of our products and services through a direct sales team that is focused primarily on the North American and EMEA markets. We have a limited direct sales presence in Asia Pacific with resources in China, Hong Kong and Japan. As at January 31, 2020, we employed a total of 184 individuals in sales and marketing roles and had active relationships with approximately 75 distributors and resellers.

We are headquartered in Waterloo, Ontario, Canada, with additional representative offices in Canada in Ottawa, Ontario; Toronto, Ontario; Windsor, Ontario; and Montreal, Quebec. Our primary representative

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offices in the United States are in Irvine, California; Boulder, Colorado; Denver, Colorado; Miami, Florida; Atlanta, Georgia; Owing Mills, Maryland; Silver Spring, Maryland; Westborough, Massachusetts; Minneapolis, Minnesota; Livingston, New Jersey; Midland Park, New Jersey; Cleveland, Ohio; Columbus, Ohio; Pittsburgh, Pennsylvania; Trevose, Pennsylvania; and Seattle, Washington. In Europe, our primary representative offices are in Ghent, Belgium; Lier, Belgium; Glostrup, Denmark; Antony, France; Munich, Germany;  Leipzig, Germany; Amersfoort, Netherlands; Woerden, Netherlands; Oslo, Norway; Fredrikstaad, Norway; Zilina, Slovakia; Ljubljana, Slovenia; Madrid, Spain; Stockholm, Sweden; Malmo, Sweden; Gotenborg, Sweden; Murten, Switzerland; Rheinfelden, Switzerland; Chippenham, UK; Aylesbury, UK; Reading, UK; and Totton, UK. In South America, our primary representative offices are in Montevideo, Uruguay; Buenos Aires, Argentina; and Sao Paulo, Brazil. In Asia Pacific, our primary representative offices are in Nelson, New Zealand; Makati City, Philippines; Hong Kong; Tokyo, Japan; Suzhou, China; and Shanghai, China.

(b)          Strategic Marketing Alliances

Through our United by Design alliance program, we also form strategic partnerships with various companies in different geographic markets, in different industries and for different products with the goal of expanding our market base. Typically, an alliance participant will market our products in certain geographic and vertical markets and refer customers to us, in exchange for a fee in respect of new customers generated by the alliance participant. Additionally, we have established several working relationships with telecommunication companies, management consulting firms, and complementary hardware and software firms.

Our various channel partners, including a variety of distributors and value-added resellers, play a central role in our strategy to address global customers, particularly in the Asia Pacific region and in Latin America with our delivery management solutions.

4.6          Research and Development

We believe that our future success depends in large part on our ability to maintain and continually enhance our current product lines and form tight integrations with our applications on our Logistics Technology Platform. Accordingly, we invest in product development to ensure that sufficient resources are focused on developing new products or enhancing our existing products. We also believe that it is important that our technology keeps pace with evolutions in hardware, applications and services that enable us to operate and deliver our own services at lower cost. In 2020, we incurred research and development expenses of approximately $53.5 million, or approximately 16% of our annual consolidated revenues for 2020.

We continue to make substantial investments in research and development based on our belief that our ability to enhance existing applications, develop and introduce new applications that keep pace with technological advances, meet changing customer requirements, respond to competitive products and achieve market acceptance is important to our growth and future financial performance.

Our research and development program requires in-depth knowledge of logistics, supply chain and customer know-how from business analysis, network operations and design, technical design, and quality assurance. Particular expertise in solving operations research or logistics problems is a benefit to us, as is practical experience in dealing with the day-to-day challenges that our customers face in dealing with logistics providers and deliveries in general. We believe that we are well positioned to address our customers’ requirements with our existing complement of resources; however, we evaluate our staffing levels on an ongoing basis particularly in those areas where we see ways we might expand or expedite our development processes as necessary to meet market opportunities or changes.

To build applications, we have implemented an application development process based on size, deployment mode and complexity. For our smaller, less complex applications as well as for our network services and SaaS solutions, we have adopted an approach centered on frequent, smaller application updates. With the applications and solutions being deployed in our own, known environment and technology infrastructure, we are able to minimize development time otherwise needed to accommodate the myriad of platforms that an application may be used over. Using this approach, the majority of these applications, network services and SaaS solutions were updated in fiscal 2020.

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For our larger more complex applications and solutions, we have adopted a four- to twelve-month release cycle. While we generally use the same underlying development methodology, building in smaller incremental blocks, we apply a more traditional process for review and quality assurance testing as well as bundling of several of these incremental blocks into each generally available release. Using this four- to twelve-month release schedule, most of our larger and more complex generally available applications and solutions were enhanced in fiscal 2020.

Enhancements not yet generally commercially available are typically subject to internal testing and, where applicable, additional testing may be conducted with select customers, following which we release the enhancements for general commercial use.

We continue to build and develop our network infrastructure to enhance our delivery of services to our customers. We continue to execute on our internal ‘One Networked Enterprise’ initiative whereby we are consolidating legacy network infrastructure acquired as part of previous acquisition activities. We anticipate continuing this initiative through fiscal 2021, including the advancement of additional integration activities resulting from new acquisitions. To facilitate these advancements in integration activities, we continue to invest in our integration platform with a specific focus on decoupling business logic from the presentation layer.

We estimate that the costs for our planned research and development activities in fiscal 2021 will not result in any significant increase relative to our historical expenditures on research and development activities.

4.7          Competition

Although we have experienced limited competition to-date from companies with broad application suites with comparable capabilities, the market for our applications is nevertheless highly competitive and subject to rapid technological change. As such, we expect competition to increase in the future. On an application-by-application basis, especially in markets where similar technology has been available for some time, such as routing software and value-added networks, we do experience competition from established vendors. However, we have found that our particular expertise in solving complex logistics problems on a network basis has enabled us to remain competitive. On a geographic basis, we experience competition from both multinational companies and local competitors. We face some disadvantage in entering new markets where competitors may have existing solutions with user interfaces that are advanced in local language presentation. To maintain and improve our competitive position on a global basis, we continue to develop and introduce new applications with the functionality to be easily adapted to local user interface needs (either by Descartes or its distributors in a particular region).

We compete or may compete, directly or indirectly, with the following: (i) application software vendors, including supply chain planning and execution software vendors, that may broaden their product offerings by internally developing, or by acquiring or partnering with, independent developers of supply chain network solutions, particularly on the execution (rather than planning) side, such as Manhattan Associates, Omnitracs, Verizon (formerly, Telogis) and Ortec; (ii) enterprise resource planning software vendors who may expand their current offerings into supply chain network service offerings, some of whom may from time to time jointly market our products as a complement to their own systems, such as SAP AG, Oracle and Infor Global Solutions; (iii) internal development efforts by corporate information technology departments; (iv) middleware software and service vendors that provide integration software, such as Software AG and SPS Commerce; (v) telematics solution providers, such as Verizon (formerly, Fleetmatics), Omnitracs and Trimble Navigation; (vi) other value-added messaging and visibility networks, such as those offered by Kleinschmidt, OpenText GXS, CHAMP Cargosystems, FourKites and Project 44; (vii) other cargo booking portals, such as Cargo Portal Services operated by Unisys Corporation and INTTRA; (viii) other customs compliance and forwarder back-office solution providers, such as Blu-Jay Solutions (formerly, Kewill) and WiseTech; (ix) other customs and security declaration providers, often specialized in particular domestic markets, such as AEB GmbH and MIC Datenverabeitung GmbH; (x) other trade data providers who may either bundle their data with a global trade management system, such as E2open (formerly Amber Road), provide trade intelligence platforms such as IHS Markets and S&P Global

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or sell trade data content on a standalone basis, such as Thomson Reuters; and (xi) eCommerce shipping and fulfillment providers such as ShipStation, ShipHawk, Finale and RF Smart. We also expect to face additional competition as other established and emerging companies enter the market for logistics technology solutions and new products and technologies are introduced and as we expand to new businesses. In addition, current and potential competitors may make strategic acquisitions or establish co-operative relationships among themselves or with third parties, thereby increasing the ability of their products to address the needs of our prospective customers.

We believe the principal competitive factors affecting the market for our solutions include vendor and product reputation; expertise and experience in implementing products in the customer's industry sector; product architecture, functionality and features; cost of ownership; ease and speed of implementation; customer support; product quality, price and performance; and product attributes such as flexibility, scalability, compatibility, functionality and ease of use. In order to be successful in the future, we believe we must continue to respond promptly and effectively to technological change and competitors' innovations.

4.8          Intellectual Property and Other Proprietary Rights

We believe our success depends significantly on our proprietary technology. Through our internal research and development and our acquisitions we have continued to enhance the breadth of our intellectual property portfolio. We continue to rely primarily on a combination of patent, copyright, trademark and trade secret laws, license agreements, non-disclosure agreements and other contractual provisions to establish, maintain and protect our proprietary rights in our products and technology. Some registered forms of protection, such as patents, copyright and trademark registrations, have a limited period of protection determined by the applicable law governing the registration. Other contractual forms of protection, such as license and non-disclosure agreements, have a limited contractual period of protection. The source codes and routing algorithms for our applications and technology are protected both as trade secrets and as unregistered copyrighted works with indefinite periods of protection. We have an extensive portfolio of patents, both over technologies we have developed internally and patents that have been acquired through our various acquisitions where patents were already held by the acquired companies or were pending. We continue to invest in the ongoing expansion of our patent portfolio.   Each of these patents offer a limited period of protection determined by the applicable laws governing the patents. We have registered or applied for registration of certain trademarks and service marks with limited periods of protection and will continue to evaluate the registration of additional trademarks and service marks as appropriate.

We also utilize certain other software technologies, such as geographic data, shipping rate data, shipping mile data, sailing schedule data and global tariff and duty data, translation applications and business intelligence applications that we license from third parties, generally on a non-exclusive basis, including software that is integrated with internally developed software and used in our products to perform key functions. These third-party licenses generally require the payment of royalties based on sales of the product in which the technology is used.

Our network customers may use electronic logistics information generated by the customer, or by third parties on behalf of the customer, in connection with the customer’s use of our network services. Our customers are responsible for procuring and paying for the generation of such electronic logistics information and the right to use such electronic logistics information in connection with our network services.

Many of our data content solutions rely on data being available to us from various public sources. This data is available on a non-exclusive basis and generally available without the payment of fees except in certain cases where we may choose to obtain the data through third party data providers who may have pre-processed or aggregated the data in a manner that is more efficient or effective for our purposes. This data is similarly available to other parties and may allow other parties to develop competitive offerings. Our ability to maintain our market position is dependent upon our continued innovation in the ability to organize the data and provision of tools that facilitate the use of the data while continuing to expand and enhance the data.

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4.9          Contracts

(a)          Customer Contracts

We provide our GLN services and access to our data content services to our customers primarily by way of written subscription agreement. The subscription agreement sets out the applicable terms and restrictions on use of the service, the length of time the customer can use the service, and the applicable fees to be paid by the customer. Typically, these subscription agreements renew at a customer’s option and, in some cases, are subject to earlier termination by the customer on appropriate notice.

We license our software products to our customers primarily by way of written license agreements. The license agreements specify the applicable terms and restrictions on use of the software, the terms and conditions of any enrolment by the customer in our software maintenance program, and the applicable fees to be paid by the customer.

We depend on our installed customer base for a significant portion of our revenues. We have significant contracts with our license customers for ongoing support and maintenance, as well as significant service contracts that provide recurring services revenues to us. In addition, our installed customer base has historically generated additional new license and services revenues for us. Service contracts are generally renewable at a customer’s option, and there are generally no mandatory payment obligations or obligations to license additional software or subscribe for additional services.

If our customers terminate their subscription agreements, fail to renew their service contracts, fail to purchase or license additional services or products, or consolidate contracts with acquired companies, then our revenues could decrease and our operating results could be materially adversely affected. Factors influencing such contract terminations and non-renewals could include changes in the financial circumstances of our customers, dissatisfaction with our products or services, our retirement or lack of support for our legacy products and services, our customers selecting or building alternate technologies to replace ours, changes in our customers’ business or in regulation impacting our customers’ business that may no longer necessitate the use of our products or services, general economic or market conditions, or other reasons. Further, our customers could delay or terminate implementations or use of our services and products or be reluctant to migrate to new products. Such customers will not generate the revenues we may have anticipated within the timelines anticipated, if at all, and may be less likely to invest in additional services or products from us in the future. We may not be able to adjust our expense levels quickly enough to account for any such revenues losses. Our business may also be materially adversely affected by market trends impacting our customer base, such as consolidation activity.

(b)          Outsourcing Contracts

We deliver some of our GLN services over our proprietary networks, which are hosted by commercial public cloud and co-location providers such as, Microsoft, Q9 Networks Inc., InterXion and CenturyLink. These hosting and co-location contracts, on which we are substantially dependent as they relate to the delivery of our network services, typically contemplate services to be provided for a term at a defined service level, with applicable rights of termination and renewal. We typically pay monthly fees under these contracts, some of which are based on the volume of network activity flowing through the hosting provider. If any of these contracts were terminated without our consent, we could incur substantial costs in migrating to an alternate hosting provider. In such an event, the costs and related management effort could materially adversely affect our operating results and the services that we provide to our customers.

4.10          Employees

As at January 31, 2020, the Company employed 1,547 employees including 1,509 full-time staff. Of the 1,509 full-time staff, 437 of the individuals were engaged in customer service roles (which includes customer support, activations and implementation services), 495were in research and development roles, 182 were engaged in sales and marketing roles, 260 in network and product support roles and 135 were in general administration roles. Geographically, 891 employees were located in North America, 483 were located in Europe, 72were located in the Asia Pacific region and 63 were located in South America.

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4.11          Risks Associated with Foreign Sales and Exchange Rate Fluctuations

In fiscal 2020, sales outside of the Americas accounted for approximately 29% of our total revenues. Our international revenues are subject to risks associated with foreign sales, including longer collection times from foreign customers, difficulty in repatriating cash from foreign jurisdictions, unexpected changes in legal and regulatory requirements, export restrictions, changes in tariffs, exchange rates and other trade barriers, political and economic instability, difficulties in accounts receivable collection, difficulties in management of distributors or representatives, difficulties in staffing and managing foreign operations, difficulties in protecting our intellectual property, seasonality of sales, language issues and potentially adverse tax consequences. There can be no assurance that any of these factors will not have a material adverse effect on our business, results of operations and financial condition.

During fiscal 2020, 70% of our revenues were denominated in US dollars, and historically the majority of our revenues have been denominated in US dollars. However, a significant portion of our expenses, including the wages of our non-US employees and obligations under certain key supply agreements, have been denominated in Canadian dollars, euros and other foreign currencies. Therefore, changes in the value of the US dollar as compared to the Canadian dollar, the euro, British pound sterling and other foreign currencies may materially affect our operating results. We generally have not implemented hedging programs to mitigate our exposure to currency fluctuations affecting international accounts receivable, cash balances and inter-company accounts. We also have not hedged our exposure to currency fluctuations affecting future international revenues and expenses and other commitments. Accordingly, currency exchange rate fluctuations have caused, and may continue to cause, variability in our foreign currency denominated revenue streams, expenses, and our cost to settle foreign currency denominated liabilities.

4.12          Risks Associated with Cyclical or Seasonal Aspects of Business

Our business may be impacted from time to time by the general cyclical and seasonal nature of particular modes of transportation and the freight market in general, as well as the cyclical and seasonal nature of the industries that such markets serve. Factors which may create cyclical fluctuations in such modes of transportation or the freight market in general include legal and regulatory requirements, timing of contract renewals between our customers and their own customers, seasonal-based tariffs, vacation periods applicable to particular shipping or receiving nations, weather-related and global health-pandemic events that impact shipping in particular geographies and amendments to international trade agreements.  In particular, the uncertainties arising from a pandemic, such as the current COVID-19 global pandemic could adversely impact global shipment volumes in all modes of transportation in fiscal 2021 and potentially beyond. Since some of our revenues from particular products and services are tied to the volume of shipments being processed, adverse fluctuations in the volume of global shipments or shipments in any particular mode of transportation may adversely affect our revenues. Declines in shipment volumes in the US or internationally likely would have a material adverse effect on our business.

4.13          Reorganizations

In 2020, 2019 and 2018, we completed various integration and reorganization activities in connection with our acquisitions of StepCom, BestTransport, Core, Visual Compliance, PinPoint, VelocityMail, Aljex, MacroPoint, PCSTrac and ShipRush, including merging or consolidating various legal entities and operations, eliminating redundant management positions and canceling certain ongoing operating contracts.

4.14          Material Contracts

The Company previously determined that the  amended and expanded credit facility agreement of the Company announced on January 28, 2019  would constitute a “material contract” of the Company and filed a copy of the agreement on SEDAR at www.sedar.com. Particulars of such contract are disclosed in “Item 3 - General Developments of the Business” of this AIF. Other than such agreement, as of January 31, 2020, the Company had not otherwise entered into any material contracts, other than contracts

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entered into in the ordinary course of business, within the past year, or entered into before the most recently completed fiscal year that are still in effect.

4.15          Code of Business Conduct and Ethics

Our Board of Directors has adopted our Code of Business Conduct and Ethics (“the Code”) applicable to our directors, officers and employees. The Code is reviewed on a regular basis by our Board of Directors and may be updated from time to time. The most recent version of the Code is available on our website at http://www.descartes.com and has been filed on and is accessible through the SEDAR website at http://www.sedar.com. The Code sets out in detail the core values and principles by which the Company is governed and addresses topics such as: honest and ethical conduct; conflicts of interest; compliance with applicable laws and our policies and procedures; public disclosure and books and records; use of corporate assets and opportunities; confidentiality of corporate information; reporting responsibilities and procedures; health and safety; anti-corruption; and non-retaliation.

ITEM 5          RISK FACTORS

Reference is made to the section entitled “Certain Factors That May Affect Future Results” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2019 Annual Report for the year ended January 31, 2020, made available to all of our shareholders and filed with various securities regulators, which section is incorporated herein by reference. This information is available through the EDGAR website at http://www.sec.gov or through the SEDAR website at http://www.sedar.com.

COVID-19 Global Pandemic

The COVID-19 pandemic and the efforts to contain it have negatively impacted the global economy, disrupted manufacturing operations and global supply chains and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty and has the potential to result in a global recession. The COVID-19 pandemic and resulting significantly weaker global economic conditions could have a negative impact on our future results of operations although the extent of that impact is uncertain at this time.

We remain well positioned to adjust to market conditions to assist our customers as they work to manage their transportation, logistics and supply chain processes.  As noted previously, we’ve been able to transition our workforce such that the majority of our workforce can work remotely and continue to service and support our customers and ensure the uninterrupted availability of our various solutions, most of which are delivered by way of a software-as-a-service or cloud-based delivery model.  In addition, the nature of the products and services provided by Descartes to the transportation and logistics community have been classified as an “essential service” in the majority of the markets in which we have personnel located which allows us, to the extent necessary, to have requisite personnel attend at our various data-centers and hosting facilities to ensure the continuity of our services under state-of-emergency and shelter-in-place orders recently issued in various jurisdictions globally.

We expect the significance of the COVID-19 pandemic, including the extent of its effect on our financial condition and results of operations, to be dictated by, among other things, its duration, the success of efforts to contain it and the impact of actions taken in response. While we are not able at this time to estimate the impact of the COVID-19 pandemic, an extended period of global supply chain and economic disruption could materially and adversely affect our business, results of operations, access to sources of liquidity and financial condition. In addition, an extended global recession caused by the COVID-19 pandemic could have a further adverse impact on our financial condition and operations.

Catastrophic Events, Natural Disasters, Severe Weather and Disease

Our business may be negatively impacted to varying degrees by a number of events which are beyond our control, including energy blackouts, pandemics (or other public health crises), terrorist attacks, acts of war, earthquakes, hurricanes, tornados, fires, floods, ice storms or other natural or manmade

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catastrophes. While we engage in emergency preparedness, including business continuity planning, to mitigate risks, such events can evolve very rapidly, and their impacts can be difficult to predict. As such, there can be no assurance that in the event of such a catastrophe that our operations and ability to carry on business will not be disrupted. The occurrence of such events may not release us from performing our obligations to third parties. A catastrophic event, including an outbreak of infectious disease, a pandemic or a similar health threat, such as the evolving 2019 COVID-19 global pandemic, or fear of any of the foregoing, could adversely impact us and our investments. In addition, liquidity and volatility, credit availability and market and financial conditions generally could change at any time as a result. Any of these events in isolation or in combination, could have a material negative impact on our performance, financial condition, results of operations and cash flows.

ITEM 6          MARKET FOR SECURITIES AND RELATED SECURITYHOLDER MATTERS

6.1 Common Shares

We are authorized to issue an unlimited number of common shares for unlimited consideration. The common shares are not redeemable or convertible. Each common share carries the right to receive notice of and one vote at a meeting of shareholders; the right to participate in any distribution of our assets on liquidation, dissolution or winding up; and the right to receive dividends if, as and when declared by the Board of Directors. As at April 14, 2020, there were 84,156,316 common shares outstanding. The common shares are listed on the TSX under the symbol “DSG” and listed on NASDAQ under the symbol “DSGX”.

6.2 Transfer Agent and Registrar

The register of transfers of common shares is located in the offices of our stock transfer agent: Computershare Investor Services Inc., 100 University Avenue, Toronto, Ontario, Canada, M5J 2Y1.

6.3 Dividend Policy

We have not paid any dividends on our common shares to date. We may consider paying dividends on our common shares in the future when operational circumstances permit, having regard to, among other things, our earnings, cash flow and financial requirements as well as relevant legal and business considerations. We are prohibited by the Credit Facility from making a distribution (which includes a dividend) when there is an uncured event of default pursuant to the Credit Facility. At present there is no such event of default.

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6.4 Market for Common Shares

Please see the following table that identifies the marketplaces on which our common shares trade, as well as the fiscal 2020 monthly price ranges and volume traded on each exchange:

	Common Shares - TSX		Common Shares – NASDAQ
Month	Price Range (CAD$)	Volume	Price Range (US$)	Volume
February 2019	$40.91 - 45.85	2,495,227	$31.28 - 34.78	1,658,616
March 2019	$45.18 - 48.72	3,382,717	$33.70 - 36.44	1,943,470
April 2019	$48.90 - 54.06	3,104,513	$36.65 - 40.17	3,182,191
May 2019	$52.95 - 56.01	4,008,650	$39.10 - 41.60	2,758,706
June 2019	$47.30 - 54.13	4,734,569	$35.97 - 40.08	5,304.406
July 2019	$47.40 - 50.72	2,498,782	$35.92 - 38.48	2,335,921
August 2019	$44.48 - 48.76	2,496,817	$33.35 - 36.97	1,928,683
September 2019	$46.98 - 54.29	3,595,763	$35.25 - 40.99	2,021,954
October 2019	$49.76 - 54.29	2,163,055	$38.10 - 41.05	1,280,591
November 2019	$50.95 - 58.11	2,097,623	$38.65 - 43.76	1,292,674
December 2019	$52.62 - 58.10	2,974,801	$39.96 - 43.81	2,237,673
January 2020	$55.37 - 61.41	2,858,337	$42.57 - 46.86	2,392,299

As of the date of this AIF, the most recent closing price for trading of our common shares was CAD$ 52.34 on the TSX and US$ 37.58 on the NASDAQ.

6.5 Shareholder Rights Plan

On November 29, 2004, our Board of Directors approved a shareholder rights plan (the “Rights Plan”) which was approved by the TSX and was approved by our shareholders on May 18, 2005. The primary objectives of the Rights Plan are to ensure that to the extent possible, in the context of an unsolicited take-over bid for of the common shares of our Company, that all shareholders of the Company are treated fairly and to ensure that the Board of Directors is provided with sufficient time to evaluate any such bid and to assess alternatives to maximize shareholder value that may include, without limitation, the continued implementation of the Company’s long-term strategic plans, as those may be modified by the Company from time to time. The Rights Plan is specifically designed to ensure that the following occurs following an unsolicited take-over bid: (i) there is adequate time for competing bids to emerge; (ii) shareholders have an equal opportunity to participate in such a bid; (iii) shareholders are provided with adequate time to properly assess the bid; and (iv) a reduction in the pressure to tender which may be encountered by a shareholder in the course of a bid. The Rights Plan creates a right that attaches to each present and subsequently issued common share. Until the separation time, which typically occurs at the time of an unsolicited take-over bid, whereby an offeror (including persons acting jointly or in concert with the offeror) acquires or attempts to acquire 20% or more of our common shares, the rights are not separable from the common shares, are not exercisable and no separate rights certificates are issued. Each right entitles the holder, other than the 20% offeror, from and after the separation time and before the expiration time, to acquire one of our common shares at 50% of the market price at the time of exercise. The continuation of the Rights Plan must be approved by shareholders every three years. On each of June 2, 2011, May 29, 2014 and June 1, 2017, our shareholders approved certain amendments

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to the Rights Plan and approved the continued effectiveness of the Rights Plan. The Rights Plan will expire at the termination of our annual meeting of the shareholders to be held in the 2020 calendar year, unless its continued existence is approved by the shareholders before such expiration.

ITEM 7          DIRECTORS AND EXECUTIVE OFFICERS

7.1          Summary Information

The following table sets forth the name, location of residence and office held by each of our executive officers and directors as at April 14, 2020. Each director is elected at the annual meeting of shareholders or appointed pursuant to the provisions of our by-laws and applicable laws to serve until the next annual meeting or until a successor is elected or appointed, subject to earlier resignation by the director.

Name and Location of Residence	Office Held
Eric A. Demirian(1)(3) Toronto, Ontario, Canada	Chair of the Board
David I. Beatson(2)(4) Hillsborough, California, USA	Director
Deborah Close(1)(2) Calgary, Alberta Canada	Director
Dennis Maple (2)(4) Malvern, Pennsylvania, USA	Director
Jane O’Hagan(2)(3)(4) Calgary, Alberta, Canada	Director
John J. Walker(1)(3)(4) Wyckoff, New Jersey, USA	Director
Edward J. Ryan Fort Washington, Pennsylvania, USA	Director and Chief Executive Officer
J. Scott Pagan Cambridge, Ontario, Canada	President and Chief Operating Officer
Allan Brett Kleinburg, Ontario, Canada	Chief Financial Officer
Raimond Diederik Waterloo, Ontario, Canada	Executive Vice President, Information Services
Ed Gardner Toronto, Ontario, Canada	Executive Vice President, Corporate Development
Chris Jones Boston, Massachusetts, USA	Executive Vice President, Marketing and Services
Robert Parker Halifax, Nova Scotia, Canada	Executive Vice President, Customer Support and Client Services
Andrew Roszko Montreal, Quebec, Canada	Executive Vice President, Global Sales
Michael Verhoeve Waterloo, Ontario, Canada	Executive Vice President, Legal, General Counsel and Corporate Secretary
Kenneth Wood Fort Myers, Florida, USA	Executive Vice President, Product Management

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Notes:

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Corporate Governance Committee.

(4) Member of the Nominating Committee

Information about each of our directors and executive officers, including his or her respective principal occupation during at least the five years preceding January 31, 2020, is as follows:

Eric A. Demirianhas been a member of our Board of Directors since June 2011. Mr. Demirian was appointed Chairman of the Board in May 2014 and previously acted as Chair of the Corporation’s audit committee. Mr. Demirian is a Chartered Professional Accountant, Certified General Accountant and a Chartered Accountant. Since 2003, Mr. Demirian has served as president of Parklea Capital, Inc. (“Parklea”), a boutique financial and strategy advisory firm providing services to small- and mid-market public and private companies, and President of Demicap Inc., a private investment firm. Prior to Mr. Demirian’s position at Parklea, he held the position of Executive Vice President of Group Telecom, Inc. from 2000 to 2003. From 1983 to 2000, Mr. Demirian was with PricewaterhouseCoopers LLP (“PwC”) where he was a partner and head of the Information and Communications Practice. Mr. Demirian serves on the boards of Enghouse Systems Ltd. (TSX:ENGH), Redline Communications Inc. (TSX:RDL), and Imax Corporation (NYSE:IMAX). Mr. Demirian is a former director and chair of the audit committees of a number of public companies. Mr. Demirian holds a Bachelor of Business Management degree from Ryerson University.

David I. Beatson has been a member of our Board of Directors since March 2006. Since August 2001, Mr. Beatson has been head of Ascent Advisors, LLC, a San Francisco Bay-Area consulting firm focusing on strategic planning and mergers and acquisitions. From December 2006 to October 2012, Mr. Beatson was Chief Executive Officer of GlobalWare Solutions, a full-service provider of e-commerce services along with digital and physical supply chain management solutions with operations in North America, Europe and Asia. From June 2003 to April 2005, Mr. Beatson was President and Chief Executive Officer of North America for Panalpina, Inc., a world-leading global transportation and logistics supplier based in Basel, Switzerland. Previously, Mr. Beatson served as Chairman, President and Chief Executive Officer of Circle International Group, Inc., a global transportation and logistics company, and as President and Chief Executive Officer of US-based air and ocean freight forwarder Emery Worldwide. Mr. Beatson serves on the board of directors, chair of the audit committee and member of the compensation committee of PFSweb, Inc. (NASDAQ: PFSW); on the board of directors of Pilot Freight Services, Ltd. a global transportation and logistics company; on the Executive Board of ATL Partners, a private equity fund based in New York City, and on several other corporate and industry boards. Mr. Beatson received his BS in Business Administration from The Ohio State University and his MBA from The University of Cincinnati and also serves on the Dean’s Advisory Council at The Fisher School of Business, The Ohio State University.

Deborah Close has been a member of our Board of Directors since May 2015. Ms. Close held the position of President of the Production Services division of Tervita Corporation from 2010 until 2016. Tervita Production Services, now High Artic Energy Services (TSX:HWO), delivers engineering and field-based services to the oil and gas industry. From 2002 to 2010, Ms. Close was the Executive Vice President of DO2 Technologies (now Transzap, Inc.), a software company providing electronic invoicing to the oil and gas industry. During Ms. Close’s tenure, DO2 grew from a start-up to the leading provider of e-invoicing to oil and gas companies and their suppliers. Prior to DO2, Ms. Close served in a number of Regional Vice President roles in Halliburton Corporation’s software division, Landmark Graphics.  She held executive roles in several of Landmark’s largest regions, including VP of Strategic Accounts, Regional VP of North America and Regional VP of Europe and the Former Soviet Union. During Ms. Close’s 12 years at Halliburton, she worked in Canada, the US and Europe.  Ms. Close also currently serves on the board of directors of a private oil and gas company.  Ms. Close holds a Bachelor of Arts from the University of Calgary and the ICD.D designation from the Institute of Corporate Directors and Rotman School of Management.

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Dennis Maple was elected to our Board of Directors on June 1, 2017. Mr. Maple is currently President and CEO of Goddard Systems, Inc., which oversees the operation of more than 500 premium early childhood education schools across the United States. Between January 2014 and August 2019, Mr. Maple was the President of First Student, Inc., a subsidiary of United Kingdom based publicly-traded First Group plc. First Group plc is the leading transport operator in the United Kingdom and North America, providing solutions encompassing student bus transportation and public rail. Mr. Maple’s portfolio at First Student included 57,000 employees focused on providing more than 5.5 million passenger journeys daily across the US and Canada. Prior to serving as President of First Group, from 2006 to January 2014, Mr. Maple was President of Aramark Education where he had responsibility for more than 15,000 employees serving more than 4,500 US schools with food preparation, facilities management and related services. Prior to his role as President of Aramark Education, from 2003 to 2006, Mr. Maple held senior executive management positions at Aramark. Prior to serving in an executive role at Aramark, from 1994 to 2003, Mr. Maple served as an Area Vice President at Coors Brewing and in several other management roles. Prior to 1994, Mr. Maple held roles at Kraft-General Foods, PepsiCola and The Quaker Oats Company. Mr. Maple has a Bachelor of Science, Business Administration, Accounting from the University of Tennessee. Mr. Maple has served on numerous charitable and community-based boards and has been an active participant in organizations supporting primary and secondary schools and communities across North America.

Jane O’Hagan has been a member of our Board of Directors since May 2014. From 2010 until 2014, Ms. O’Hagan was the Executive Vice President and Chief Marketing Officer of Canadian Pacific Railway Limited (“CP Rail”). Ms. O’Hagan also held various roles at CP including Senior Vice President, Strategy and Yield, Vice President, Strategy and External Affairs and Assistant Vice President, Strategy and Research. Ms. O’Hagan also serves as a director of USD Partners GP LCC, the general partner of USD Partners LP (NYSE:USDP), an acquirer, developer and operator of energy-related rail terminals and other complementary mid-stream assets, where  Ms. O’Hagan serves as the Chair of USD Partners GP LLC board’s conflicts committee and as a member of the audit committee. In 2018, Ms. O’Hagan joined the board of Pinnacle Renewable Holdings (TSX:PL), a supplier of industrial wood pellets based in Richmond, BC and serves as a member of the audit and risk committees. Ms. O’Hagan has a Bachelor of Arts (Hons.) and a Bachelor of Administrative and Commercial Studies from the University of Western Ontario (London, Ontario, Canada) and has completed graduate studies in Program and Policy Studies from the University of Western Ontario. In December 2012, Ms. O’Hagan was named one of Canada’s Top 100 Most Powerful Women by the Women’s Executive Network. Ms. O’Hagan is also a holder of the ICD.D designation from the Institute of Corporate Directors, which she achieved in June 2016 and earned the CERT Certificate in Cyber Risk Oversight issued by Carnegie Mellon University and the National Association of Corporate Directors in February 2018. 

John J. Walker has been a member of our Board of Directors since September 2011. Mr. Walker is a Certified Public Accountant and a Chartered Global Management Accountant with 37 years overall financial and executive management experience including twenty-one years of experience as a Chief Financial Officer with both public and private companies. Since December 2018, Mr. Walker is also a member of the Board of Directors, Chair of the Audit Committee and member of the Compensation and Nominating Committees of Schultze Special Purpose Acquisition Corp. (Nasdaq: SAMAU; SAMA and SAMAW). Previously, he served as Chief Financial Officer, and Senior Vice President of Bowne & Company, a New York Stock Exchange-listed provider of services to help companies produce and manage their shareholder, investor and marketing & business communications, from 2006 until its acquisition by R.R. Donnelley & Sons in 2010. Prior to Bowne & Company, from 1988 to 2006, Mr. Walker was an executive with Loews Cineplex Entertainment Corporation a motion picture theatre exhibition chain, including sixteen years as Chief Financial Officer. Prior thereto, Mr. Walker served for six years as Controller and Principal Accounting Officer of Corporate Property Investors, then one of the largest real estate investment trusts in the United States. Mr. Walker also served for six years as Treasurer and Assistant Corporate Controller of Princess Hotels International a company involved in the ownership and operation of luxury resort hotels, real estate and timesharing developments. Mr. Walker started his career in the New York office of then-Price Waterhouse. Mr. Walker is a member of the American Institute of Certified Public Accountants and the New York State Society of CPAs.

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Edward J. Ryan is our Chief Executive Officer and has been a member of our Board of Directors since May 2014. Mr. Ryan joined Descartes in February 2000 in connection with our acquisition of E-Transport Incorporated. Since then, Mr. Ryan has occupied various senior management positions within Descartes, with particular focus on our network and recurring business. Mr. Ryan was appointed General Manager, Global Logistics Network in June 2004 and then appointed Executive Vice President, Global Field Operations in July 2007. He was appointed Chief Commercial Officer in June 2011 and appointed Chief Executive Officer in November 2013.

J. Scott Pagan is our President and Chief Operating Officer. Mr. Pagan joined our legal department in May 2000. Mr. Pagan was appointed Corporate Secretary in May 2003, General Counsel & Corporate Secretary in June 2004, and Executive Vice President, Corporate Development in July 2007. He was appointed Chief Corporate Officer in June 2011 and appointed President and Chief Operating Officer in November 2013. Prior to joining Descartes, Mr. Pagan was in private legal practice.

Allan Brett is our Chief Financial Officer. Mr. Brett is a Chartered Professional Accountant and is an experienced public company executive, who served as Chief Financial Officer of Aastra Technologies Limited from 1996 through to its sale to Mitel Networks Corporation in 2014. Mr. Brett was appointed Chief Financial Officer of Descartes in May 2014.

Raimond Diederik is our Executive Vice President, Information Services. Mr. Diederik joined Descartes in July 1998 in connection with our acquisition of Calixon N.V. Since then, Mr. Diederik has occupied various senior management positions within Descartes, with particular focus on our information technology infrastructure and technology development activities. Mr. Diederik was appointed SVP, Network Operations & Information Technology in June 2006 and then appointed Executive Vice President, Information Services in September 2009.

Ed Gardner is our Executive Vice President, Corporate Development. Mr. Gardner joined Descartes in 2003 where he first held a number of senior roles within our corporate finance organization. In his current role as Executive Vice President, Corporate Development, Mr. Gardner is responsible for the development and execution of our M&A strategy.  Mr. Gardner’s previous experience includes both practical logistics experience where he worked in a senior leadership position at a third-party logistics provider as well as deal execution and integration experience as part of Ernst & Young’s Transaction Advisory Services practice in London, England.

Chris Jones is our Executive Vice President, Marketing & Services. Mr. Jones joined Descartes in May 2005 and served as Executive Vice President, Solutions & Markets until his appointment to Executive Vice President, Solutions & Services in September 2006. Mr. Jones was appointed Executive Vice President, Services in February 2011 and Executive Vice-President, Marketing & Services in June 2011. From November 2003 until he joined Descartes, Mr. Jones was Senior Vice President in Aberdeen Group's Value Chain Research division where he was responsible for creating a market-leading supply chain and manufacturing research and advisory research practice. Prior to Aberdeen, from September 1998 to January 2003, Mr. Jones was Executive Vice President of Marketing and Corporate Development for SynQuest, Inc., a provider of supply chain planning solutions. Before joining SynQuest, from May 1994 to September 1998, Mr. Jones was Vice President and Research Director for Enterprise Resource Planning Solutions at the Gartner Group.

Robert Parker is our Executive Vice President, Customer Support and Client Services. Mr. Parker joined Descartes in 2009 as part of the acquisition of Scancode where he had held the role of VP, Operations for 10 years. Mr. Parker leads Descartes’ global customer support and client services organization and brings over 20 years of senior management and logistics consulting experience to Descartes.

Andrew Roszko was appointed Executive Vice President, Global Sales in February 2019. Mr. Roszko joined Descartes in November 2006 as part of the acquisition of CubeRoute, where he was a founder and held both engineering and operational leadership roles. Prior to CubeRoute, Mr. Roszko ran a consulting practice and, since joining Descartes, he has held progressively increasing senior sales leadership roles until his most recent appointment to an Executive Vice President role.

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Michael Verhoeve is our Executive Vice President, Legal, General Counsel and Corporate Secretary. Mr. Verhoeve was previously our Associate General Counsel from 1998 through to 2003, following which, from 2003 to 2014, he acted as General Counsel and Corporate Secretary at two other Canadian-based international publicly traded technology companies: ATS Automation Tooling Systems Inc. (TSX:ATA) and Sandvine Corporation (TSX: SVC). Mr. Verhoeve re-joined Descartes in May 2014 in his current role.

Kenneth Woodis our Executive Vice President of Product Management. Mr. Wood joined Descartes in July 2001 in connection with our acquisition of Centricity. Mr. Wood provides leadership in defining our product strategy, developing roadmaps, and working with all aspects of product delivery. He brings deep domain expertise in supply chain management, transportation management, fleet management, mobile solutions and supply chain planning. Mr. Wood's previous experience included leadership roles in development, consulting and product management with leading supply chain software providers such as CAPS Logistics, i2 Technologies, and Centricity.

To our knowledge, as at April 14, 2020, our directors and executive officers as a group beneficially owned, or controlled or directed, directly or indirectly, 282,633 of our common shares, representing approximately 0.33% of the common shares then outstanding.

7.2          Committees of the Board of Directors

Our Board of Directors currently has four committees: the Audit Committee; the Compensation Committee; the Corporate Governance Committee; and the Nominating Committee. The committees, their mandates and membership are discussed below.

Audit Committee

The primary functions of the Audit Committee are to oversee the accounting and financial reporting practices of the Company and the audits of the Company's financial statements, including assisting the Board in fulfilling its responsibilities in reviewing: financial disclosures and internal controls over financial reporting; monitoring the system of internal control and overall enterprise risk management; monitoring the Company's compliance with Applicable Requirements (as defined in Descartes’ Audit Committee charter); overseeing internal audit functions; selecting the auditors for shareholder approval; reviewing the qualifications, independence and performance of the auditors; and reviewing the qualifications, independence and performance of the Company's financial management.

The Board of Directors has adopted an amended Audit Committee charter setting out the scope of the Audit Committee’s functions, responsibilities and membership requirements. A copy of that charter is attached as Appendix “A” to this AIF.

The Audit Committee is currently composed of three independent directors: Mr. John J. Walker (Chair), Ms. Deborah Close and Mr. Eric Demirian. The Board of Directors has resolved that Mr. Walker and Mr. Demirian are each an “audit committee financial expert” as defined in paragraph 8(b) of General Instruction B to Form 40-F promulgated by the Securities and Exchange Commission and that each is financially sophisticated for the purposes of NASDAQ Rule 5605(c)(2)(A).

The following sets out the education and experience of the members of the Audit Committee, each of whom is independent and financially literate:

John J. Walker C.P.A., C.G.M.A., B.S. – Mr. Walker is a Certified Public Accountant and a Chartered Global Management Accountant with experience as a Chief Financial Officer with public companies, including Bowne & Company, a New York Stock Exchange-listed company and Loews Cineplex Entertainment Corporation, a New York Stock Exchange-listed company and a Toronto Stock Exchange-listed company. Prior to Loews, Mr. Walker served as Controller of Corporate Property Investors and a financial executive at Princess Hotels International. Mr. Walker received his B.S. in Accounting from the University of Scranton. Mr. Walker started his career in the New York office of then Price Waterhouse. Mr. Walker is a member of the American Institute of Certified Public Accountants and the New York State Society of CPA’s.

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Deborah CloseB.A., ICD.D – Ms. Close is formerly the President of the Production Services division of Tervita Corporation, a position she held for five years during which she held full P&L responsibility for a division with 1,000 employees; represented the division in financial disclosure and reporting reviews for the corporation; and sat on the executive risk management committee.  Ms. Close has held numerous senior executive positions in the oil and gas industry over the course of her 40-year career, including 12 years with Halliburton Corporation in various capacities across Canada, the US and Europe.  Ms. Close holds a Bachelor of Arts from the University of Calgary and the ICD.D designation from the Institute of Corporate Directors and Rotman School of Management.

Eric A. Demirian BBM., C.P.A., C.G.A, C.A.– Mr. Demirian is the Chair of the Corporation’s Board of Directors and was previously the Chair of the Corporation’s audit committee.  Mr. Demirian is a Chartered Professional Accountant, Certified General Accountant and a Chartered Accountant. Mr. Demirian is a seasoned business executive with a unique blend of financial, operational and board governance experience. Since 2003, Mr. Demirian has served as president of Parklea Capital, Inc. (“Parklea”), a boutique financial and strategy advisory firm providing services to small- and mid-market public and private companies, and President of Demicap Inc., a private investment firm. Prior to Mr. Demirian’s position at Parklea, he held the position of Executive Vice President of Group Telecom, Inc. from 2000 to 2003. From 1983 to 2000, Mr. Demirian was with PricewaterhouseCoopers LLP (“PwC”) where he was a partner and head of the Information and Communications Practice. Mr. Demirian serves on the boards of Enghouse Systems Ltd. (TSX:ESL), Redline Communications Inc. (TSX:RDL), and Imax Corporation (NYSE:IMAX). Mr. Demirian is a former director and chair of the audit committees of a number of public companies, including Menu Foods Income Fund (2005-2010) and Keystone North America Inc. (2007-2010). Mr. Demirian holds a Bachelor of Business Management degree from Ryerson University.

The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services from our independent auditor. Those procedures are attached at Appendix “B” to this AIF.

Compensation Committee

The Compensation Committee is appointed by the Board of Directors to discharge the Board's duties and responsibilities relating to the compensation of the Company's Chief Executive Officer and senior management, as well as to review the human resource policies and practices that cover the Company's employees. The Compensation Committee is currently composed of four independent directors: Ms. Deborah Close (Chair), Mr. David Beatson, Mr. Dennis Maple and Ms. Jane O’Hagan.

Corporate Governance Committee

The Corporate Governance Committee is primarily responsible for overseeing Descartes' corporate governance policies and activities. The Corporate Governance Committee reviews and maintains the Board of Directors governing documents in compliance with the Code of Business Conduct and Ethics. The Corporate Governance Committee is currently composed of three independent directors: Ms. Jane O’Hagan (Chair), Mr. Eric Demirian, and Mr. John Walker.

Nominating Committee

The primary function of the Nominating Committee is to assist the Board of Directors in identifying, recruiting and nominating suitable candidates to serve on the Board of Directors. The Nominating Committee is currently composed of four independent directors: Mr. David Beatson (Chair), Mr. Dennis Maple, Ms. Jane O’Hagan and Mr. John Walker.

7.3          Certain Relationships and Related Transactions

Chris Hewat retired from our Board of Directors as of May 30, 2019, partially through our fiscal 2020 year. Blake, Cassels & Graydon LLP, of which Mr. Hewat is a partner, provided legal services to us during fiscal 2020 and has been providing, and is expected to continue to provide, legal services to us in fiscal 2021. For fiscal 2020, we incurred fees of approximately CAD $607,119 for legal services rendered by Blake, Cassels & Graydon LLP. For fiscal 2019, we incurred fees of approximately CAD $455,399 for legal services rendered by Blake, Cassels & Graydon LLP. The increase in fees incurred with Blake, Cassels & Graydon

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LLP from 2019 to 2020 was primarily the result of legal services provided in connection with the Visual Compliance acquisition and the share offering completed in June 2019.

ITEM 8          EXTERNAL AUDITORS

For the fiscal year ended January 31, 2020, our external auditors were KPMG LLP, Independent Registered Public Accounting Firm. KPMG LLP has been our external auditors since April 16, 2015. KPMG LLP have confirmed that they are independent with respect to the Company with the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations and also that they are independent accountants with respect to the Company under all relevant US professional and regulatory standards.

The following table sets forth the fees we have incurred in using the services of KPMG LLP in respect of the applicable fiscal years noted (all amounts in the table are in US dollars – amounts that were billed in Canadian dollars are converted to US dollars at the applicable exchange rate on the last day of the applicable fiscal period):

Fiscal Year Ended	Audit Fees	Audit-Related Fees	All Other Fees	Total
January 31, 2020	$708,217	$2,430	Nil	$710,647
January 31, 2019	$579,606	$2,430	Nil	$582,036

“Audit Fees” relate to professional services rendered for the audit of the Company’s annual consolidated financial statements and reviews of our interim consolidated financial statements for the first three quarters of the year, fees associated with a statutory audit of two of our subsidiaries in a foreign jurisdiction and fees associated with the audit of our base-shelf prospectus.

“Audit-Related Fees” consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported as “Audit Fees”.

The above amounts are exclusive of any disbursements and related taxes.

ITEM 9          LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to a variety of claims and suits that arise from time to time in the ordinary course of our business and are typical in our industry. The consequences of these matters are not presently determinable but, in the opinion of management, the ultimate liability is not expected to have a material effect on our annual results of operations, financial position or capital resources. None of these proceedings involves a claim for damages, exclusive of interest and costs, that exceeds 10% of our current assets.

ITEM 10          ADDITIONAL INFORMATION

Additional information about us is available at our website at http://www.descartes.com, on SEDAR at http://www.sedar.com and on EDGAR at http://www.sec.gov. Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities and securities authorized for issuance under equity compensation plans, where applicable, is contained in our Management Information Circular for our annual meeting of shareholders held on May 30, 2019. Additional financial

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information is provided in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements, the notes thereto and the report of independent registered public accounting firm thereon contained in our Annual Report to the Shareholders for the year ended January 31, 2020.

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Appendix A to Annual Information Form

THE DESCARTES SYSTEMS GROUP INC.

CHARTER FOR

THE AUDIT COMMITTEE OF

THE BOARD OF DIRECTORS

1. PURPOSE

1. The primary functions of the Audit Committee are to oversee the accounting and financial reporting practices of The Descartes Systems Group Inc. (the “Company”) and the audits of the Company’s financial statements and to exercise the responsibilities and duties set forth below, including, but not limited to, assisting the Board of Directors (the “Board”) in fulfilling its responsibilities in reviewing the following: financial disclosures and internal controls over financial reporting; monitoring the system of internal control and compliance with Applicable Requirements (as defined below); selecting the auditors for shareholder approval; and reviewing the qualifications, independence and performance of the auditors and the qualifications and performance of the Company’s financial management.

2. MEMBERSHIP AND ORGANIZATION

1. Composition - The Audit Committee shall consist of not less than three independent members of the Board. At the invitation of the Audit Committee, members of the Company’s management and others may attend Audit Committee meetings as the Audit Committee considers necessary or desirable.

2. Appointment and Removal of Audit Committee Members - Each member of the Audit Committee shall be appointed by the Board on an annual basis and shall serve at the pleasure of the Board, or until the earlier of (a) the close of the next annual meeting of the Company’s shareholders at which the member's term of office expires, (b) the death of the member, or (c) the resignation, disqualification or removal of the member from the Audit Committee or from the Board. The Board may fill a vacancy in the membership of the Audit Committee.

3. Chair - At the time of the annual appointment of the members of the Audit Committee, the Board shall appoint a Chair of the Audit Committee. The Chair

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shall: be a member of the Audit Committee, preside over all Audit Committee meetings that he or she attends, coordinate the Audit Committee's compliance with this mandate, work with management to develop the Audit Committee's annual work-plan and provide reports of the Audit Committee to the Board.

4. Independence - Each member of the Audit Committee shall meet the requirements of applicable law and any applicable requirements promulgated by any exchange upon which securities of the Company are traded, or any governmental or regulatory body exercising authority over the Company, as are in effect from time to time (collectively, the “Applicable Requirements”) related to independence and audit committee composition.

5. Financial Expertise - At the time of his or her appointment to the Audit Committee, each member of the Audit Committee shall be able to read and understand fundamental financial statements, including a balance sheet, cash flow statement and income statement, be “financially literate” as defined under Applicable Requirements, and shall not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the preceding three years.  At least one member of the Audit Committee shall have past employment experience in financing or accounting, requisite professional certification in accounting, or other comparable experience or background which results in the individual’s financial sophistication, including being or having been a Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or other senior officer with financial oversight responsibilities.  Further, at least one member of the Audit Committee shall qualify as an “audit committee financial expert” (as such term is defined under the Securities and Exchange Commission’s rules).

3. MEETINGS

1. Meetings - The members of the Audit Committee shall hold meetings as are required to carry out this mandate, and in any case no less than four meetings annually. The external auditors are entitled to attend and be heard at each quarterly Audit Committee meeting scheduled to consider the Company’s financial statements. The Chair, any member of the Audit Committee, the external auditors, the Chair of the Board, the Lead Director, the Chief Executive Officer or

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the Chief Financial Officer may call a meeting of the Audit Committee by notifying the Company’s Corporate Secretary who will notify the members of the Audit Committee. The Chair shall chair all Audit Committee meetings that he or she attends, and in the absence of the Chair, the members of the Audit Committee present may appoint a chair from their number for a meeting.

 

2. Secretary and Minutes - The Corporate Secretary, his or her designate or any other person the Audit Committee requests, shall act as secretary at Audit Committee meetings. Minutes of Audit Committee meetings shall be recorded and maintained by the Corporate Secretary and subsequently presented to the Audit Committee for approval.

3. Quorum - A majority of the members of the Audit Committee shall constitute a quorum.

4. Access to Management and Outside Advisors - The Audit Committee shall have unrestricted access to the Company’s management and employees and the books and records of the Company, and, from time to time may hold unscheduled or regularly scheduled meetings or portions of regularly scheduled meetings with the auditor, the Chief Financial Officer, the Chief Operating Officer, President or the Chief Executive Officer. The Audit Committee shall have the authority to conduct investigations into any matters within its scope of responsibilities, retain external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective compensation for these advisors without consulting or obtaining the approval of the Board or any Company officer. The Company shall provide appropriate funding, as determined by the Audit Committee, for the services of these advisors.

5. Meetings Without Management - The Audit Committee shall hold unscheduled or regularly scheduled meetings, or portions of regularly scheduled meetings, at which management is not present.

4. FUNCTIONS AND RESPONSIBILITIES

The Audit Committee shall have the functions and responsibilities set out below as well as any other functions that are specifically delegated to the Audit Committee by the Board and that the Board is authorized to delegate by applicable laws and regulations. In

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Appendix A to Annual Information Form

addition to these functions and responsibilities, the Audit Committee shall perform the duties required of an audit committee by the Applicable Requirements.

1. Financial Reports

a. General - The Audit Committee is responsible for overseeing the Company’s accounting and financial reporting practices and the audits of the Company’s financial statements. Management is responsible for the preparation, presentation and integrity of the Company’s financial statements and financial disclosures and for the appropriateness of the accounting principles and the reporting policies used by the Company. The auditors are responsible for auditing the Company’s annual consolidated financial statements and for reviewing the Company’s unaudited interim financial statements.

b. Review of Annual Financial Reports - The Audit Committee shall review the annual consolidated audited financial statements of the Companyprepared by management, the auditors' report thereon and the related management's discussion and analysis of the Company’s financial condition and results of operation (“MD&A”). After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval the annual financial statements and the related MD&A.

c. Review of Interim Financial Reports - The Audit Committee shall review the interim consolidated financial statements of the Company prepared by management, the auditors’ review report thereon and the related MD&A. After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval the interim financial statements and the related MD&A.

d. Review Considerations - In conducting its review of the annual financial statements or the interim financial statements, the Audit Committee shall:

i. meet with management and the auditors to discuss the financial statements and MD&A;

ii. review the disclosures in the financial statements;

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iii. review the audit report or review report prepared by the auditors;

iv. review the qualitative judgments of the auditors about the appropriateness, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the Company;

v. discuss with management, the auditors and internal legal counsel, as requested, any litigation claim or other contingency that could have a material effect on the financial statements;

vi. review the accounting policies followed and critical accounting and other significant estimates and judgments underlying the financial statements as presented by management;

vii. review any material effects of regulatory accounting initiatives or off-balance sheet structures on the financial statements as presented by management;

viii. review any material changes in accounting policies and any significant changes in accounting practices and their impact on the financial statements as presented by management;

ix. review the methods used to account for significant unusual transactions;

x. review the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus;

xi. review significant recorded and unrecorded audit adjustments;

xii. review any  material   accounting   issues   among  management   and the auditors;

xiii. review management's report on the effectiveness of internal controls over financial reporting;

xiv. review the factors identified by management as factors that may affect future financial results;

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xv. review results of the Company’s audit committee hotline program; and

xvi. review any other matters, related to the financial statements, that are brought forward by the auditors, management or which are required to be communicated to the Audit Committee under accounting policies, auditing standards or Applicable Requirements.

e. Approval of Other Financial Disclosures - The Audit Committee shall review and, if advisable, approve and recommend for Board approval financial disclosure in a prospectus or other securities offering document of the Company, press releases disclosing financial results of the Company and any other material financial disclosure, including financial guidance provided to analysts, rating agencies or otherwise publicly disseminated.

2. Independent Auditors

a. General -The Audit Committee shall be responsible for oversight of the work of the auditors, including the auditors’ work in preparing or issuing an audit report, performing other audit, review or attest services or any other related work.

b. Appointment and Compensation - The Audit Committee shall review and, if advisable, select and recommend for Board and shareholder approval the appointment of the auditors. The Audit Committee shall have ultimate authority to approve all audit engagement terms and fees, including the auditors’ audit plan.

c. Resolution of Disagreements – Review all reportable events, including any disagreements, unresolved issues and consultations (as those terms are defined by Applicable Requirements), with the Company’s auditors, whether or not there is to be a change of auditors.

d. Change of Auditors – When the Audit Committee determines to recommend a change of auditors or the auditors are otherwise terminated or resign, the Audit Committee shall review all issues related to the

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change of auditors, including the information required to be disclosed by applicable legal requirements and the planned steps for an orderly transition.

 

e. Discussions with Auditors – At least annually, the Audit Committee shall discuss with the auditors such matters as are required by applicable auditing standards to be discussed by the auditors with the audit committee, including the matters required to be discussed by applicable auditing standards.

f. Audit Plan - At least annually, the Audit Committee shall review a summary of the auditors' annual audit plan. The Audit Committee shall consider and review with the auditors any material changes to the scope of the plan.

g. Quarterly Review Report - The Audit Committee shall review a report prepared by the auditors in respect of each of the interim financial statements of the Company.

h. Independence of Auditors - At least annually, and before the auditors issue their report on the annual financial statements, the Audit Committee shall: obtain from the auditors a formal written statement describing all relationships between the auditors and the Company; discuss with the auditors any disclosed relationships or services that may impact the objectivity and independence of the auditors; and obtain written confirmation from the auditors that they are objective and independent within the meaning of the applicable Rules of Professional Conduct/Code of Ethics adopted by the provincial institute or order of chartered accountants to which it belongs and other Applicable Requirements. The Audit Committee shall take appropriate action to oversee the independence of the auditors.

i. Evaluation and Rotation of Lead Partner - At least annually, the Audit Committee shall review the qualifications and performance of the lead partner(s) of the auditors. The Audit Committee shall obtain a report from the auditors annually verifying that the lead partner of the auditors has

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served in that capacity for no more than five fiscal years of the Company and that the engagement team collectively possesses the experience and competence to perform an appropriate audit.

j. Evaluation of performance and audit quality –  the Audit Committee shall review and evaluate the performance of the external auditor to assess the quality of the audit and the services performed by the external auditor.

k. Requirement for Pre-Approval of Non-Audit Services - The Audit Committee shall approve in advance any retainer of the auditors to perform any non-audit service to the Company that it deems advisable in accordance with Applicable Requirements, and Board approved policies and procedures. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee. The decisions of any member of the Audit Committee to whom this authority has been delegated must be presented to the full Audit Committee at its next scheduled Audit Committee meeting.

l. Review of Professional Services - The Audit Committee shall review reports from management at each quarterly Audit Committee meeting scheduled to consider the Company’s financial statements concerning expenses incurred in the quarter for the services of any accounting firm (other than the appointed auditor) engaged to provide services to the Company, in each case to the extent that the amount of such expenses in respect of any such firm exceeds $100,000.

m. Approval of Hiring Policies - The Audit Committee shall review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company.

3. Internal Controls

a. General - The Audit Committee shall review reports from management on the nature, establishment, monitoring and effectiveness of the Company’s system of internal control over financial reporting and disclosure controls and procedures (as those terms are defined in the Applicable

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Appendix A to Annual Information Form

Requirements).

b. Establishment, Review and Approval - The Audit Committee shall require management to establish and maintain appropriate systems of internal control over financial reporting and disclosure controls and procedures in accordance with Applicable Requirements and guidance and to review, evaluate and approve these controls and procedures. At least annually, the Audit Committee shall consider and review with management and the auditors:

i. the effectiveness of, or weaknesses or deficiencies in the design or operation of the Company’s internal control over financial reporting and disclosure controls and procedures, and the impact of any identified weaknesses in these controls and procedures on management's conclusions;

ii. any significant changes in internal control over financial reporting that are disclosed, or considered for disclosure, including those in the Company’s periodic regulatory filings;

iii. the auditors’ report on the Company’s internal control over financial reporting;

iv. any material issues raised by any inquiry or investigation by the Company’s regulators;

v. the Company’s fraud prevention and detection program, including deficiencies in internal controls that may impact the integrity of financial information, or may expose the Company to other significant internal or external fraud losses and the extent of those losses and any disciplinary action in respect of fraud taken against management or other employees who have a significant role in financial reporting; and

vi. any related significant issues and recommendations of the auditors together with management's responses thereto, including the timetable for implementation of recommendations to correct weaknesses in internal controls over financial reporting and

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Appendix A to Annual Information Form

disclosure controls.

4. Risk Management

a. General – In addition to being responsible for overseeing risks related to the Company’s accounting, financial statements, financial reporting process and internal controls related to financial reporting, the Audit Committee is also responsible for overseeing management’s implementation and operation of the enterprise risk management program, as documented in the Risk Management Policy established by the Board of Directors.   The risk oversight process is the means by which the Board of Directors determines that the Company has in place an effective process for identifying, assessing, managing and monitoring key risks in the business on a continuous basis as the business evolves.

b. Management Responsibilities - Management is responsible for:

i. ensuring the development and implementation of the Risk Management process.  Risk Management is the framework required to identify, assess and develop strategies to manage and monitor control risks;

ii. the design and implementation of the actions, measures and/or processes to mitigate to an appropriate level all material risks in the business (the “Risk Controls”) including the design and implementation of appropriate crisis preparedness, business continuity and disaster recovery plans; and

iii. monitoring overall compliance with and adherence to the Risk Management Policy as established by the Board of Directors.

c. Audit Committee Responsibilities - The Audit Committee is responsible for:

i. at least annually, reviewing the effectiveness of the Risk Management program that is in place.  As part of its review, the Audit Committee will review reports prepared by management that

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Appendix A to Annual Information Form

assess the risks in the business, identifies the Risk Controls that are in place to mitigate and manage these risks to an appropriate level, and evaluate the residual risk in the business (the risk that remains after implementation of the Risk Controls);

ii. periodically monitor risk and risk management capabilities within the Company including crisis preparedness, business continuity and disaster recovery plans; and

iii. reporting to the Board of Directors on its oversight of the Company’s Risk Management program,  including an assessment of whether the program is being followed and is effective.

d. ComputerizedInformation Systems- The Audit Committee shall review reports from the Company’s management containing its assessment of the adequacy of the Company’s computerized information system controls and security and related risks, including cybersecurity risk.

5. Internal Audit – the Audit Committee may choose to establish and maintain an Internal Audit function from time to time.   If so established, the internal audit function will report directly to the Chair of the Audit Committee and administratively to the Chief Financial Officer.  In relation to the internal audit function, if so established and maintained, the Audit Committee shall:

a. Establish an internal audit charter and review and approve any necessary revisions to such charter on an annual basis;

b. review and evaluate the effectiveness of the internal audit function;

c. review the  operating budget for the internal audit function including staffing levels and resources; and

d. On a regular basis, meet with the head of the internal audit function without other members of management present.

6. Compliance with Legal and Regulatory Requirements - The Audit Committee shall review reports from the Company’s Corporate Secretary and other management members on: legal or compliance matters that may have a material

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impact on the Company; the effectiveness of the Company’s compliance policies; and any material communications received from regulators. The Audit Committee shall review management's evaluation of and representations relating to compliance with specific Applicable Requirements, and management's plans to remediate any deficiencies identified.

7. Audit Committee Hotline Procedures - The Audit Committee shall establish procedures for (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.  Any such complaints or concerns that are received shall be reviewed by the Audit Committee and, if the Audit Committee determines that the matter requires further investigation, it will direct the Chair of the Audit Committee to engage outside advisors, as it deems necessary or appropriate, to investigate the matter and will work with management and the Company’s general counsel to reach a satisfactory conclusion.

8. Audit Committee Disclosure - The Audit Committee shall prepare, review and approve any audit committee disclosures required by Applicable Requirements in the Company’s disclosure documents.

9. Requirement for Review and Approval of the CEO Business Expenses - The Chair of the Audit Committee shall review and approve the reimbursable business expenses incurred by the Chief Executive Officer of the Company in connection with the performance of his duties.  Such approval may be provided subsequent to reimbursement of such expenses.

10. Review of Audit Committee Charter - On at least an annual basis, the Audit Committee shall, in conjunction with the Corporate Governance Committee, review and reassess the adequacy of this Audit Committee Charter.

11. Delegation - The Audit Committee may, to the extent permissible by Applicable Requirements, designate a sub-committee to review any matter within this mandate as the Audit Committee deems appropriate.

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6. REPORTING TO THE BOARD

1. The Chair shall report to the Board, as required by Applicable Requirements or as deemed necessary by the Audit Committee or as requested by the Board, on matters arising at Audit Committee meetings and, where applicable, shall present the Audit Committee's recommendation to the Board for its approval.

7. GENERAL

1. The Audit Committee shall, to the extent permissible by Applicable Requirements, have such additional authority as may be reasonably necessary or desirable, in the Audit Committee’s discretion, to exercise its powers and fulfill the duties under this mandate.

8. CURRENCY OF THE AUDIT COMMITTEE CHARTER

1. This charter was last approved by the Audit Committee and Board on March 4, 2020.

55

Appendix B to Annual Information Form

PRE-APPROVAL POLICY AND PROCEDURE FOR ENGAGEMENTS OF THE INDEPENDENT AUDITOR

The responsibilities of the Company’s audit committee are set out in the Company’s Audit Committee Charter, which responsibilities include pre-approving audit and non-audit services provided by the independent auditors in order to ensure the services do not impair the auditors' independence. Applicable securities commissions and accounting standards boards have issued rules specifying the permissible services independent auditors may provide to audit clients, as well as the pre-approval of fees. Accordingly, the Company’s Audit Committee has adopted the following Pre-Approval Policy and Procedure.

Under the Audit Committee's approach, an annual program of work will be approved each year for the following categories of services: Audit, Audit-Related, and Tax. Each engagement or category of service will be presented in appropriate detail by business function and geographic area to provide the Audit Committee sufficient understanding of the services provided. Additional engagements may be brought forward from time to time for pre-approval by the Audit Committee.

The Audit Committee will consider whether any service to be obtained from the independent auditors is consistent with applicable rules on auditor independence. Also, the Audit Committee will consider the level of Audit and Audit-Related fees in relation to all other fees paid to the independent auditors, and will review such level each year. In carrying out this responsibility, the Audit Committee may obtain input from Company management on the general level of fees, and the process for determining and reporting fees from the numerous locations where the Company operates and the independent auditors provide services.

The term of any pre-approval applies to the Company’s financial year. Thus, Audit fees for the financial year may include work performed after the close of the calendar year. The pre-approval for Audit-Related and Tax fees is on a calendar-year basis. Unused pre-approval amounts will not be carried forward to the next financial year. Pre-approvals will apply to engagements within a category of service, and cannot be transferred between categories. If fees might otherwise exceed pre-approved amounts for any category of permissible services, then time will be scheduled so that incremental amounts can be reviewed and pre-approved prior to commitment.

Audit Services

Audit services include the annual financial statement audit engagement (including required quarterly reviews), affiliate and subsidiary statutory audits, and other procedures required to be performed by the independent auditors to render an opinion on the Company’s consolidated financial statements. Audit services also include information systems reviews, tests performed on the system of internal controls, and other procedures necessary to support the independent auditors' attestation of management's report on

56

Appendix B to Annual Information Form

internal controls for financial reporting consistent with applicable securities legislation, as applicable.

The independent auditors are responsible for cost-effectively providing audit services and confirming that audit services are not undertaken prior to review and pre-approval by the Audit Committee. The independent auditors and Company management will jointly manage a process for collecting and reporting Audit fees billed by the independent auditors to Company each year.

Audit-Related Services

Audit-Related services include services that are reasonably related to the review of the Company’s financial statements. These services include benefit plan and joint venture audits, attestation procedures related to cost certifications and government compliance, consultations on accounting issues, and due diligence procedures. Each year the Audit Committee will review the proposed services to ensure the independence of the independent auditors is not impaired.

Pre-approval will occur each year coincident with pre-approval of Audit services. Company management will monitor the engagement of the independent auditors for Audit-Related services using designated process owners. This process will help provide assurance that the aggregate dollar amount of services obtained does not exceed pre-approval amounts at any time, and that new engagements not initially identified are pre-approved prior to commitment.

Tax Services

The Audit Committee concurs that the independent auditors may provide certain Tax services without impairing independence. These services include preparing local tax filings and related tax services, tax planning, preparing individual employee expatriate tax returns, and other services permitted by applicable securities regulations. The Audit Committee will not permit engaging the independent auditors (1) in connection with a transaction, the sole purpose of which may be impermissible tax avoidance, or (2) for any tax services that may be prohibited by applicable securities rules now or in the future. Company management will monitor the engagement of the independent auditors or other firms for such Tax services to help provide assurance that aggregate dollar amounts of services obtained from the independent auditors do not exceed pre-approval amounts at any time.

All Other Services

The Company does not envision obtaining other services from the independent auditors, except for the Audit, Audit-Related, and Tax services described previously. If permissible other services are requested by the Company, each engagement must be pre-approved by the Audit Committee. Such requests should be supported by endorsement of the Chief Financial Officer prior to review with the Audit Committee.

57

Appendix B to Annual Information Form

Prohibited Services

Current securities regulations specify that independent auditors may not provide the following prohibited services: Bookkeeping, Financial Information Systems Design and Implementation, Appraisals or Valuation (other than Tax), Fairness Opinions, Actuarial Services, Internal Audit Outsourcing, Management Functions, Human Resources such as Executive Recruiting, Broker-Dealer Services, Legal Services, or Expert Services such as providing expert testimony or opinions where the purpose of the engagement is to advocate the client's position in an adversarial proceeding. Company personnel may not under any circumstances engage the independent auditors for prohibited services. Potential engagements not clearly permissible should be referred to the Chief Financial Officer.

Delegation

The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee may not delegate to management the Audit Committee’s responsibilities to pre-approve services performed by the independent auditor.

58

EX-99.3

EXHIBIT 99.3

Consent of Independent Registered Public Accounting Firm

The Board of Directors

The Descartes Systems Group Inc.

We consent to the incorporation by reference in the Registration Statement (No. 333-225174) on Form F-10/A of The Descartes Systems Group Inc. of our report dated March 4, 2020 on the consolidated financial statements of The Descartes Systems Group Inc., which comprise the consolidated balance sheets as of January 31, 2020 and January 31, 2019, the related statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the years in the three-year period ended January 31, 2020, and the related notes and our report dated March 4, 2020 on the effectiveness of internal control over financial reporting as of January 31, 2020, which reports appear in the 2020 Annual Report of The Descartes Systems Group Inc., incorporated by reference in this annual report on Form 40-F, for the fiscal year ended January 31, 2020, and further consent to the use of such reports in this annual report on Form 40-F.

Our report dated March 4, 2020 on the consolidated financial statements referred to above contains an explanatory paragraph indicating the Company has changed its method of accounting for leases in 2020 due to the adoption of Accounting Standards Codification (ASC) Topic 842 and for revenue from contracts with customers and income taxes related to intra-entity transfers of assets other than inventory in 2019 due to the adoption of the new revenue standard (ASC Topic 606) and amendments to the income taxes standard (ASC Topic 740), respectively.

/s/ KPMG LLP

Chartered Professional Accountants, Licensed Public Accountants

April 14, 2020

Toronto, Canada

EX-99.4

EXHIBIT 99.4

CERTIFICATION PURSUANT TO RULE 13a-14 or 15d-14 OF THE

SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward J. Ryan, certify that:

1. I have reviewed this annual report on Form 40-F of The Descartes Systems Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Dated: April 14, 2020
	By:	/s/ Edward J. Ryan
	Name:	Edward J. Ryan
	Title:	Chief Executive Officer

EX-99.5

EXHIBIT 99.5

CERTIFICATION PURSUANT TO RULE 13a-14 or 15d-14 OF THE

SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan Brett, certify that:

1 . I have reviewed this annual report on Form 40-F of The Descartes Systems Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Dated: April 14, 2020
	By:	/s/ Allan Brett
	Name:	Allan Brett
	Title:	Chief Financial Officer

EX-99.6

EXHIBIT 99.6

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of The Descartes Systems Group Inc., a Canadian company and foreign private issuer (the “Company”), on Form 40-F for the fiscal year ended January 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Edward J. Ryan and Allan Brett, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

1. This Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Edward J. Ryan

Edward J. Ryan

Chief Executive Officer

/s/ Allan Brett

Allan Brett

Chief Financial Officer

April 14, 2020

This certification is being submitted solely for the purpose of complying with Section 1350 of Chapter 63 of Title 18 of the United States Code. This certification is not to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor will the certification be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference.

XML

Note 9 - Intangible Assets (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	January 31,	January 31,
	2020	2019
Cost
Customer agreements and relationships	226,514	177,224
Existing technology	262,614	184,641
Trade names	8,582	7,754
Non-compete covenants	9,985	6,173
	507,695	375,792
Accumulated amortization
Customer agreements and relationships	98,241	82,028
Existing technology	142,757	110,051
Trade names	5,124	4,456
Non-compete covenants	4,617	3,065
	250,739	199,600
Net	256,956	176,192

XML

Note 4 - Fair Value Measurements (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Derivative Assets at Fair Value [Table Text Block]

	Fair Value of Derivatives Designated as Hedge Instruments	Fair Value of Derivatives Not Designated As Hedge Instruments	Fair Value
Derivative assets:
Equity contracts	–	5,656	5,656

	Fair Value of Derivatives Designated as Hedge Instruments	Fair Value of Derivatives Not Designated As Hedge Instruments	Fair Value
Derivative assets:
Equity contracts	–	2,794	2,794

XML

Note 22 - Segmented Information

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

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

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues
United States	202,814	165,115	133,263
Europe, Middle-East and Africa	82,596	80,094	77,576
Canada	27,304	18,167	15,667
Asia Pacific	13,077	11,795	10,933
	325,791	275,171	237,439

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues
Services	284,654	241,543	204,376
Professional services and other	33,555	27,774	24,918
Licenses	7,582	5,854	8,145
	325,791	275,171	237,439

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.

	January 31,	January 31,
	2020	2019
Total long-lived assets
United States	114,980	119,958
Europe, Middle-East and Africa	31,299	28,433
Canada	111,264	40,413
Asia-Pacific	13,144	–
	270,687	188,804

XML

Note 5 - Trade Receivables

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note

5

– Trade Receivables

	January 31,		January 31,
	2020		2019
Trade receivables	37,121		33,350
Less: Allowance for doubtful accounts	(2,003	)	(1,857	)
	35,118		31,493

Included in accounts receivable are unbilled receivables in the amount of

$1.4

million as at

January 31, 2020 (

$1.0

million as at

January 31, 2019).

For the years ended

January 31, 2020,

2019

and

2018,

bad debt expense was

$0.6

million,

$1.2

million and

$0.8

million, respectively.

XML

Note 9 - Intangible Assets

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

9

- Intangible Assets

	January 31,	January 31,
	2020	2019
Cost
Customer agreements and relationships	226,514	177,224
Existing technology	262,614	184,641
Trade names	8,582	7,754
Non-compete covenants	9,985	6,173
	507,695	375,792
Accumulated amortization
Customer agreements and relationships	98,241	82,028
Existing technology	142,757	110,051
Trade names	5,124	4,456
Non-compete covenants	4,617	3,065
	250,739	199,600
Net	256,956	176,192

Intangible assets related to our acquisitions are recorded at their fair value at the acquisition date. The change in intangible assets during the year ended

January 31, 2020

is primarily due to the acquisitions of Visual Compliance, CORE, STEPcom and BestTransport, partially offset by amortization. The balance of the change in intangible assets is due to foreign currency translation.

Intangible assets with a finite life are amortized into income over their useful lives. Amortization expense for existing intangible assets is expected to be

$257.0

million over the following periods:

$52.7

million for

2021,

$48.3

million for

2022,

$40.7

million for

2023,

$28.9

million for

2024,

$25.9

million for

2025

and

$60.5

million thereafter. Expected future amortization expense is subject to fluctuations in foreign exchange rates and assumes

no

future adjustments to acquired intangible assets.

XML

Note 17 - Stock-based Compensation Plans Summary of Performance Share Units Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Vested or expected to vest, shares (in shares)	1,127,822
Vested or expected to vest, weighted-average exercise price (in dollars per share)	$ 26.82
Vested or expected to vest, weighted-average remaining contractual life (Year)	4 years 219 days
Vested or expected to vest, aggregate intrinsic value	$ 20.2
Performance Shares [Member]
Number of Units Outstanding (in shares)	530,383	440,520
Weighted-Average Grant Date Fair Value, PSU (in dollars per share)	$ 18.02	$ 15.91
Weighted-Average Remaining Contractual, PSU (Year)	5 years	5 years 182 days	6 years 36 days
Aggregate Intrinsic Value, PSU	$ 28.2	$ 16.6	$ 11.9
Number of PSUs Granted (in shares)	53,729	54,351
PSUs Granted, Weighted-Average Granted Date Fair Value (in dollars per share)	$ 53.65	$ 35.23
Performance units issued (in shares)	45,762	35,512
Performance units issued, weighted-average granted date fair value (in dollars per share)	$ 23.24	$ 19.59
Number of Units Outstanding (in shares)	629,874	530,383	440,520
Weighted-Average Grant Date Fair Value, PSU (in dollars per share)	$ 21.19	$ 18.02	$ 15.91
Vested or expected to vest, shares (in shares)	629,874
Vested or expected to vest, weighted-average exercise price (in dollars per share)	$ 21.19
Vested or expected to vest, weighted-average remaining contractual life (Year)	5 years
Vested or expected to vest, aggregate intrinsic value	$ 28.2
Exercisable, number of units (in shares)	521,794
Exercisable, PSU weighted-average granted date fair value (in dollars per share)	$ 16.45
Exercisable, Weighted-Average Remaining Contractual, PSU (Year)	4 years 109 days
Exercisable, Aggregate Intrinsic Value, PSU	$ 23.4

XML

Note 15 - Share Capital (Details Textual) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	Jun. 10, 2019	Jun. 06, 2018	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Shares Issued, Price Per Share	$ 35.50
Stock Issued During Period, Shares, New Issues	6,900,000		6,900,000
Over-Allotment Option	15.00%
Stock Issued During Period, Value, New Issues	$ 245.0
Proceeds from Issuance of Common Stock, Net	236.6
Proceeds from Stock Options Exercised			$ 1.5	$ 0.5	$ 1.0
Shelf Prospectus [Member]
Shelf Prospectus Period		2 years 30 days
Shelf Prospectus, Maximum Amount	$ 505.0	$ 750.0

XML

Note 13 - Leases - Components of Operating Lease Expense (Details) $ in Thousands	12 Months Ended
	Jan. 31, 2020 USD ($)
Operating lease cost	$ 4,902
Short-term lease cost	866
Total operating lease cost	5,768
Operating cash outflows from operating leases included in measurement of lease liabilities	4,150
Increase in ROU asset from non-cash activities, including lease modifications and new leases	$ 6,439
Weighted average remaining lease term (years) (Year)	4 years 109 days
Weighted average discount rate (%)	2.80%

XML

Note 17 - Stock-based Compensation Plans - Assumptions Used in Black-scholes Model for Each Grant (Details)	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Expected dividend yield (%)
Expected volatility (%)	23.50%	23.60%	23.50%
Risk-free rate (%)	1.40%	2.00%	1.00%
Expected option life (years) (Year)	5 years	5 years	5 years

XML

Note 22 - Segmented Information - Segmented Revenue by Geographical Location of Customer (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Geographical Revenue	$ 325,791	$ 275,171	$ 237,439
UNITED STATES
Geographical Revenue	202,814	165,115	133,263
EMEA [Member]
Geographical Revenue	82,596	80,094	77,576
CANADA
Geographical Revenue	27,304	18,167	15,667
Asia Pacific [Member]
Geographical Revenue	$ 13,077	$ 11,795	$ 10,933

XML

Note 2 - Basis of Presentation (Details Textual) $ in Thousands	12 Months Ended
	Jan. 31, 2020 USD ($)	Jan. 31, 2019 USD ($)	Jan. 31, 2018 USD ($)	Feb. 01, 2019 USD ($)	Feb. 01, 2018 USD ($)
Foreign Currency Transaction Gain (Loss), before Tax, Total	$ 600	$ (400)	$ (400)
Impairment of Long-Lived Assets Held-for-use	0	0	0
Goodwill, Impairment Loss	0	0	0
Contract with Customer, Asset, after Allowance for Credit Loss, Total	1,107	812	495
Other Assets, Noncurrent, Total	13,520	10,510
Deferred Income Tax Liabilities, Net, Total	15,067	15,507
Retained Earnings (Accumulated Deficit), Ending Balance	(135,770)	(172,767)
Operating Lease, Liability, Total	13,405
Operating Lease, Right-of-Use Asset	12,877
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption		$ 7,579	$ (37)
Accounting Standards Update 2014-09 [Member]
Contract with Customer, Asset, after Allowance for Credit Loss, Total					$ 500
Other Assets, Noncurrent, Total					4,200
Deferred Income Tax Liabilities, Net, Total					1,100
Retained Earnings (Accumulated Deficit), Ending Balance					3,600
Accounting Standards Update 2016-06 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption					$ 4,000
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total				$ 10,400
Operating Lease, Right-of-Use Asset				$ 10,400
Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	7 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Deferred Share Unit Plan [Member]
Base Annual Fee, Percent	50.00%
Computer Equipment [Member]
Property Plant and Equipment, Percent Declining Balance Depreciation	30.00%
Furniture and Fixtures [Member]
Property Plant and Equipment, Percent Declining Balance Depreciation	20.00%
Minimum [Member]
Costs to Obtain a Contract with a Customer, Period of Benefit Including Renewals	4 years
Minimum [Member] | Share-based Payment Arrangement, Option [Member] | Directors and Officers [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Minimum [Member] | Cash-Settled Restricted Share Plan [Member]
Cash Settled Restricted Share Units, Vesting Period	3 years
Maximum [Member]
Costs to Obtain a Contract with a Customer, Period of Benefit Including Renewals	6 years
Maximum [Member] | Share-based Payment Arrangement, Option [Member] | Directors and Officers [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Maximum [Member] | Cash-Settled Restricted Share Plan [Member]
Cash Settled Restricted Share Units, Vesting Period	5 years
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	20 years
Existing Technology [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years
Existing Technology [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	12 years
Trade Names [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	1 year
Trade Names [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	15 years
Noncompete Agreements [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years
Noncompete Agreements [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	12 years
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers	0	0

XML

Note 3 - Acquisitions - Acquired Intangible Assets Useful Lives (Details)	12 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Customer Relationships [Member] | Visual Compliance [Member]
Acquired intangible assets estimated useful lives (Year)	14 years
Customer Relationships [Member] | Core Transport Technologies NZ Limited [Member]
Acquired intangible assets estimated useful lives (Year)	13 years
Customer Relationships [Member] | STEPcom [Member]
Acquired intangible assets estimated useful lives (Year)	9 years
Customer Relationships [Member] | BestTransport [Member]
Acquired intangible assets estimated useful lives (Year)	12 years
Customer Relationships [Member] | Aljex Software, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)	13 years
Customer Relationships [Member] | Velocity Mail [Member]
Acquired intangible assets estimated useful lives (Year)	12 years
Customer Relationships [Member] | PinPoint [Member]
Acquired intangible assets estimated useful lives (Year)	9 years
Customer Relationships [Member] | ShipRush [Member]
Acquired intangible assets estimated useful lives (Year)		9 years
Customer Relationships [Member] | PCSTrac, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)		13 years
Customer Relationships [Member] | MacroPoint LLC [Member]
Acquired intangible assets estimated useful lives (Year)		12 years
Existing Technology [Member] | Visual Compliance [Member]
Acquired intangible assets estimated useful lives (Year)	7 years
Existing Technology [Member] | Core Transport Technologies NZ Limited [Member]
Acquired intangible assets estimated useful lives (Year)	6 years
Existing Technology [Member] | BestTransport [Member]
Acquired intangible assets estimated useful lives (Year)	6 years
Existing Technology [Member] | Aljex Software, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Existing Technology [Member] | Velocity Mail [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Existing Technology [Member] | ShipRush [Member]
Acquired intangible assets estimated useful lives (Year)		5 years
Existing Technology [Member] | PCSTrac, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)		5 years
Existing Technology [Member] | MacroPoint LLC [Member]
Acquired intangible assets estimated useful lives (Year)		5 years
Trade Names [Member] | Visual Compliance [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Trade Names [Member] | Core Transport Technologies NZ Limited [Member]
Acquired intangible assets estimated useful lives (Year)	8 years
Trade Names [Member] | STEPcom [Member]
Acquired intangible assets estimated useful lives (Year)	3 years
Trade Names [Member] | BestTransport [Member]
Acquired intangible assets estimated useful lives (Year)	3 years
Trade Names [Member] | Aljex Software, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)	8 years
Trade Names [Member] | Velocity Mail [Member]
Acquired intangible assets estimated useful lives (Year)	4 years
Trade Names [Member] | PinPoint [Member]
Acquired intangible assets estimated useful lives (Year)	8 years
Trade Names [Member] | ShipRush [Member]
Acquired intangible assets estimated useful lives (Year)		8 years
Trade Names [Member] | PCSTrac, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)		4 years
Trade Names [Member] | MacroPoint LLC [Member]
Acquired intangible assets estimated useful lives (Year)		8 years
Noncompete Agreements [Member] | Visual Compliance [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Noncompete Agreements [Member] | Core Transport Technologies NZ Limited [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Noncompete Agreements [Member] | STEPcom [Member]
Acquired intangible assets estimated useful lives (Year)	3 years
Noncompete Agreements [Member] | BestTransport [Member]
Acquired intangible assets estimated useful lives (Year)	2 years
Noncompete Agreements [Member] | Aljex Software, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Noncompete Agreements [Member] | Velocity Mail [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Noncompete Agreements [Member] | PinPoint [Member]
Acquired intangible assets estimated useful lives (Year)	5 years
Noncompete Agreements [Member] | ShipRush [Member]
Acquired intangible assets estimated useful lives (Year)		5 years
Noncompete Agreements [Member] | PCSTrac, Inc. [Member]
Acquired intangible assets estimated useful lives (Year)		5 years
Noncompete Agreements [Member] | MacroPoint LLC [Member]
Acquired intangible assets estimated useful lives (Year)		5 years

XML

Note 5 - Trade Receivables (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Unbilled Receivables, Current	$ 1.4	$ 1.0
Accounts Receivable, Credit Loss Expense (Reversal)	$ 0.6	$ 1.2	$ 0.8

XML

Note 18 - Income Taxes - Provision (Recovery) for Income Taxes from the Expected Provision at the Statutory Rates (Details) - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Income before income taxes	$ 48,035	$ 48,033	$ 39,510	$ 34,748
Combined basic Canadian statutory rates		26.50%	26.50%	26.50%
Income tax expense based on the above rates		$ 12,729	$ 10,470	$ 9,207
Permanent differences including amortization of intangible assets		(673)	(133)	(1,870)
Effect of differences between Canadian and foreign tax rates		(274)	(172)	595
Effect of rate changes on current year timing differences		(609)	(245)	(571)
Adjustments relating to previous periods		94	(973)	(152)
Increase (decrease) in accruals for uncertain tax positions		(1,042)	(515)	1,954
Valuation allowance		692	(344)	(1,564)
Stock based compensation		352	231	(135)
Deferred tax charges				179
Other, including foreign exchange		(231)	(86)	226
Income tax expense	$ 11,038	$ 11,038	$ 8,233	$ 7,869

XML

Note 7 - Inventory (Details Textual) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2018
Inventory Valuation Reserves, Ending Balance	$ 0	$ 100

XML

Note 10 - Goodwill - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Balance	$ 378,178	$ 350,148
Adjustments on account of foreign exchange	(1,475)	(5,627)
Balance	523,690	378,178
Aljex Software, Inc. [Member]
Balance	18,903
Goodwill Acquired During Period		18,903
Balance		18,903
Velocity Mail [Member]
Balance	8,448
Goodwill Acquired During Period		8,448
Balance		8,448
PinPoint [Member]
Balance	6,306
Goodwill Acquired During Period		6,306
Balance		6,306
Visual Compliance [Member]
Goodwill Acquired During Period	118,785
Balance	118,785
Core Transport Technologies NZ Limited [Member]
Goodwill Acquired During Period	12,670
Balance	12,670
STEPcom [Member]
Goodwill Acquired During Period	10,019
Balance	10,019
BestTransport [Member]
Goodwill Acquired During Period	5,513
Balance	$ 5,513

XML

Note 19 - Contract Balances, Performance Obligations and Contract Costs 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-02-01 $ in Thousands	Jan. 31, 2020 USD ($)
Revenue, Remaining Performance Obligation, Amount	$ 216,900
Revenue, Remaining Performance Obligation, Percentage	80.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	2 years

XML

Note 20 - Other Charges (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Other Operating Cost and Expense, by Component [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Acquisition-related costs	3,797	3,778	3,471
Restructuring plans	–	20	523
	3,797	3,798	3,994

XML

Note 16 - Earnings Per Share (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Year Ended	January 31, 2020	January 31, 2019	January 31, 2018
Net income for purposes of calculating basic and diluted earnings per share	36,997	31,277	26,879
Weighted average shares outstanding	81,659	76,832	76,324
Dilutive effect of employee stock options	318	205	167
Dilutive effect of restricted and performance share units	890	754	621
Weighted average common and common equivalent shares outstanding	82,867	77,791	77,112
Earnings per share
Basic	0.45	0.41	0.35
Diluted	0.45	0.40	0.35

XML

Note 11 - Accrued Liabilities (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	January 31,	January 31,
	2020	2019
Accrued compensation and benefits	20,613	16,771
Accrued professional fees	1,010	1,137
Other accrued liabilities	13,253	11,484
	34,876	29,392

XML

Note 13 - Leases

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note

13

- Leases

We have operating leases for buildings, vehicles and computer equipment. Our leases have remaining terms of

1

to

9

years, some of which include options to extend the leases for up to

3

years.

The components of operating lease expense were as follows:

Year Ended	January 31, 2020
Operating lease cost	4,902
Short-term lease cost	866
Total operating lease cost	5,768

Supplemental cash flow information related to operating leases was as follows:

Year Ended	January 31, 2020
Operating cash outflows from operating leases included in measurement of lease liabilities	4,150
Increase in ROU asset from non-cash activities, including lease modifications and new leases	6,439

Supplemental information related to operating leases was as follows:

	January 31, 2020
Weighted average remaining lease term (years)	4.3
Weighted average discount rate (%)	2.8

Maturities of operating lease liabilities were as follows as of

January 31, 2020:

Years Ended January 31,	Operating Leases
2021	4,343
2022	3,283
2023	2,508
2024	1,924
2025	1,252
2026 and thereafter	1,049
Total lease payments	14,359
Less: imputed interest	(954	)
Total lease obligations	13,405
Current	3,928
Long-term	9,477

Disclosures Related to Periods Prior to Adoption of New Lease Standard

As of

January 31, 2019,

future minimum lease payment obligations under non-cancelable operating and capital lease obligations were as follows:

Years Ended January 31,	Operating Leases	Capital Leases	Total
2020	4,627	51	4,678
2021	3,046	2	3,048
2022	1,979	–	1,979
2023	1,470	–	1,470
2024	1,038	–	1,038
2025	737	–	737
2026	733	–	733
2027	271	–	271
	13,901	53	13,954

For the years ended

January 31, 2019

and

2018,

rental expense from operating leases was

$5.2

million and

$5.1

million, respectively.

XML

Note 17 - Stock-based Compensation Plans

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note

17

- Stock-Based Compensation Plans

Total estimated stock-based compensation expense recognized in our consolidated statement of operations was as follows:

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Cost of revenues	220	160	90
Sales and marketing	706	436	246
Research and development	281	184	85
General and administrative	3,702	2,930	2,386
Effect on net income	4,909	3,710	2,807

Differences between how GAAP and applicable income tax laws treat the amount and timing of recognition of stock-based compensation expense

may

result in a deferred tax asset. We have recorded a valuation allowance against any such deferred tax asset except for

$0.7

million (

$0.6

million at

January 31, 2019)

recognized in the United States. The tax benefit realized in connection with stock options exercised during

2020,

2019

and

2018

was

$0.1

million,

$0.2

million and nominal, respectively.

Stock Options

As of

January 31, 2020,

we had

1,021,322

stock options granted and outstanding under our shareholder-approved stock option plan and

3,661,684

remained available for grant. In addition, we had

106,500

stock options outstanding pursuant to option grants made outside of our shareholder-approved stock option plan as permitted under the rules of the Toronto Stock Exchange in certain circumstances.

As of

January 31, 2020,

$3.5

million of total unrecognized compensation costs, net of forfeitures, related to non-vested stock option awards is expected to be recognized over a weighted average period of

2.8

years. The total fair value of stock options vested during

2020

was

$1.9

million.

The total number of options granted during the years ended

January 31, 2020,

2019

and

2018

was

367,173,

272,144

and

274,500,

respectively. The weighted average grant-date fair value of options granted during the years ended

January 31, 2020,

2019

and

2018

was

$8.99,

$7.10

and

$5.26

per option, respectively.

The weighted-average assumptions were as follows:

Year Ended	January 31, 2020	January 31, 2019	January 31, 2018
Expected dividend yield (%)	–	–	–
Expected volatility (%)	23.5	23.6	23.5
Risk-free rate (%)	1.4	2.0	1.0
Expected option life (years)	5	5	5

A summary of option activity under all of our plans is presented as follows:

	Number of Stock Options Outstanding			Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	657,209		$	18.21	4.9	5.7
Granted	272,144		$	27.96
Exercised	(46,065	)	$	11.75
Forfeited	(3,950	)	$	26.43
Balance at January 31, 2019	879,338		$	21.41	4.7	8.7
Granted	367,173		$	38.06
Exercised	(94,970	)	$	15.62
Forfeited	(23,719	)	$	31.93
Balance at January 31, 2020	1,127,822		$	26.82	4.6	20.2
Vested or expected to vest at January 31, 2020	1,127,822		$	26.82	4.6	20.2
Exercisable at January 31, 2020	718,169		$	22.88	4.0	15.7

The total intrinsic value of options exercised during the years ended

January 31, 2020,

2019

and

2018

was approximately

$2.0

million,

$0.8

million and

$2.5

million, respectively.

Options outstanding and options exercisable as at

January 31, 2020

by range of exercise price are as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices		Weighted Average Exercise Price	Number of Stock Options	Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price	Number of Stock Options
$11.43 – $11.59	$	11.57	126,500	1.4	$	11.57	126,500
$18.71 – $22.57	$	21.17	397,014	3.8	$	21.08	357,014
$25.91 – $27.50	$	27.49	247,935	5.2	$	27.49	140,461
$38.04 – $39.70	$	38.07	356,373	6.2	$	38.06	94,194
	$	26.82	1,127,822	4.6	$	22.88	718,169

A summary of the status of our unvested stock options

under our shareholder-approved stock option plan

as of

January 31, 2020

is presented as follows:

	Number of Stock Options Outstanding			Weighted-Average Grant-Date Fair Value per Share
Balance at January 31, 2018	276,067		$	4.98
Granted	272,144		$	7.10
Vested	(219,043	)	$	5.56
Forfeited	(3,950	)	$	6.41
Balance at January 31, 2019	325,218		$	6.18
Granted	367,173		$	8.99
Vested	(259,269	)	$	6.96
Forfeited	(23,469	)	$	7.69
Balance at January 31, 2020	409,653		$	8.03

The above noted table excludes the

106,500

options outstanding pursuant to option grants made outside of our shareholder-approved stock option plan as permitted under the rules of the Toronto Stock Exchange in certain circumstances.

Performance Share Units

A summary of PSU activity is as follows:

	Number of PSUs Outstanding		Weighted- Average Granted Date Fair Value	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	440,520	$	15.91	6.1	11.9
Granted	54,351	$	35.23
Performance units issued	35,512	$	19.59
Balance at January 31, 2019	530,383	$	18.02	5.5	16.6
Granted	53,729	$	53.65
Performance units issued	45,762	$	23.24
Balance at January 31, 2020	629,874	$	21.19	5.0	28.2
Vested or expected to vest at January 31, 2020	629,874	$	21.19	5.0	28.2
Exercisable at January 31, 2020	521,794	$	16.45	4.3	23.4

The aggregate intrinsic values represent the total pre-tax intrinsic value (the aggregate closing share price of our common shares on

January 31, 2020)

that would have been received by PSU holders if all PSUs had been vested on

January 31, 2020.

As of

January 31, 2020,

$2.7

million of total unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted average period of

1.5

years. The total fair value of PSUs vested during

2020

was

$2.6

million.

Restricted Share Units

A summary of RSU activity is as follows:

	Number of RSUs Outstanding		Weighted- Average Granted Date Fair Value	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	299,020	$	12.80	6.1	8.1
Granted	38,046	$	27.96
Balance at January 31, 2019	337,066	$	14.42	5.6	10.6
Granted	37,611	$	38.04
Balance at January 31, 2020	374,677	$	16.57	5.0	16.8
Vested or expected to vest at January 31, 2020	374,677	$	16.57	5.0	16.8
Exercisable at January 31, 2020	336,921	$	14.56	4.6	15.1

The aggregate intrinsic values represent the total pre-tax intrinsic value (the aggregate closing share price of our common shares on

January 31, 2020)

that would have been received by RSU holders if all RSUs had been vested on

January 31, 2020.

As of

January 31, 2020,

$1.3

million of total unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted average period of

1.7

years. The total fair value of RSUs vested during

2020

was

$1.1

million.

Deferred Share Unit Plan

As at

January 31, 2020,

the total number of DSUs held by participating directors was

251,422

(

277,390

at

January 31, 2019),

representing an aggregate accrued liability of

$11.3

million (

$8.6

million at

January 31, 2019).

During

2020,

25,373

DSUs were granted and

51,341

DSUs were redeemed and settled in cash. As at

January 31, 2020,

the unrecognized aggregate liability for the unvested DSUs was

nil

(

nil

at

January 31, 2019).

The fair value of the DSU liability is based on the closing price of our common shares at the balance sheet date. The total compensation cost related to DSUs recognized in our consolidated statements of operations was approximately

$5.0

million,

$2.2

million and

$2.3

million for the years ended

January 31, 2020,

2019

and

2018,

respectively.

Cash-Settled Restricted Share Unit Plan

A summary of activity under our CRSU plan is as follows:

	Number of CRSUs Outstanding		Weighted- Average Remaining Contractual Life (years)
Balance at January 31, 2018	58,171		1.5
Granted	32,261
Vested and settled in cash	(45,369	)
Balance at January 31, 2019	45,063		1.6
Granted	30,086
Vested and settled in cash	(32,422	)
Balance at January 31, 2020	42,727		1.6
Non-vested at January 31, 2020	42,727		1.6

We recognize the compensation cost of the CRSUs ratably over the service/vesting period relating to the grant and have recorded an aggregate accrued liability of

$0.8

million at

January 31, 2020 (

$0.6

million at

January 31, 2019).

As at

January 31, 2020,

the unrecognized aggregate liability for the unvested CRSUs was

$1.1

million (

$0.8

million at

January 31, 2019).

The fair value of the CRSU liability is based on the closing price of our common shares at the balance sheet date. The total compensation cost related to CRSUs recognized in our consolidated statements of operations was approximately

$0.9

million,

$0.8

million and

$1.0

million for the years ended

January 31, 2020,

2019

and

2018,

respectively.

XML

Note 21 - Supplemental Cash Flow Information

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

Note

21

– Supplemental Cash Flow Information

The following tables presents the cash flow changes in operating asset and liabilities:

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Trade accounts receivable	3,733		(135	)	(1,963	)
Other accounts receivable	(2,547	)	(451	)	16
Prepaid expenses and other	(5,942	)	(4,466	)	(1,772	)
Inventory	(345	)	74		52
Accounts payable	1,768		(1,065	)	1,428
Accrued liabilities	3,265		2,570		(592	)
Income taxes payable	(1,550	)	(2,423	)	6,326
Operating leases	546		–		–
Deferred revenue	(4,184	)	2,047		902
	(5,256	)	(3,849	)	4,397

XML

Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Foreign currency translation adjustment, income tax expense (recovery)	$ (132)	$ (44)	$ 255

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
CURRENT ASSETS
Cash	$ 44,403	$ 27,298
Accounts receivable (net)
Trade (Note 5)	35,118	31,493
Other (Note 6)	7,294	4,331
Prepaid expenses and other	12,984	9,027
Inventory (Note 7)	411	95
	100,210	72,244
OTHER LONG-TERM ASSETS (Note 19)	13,520	10,510
PROPERTY AND EQUIPMENT, NET (Note 8)	13,731	12,612
RIGHT-OF-USE ASSETS (Note 13)	12,877
DEFERRED INCOME TAXES	21,602	3,598
INTANGIBLE ASSETS, NET (Note 9)	256,956	176,192
GOODWILL (Note 10)	523,690	378,178
	942,586	653,334
CURRENT LIABILITIES
Accounts payable	7,667	5,147
Accrued liabilities (Note 11)	34,876	29,392
Lease obligations (Note 13)	3,928
Income taxes payable	1,329	1,592
Deferred revenue (Note 19)	41,143	34,236
	88,943	70,367
LONG-TERM DEBT (Note 12)		25,464
LEASE OBLIGATIONS (Note 13)	9,477
DEFERRED REVENUE (Note 19)	920	855
INCOME TAXES PAYABLE	6,470	7,634
DEFERRED INCOME TAXES	15,067	15,507
	120,877	119,827
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 14)
SHAREHOLDERS’ EQUITY (Note 15)
Common shares – unlimited shares authorized; Shares issued and outstanding totaled 84,156,316 at January 31, 2020 (January 31, 2019 – 76,864,866)	524,154	276,753
Additional paid-in capital	459,269	454,722
Accumulated other comprehensive loss	(25,944)	(25,201)
Accumulated deficit	(135,770)	(172,767)
	821,709	533,507
	$ 942,586	$ 653,334

XML

Note 18 - Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Accrued liabilities not currently deductible	$ 14,838	$ 11,483
Accumulated net operating losses	10,579	11,081
Difference between tax and accounting basis of property and equipment	33,929
Research and development and other tax credits and expenses	756	911
Total deferred income tax assets	60,102	23,475
Difference between tax and accounting basis of intangible assets	(41,381)	(23,974)
Difference between tax and accounting basis of property and equipment		(909)
Other temporary differences	(1,716)	(574)
Total deferred income tax liabilities	(43,097)	(25,457)
Net deferred income taxes	17,005	(1,982)
Valuation allowance	(10,470)	(9,927)
Net deferred income taxes, net of valuation allowance	$ 6,535	$ (11,909)

XML

Note 6 - Other Receivables - Other Receivables (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Net working capital adjustments receivable from acquisitions		$ 55
Other receivables	7,294	4,276
	$ 7,294	$ 4,331

XML

Note 9 - Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Intangible assets, cost	$ 507,695	$ 375,792
Intangible assets, amortization cost	250,739	199,600
Intangible assets. net	256,956	176,192
Customer Relationships [Member]
Intangible assets, cost	226,514	177,224
Intangible assets, amortization cost	98,241	82,028
Developed Technology Rights [Member]
Intangible assets, cost	262,614	184,641
Intangible assets, amortization cost	142,757	110,051
Trade Names [Member]
Intangible assets, cost	8,582	7,754
Intangible assets, amortization cost	5,124	4,456
Noncompete Agreements [Member]
Intangible assets, cost	9,985	6,173
Intangible assets, amortization cost	$ 4,617	$ 3,065

XML

Note 19 - Contract Balances, Performance Obligations and Contract Costs 1 (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Capitalized Contract Cost, Net, Total	$ 9,800	$ 7,300
Capitalized Contract Cost, Amortization	2,500	1,800
Capitalized Contract Cost, Impairment Loss	$ 0	$ 0

XML

Note 17 - Stock-based Compensation Plans (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Cost of revenues	220	160	90
Sales and marketing	706	436	246
Research and development	281	184	85
General and administrative	3,702	2,930	2,386
Effect on net income	4,909	3,710	2,807

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Year Ended	January 31, 2020	January 31, 2019	January 31, 2018
Expected dividend yield (%)	–	–	–
Expected volatility (%)	23.5	23.6	23.5
Risk-free rate (%)	1.4	2.0	1.0
Expected option life (years)	5	5	5

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Stock Options Outstanding			Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	657,209		$	18.21	4.9	5.7
Granted	272,144		$	27.96
Exercised	(46,065	)	$	11.75
Forfeited	(3,950	)	$	26.43
Balance at January 31, 2019	879,338		$	21.41	4.7	8.7
Granted	367,173		$	38.06
Exercised	(94,970	)	$	15.62
Forfeited	(23,719	)	$	31.93
Balance at January 31, 2020	1,127,822		$	26.82	4.6	20.2
Vested or expected to vest at January 31, 2020	1,127,822		$	26.82	4.6	20.2
Exercisable at January 31, 2020	718,169		$	22.88	4.0	15.7

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

	Options Outstanding				Options Exercisable
Range of Exercise Prices		Weighted Average Exercise Price	Number of Stock Options	Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price	Number of Stock Options
$11.43 – $11.59	$	11.57	126,500	1.4	$	11.57	126,500
$18.71 – $22.57	$	21.17	397,014	3.8	$	21.08	357,014
$25.91 – $27.50	$	27.49	247,935	5.2	$	27.49	140,461
$38.04 – $39.70	$	38.07	356,373	6.2	$	38.06	94,194
	$	26.82	1,127,822	4.6	$	22.88	718,169

Schedule of Nonvested Share Activity [Table Text Block]

	Number of Stock Options Outstanding			Weighted-Average Grant-Date Fair Value per Share
Balance at January 31, 2018	276,067		$	4.98
Granted	272,144		$	7.10
Vested	(219,043	)	$	5.56
Forfeited	(3,950	)	$	6.41
Balance at January 31, 2019	325,218		$	6.18
Granted	367,173		$	8.99
Vested	(259,269	)	$	6.96
Forfeited	(23,469	)	$	7.69
Balance at January 31, 2020	409,653		$	8.03

Share-based Payment Arrangement, Performance Shares, Outstanding Activity [Table Text Block]

	Number of PSUs Outstanding		Weighted- Average Granted Date Fair Value	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	440,520	$	15.91	6.1	11.9
Granted	54,351	$	35.23
Performance units issued	35,512	$	19.59
Balance at January 31, 2019	530,383	$	18.02	5.5	16.6
Granted	53,729	$	53.65
Performance units issued	45,762	$	23.24
Balance at January 31, 2020	629,874	$	21.19	5.0	28.2
Vested or expected to vest at January 31, 2020	629,874	$	21.19	5.0	28.2
Exercisable at January 31, 2020	521,794	$	16.45	4.3	23.4

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]

	Number of RSUs Outstanding		Weighted- Average Granted Date Fair Value	Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Balance at January 31, 2018	299,020	$	12.80	6.1	8.1
Granted	38,046	$	27.96
Balance at January 31, 2019	337,066	$	14.42	5.6	10.6
Granted	37,611	$	38.04
Balance at January 31, 2020	374,677	$	16.57	5.0	16.8
Vested or expected to vest at January 31, 2020	374,677	$	16.57	5.0	16.8
Exercisable at January 31, 2020	336,921	$	14.56	4.6	15.1

Schedule Of Cash Settled Restricted Share Unit Plan Activity [Table Text Block]

	Number of CRSUs Outstanding		Weighted- Average Remaining Contractual Life (years)
Balance at January 31, 2018	58,171		1.5
Granted	32,261
Vested and settled in cash	(45,369	)
Balance at January 31, 2019	45,063		1.6
Granted	30,086
Vested and settled in cash	(32,422	)
Balance at January 31, 2020	42,727		1.6
Non-vested at January 31, 2020	42,727		1.6

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Note 12 - Debt (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	January 31,	January 31,
	2020	2019
Credit facility	–	25,464
Available for use	350,000	324,536

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Note 21 - Supplemental Cash Flow Information (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Trade accounts receivable	3,733		(135	)	(1,963	)
Other accounts receivable	(2,547	)	(451	)	16
Prepaid expenses and other	(5,942	)	(4,466	)	(1,772	)
Inventory	(345	)	74		52
Accounts payable	1,768		(1,065	)	1,428
Accrued liabilities	3,265		2,570		(592	)
Income taxes payable	(1,550	)	(2,423	)	6,326
Operating leases	546		–		–
Deferred revenue	(4,184	)	2,047		902
	(5,256	)	(3,849	)	4,397

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Note 20 - Other Charges

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Other Income and Other Expense Disclosure [Text Block]

Note

20

- Other Charges

Other charges are comprised of acquisition-related costs and restructuring initiatives which have been undertaken from time to time under various restructuring plans. Acquisition-related costs primarily include advisory services, brokerage services, administrative costs and retention bonuses to employees joining by way of an acquisition, and collectively relate to completed and prospective acquisitions.

The following tables shows the components of other charges as follows:

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Acquisition-related costs	3,797	3,778	3,471
Restructuring plans	–	20	523
	3,797	3,798	3,994

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Note 12 - Debt

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

12

- Debt

On

January 25, 2019,

we amended and increased our existing

$150.0

million senior secured revolving credit facility. The amended facility is now a

$350.0

million revolving operating credit facility to be available for general corporate purposes, including the financing of ongoing working capital needs and acquisitions. With the approval of the lenders, the credit facility can be expanded to a total of

$500.0

million. The credit facility has a

five

-year maturity with

no

fixed repayment dates prior to the end of the

five

-year term ending

January 2024.

Borrowings under the credit facility are secured by a

first

charge over substantially all of Descartes’ assets. Depending on the type of advance, interest rates under the revolving operating portion of the credit facility are based on the Canada or US prime rate, Bankers’ Acceptance (BA) or London Interbank Offered Rate (LIBOR) plus an additional

0

to

250

basis points based on the ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization, as defined in the credit agreement. A standby fee of between

20

to

40

basis points will be charged on all undrawn amounts. The credit facility contains certain customary representations, warranties and guarantees, and covenants.

Long-term debt is comprised of the following:

	January 31,	January 31,
	2020	2019
Credit facility	–	25,464
Available for use	350,000	324,536

We were in compliance with the covenants of the credit facility as of

January 31, 2020.

As at

January 31, 2020,

we had outstanding letters of credit of approximately

$0.2

million (

$0.2

million as at

January 31, 2019),

which were

not

related to our credit facility.

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Note 16 - Earnings Per Share

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

16

- Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (number of shares in thousands):

Year Ended	January 31, 2020	January 31, 2019	January 31, 2018
Net income for purposes of calculating basic and diluted earnings per share	36,997	31,277	26,879
Weighted average shares outstanding	81,659	76,832	76,324
Dilutive effect of employee stock options	318	205	167
Dilutive effect of restricted and performance share units	890	754	621
Weighted average common and common equivalent shares outstanding	82,867	77,791	77,112
Earnings per share
Basic	0.45	0.41	0.35
Diluted	0.45	0.40	0.35

For the years ended

January 31, 2020,

2019

and

2018,

the application of the treasury stock method excluded

350,464,

271,869

and

270,525

stock options, respectively, from the calculation of diluted EPS as the assumed proceeds from the unrecognized stock-based compensation expense of such stock options that are attributed to future service periods made such stock options anti-dilutive.

For the years ended

January 31, 2020,

2019

and

2018,

5,909,

nil

and

2,475

stock options, respectively, were excluded from the calculation of diluted EPS as those options had an exercise price greater than or equal to the average market value of our common shares during the applicable periods and their inclusion would have been anti-dilutive.

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]
Balance at Jan. 31, 2017		$ 253,242	$ 448,597	$ (32,779)	$ (238,465)
Stock options and share units exercised		1,294
Issuance of common shares, net of issuance costs (Note 15)
Acquisitions (Note 3)		20,000
Balance at Jan. 31, 2018	$ 498,812	274,536	451,151	(15,252)	(211,623)
Stock-based compensation expense (Note 17)			2,807
Stock options and share units exercised			(290)
Other comprehensive income (loss), net of income taxes				17,527
Net income	26,879				26,879
Cumulative adjustment upon modified retrospective accounting policy adoption (Note 2)			37		(37)
Stock options and share units exercised		681
Issuance of common shares, net of issuance costs (Note 15)
Acquisitions (Note 3)		1,536
Balance at Jan. 31, 2019	533,507	276,753	454,722	(25,201)	(172,767)
Stock-based compensation expense (Note 17)			3,710
Stock options and share units exercised			(139)
Other comprehensive income (loss), net of income taxes				(9,949)
Net income	31,277				31,277
Cumulative adjustment upon modified retrospective accounting policy adoption (Note 2)					7,579
Stock options and share units exercised		1,788
Issuance of common shares, net of issuance costs (Note 15)		236,568
Acquisitions (Note 3)		9,045
Balance at Jan. 31, 2020	821,709	$ 524,154	459,269	(25,944)	(135,770)
Stock-based compensation expense (Note 17)			4,909
Stock options and share units exercised			(362)
Other comprehensive income (loss), net of income taxes				$ (743)
Net income	$ 36,997				36,997
Cumulative adjustment upon modified retrospective accounting policy adoption (Note 2)

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Consolidated Balance Sheets (Parentheticals) - shares	Jan. 31, 2020	Jan. 31, 2019
Common shares, shares issued (in shares)	84,156,316	76,864,866
Common shares, shares outstanding (in shares)	84,156,316	76,864,866

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Note 5 - Trade Receivables (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	January 31,		January 31,
	2020		2019
Trade receivables	37,121		33,350
Less: Allowance for doubtful accounts	(2,003	)	(1,857	)
	35,118		31,493

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Note 23 - Subsequent Event

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

Note

23

– Subsequent Event

On

February 21, 2020,

Descartes acquired all the shares of Peoplevox Limited (“Peoplevox”), a provider of cloud-based ecommerce warehouse management solutions. The purchase price for the acquisition was approximately

$24.5

million (GBP

18.9

million), net of cash acquired, which was funded from a combination of cash on hand and drawing on Descartes’ existing credit facility. As of the issue date of these consolidated financial statements, the fair value of the acquired assets and liabilities has

not

been determined.

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Note 10 - Goodwill (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Condensed Cash Flow Statement [Table Text Block]

	January 31,		January 31,
	2020		2019
Balance at beginning of year	378,178		350,148
Acquisition of Aljex	–		18,903
Acquisition of Velocity Mail	–		8,448
Acquisition of PinPoint	–		6,306
Acquisition of Visual Compliance	118,785		–
Acquisition of CORE	12,670		–
Acquisition of STEPcom	10,019		–
Acquisition of BestTransport	5,513		–
Adjustments on account of foreign exchange	(1,475	)	(5,627	)
Balance at end of year	523,690		378,178

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Note 4 - Fair Value Measurements

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

4

– Fair Value Measurements

ASC Topic

820

“Fair Value Measurements and Disclosures” (Topic

820

) defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability,

not

on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk.

Topic

820

establishes a fair value hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value into

three

levels:

• Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

• Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The carrying amounts of the Company’s cash, accounts receivable (net), accounts payable, accrued liabilities and income taxes payable approximate their fair value (a Level

2

measurement) due to their short maturities.

The Company enters into equity derivative contracts including floating-rate equity forwards to partially offset the potential fluctuations of certain future share-based compensation expenses. The Company does

not

hold derivatives for speculative purposes. As at

January 31, 2020,

we had equity derivatives for

251,422

Descartes common shares with a weighted average price of

$22.37.

The following table shows the Company’s derivative instruments measured at fair value on a recurring basis as of

January 31, 2020:

	Fair Value of Derivatives Designated as Hedge Instruments	Fair Value of Derivatives Not Designated As Hedge Instruments	Fair Value
Derivative assets:
Equity contracts	–	5,656	5,656

The following table shows the Company’s derivative instruments measured at fair value on a recurring basis as of

January 31, 2019:

	Fair Value of Derivatives Designated as Hedge Instruments	Fair Value of Derivatives Not Designated As Hedge Instruments	Fair Value
Derivative assets:
Equity contracts	–	2,794	2,794

The fair value of equity contract derivatives is determined utilizing a valuation model based on the quoted market value of

our common shares at the balance sheet date

(Level

2

fair value inputs). The fair value of equity contract derivatives is recorded as other current assets and gains and losses are recorded in general and administrative expenses in the consolidated financial statements. For the years ended

January 31, 2020,

2019

and

2018,

we recognized an expense (recovery) in general and administrative expenses of (

$4.0

) million, (

$1.2

) million and (

$1.1

) million, respectively.

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Note 8 - Property and Equipment

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note

8

– Property and Equipment

	January 31,	January 31,
	2020	2019
Cost
Computer equipment and software	34,442	34,870
Furniture and fixtures	1,432	1,262
Leasehold improvements	778	444
Equipment installed with customers	1,289	–
Assets under construction	829	–
	38,770	36,576
Accumulated depreciation
Computer equipment and software	23,730	23,070
Furniture and fixtures	816	634
Leasehold improvements	290	260
Equipment installed with customers	203	–
	25,039	23,964
Net	13,731	12,612

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Note 17 - Stock-based Compensation Plans - Summary of Restricted Share Units Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Vested or expected to vest, weighted-average exercise price (in dollars per share)	$ 26.82
Vested or expected to vest, weighted-average remaining contractual life (Year)	4 years 219 days
Vested or expected to vest, aggregate intrinsic value	$ 20.2
Restricted Stock Units (RSUs) [Member]
Number of Units Outstanding (in shares)	337,066	299,020
Weighted-Average Grant Date Fair Value, PSU (in dollars per share)	$ 14.42	$ 12.80
Weighted-Average Remaining Contractual, PSU (Year)	5 years	5 years 219 days	6 years 36 days
Aggregate Intrinsic Value, PSU	$ 16.8	$ 10.6	$ 8.1
Number of PSUs Granted (in shares)	37,611	38,046
PSUs Granted, Weighted-Average Granted Date Fair Value (in dollars per share)	$ 38.04	$ 27.96
Number of Units Outstanding (in shares)	374,677	337,066	299,020
Weighted-Average Grant Date Fair Value, PSU (in dollars per share)	$ 16.57	$ 14.42	$ 12.80
Vested or expected to vest, RSU (in shares)	374,677
Vested or expected to vest, weighted-average exercise price (in dollars per share)	$ 16.57
Vested or expected to vest, weighted-average remaining contractual life (Year)	5 years
Vested or expected to vest, aggregate intrinsic value	$ 16.8
Exercisable, number of units (in shares)	336,921
Exercisable, PSU weighted-average granted date fair value (in dollars per share)	$ 14.56
Exercisable, Weighted-Average Remaining Contractual, PSU (Year)	4 years 219 days
Exercisable, Aggregate Intrinsic Value, PSU	$ 15.1

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Note 15 - Share Capital - Common Shares Outstanding (Details) - shares		12 Months Ended
	Jun. 10, 2019	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Balance, beginning of year (in shares)		76,864,866	76,773,000	75,875,000
Stock options and share units exercised (in shares)		95,000	46,000	141,000
Issuance of common shares (in shares)	6,900,000	6,900,000
Acquisitions (Note 3) (in shares)		296,000	46,000	757,000
Balance, end of year (in shares)		84,156,316	76,864,866	76,773,000

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Note 13 - Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
2021	$ 4,343
2022	3,283
2023	2,508
2024	1,924
2025	1,252
2026 and thereafter	1,049
Total lease payments	14,359
Less: imputed interest	(954)
Total lease obligations	13,405
Current	3,928
Long-term	$ 9,477

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Note 17 -Stock-based Compensation Plans - Summary of Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Number of Stock Options Outstanding (in shares)	879,338	657,209
Weighted-Average Exercise Price (in dollars per share)	$ 21.41	$ 18.21
Weighted-Average Remaining Contractual Life (Year)	4 years 219 days	4 years 255 days	4 years 328 days
Aggregate Intrinsic Value	$ 20.2	$ 8.7	$ 5.7
Granted, shares (in shares)	367,173	272,144	274,500
Granted, weighted-average exercise price (in dollars per share)	$ 38.06	$ 27.96
Exercised, shares (in shares)	(94,970)	(46,065)
Exercised, weighted-average exercise price (in dollars per share)	$ 15.62	$ 11.75
Forfeited, shares (in shares)	(23,719)	(3,950)
Forfeited, weighted-average exercise price (in dollars per share)	$ 31.93	$ 26.43
Number of Stock Options Outstanding (in shares)	1,127,822	879,338	657,209
Weighted-Average Exercise Price (in dollars per share)	$ 26.82	$ 21.41	$ 18.21
Vested or expected to vest, shares (in shares)	1,127,822
Vested or expected to vest, weighted-average exercise price (in dollars per share)	$ 26.82
Vested or expected to vest, weighted-average remaining contractual life (Year)	4 years 219 days
Vested or expected to vest, aggregate intrinsic value	$ 20.2
Exercisable, shares (in shares)	718,169
Exercisable, weighted-average exercise price (in dollars per share)	$ 22.88
Exercisable, weighted-average remaining contractual life (Year)	4 years
Exercisable, aggregate intrinsic value	$ 15.7

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Note 4 - Fair Value Measurements - Derivative Instruments at Fair Value (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Equity contracts	$ 5,656	$ 2,794
Designated as Hedging Instrument [Member]
Equity contracts
Not Designated as Hedging Instrument [Member]
Equity contracts	$ 5,656	$ 2,794

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Note 22 - Segmented Information - Segmented Revenue by Revenue Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Revenues	$ 325,791	$ 275,171	$ 237,439
Service [Member]
Revenues	284,654	241,543	204,376
Professional Services and Other [Member]
Revenues	33,555	27,774	24,918
License [Member]
Revenues	$ 7,582	$ 5,854	$ 8,145

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Note 22 - Segmented Information (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues
United States	202,814	165,115	133,263
Europe, Middle-East and Africa	82,596	80,094	77,576
Canada	27,304	18,167	15,667
Asia Pacific	13,077	11,795	10,933
	325,791	275,171	237,439

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues
Services	284,654	241,543	204,376
Professional services and other	33,555	27,774	24,918
Licenses	7,582	5,854	8,145
	325,791	275,171	237,439

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

	January 31,	January 31,
	2020	2019
Total long-lived assets
United States	114,980	119,958
Europe, Middle-East and Africa	31,299	28,433
Canada	111,264	40,413
Asia-Pacific	13,144	–
	270,687	188,804

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Note 3 - Acquisitions - Preliminary Purchase Price Allocation for Businesses Acquired (Details) (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Visual Compliance [Member]
Cash acquired	$ 170
Core Transport Technologies NZ Limited [Member]
Cash acquired	213
STEPcom [Member]
Cash acquired	2,700
BestTransport [Member]
Cash acquired	$ 507
Aljex Software, Inc. [Member]
Cash acquired		$ 193
Velocity Mail [Member]
Cash acquired
PinPoint [Member]
Cash acquired		$ 769
ShipRush [Member]
Cash acquired			$ 253
PCSTrac, Inc. [Member]
Cash acquired
MacroPoint LLC [Member]
Cash acquired			$ 2,098

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Note 19 - Contract Balances, Performance Obligations and Contract Costs (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Contract with Customer, Asset and Liability [Table Text Block]

	Deferred Revenue
Balance at January 31, 2018	32,113
Recognition of previously deferred revenue	(27,252	)
Deferral of revenue	29,423
Increases from business combinations, net	1,789
Effect of movements in foreign exchange	(982	)
Balance at January 31, 2019	35,091
Recognition of previously deferred revenue	(30,580	)
Deferral of revenue	37,408
Increases from business combinations, net	551
Effect of movements in foreign exchange	(407	)
Balance at January 31, 2020	42,063
Current	41,143
Long-term	920

	Contract Assets
Balance at January 31, 2018	–
Adjustment for adoption of ASC 606	495
Balance at February 1, 2018	495
Transfers to trade receivables from contract assets	(266	)
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to trade receivables	606
Effect of movements in foreign exchange	(23	)
Balance at January 31, 2019	812
Transfers to trade receivables from contract assets	(490	)
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to trade receivables	791
Effect of movements in foreign exchange	(6	)
Balance at January 31, 2020	1,107

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Note 15 - Share Capital (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Common Stock Outstanding Roll Forward [Table Text Block]

	January 31,	January 31,	January 31,
(thousands of shares)	2020	2019	2018
Balance, beginning of year	76,865	76,773	75,875
Shares issued:
Stock options and share units exercised	95	46	141
Issuance of common shares	6,900	–	–
Acquisitions (Note 3)	296	46	757
Balance, end of year	84,156	76,865	76,773

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Note 18 - Income Taxes - Income (Loss) Before Income Taxes Earned by Tax Jurisdictions (Details) - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Income (loss) from continuing operations	$ 48,035	$ 48,033	$ 39,510	$ 34,748
CANADA
Income (loss) from continuing operations	19,557		16,715	17,964
UNITED STATES
Income (loss) from continuing operations	19,962		11,077	6,203
Other Countries [Member]
Income (loss) from continuing operations	$ 8,516		$ 11,718	$ 10,581

XML

Note 5 - Trade Receivables - Trade Receivables (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Trade receivables	$ 37,121	$ 33,350
Less: Allowance for doubtful accounts	(2,003)	(1,857)
	$ 35,118	$ 31,493

XML

Note 8 - Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Cost	$ 38,770	$ 36,576
Accumulated amortization	25,039	23,964
Net	13,731	12,612
Computer Equipment [Member]
Cost	34,442	34,870
Accumulated amortization	23,730	23,070
Furniture and Fixtures [Member]
Cost	1,432	1,262
Accumulated amortization	816	634
Leasehold Improvements [Member]
Cost	778	444
Accumulated amortization	290	260
Equipment Installed With Customers [Member]
Cost	1,289
Accumulated amortization	203
Asset under Construction [Member]
Cost	$ 829

XML

Note 18 - Income Taxes - Income Tax Loss Carryforwards Expiration Dates (Details) $ in Thousands	Jan. 31, 2020 USD ($)
Operating loss carryforwards	$ 55,401
Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards	1,609
Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards	43,642
Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	4,136
Domestic Tax Authority [Member]
Operating loss carryforwards	6,014
Tax Year 2021 [Member]
Operating loss carryforwards	585
Tax Year 2021 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2021 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards
Tax Year 2021 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	585
Tax Year 2021 [Member] | Domestic Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2022 [Member]
Operating loss carryforwards	509
Tax Year 2022 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2022 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards
Tax Year 2022 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	264
Tax Year 2022 [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Operating loss carryforwards	245
Tax Year 2023 [Member]
Operating loss carryforwards	950
Tax Year 2023 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2023 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards	651
Tax Year 2023 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	46
Tax Year 2023 [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Operating loss carryforwards	253
Tax Year 2024 [Member]
Operating loss carryforwards	542
Tax Year 2024 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2024 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards	126
Tax Year 2024 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	171
Tax Year 2024 [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Operating loss carryforwards	245
Tax Year 2025 [Member]
Operating loss carryforwards	245
Tax Year 2025 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards
Tax Year 2025 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards
Tax Year 2025 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards
Tax Year 2025 [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Operating loss carryforwards	245
After Tax Year 2025 [Member]
Operating loss carryforwards	52,570
After Tax Year 2025 [Member] | Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Operating loss carryforwards	1,609
After Tax Year 2025 [Member] | Foreign Tax Authority [Member] | EMEA Income Tax Authority [Member]
Operating loss carryforwards	42,865
After Tax Year 2025 [Member] | Foreign Tax Authority [Member] | Asia Pacific Income Tax Authority [Member]
Operating loss carryforwards	3,070
After Tax Year 2025 [Member] | Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Operating loss carryforwards	$ 5,026

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Note 19 - Contract Balances, Performance Obligations and Contract Costs - Changes in Deferred Revenue and Contract Assets (Details) - USD ($) $ in Thousands		12 Months Ended
	Feb. 01, 2018	Jan. 31, 2020	Jan. 31, 2019
Balance	$ 32,113	$ 35,091	$ 32,113
Recognition of previously deferred revenue		(30,580)	(27,252)
Deferral of revenue		37,408	29,423
Increases from business combinations, net		551	1,789
Effect of movements in foreign exchange		(407)	(982)
Balance		42,063	35,091
Current		41,143	34,236
Long-term		920
Balance
Adjustment for adoption of ASC 606	495
Balance at February 1, 2018	$ 495	812	495
Transfers to trade receivables from contract assets		(490)	(266)
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to trade receivables		791	606
Effect of movements in foreign exchange		(6)	(23)
Balance		$ 1,107	$ 812

XML

Note 11 - Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Accrued compensation and benefits	$ 20,613	$ 16,771
Accrued professional fees	1,010	1,137
Other accrued liabilities	13,253	11,484
	$ 34,876	$ 29,392

XML

Note 1 - Description of the Business

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

Note

1

- Description of the Business

The Descartes Systems Group Inc. (“Descartes,” “Company,” “our” or “we”) is a provider of global logistics technology solutions. Customers use our modular, software-as-a-service (“SaaS”) and data solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in a large, collaborative multi-modal logistics community. Our pricing model provides our customers with flexibility in purchasing our solutions either on a subscription, transactional or perpetual license basis. Our primary focus is on serving transportation providers (air, ocean and truck modes), logistics service providers (including

third

-party logistics providers, freight forwarders and customs brokers) and distribution-intensive companies for which logistics is either a key or a defining part of their own product or service offering, or for which our solutions can provide an opportunity to reduce costs, improve service levels, or support growth by optimizing the use of assets and information.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Net income	$ 36,997	$ 31,277	$ 26,879
Other comprehensive income (loss):
Foreign currency translation adjustment, net of income tax expense (recovery) of ($132) for the year ended January 31, 2020 (January 31, 2019 – ($44); January 31, 2018 – $255)	(743)	(9,949)	17,527
Total other comprehensive income (loss)	(743)	(9,949)	17,527
COMPREHENSIVE INCOME	$ 36,254	$ 21,328	$ 44,406

XML

Document And Entity Information	12 Months Ended
	Jan. 31, 2020 shares
Document Information [Line Items]
Entity Registrant Name	DESCARTES SYSTEMS GROUP INC
Entity Central Index Key	0001050140
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)	84,156,316
Document Type	40-F
Document Period End Date	Jan. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Note 14 - Commitments, Contingencies and Guarantees

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

14

- Commitments, Contingencies and Guarantees

Commitments

As described in Note

2

to these consolidated financial statements, we maintain deferred share unit (“DSU”) and cash-settled restricted share unit (“CRSU”) plans for our directors and employees. Any payments made pursuant to these plans are settled in cash. For DSUs and CRSUs, the units vest over time and the liability recognized at any given consolidated balance sheet date reflects only those units vested at that date that have

not

yet been settled in cash. As such, we had an unrecognized aggregate liability for the unvested CRSUs and DSUs of

$1.1

million and

nil,

respectively, at

January 31, 2020.

The ultimate liability for any payment of DSUs and CRSUs is dependent on the trading price of our common shares. To partially offset our exposure to fluctuations in our stock price, we have entered into equity derivative contracts, including floating-rate equity forwards. As at

January 31, 2020,

we had equity derivatives for

251,422

Descartes common shares and a DSU liability for

251,422

Descartes common shares, resulting in minimal net exposure resulting from changes to our share price

.

Contingencies

We are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. The consequences of these matters are

not

presently determinable but, in the opinion of management after consulting with legal counsel, the ultimate aggregate potential liability is

not

currently expected to have a material effect on our results of operations or financial position.

Product Warranties

In the normal course of operations, we provide our customers with product warranties relating to the performance of our hardware, software and services. To date, we have

not

encountered material costs as a result of such obligations and have

not

accrued any liabilities related to such obligations in our consolidated financial statements.

Business combination agreements

In respect of our acquisitions of PinPoint and CORE, up to

$10.1

million in cash

may

become payable if certain revenue performance targets are met in the

two

years following the acquisition. A balance of

$1.9

million is accrued related to the fair value of this contingent consideration as at

January 31, 2020.

Guarantees

In the normal course of business, we enter into a variety of agreements that

may

contain features that meet the definition of a guarantee under ASC Topic

460,

“Guarantees”. The following lists our significant guarantees:

Intellectual property indemnification obligations

We provide indemnifications of varying scope to our customers against claims of intellectual property infringement made by

third

parties arising from the use of our products. In the event of such a claim, we are generally obligated to defend our customers against the claim and we are liable to pay damages and costs assessed against our customers that are payable as part of a final judgment or settlement. These intellectual property infringement indemnification clauses are

not

generally subject to any dollar limits and remain in force for the term of our license agreement with our customer, which license terms are typically perpetual. Historically, we have

not

encountered material costs as a result of such indemnification obligations.

Other indemnification agreements

In the normal course of operations, we enter into various agreements that provide general indemnities. These indemnities typically arise in connection with purchases and sales of assets, securities offerings or buy-backs, service contracts, administration of employee benefit plans, retention of officers and directors, membership agreements, customer financing transactions, and leasing transactions. In addition, our corporate by-laws provide for the indemnification of our directors and officers. Each of these indemnities requires us, in certain circumstances, to compensate the counterparties for various costs resulting from breaches of representations or obligations under such arrangements, or as a result of

third

party claims that

may

be suffered by the counterparty as a consequence of the transaction. We believe that the likelihood that we could incur significant liability under these obligations is remote. Historically, we have

not

made any significant payments under such indemnities.

In evaluating estimated losses for the guarantees or indemnities described above, we consider such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. We are unable to make a reasonable estimate of the maximum potential amount payable under such guarantees or indemnities as many of these arrangements do

not

specify a maximum potential dollar exposure or time limitation. The amount also depends on the outcome of future events and conditions, which cannot be predicted. Given the foregoing, to date, we have

not

accrued any liability in our consolidated financial statements for the guarantees or indemnities described above.

XML

Note 18 - Income Taxes

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

18

- Income Taxes

Income before income taxes is earned in the following tax jurisdictions:

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Canada	19,557	16,715	17,964
United States	19,962	11,077	6,203
Other countries	8,516	11,718	10,581
	48,035	39,510	34,748

Income tax expense is incurred in the following jurisdictions:

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Current income tax expense
Canada	1,020		3,037		1,243
United States	3,496		1,298		494
Other countries	779		1,707		4,835
	5,295		6,042		6,572
Deferred income tax expense (recovery)
Canada	5,008		2,531		2,051
United States	1,390		67		1,876
Other countries	(655	)	(407	)	(2,630	)
	5,743		2,191		1,297
	11,038		8,233		7,869

Income tax expense for

2020,

2019

and

2018

was

23%,

21%

and

23%

of income before income taxes, respectively, with current income tax expense being

11%,

15%

and

19%

of income before income taxes, respectively.

On

December 22, 2017,

the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). Although the legislative changes contained in the Tax Act are extensive and the interpretation of several aspects of the Tax Act are still unclear, we recorded an income tax benefit of

$0.7

million in

2018

to reflect the reduced U.S. tax rate from

35%

to

21%

and other effects of the Tax Act. There was

no

material adjustment to income tax expense in

2019

or

2020

related to the Tax Act.

Current income tax expense decreased in

2020

compared to

2019

primarily due to utilization of tax attributes acquired in

2020.

Current income tax expense decreased in

2019

compared to

2018

primarily due to benefits recorded in

2019

from the completion of certain prior year tax audits partially offset by higher current income tax expense as a result of the higher pre-tax income generated in

2019.

Deferred income tax expense increased in

2020

compared to

2019

primarily due to utilization of tax attributes acquired in

2020.

Deferred income tax expense increased in

2019

compared to

2018

primarily due to the adoption of Accounting Standards Update

2016

-

16

during

2019.

The components of the deferred income tax assets and liabilities are as follows:

	January 31,		January 31,
	2020		2019
Assets
Accrued liabilities not currently deductible	14,838		11,483
Accumulated net operating losses	10,579		11,081
Difference between tax and accounting basis of property and equipment	33,929		–
Research and development and other tax credits and expenses	756		911
Total deferred income tax assets	60,102		23,475
Liabilities
Difference between tax and accounting basis of intangible assets	(41,381	)	(23,974	)
Difference between tax and accounting basis of property and equipment	–		(909	)
Other temporary differences	(1,716	)	(574	)
Total deferred income tax liabilities	(43,097	)	(25,457	)
Net deferred income taxes	17,005		(1,982	)
Valuation allowance	(10,470	)	(9,927	)
Net deferred income taxes, net of valuation allowance	6,535		(11,909	)

As at

January 31, 2020,

we have

not

accrued for foreign withholding taxes and Canadian income taxes applicable to approximately

$381.3

million of unremitted earnings of subsidiaries operating outside of Canada. These earnings, which we consider to be invested indefinitely, will become subject to these taxes if and when they are remitted as dividends or if we sell our stock in the subsidiaries. If we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will

no

longer be indefinitely invested outside Canada.

The provision (recovery) for income taxes varies from the expected provision at the statutory rates for the reasons detailed in the table below:

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Income before income taxes	48,033		39,510		34,748
Combined basic Canadian statutory rates	26.5	%	26.5	%	26.5	%
Income tax expense based on the above rates	12,729		10,470		9,207
Increase (decrease) in income taxes resulting from:
Permanent differences including amortization of intangible assets	(673	)	(133	)	(1,870	)
Effect of differences between Canadian and foreign tax rates	(274	)	(172	)	595
Effect of rate changes on current year timing differences	(609	)	(245	)	(571	)
Adjustments relating to previous periods	94		(973	)	(152	)
Increase (decrease) in accruals for uncertain tax positions	(1,042	)	(515	)	1,954
Valuation allowance	692		(344	)	(1,564	)
Stock based compensation	352		231		(135	)
Deferred tax charges	–		–		179
Other, including foreign exchange	(231	)	(86	)	226
Income tax expense	11,038		8,233		7,869

We have income tax loss carry forwards which expire as follows:

Expiry year	Canada	United States	EMEA	Asia Pacific	Total
2021	–	–	–	585	585
2022	–	245	–	264	509
2023	–	253	651	46	950
2024	–	245	126	171	542
2025	–	245	–	–	245
Thereafter	1,609	5,026	42,865	3,070	52,570
	1,609	6,014	43,642	4,136	55,401

The following is a tabular reconciliation of the total estimated liability associated with uncertain tax positions taken:

	January 31,		January 31,
	2020		2019
Liability, beginning of year	7,824		8,977
Gross increases – current period	139		493
Lapsing due to statutes of limitations	(1,313	)	(1,646	)
Liability, end of year	6,650		7,824

We have identified accruals of

$6.7

million with respect to uncertain tax positions as at

January 31, 2020.

It is possible that these accruals for uncertain tax positions will

not

be required in which case up to

$6.5

million of the recorded liability will decrease the effective tax rate in future years if this liability is reversed. We believe that it is reasonably possible that

$0.3

million of the uncertain tax positions could decrease tax expense in the next

12

months relating primarily to tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions.

We recognize accrued interest and penalties related to uncertain tax positions as a current tax expense. As at

January 31, 2020

and

January 31, 2019,

the unrecognized tax positions have resulted in

no

material liability for estimated interest and penalties.

Descartes and our subsidiaries file their tax returns as prescribed by the tax laws of the jurisdictions within which they operate. We are

no

longer subject to income tax examinations by tax authorities in our major tax jurisdictions as follows:

	Years No Longer Subject to Audit
Tax Jurisdiction
United States Federal	2016 and prior
Canada	2018 and prior
United Kingdom	2016 and prior
Sweden	2013 and prior
Norway	2018 and prior
Netherlands	2014 and prior
Belgium	2015 and prior

XML

Note 2 - Basis of Presentation

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Note

2

– Basis of Presentation

The accompanying consolidated financial statements are presented in United States (“US”) dollars and are prepared in accordance with generally accepted accounting principles in the US (“GAAP”) and the rules and regulations of the Canadian Securities Administrators and the US Securities and Exchange Commission (“SEC”) for the preparation of consolidated financial statements.

Our fiscal year commences on

February 1

st

of each year and ends on

January 31

st

of the following year. Our fiscal year, which ends on

January 31, 2020,

is referred to as the “current fiscal year”, “fiscal

2020”,

“2020”

or using similar words. Our previous fiscal year, which ended on

January 31, 2019,

is referred to as the “previous fiscal year”, “fiscal

2019”,

“2019”

or using similar words. Other fiscal years are referenced by the applicable year during which the fiscal year ends. For example,

“2021”

refers to the annual period ending

January 31, 2021

and the “fourth quarter of

2021”

refers to the quarter ending

January 31, 2021.

Basis of consolidation

The consolidated financial statements include the financial statements of Descartes and our wholly-owned subsidiaries. We do

not

have any variable interests in variable interest entities. All intercompany accounts and transactions have been eliminated during consolidation.

Foreign currency translation

The US dollar is the presentation currency of the Company. Assets and liabilities of our subsidiaries are translated into US dollars at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated into US dollars using daily exchange rates. Translation adjustments resulting from this process are accumulated in other comprehensive income (loss) as a separate component of shareholders’ equity. On substantial liquidation of a foreign operation, the component of accumulated other comprehensive income relating to that particular foreign operation is recognized in the consolidated statements of operations.

The functional currency of each of our entities is the local currency in which they operate. Transactions incurred in currencies other than the local currency of an entity are converted to the local currency at the transaction date. Monetary assets and liabilities denominated in foreign currencies are re-measured into the local currency at the exchange rate in effect at the balance sheet date. All foreign currency re-measurement gains and losses are included in net income. For the year ended

January 31, 2020,

foreign currency re-measurement loss of

$0.6

million was included in net income (

January 31, 2019 –

loss of

$0.4

million;

January 31, 2018 –

loss of

$0.4

million).

Use of estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying note disclosures. Although these estimates and assumptions are based on management’s best knowledge of current events, actual results

may

be different from the estimates. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources.

Estimates and assumptions are used when accounting for items such as allocations of the purchase price and the fair value of net assets acquired in business combination transactions, useful lives of intangible assets and property and equipment, revenue related estimates including determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds, allowance for doubtful accounts, collectability of other receivables, provisions for excess or obsolete inventory, determining the Company’s incremental borrowing rate, restructuring accruals, fair value of stock-based compensation, assumptions embodied in the valuation of assets for impairment assessment, accounting for income taxes, valuation allowances for deferred income tax assets, realization of investment tax credits, uncertain tax positions and recognition of contingencies.

Cash

Cash included highly liquid short-term deposits with original maturities of

three

months or less.

Financial instruments

Fair value of financial instruments

The carrying amounts of the Company’s cash, accounts receivable (net), accounts payable, accrued liabilities and income taxes payable approximate their fair value due to their short maturities.

Derivative instruments

We use derivative instruments to manage equity risk relating to our share-based compensation. We account for these instruments in accordance with ASC Topic

815

“Derivatives and Hedging” (Topic

815

), which requires that every derivative instrument be recorded on the balance sheet as either an asset or a liability measured at its fair value as of the reporting date. We do

not

designate our derivative instruments as hedges and as such the changes in our derivative financial instruments' fair values are recognized in earnings. The fair value of equity contract derivatives is determined utilizing a valuation model based on the quoted market value of our common shares at the balance sheet date.

Foreign exchange risk

We are exposed to foreign exchange risk because the Company transacts business in currencies other than the US dollar. Accordingly, our results are affected, and

may

be affected in the future, by exchange rate fluctuations of the US dollar relative to the Canadian dollar, euro, British pound sterling and various other foreign currencies.

Interest rate risk

Depending on the type of advance under the available facilities, interest on such borrowings will be charged based on either i) Canada or US prime rate; or ii) Banker’s Acceptance (BA); or iii) LIBOR. We are exposed to interest rate fluctuations to the extent that we borrow on our credit facility.

Credit risk

We are exposed to credit risk through our invested cash and accounts receivable. We hold our cash with reputable financial institutions. The lack of concentration of accounts receivable from a single customer and the dispersion of customers among industries and geographical locations mitigate our credit risk.

We do

not

use any type of speculative financial instruments, including but

not

limited to foreign exchange contracts, futures, swaps and option agreements, to manage our foreign exchange or interest rate risks. In addition, we do

not

hold or issue financial instruments for trading purposes.

Equity risk

We are exposed to equity risk through certain share-based compensation expenses that are fair valued at the balance sheet date. The Company enters into equity derivative contracts including floating-rate equity forwards to partially offset the potential fluctuations of certain future share-based compensation expenses. The Company does

not

hold derivatives for speculative purposes.

Allowance for doubtful accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make their required payments. Specifically, we consider the age of the receivables, customers’ payment history, historical write-offs, the creditworthiness of the customer, and current economic trends among other factors. Accounts receivable are written off, and the associated allowance is eliminated, if it is determined that the specific balance is

no

longer collectible. The allowance is maintained for

100%

of all accounts deemed to be uncollectible and, for those receivables

not

specifically identified as uncollectible, an allowance is maintained for a specific percentage of those receivables based upon the aging of accounts, our historical collection experience and current economic expectations. To date, the actual losses have been within our expectations.

No

single customer accounted for more than

10%

of the accounts receivable balance as of

January 31, 2020

and

2019.

Inventory

Finished goods inventories are stated at the lower of cost and net realizable value. The cost of finished goods is determined on the basis of average cost of units.

The valuation of inventory, including the determination of obsolete or excess inventory, requires management to estimate the future demand for our products within specified time horizons. We perform an assessment of inventory which includes a review of, among other factors, demand requirements, product life cycle and development plans, product pricing and quality issues. If the demand for our products indicates we are

no

longer able to sell inventories above cost or at all, we write down inventory to market or excess inventory is written off.

Impairment of long-lived assets

We test long-lived assets or asset groups, such as property and equipment and finite life intangible assets, for recoverability when events or changes in circumstances indicate that there

may

be impairment. Circumstances which could trigger a review include, but are

not

limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset or asset group; and a current expectation that the asset or asset group will more likely than

not

be sold or disposed of before the end of its estimated useful life. An impairment loss is recognized when the estimate of undiscounted future cash flows generated by such asset or asset group is less than the carrying amount. Measurement of the impairment loss is based on the present value of the expected future cash flows.

No

impairment of long-lived assets has been identified or recorded in our consolidated statements of operations for any of the fiscal years presented.

Goodwill and intangible assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is

not

subject to amortization.

We test for impairment of goodwill at least annually on

October 31

st

of each year and at any other time if any event occurs or circumstances change that would more likely than

not

reduce our fair value below our reporting unit’s carrying amount. Our operations are analyzed by management and our chief operating decision maker as being part of a single industry segment providing logistics technology solutions. Accordingly, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. We completed the qualitative assessment during our

third

quarter of

2020

and concluded that it was more likely than

not

that the fair value of the goodwill was greater than the carrying value. As a result,

no

impairment of goodwill was recorded in fiscal

2020

(

no

impairments were recorded for fiscal

2019

or fiscal

2018

).

We perform further quarterly analysis of whether any event has occurred that would more likely than

not

reduce our fair value below our reporting unit’s carrying amount and, if so, we perform a goodwill impairment test between the annual date. Any impairment adjustment is recognized as an expense in the period that the adjustment is identified.

Intangible assets related to our acquisitions are recorded at their fair value at the acquisition date. Intangible assets include customer agreements and relationships, non-compete covenants, existing technologies and trade names. Intangible assets are amortized on a straight-line basis over their estimated useful lives. We write down intangible asset or asset groups with a finite life to fair value when the related undiscounted cash flows are

not

expected to allow for recovery of the carrying value. Fair value of intangible asset or asset groups is determined by discounting the expected related future cash flows.

Amortization of our intangible assets is generally recorded at the following rates:

Customer agreements and relationships	Straight-line over three to twenty years
Existing technologies	Straight-line over two to twelve years
Trade names	Straight-line over one to fifteen years
Non-compete covenants	Straight-line over two to twelve years

Property and equipment

Property and equipment is recorded at cost. Depreciation of our property and equipment is generally recorded at the following rates:

Computer equipment and software	30% declining balance
Furniture and fixtures	20% declining balance
Leasehold improvements	Straight-line over lesser of useful life or term of lease

Fully depreciated property and equipment are removed from the balance sheet when they are

no

longer in use.

Leases

At the inception of a contract we assess whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We have building lease agreements with lease and non-lease components, which are accounted for separately. For computer equipment and vehicle leases, we have elected to account for the lease and non-lease components as a single lease component.

We recognize a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The ROU asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentives received. The assets are depreciated to the earlier of the end of the useful life of the ROU asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option.

The lease liability is initially measured at the present value of the future lease payments at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU asset has been reduced to zero.

We have elected to apply the practical expedient

not

to recognize ROU assets and lease liabilities for short-term leases that have a lease term of

12

months or less. The lease payments associated with these leases is recognized as an expense on a straight-line basis over the lease term.

Revenue recognition

Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts that can include various combinations of goods and services, which are generally capable of being distinct within the context of the contract and accounted for as separate performance obligations. A product or service is distinct if the customer can benefit from it on its own or together with other readily available resources and the promise to transfer the good or service is separately identifiable from other promises in the contractual arrangement with the customer. Non-distinct goods and services are combined with other goods or services until they are distinct as a bundle and therefore form a single performance obligation.

The consideration (including any discounts) is allocated between separate goods and services in a bundle on a relative basis based on their SSP. The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. In addition to these general policies, the specific revenue recognition policies for each major category of revenue are included below.

License

Revenues for distinct licenses for on-premise or hosted software are derived from perpetual licenses granted to our customers for the right to use our software products. License revenues are billed on the effective date of a contract and revenue is recognized at the point in time when the customer is provided control of the respective software.

Services

Services, which allow customers to access hosted software over a contract term without taking possession of the software, is provided on a subscription and/or transactional fee basis. Revenues from hosted software subscriptions and maintenance are typically billed annually in advance and revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Transaction fees are typically billed and recognized as revenue on a monthly basis based on the customer usage for that period.

Professional Services & Other

Professional services are comprised of consulting, implementation and training services related to our services and products. These services are generally considered to be separate performance obligations as they provide incremental benefit to customers beyond providing access to the software. Professional services are typically billed on a time and materials basis and revenue is recognized over time as the services are performed. For professional services contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Revenue related to customer reimbursement of travel related expenses is recognized on a gross basis as incurred. Other revenues include hardware revenue and is generally billed, and revenue is recognized, when control of the product has transferred under the terms of an enforceable contract.

Costs to obtain a contract with a customer

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the costs to be recoverable. We have determined that certain sales incentive programs meet the requirements to be capitalized. These capitalized costs are amortized consistent with the pattern of transfer to the customer for the goods and services to which the asset relates, including specifically identifiable contract renewals. The period of benefit including renewals is determined to be generally between

four

to

six

years, taking into consideration our customer contracts, our technology, renewal behaviors and other factors. Amortization of the asset is included in sales and marketing expenses in the consolidated statements of operations. Applying the practical expedient, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is

one

year or less.

Contract assets and liabilities

The payment terms and conditions in our customer contracts

may

vary from the timing of revenue recognition. In some cases, customers pay in advance of delivery of products or services; in other cases, payment is due as services are performed or in arrears following delivery. Timing differences between revenue recognition and invoicing result in unbilled receivables, contract assets, or deferred revenue. Receivables are accrued when revenue is recognized prior to invoicing but the right to payment is unconditional (i.e., only the passage of time is required). This occurs most commonly when software term licenses recognized at a point in time are paid for periodically over the license term. Contract assets result when amounts allocated to distinct performance obligations are recognized when or as control of a product or service is transferred to the customer, but invoicing is contingent on performance of other performance obligations or on completion of contractual milestones and is presented as other receivables. Contract assets are transferred to receivables when the rights become unconditional, typically upon invoicing of the related performance obligations in the contract or upon achieving the requisite project milestone.

Contract liabilities primarily relate to the advance consideration received from customers and is presented as deferred revenue.

Deferred revenue results from customer payments in advance of our satisfaction of the associated performance obligation(s) and relates primarily to prepaid maintenance or other recurring services. Deferred revenues are relieved as revenue is recognized. Contract assets and deferred revenues are reported on a contract-by-contract basis at the end of each reporting period.

Revenue judgments and estimates

Our contracts with customers often include promises to transfer multiple goods and services to a customer. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately versus together

may

require judgment. Judgment is also needed in assessing the ability to collect the corresponding receivables.

Significant judgment is required to determine the SSP for each distinct performance obligation, which is needed to determine whether there is a discount that needs to be allocated based on the relative SSP of the various goods and services. In order to determine the SSP of its promised goods or services, we conduct a regular analysis to determine whether various goods or services have an observable standalone selling price. If the Company does

not

have an observable SSP for a particular good or service, then SSP for that particular good or service is estimated using reasonably available information and maximizing observable inputs with approaches including historical pricing, cost plus a margin, adjusted market assessment, and the residual approach.

Research and development costs

To date, we have

not

capitalized any costs related to research and development of our computer software products. Costs incurred between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers have historically been expensed as they have

not

been significant.

Stock-based compensation plans

Stock Options

We maintain stock option plans for non-employee directors, officers, employees and other service providers. Options to purchase our common shares are granted at an exercise price equal to the fair market value of our common shares as of the date of grant. This fair market value is determined using the closing price of our common shares on the TSX on the day immediately preceding the date of the grant.

Employee stock options generally vest over a

five

-year period starting from the grant date and expire

seven

years from the grant date. Non-employee directors’ and officers’ stock options generally have quarterly vesting over a

three

to

five

-year period. We issue new shares from treasury upon the exercise of a stock option.

The fair value of employee stock option grants that are ultimately expected to vest are amortized to expense in our consolidated statement of operations based on the straight-line attribution method. The fair value of stock option grants is calculated using the Black-Scholes Merton option-pricing model. Expected volatility is based on historical volatility of our common stock and other factors. The risk-free interest rates are based on Government of Canada average bond yields for a period consistent with the expected life of the option in effect at the time of the grant. The expected option life is based on the historical life of our granted options and other factors.

Effective as of

February 1, 2017,

the Company adopted a change in accounting policy in accordance with ASU

2016

-

09

to account for forfeitures as they occur. The change was applied on a modified retrospective basis, and

no

prior periods were restated as a result of this change in accounting policy.

Performance & Restricted Share Units

We maintain a performance and restricted share unit plan pursuant to which certain of our officers are eligible to receive grants of performance share units (“PSUs”) and restricted share units (“RSUs”).

PSUs vest at the end of a

three

-year performance period. The ultimate number of PSUs that vest is based on the total shareholder return (“TSR”) of our Company relative to the TSR of companies comprising a peer index group. TSR is calculated based on the weighted-average closing price of shares for the

five

trading days preceding the beginning and end of the performance period. The fair value of PSUs is expensed to stock-based compensation expense over the vesting period. PSUs expire

ten

years from the grant date. New shares are issued from treasury upon the redemption of a PSU.

PSUs are measured at fair value estimated using a Monte Carlo Simulation approach. Expected volatility is based on historical volatility of our common stock and other factors. The risk-free interest rates are based on the Government of Canada average bond yields for a period consistent with the expected life of the PSUs at the time of the grant. The expected PSU life is based on the historical life of our stock options and other factors.

RSUs vest annually over a

three

-year period starting from the grant date and expire

ten

years from the grant date. We issue new shares from treasury upon the redemption of an RSU.

RSUs are measured at fair value based on the closing price of our common shares for the day preceding the date of the grant and will be expensed to stock-based compensation expense over the vesting period.

Deferred Share Unit Plan

Our board of directors adopted a deferred share unit plan effective as of

June 28, 2004,

pursuant to which non-employee directors are eligible to receive grants of deferred share units (“DSUs”), each of which has an initial value equal to the weighted-average closing price of our common shares for the

five

trading days preceding the grant date. The plan allows each director to choose to receive, in the form of DSUs, all,

none

or a percentage of the eligible director’s fees which would otherwise be payable in cash. If a director has invested less than the minimum amount of equity in Descartes, as prescribed from time to time by the board of directors, then the director must take at least

50%

of the base annual fee for serving as a director in the form of DSUs. Each DSU fully vests upon award but is distributed only when the director ceases to be a member of the board of directors. Vested units are settled in cash based on our common share price when conversion takes place. Fair value of the liability is based on the closing price of our common shares at the balance sheet date.

Cash-Settled Restricted Share Unit Plan

Our board of directors adopted a cash-settled restricted share unit plan effective as of

May 23, 2007,

pursuant to which certain of our employees and non-employee directors are eligible to receive grants of cash-settled restricted share units (“CRSUs”), each of which has an initial value equal to the weighted-average closing price of our common shares for the

five

trading days preceding the date of the grant. The CRSUs generally vest based on continued employment and have annual vesting over

three

to

five

-year periods. Vested units are settled in cash based on our common share price when conversion takes place, which is within

30

days following a vesting date and in any event prior to

December 31

st

of the calendar year in which a vesting date occurs. Fair value of the liability is based on the closing price of our common shares at the balance sheet date.

Business combinations

We apply the provisions of ASC Topic

805,

“Business Combinations” (Topic

805

), in the accounting for our acquisitions. It requires us to recognize separately from goodwill, the assets acquired and the liabilities assumed at their acquisition date fair values including certain identifiable intangible assets (other than goodwill). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. The determination of the acquisition date fair value of the intangible assets acquired required us to make significant estimates and assumptions regarding projected revenues, earnings before interest, taxes, depreciation and amortization, technology migration rates, customer attrition rates and discount rates.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which

may

be up to

one

year from the acquisition date, we

may

record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded to our consolidated statement of operations.

Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as termination and exit costs pursuant to ASC Topic

420,

“Exit or Disposal Cost Obligations” (Topic

420

) and are accounted for separately from the business combination.

For a given acquisition, we generally identify certain pre-acquisition contingencies as of the acquisition date and

may

extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts.

If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations.

Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did

not

exist at the acquisition date, are recorded in our provision for income taxes in our consolidated statement of operations.

Income taxes

We use the liability method of income tax allocation to account for income taxes. Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than

not

that a deferred tax asset will

not

be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, our history of losses for tax purposes, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense.

We evaluate our uncertain tax positions by using a

two

-step approach to recognize and measure uncertain tax positions and provisions for income taxes. The

first

step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than

not,

based solely on the technical merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The

second

step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than

not

to be realized. The tax position is derecognized when it is

no

longer more likely than

not

that the position will be sustained on audit. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that give rise to a revision become known.

Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued during the period. The treasury stock method is used to compute the dilutive effect of stock-based compensation.

Recently adopted accounting pronouncements

In

May 2014,

the FASB issued Accounting Standards Update

2014

-

09,

“Revenue from Contracts with Customers” (“ASC

606”

). ASC

606

supersedes the revenue recognition requirements in ASC Topic

605,

“Revenue Recognition” ("ASC

605"

) and nearly all other existing revenue recognition guidance under US GAAP. The core principle of ASC

606

is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC

606

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017,

which is our fiscal year that began on

February 1, 2018 (

fiscal

2019

). The Company has adopted ASC

606

in the

first

quarter of fiscal

2019

using the cumulative effect method and therefore the comparative information has

not

been restated and continues to be reported under ASC

605.

The details of the significant changes and quantitative impact of the changes are set out below.

Term-based licenses

Under ASC

605,

revenue attributable to term-based arrangements was recognized ratably over the term of the arrangement because Vendor Specific Objective Evidence did

not

exist for the undelivered maintenance and support element of the arrangement. Under ASC

606,

the Company has deemed the licenses to be distinct from other performance obligations. Revenue allocated to the distinct license based on the SSP is recognized at the time that both the right-to-use the software has commenced for the term and the software has been made available to the customer.

Costs to obtain a contract

Under the Company’s previous accounting policies, the Company generally expensed commission costs paid to employees or

third

parties to obtain customer contracts as incurred. Under ASC

606,

the Company allocates these incremental commission costs to the various performance obligations to which they relate using the relative selling price allocation for bundled commissions. For performance obligations

not

delivered upfront, the allocated commissions are deferred and amortized over the pattern of transfer of the related performance obligation. If the expected amortization period for all performance obligations in a contract with a customer is

one

year or less, the commission fee is expensed when incurred. Capitalized costs to obtain a contract are included in other long-term assets on the consolidated balance sheet.

The adoption of ASC

606

resulted in an increase to contract assets of

$0.5

million, an increase to other long-term assets of

$4.2

million, an increase to the liability for deferred income taxes of

$1.1

million and a decrease to accumulated deficit of

$3.6

million, as of

February 1, 2018.

In

October 2016,

the FASB issued Accounting Standards Update

2016

-

16,

“Income Taxes (Topic

740

): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU

2016

-

16”

). ASU

2016

-

16

requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU

2016

-

16

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017,

which is our fiscal year that began on

February 1, 2018 (

fiscal

2019

). The Company adopted this guidance in the

first

quarter of fiscal

2019.

As a result of adoption, the balance of unamortized deferred tax charges was written-off and previously unrecognized deferred income tax assets in certain jurisdictions were recognized. The change was applied on a modified retrospective basis, and

no

prior periods were restated. Accordingly, we have recognized a decrease of

$4.0

million in accumulated deficit as a result of the adoption of this change in accounting policy, as of

February 1, 2018.

In

February 2016,

the FASB issued Accounting Standards Update

2016

-

02,

“Leases (Topic

842

)” (“ASU

2016

-

02”

) and issued subsequent amendments to the initial guidance during

2018,

collectively referred to as “ASC

842”.

These updates supersede the lease guidance in ASC Topic

840,

“Leases” (“ASC

840”

) and require the recognition of lease assets and lease liabilities by lessees for most leases previously classified as operating leases under ASC Topic

840.

Leases will continue to be classified as either operating or finance. ASC

842

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2018,

which is our fiscal year that began on

February 1, 2019 (

fiscal

2020

). The Company adopted ASC

842

as of

February 1, 2019

using the cumulative effect method and therefore the comparative information has

not

been restated and continues to be reported under ASC Topic

840.

The adoption of ASC

842

resulted in an increase to ROU assets and lease liabilities of

$

10.4

million as of

February 1, 2019.

The adoption of ASC

842

did

not

have a material impact on either our consolidated statement of operations or our consolidated statement of cash flows.

On adoption of ASC

842,

we have elected to apply the practical expedient to carry forward our current assessments of whether a contract contains a lease, lease classification, and amounts capitalized as initial direct costs. In addition, we have elected the hindsight practical expedient to determine lease term for existing leases.

Recently issued accounting pronouncements

In

June 2016,

the FASB issued Accounting Standards Update

2016

-

13,

“Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments” (“ASU

2016

-

13”

) and issued subsequent amendments to the initial guidance during the

2019

calendar year, collectively referred to as “ASC

326”.

ASC

326

requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASC

326

replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. These changes will result in earlier recognition of credit losses. ASC

326

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance using the cumulative effect method resulting in an adjustment to retained earnings in the

first

quarter of fiscal

2021

and will

not

restate comparative periods. We are currently implementing new credit loss models and updating our processes and controls in preparation for the adoption of ASC

326.

The effect on our consolidated financial statements is expected to largely depend on the composition and credit quality of our financial assets held at amortized cost and the economic conditions and forecasts at the time of adoption. The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

January 2017,

the FASB issued Accounting Standards Update

2017

-

04,

“Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment” (“ASU

2017

-

04”

). ASU

2017

-

04

simplifies how an entity is required to test goodwill for impairment. ASU

2017

-

04

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2021.

The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

August 2018,

the FASB issued Accounting Standards Update

2018

-

15,

“Intangibles – Goodwill and Other – Internal-Use Software (Subtopic

350

-

40

): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU

2018

-

15”

). ASU

2018

-

15

aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU

2018

-

15

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2021.

The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

December 2019,

the FASB issued Accounting Standards Update

2019

-

12,

“Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes” (“ASU

2019

-

12”

). ASU

2019

-

12

simplifies how an entity accounts for income taxes. ASU

2019

-

12

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2020,

which will be our fiscal year beginning

February 1, 2021 (

fiscal

2022

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2022.

We are currently evaluating the impact that the adoption will have on our results of operations, financial position and disclosures.

XML

Note 6 - Other Receivables

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Other Receivables [Text Block]

Note

6

– Other Receivables

	January 31,	January 31,
	2020	2019
Net working capital adjustments receivable from acquisitions	–	55
Other receivables	7,294	4,276
	7,294	4,331

Other receivables include receivables related to sales and use taxes, income taxes, non-trade receivables and contract assets. At

January 31, 2020,

nil

(

$0.1

million as at

January 31, 2019)

of the net working capital adjustments receivable from acquisitions is recoverable from amounts held in escrow related to the respective acquisitions.

XML

Note 10 - Goodwill

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Goodwill Disclosure [Text Block]

Note

10

– Goodwill

Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets acquired. The following table summarizes the changes in goodwill since

January 31, 2018:

	January 31,		January 31,
	2020		2019
Balance at beginning of year	378,178		350,148
Acquisition of Aljex	–		18,903
Acquisition of Velocity Mail	–		8,448
Acquisition of PinPoint	–		6,306
Acquisition of Visual Compliance	118,785		–
Acquisition of CORE	12,670		–
Acquisition of STEPcom	10,019		–
Acquisition of BestTransport	5,513		–
Adjustments on account of foreign exchange	(1,475	)	(5,627	)
Balance at end of year	523,690		378,178

XML

Note 8 - Property and Equipment (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Property, Plant and Equipment [Table Text Block]

	January 31,	January 31,
	2020	2019
Cost
Computer equipment and software	34,442	34,870
Furniture and fixtures	1,432	1,262
Leasehold improvements	778	444
Equipment installed with customers	1,289	–
Assets under construction	829	–
	38,770	36,576
Accumulated depreciation
Computer equipment and software	23,730	23,070
Furniture and fixtures	816	634
Leasehold improvements	290	260
Equipment installed with customers	203	–
	25,039	23,964
Net	13,731	12,612

XML

Note 3 - Acquisitions (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Visual Compliance		CORE		STEP- com		Best- Transport		Total
Purchase price consideration:
Cash, less cash acquired related to Visual Compliance ($170), CORE ($213), STEPcom ($2,700) and BestTransport ($507)	239,863		21,833		18,639		11,718		292,053
Common shares issued	9,045		–		–		–		9,045
Contingent consideration	–		1,450		–		–		1,450
Net working capital adjustments payable / (receivable)	1,147		62		250		–		1,459
	250,055		23,345		18,889		11,718		304,007
Allocated to:
Current assets, excluding cash acquired	6,403		689		1,470		815		9,377
Property and equipment	30		2,048		257		35		2,370
Deferred income tax asset	30,924		–		–		–		30,924
Right-of-use assets	1,188		68		232		194		1,682
Current liabilities	(840	)	(352	)	(874	)	(284	)	(2,350	)
Deferred revenue	(10,267	)	(278	)	(813	)	(9	)	(11,367	)
Lease obligations	(1,188	)	(68	)	(232	)	(194	)	(1,682	)
Deferred income tax liability	(282	)	(3,332	)	(2,316	)	(1,352	)	(7,282	)
Net tangible assets (liabilities) assumed	25,968		(1,225	)	(2,276	)	(795	)	21,672
Finite life intangible assets acquired:
Customer agreements and relationships	32,186		4,600		10,839		3,000		50,625
Existing technology	69,422		6,800		–		3,800		80,022
Trade names	528		200		102		50		880
Non-compete covenants	3,166		300		205		150		3,821
Goodwill	118,785		12,670		10,019		5,513		146,987
	250,055		23,345		18,889		11,718		304,007

	Aljex		Velocity Mail		PinPoint		Total
Purchase price consideration:
Cash, less cash acquired related to Aljex ($193), Velocity Mail (nil) and PinPoint ($769)	32,382		26,107		9,443		67,932
Common shares issued	–		–		1,536		1,536
Contingent consideration	–		–		714		714
Net working capital adjustments (receivable) / payable	(152	)	(102	)	36		(218	)
	32,230		26,005		11,729		69,964
Allocated to:
Current assets, excluding cash acquired	607		1,407		599		2,613
Other long-term assets	–		501		–		501
Current liabilities	(266	)	(81	)	(559	)	(906	)
Deferred revenue	(1,024	)	(70	)	(574	)	(1,668	)
Deferred income tax liability	(4,200	)	–		(2,077	)	(6,277	)
Net tangible (liabilities) assets assumed	(4,883	)	1,757		(2,611	)	(5,737	)
Finite life intangible assets acquired:
Customer agreements and relationships	5,300		7,800		7,758		20,858
Existing technology	12,400		7,600		–		20,000
Tradenames	280		100		207		587
Non-compete covenants	230		300		69		599
Goodwill	18,903		8,448		6,306		33,657
	32,230		26,005		11,729		69,964

	ShipRush		PCSTrac		MacroPoint		Total
Purchase price consideration:
Cash, less cash acquired related to ShipRush ($253), PCSTrac (nil) and MacroPoint ($2,098)	14,198		11,492		86,177		111,867
Common shares issued	–		–		20,000		20,000
Contingent consideration	1,233		–		–		1,233
Net working capital adjustments payable	88		40		163		291
	15,519		11,532		106,340		133,391
Allocated to:
Current assets, excluding cash acquired	461		467		2,127		3,055
Current liabilities	(266	)	(10	)	(1,693	)	(1,969	)
Deferred revenue	(609	)	–		(5,787	)	(6,396	)
Net tangible (liabilities) assets assumed	(414	)	457		(5,353	)	(5,310	)
Finite life intangible assets acquired:
Customer agreements and relationships	2,400		1,850		26,030		30,280
Existing technology	4,710		3,270		17,170		25,150
In-process research and development	–		–		290		290
Tradenames	120		60		570		750
Non-compete covenants	100		80		2,420		2,600
Goodwill	8,603		5,815		65,213		79,631
	15,519		11,532		106,340		133,391

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

	Visual Compliance (in years)	CORE (in years)	STEPcom (in years)	Best Transport (in years)
Customer agreements and relationships	14	13	9	12
Existing technology	7	6	N/A	6
Trade names	5	8	3	3
Non-compete covenants	5	5	3	2

	Aljex (in years)	Velocity Mail (in years)	PinPoint (in years)
Customer agreements and relationships	13	12	9
Existing technology	5	5	N/A
Trade names	8	4	8
Non-compete covenants	5	5	5

	ShipRush (in years)	PCSTrac (in years)	MacroPoint (in years)
Customer agreements and relationships	9	13	12
Existing technology	5	5	5
Trade names	8	4	8
Non-compete covenants	5	5	5

Business Acquisition, Pro Forma Information [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues	333,323	322,649	313,759
Net income	37,540	31,609	25,312
Earnings per share
Basic	0.46	0.41	0.33
Diluted	0.45	0.41	0.33

XML

Note 22 - Segmented Information (Details Textual)	12 Months Ended
	Jan. 31, 2020
Number of Reportable Segments	1

XML

Note 3 - Acquisitions (Details Textual) shares in Thousands, $ in Thousands, $ in Millions												12 Months Ended
	Aug. 20, 2019 USD ($)	Jun. 27, 2019 USD ($)	May 10, 2019 USD ($)	Feb. 12, 2019 USD ($) shares	Aug. 21, 2018 USD ($) shares	Aug. 21, 2018 CAD ($) shares	Jun. 22, 2018 USD ($)	Feb. 02, 2018 USD ($)	Aug. 14, 2017 USD ($)	Jun. 01, 2017 USD ($)	May 18, 2017 USD ($)	Feb. 01, 2020 USD ($)	Jan. 31, 2020 USD ($) shares	Jan. 31, 2019 USD ($) shares	Jan. 31, 2018 USD ($) shares	Aug. 21, 2018 CAD ($)
Payments to Acquire Businesses, Net of Cash Acquired, Total													$ 292,053	$ 67,932	$ 111,867
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares													296	46	757
Business Combination, Acquisition Related Costs												$ 3,797		$ 3,778	$ 3,471
Visual Compliance [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total				$ 248,900									$ 239,863
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares				300
Business Combination, Acquired Receivables, Gross Contractual Amount				$ 6,400
Business Combination, Acquired Receivable, Fair Value				5,200
Business Combination, Acquired Receivables, Estimated Uncollectible				$ 1,200
Business Combination, Consideration Transferred, Total													250,055
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable													9,045
Business Combination, Consideration Transferred, Liabilities Incurred
Core Transport Technologies NZ Limited [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total			$ 21,800										21,833
Business Combination, Acquired Receivables, Gross Contractual Amount			400
Business Combination, Acquired Receivable, Fair Value			400
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High			$ 9,000
Business Combination, Contingent Consideration Arrangements, Period for Revenue Performance Targets			2 years
Business Combination, Contingent Consideration, Liability, Total			$ 1,500
Business Combination, Consideration Transferred, Total													23,345
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred													1,450
STEPcom [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total		$ 18,600											18,639
Business Combination, Acquired Receivables, Gross Contractual Amount		900
Business Combination, Acquired Receivable, Fair Value		800
Business Combination, Acquired Receivables, Estimated Uncollectible		$ 100
Business Combination, Consideration Transferred, Total													18,889
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred
BestTransport [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total	$ 11,700												11,718
Business Combination, Acquired Receivables, Gross Contractual Amount	600
Business Combination, Acquired Receivable, Fair Value	$ 600
Business Combination, Consideration Transferred, Total													11,718
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred
The 2020 Acquisitions [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total													292,053
Business Combination, Acquisition Related Costs													2,200
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual													33,800
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual													6,400
Business Combination, Consideration Transferred, Total													304,007
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable													9,045
Business Combination, Consideration Transferred, Liabilities Incurred													$ 1,450
Aljex Software, Inc. [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total								$ 32,400						32,382
Business Combination, Acquired Receivables, Gross Contractual Amount								200
Business Combination, Acquired Receivable, Fair Value								$ 200
Business Combination, Consideration Transferred, Total														32,230
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred
Velocity Mail [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total							$ 26,100							26,107
Business Combination, Acquired Receivables, Gross Contractual Amount							1,000
Business Combination, Acquired Receivable, Fair Value							$ 1,000
Business Combination, Consideration Transferred, Total														26,005
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred
PinPoint [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total														9,443
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares					100	100
Business Combination, Acquired Receivables, Gross Contractual Amount					$ 500
Business Combination, Acquired Receivable, Fair Value					500
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High					$ 2,300											$ 3.0
Business Combination, Contingent Consideration Arrangements, Period for Revenue Performance Targets					2 years	2 years
Business Combination, Contingent Consideration, Liability, Total					$ 700
Business Combination, Consideration Transferred, Total					$ 11,000	$ 14.4								11,729
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable														1,536
Business Combination, Consideration Transferred, Liabilities Incurred														$ 714
MacroPoint LLC [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total															86,177
Business Combination, Acquired Receivables, Gross Contractual Amount									$ 2,000
Business Combination, Acquired Receivable, Fair Value									2,000
Business Combination, Consideration Transferred, Total									106,200						106,340
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable									20,000						20,000
Business Combination, Consideration Transferred, Liabilities Incurred									$ 80,000
PCSTrac, Inc. [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total										$ 11,500					11,492
Business Combination, Acquired Receivables, Gross Contractual Amount										400
Business Combination, Acquired Receivable, Fair Value										$ 400
Business Combination, Consideration Transferred, Total															11,532
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred
ShipRush [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total											$ 14,200				14,198
Business Combination, Acquired Receivables, Gross Contractual Amount											400
Business Combination, Acquired Receivable, Fair Value											400
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High											$ 3,000
Business Combination, Contingent Consideration Arrangements, Period for Revenue Performance Targets											2 years
Business Combination, Contingent Consideration, Liability, Total											$ 1,200
Business Combination, Consideration Transferred, Total															15,519
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable
Business Combination, Consideration Transferred, Liabilities Incurred															$ 1,233

XML

Note 3 - Acquisitions - Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Revenues	$ 333,323	$ 322,649	$ 313,759
Net income	$ 37,540	$ 31,609	$ 25,312
Earnings per share
Basic (in dollars per share)	$ 0.46	$ 0.41	$ 0.33
Diluted (in dollars per share)	$ 0.45	$ 0.41	$ 0.33

XML

Note 23 - Subsequent Event (Details Textual) $ in Thousands, £ in Millions			12 Months Ended
	Feb. 21, 2020 USD ($)	Feb. 21, 2020 GBP (£)	Jan. 31, 2020 USD ($)	Jan. 31, 2019 USD ($)	Jan. 31, 2018 USD ($)
Payments to Acquire Businesses, Net of Cash Acquired, Total			$ 292,053	$ 67,932	$ 111,867
Subsequent Event [Member] | Peoplevox Limited [Member]
Payments to Acquire Businesses, Net of Cash Acquired, Total	$ 24,500	£ 18.9

XML

Note 16 - Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Net income	$ 36,997	$ 31,277	$ 26,879
Weighted average shares outstanding (in shares)	81,659	76,832	76,324
Weighted average common and common equivalent shares outstanding (in shares)	82,867	77,791	77,112
Earnings per share
Basic (in dollars per share)	$ 0.45	$ 0.41	$ 0.35
Diluted (in dollars per share)	$ 0.45	$ 0.40	$ 0.35
Share-based Payment Arrangement, Option [Member]
Dilutive effect of employee stock options (in shares)	318	205	167
Restricted Stock Units (RSUs) [Member]
Dilutive effect of employee stock options (in shares)	890	754	621

XML

Note 18 - Income Taxes (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Income Before Taxes, Percent	23.00%	21.00%	23.00%
Effective Income Tax Rate Reconciliation, Percent, Total	11.00%	15.00%	19.00%
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability			$ 0.7
Undistributed Earnings of Foreign Subsidiaries	$ 381.3
Liability for Uncertainty in Income Taxes, Noncurrent	6.7
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	6.5
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 0.3

XML

Note 17 - Stock-based Compensation Plans - Summary of Nonvested Share (Details) - $ / shares	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	367,173	272,144	274,500
Granted, Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 8.99	$ 7.10	$ 5.26
Shareholder-Approved Stock Option Plan [Member]
Stock Options Outstanding (in shares)	325,218	276,067
Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 6.18	$ 4.98
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	367,173	272,144
Granted, Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 8.99	$ 7.10
Vested (in shares)	(259,269)	(219,043)
Vested, Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 6.96	$ 5.56
Forfeited (in shares)	(23,469)	(3,950)
Forfeited, Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 7.69	$ 6.41
Stock Options Outstanding (in shares)	409,653	325,218	276,067
Weighted- Average Grant-Date Fair Value per Share (in dollars per share)	$ 8.03	$ 6.18	$ 4.98

XML

Note 14 - Commitments, Contingencies and Guarantees (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Cash Settled Restricted Share Units Nonvested Total Compensation Cost Not Yet Recognized	$ 1,100	$ 0
Derivative Instrument, Shares of Common Stock Held	251,422
Deferred Share Unit Liability, Number of Common Shares	251,422
PinPoint and CORE [Member]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 10,100
Business Combination, Contingent Consideration Arrangements, Period for Revenue Performance Targets	2 years
Business Combination, Contingent Consideration, Liability, Total	$ 1,900

XML

Note 13 - Leases (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Operating Lease, Expense		$ 5.2	$ 5.1
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term	9 years
Lessee, Operating Lease, Renewal Term	3 years

XML

Note 17 - Stock-based Compensation Plans - Total Estimated Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Stock-based compensation expense	$ 4,909	$ 3,710	$ 2,807
Cost of Sales [Member]
Stock-based compensation expense	220	160	90
Selling and Marketing Expense [Member]
Stock-based compensation expense	706	436	246
Research and Development Expense [Member]
Stock-based compensation expense	281	184	85
General and Administrative Expense [Member]
Stock-based compensation expense	$ 3,702	$ 2,930	$ 2,386

XML

Note 11 - Accrued Liabilities

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note

11

- Accrued Liabilities

	January 31,	January 31,
	2020	2019
Accrued compensation and benefits	20,613	16,771
Accrued professional fees	1,010	1,137
Other accrued liabilities	13,253	11,484
	34,876	29,392

Other accrued liabilities include accrued expenses related to

third

party resellers and royalties, suppliers, accrued restructuring charges and accrued contingent acquisition purchase consideration.

XML

Note 3 - Acquisitions

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

3

– Acquisitions

Fiscal

2020

Acquisitions

On

February 12, 2019,

Descartes acquired substantially all of the assets of the businesses run by the Management Systems Resources Inc. group of companies (collectively, “Visual Compliance”), a provider of software solutions and services to automate customs, trade and fiscal compliance processes including denied and restricted party screening processes and export licensing. The purchase price for the acquisition was approximately

$248.9

million, net of cash acquired, which was funded from a combination of drawing on Descartes’ existing credit facility and issuing to the sellers

0.3

million Descartes common shares from treasury. The gross contractual amount of trade receivables acquired was

$6.4

million with a fair value of

$5.2

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was

$1.2

million. The purchase price was finalized in the

three

month period ended

January 31, 2020

with

no

adjustments.

On

May 10, 2019,

Descartes acquired all the shares of Core Transport Technologies NZ Limited (“CORE”), an electronic transportation network that provides global air carriers and ground handlers with shipment scanning and tracking solutions. The purchase price for the acquisition was approximately

$21.8

million, net of cash acquired, which was funded from drawing on Descartes’ existing credit facility. Additional contingent consideration of up to

$9.0

million in cash is payable if certain revenue performance targets are met by CORE in the

two

years following the acquisition. The fair value of the contingent consideration was valued at

$1.5

million at the acquisition date. The gross contractual amount of trade receivables acquired was

$0.4

million with a fair value of

$0.4

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The completion of the initial purchase price allocation is pending the finalization of the fair value of accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before

May 10, 2020.

On

June 27, 2019,

Descartes acquired all the shares of Tegmento AG and Contentis AG (collectively, “STEPcom”), a business-to-business supply chain integration network based in Switzerland. The purchase price for the acquisition was approximately

$18.6

million, net of cash acquired, which was funded from drawing on Descartes’ existing credit facility. The gross contractual amount of trade receivables acquired was

$0.9

million with a fair value of

$0.8

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was

$0.1

million. The completion of the initial purchase price allocation is pending the finalization of the fair value for trade receivables, accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before

June 27, 2020.

On

August 20, 2019,

Descartes acquired BestTransport.com, Inc. (“BestTransport”), a cloud-based transportation management system provider focused on flatbed-intensive manufacturers and distributors. The purchase price for the acquisition was approximately

$11.7

million, net of cash acquired, which was funded from drawing on Descartes’ existing credit facility. The gross contractual amount of trade receivables acquired was

$0.6

million with a fair value of

$0.6

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The completion of the initial purchase price allocation is pending the finalization of the fair value for trade receivables, accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before

August 20, 2020.

For the businesses acquired during fiscal

2020,

we incurred acquisition-related costs of

$2.2

million for the year ended

January 31, 2020.

The acquisition-related costs were primarily for advisory services and are included in other charges in our consolidated statements of operations. For the year ended

January 31, 2020,

we have recognized

aggregate revenues of

$33.8

million, and net income (excluding any interest costs on financing the a

cquisition) of

$6.4

million from Visual Compliance, CORE, STEPcom and BestTransport since the date of acquisition in our consolidated statements of operations.

The final purchase price allocation for Visual Compliance and the preliminary purchase price allocations CORE, STEPcom and BestTransport, which have

not

been finalized, are as follows:

	Visual Compliance		CORE		STEP- com		Best- Transport		Total
Purchase price consideration:
Cash, less cash acquired related to Visual Compliance ($170), CORE ($213), STEPcom ($2,700) and BestTransport ($507)	239,863		21,833		18,639		11,718		292,053
Common shares issued	9,045		–		–		–		9,045
Contingent consideration	–		1,450		–		–		1,450
Net working capital adjustments payable / (receivable)	1,147		62		250		–		1,459
	250,055		23,345		18,889		11,718		304,007
Allocated to:
Current assets, excluding cash acquired	6,403		689		1,470		815		9,377
Property and equipment	30		2,048		257		35		2,370
Deferred income tax asset	30,924		–		–		–		30,924
Right-of-use assets	1,188		68		232		194		1,682
Current liabilities	(840	)	(352	)	(874	)	(284	)	(2,350	)
Deferred revenue	(10,267	)	(278	)	(813	)	(9	)	(11,367	)
Lease obligations	(1,188	)	(68	)	(232	)	(194	)	(1,682	)
Deferred income tax liability	(282	)	(3,332	)	(2,316	)	(1,352	)	(7,282	)
Net tangible assets (liabilities) assumed	25,968		(1,225	)	(2,276	)	(795	)	21,672
Finite life intangible assets acquired:
Customer agreements and relationships	32,186		4,600		10,839		3,000		50,625
Existing technology	69,422		6,800		–		3,800		80,022
Trade names	528		200		102		50		880
Non-compete covenants	3,166		300		205		150		3,821
Goodwill	118,785		12,670		10,019		5,513		146,987
	250,055		23,345		18,889		11,718		304,007

The above transactions were accounted for using the acquisition method in accordance with ASC Topic

805,

“Business Combinations”. The purchase price allocations in the table above represents our estimates of the allocation of the purchase price and the fair value of net assets acquired. The preliminary purchase price allocations

may

differ from the final purchase price allocations, and these differences

may

be material. Revisions to the allocations will occur as additional information about the fair value of assets and liabilities becomes available. The final purchase price allocations will be completed within

one

year from the acquisition dates.

The acquired intangible assets are being amortized over their estimated useful lives as follows:

	Visual Compliance (in years)	CORE (in years)	STEPcom (in years)	Best Transport (in years)
Customer agreements and relationships	14	13	9	12
Existing technology	7	6	N/A	6
Trade names	5	8	3	3
Non-compete covenants	5	5	3	2

The goodwill on the Visual Compliance, CORE, STEPcom and BestTransport acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the CORE, STEPcom and BestTransport acquisitions is

not

deductible for tax purposes. The goodwill from the Visual Compliance acquisition is deductible for tax purposes.

Fiscal

2019

Acquisitions

On

February 2, 2018,

Descartes acquired Aljex Software, Inc. (“Aljex”), a cloud-based provider of back-office transportation management solutions for freight brokers and transportation providers. US-based Aljex helps customers automate business processes and create electronic documents critical for executing transportation moves through the lifecycle of a shipment. The purchase price for the acquisition was approximately

$32.4

million, net of cash acquired, which was funded from drawing on Descartes’ existing credit facility. The gross contractual amount of trade receivables acquired was

$0.2

million with a fair value of

$0.2

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

January 31, 2019

with

no

adjustments.

On

June 22, 2018,

Descartes acquired certain assets of Velocity Mail, LLC (“Velocity Mail”), an electronic transportation network that provides global air carriers with mail and parcel shipment scanning and tracking solutions. Using US-based Velocity Mail’s network, global air carriers leverage mobile devices to accurately track shipments and deliveries in real-time. The purchase price for the acquisition was approximately

$26.1

million, net of cash acquired, which was funded from drawing on Descartes’ existing credit facility. The gross contractual amount of trade receivables acquired was

$1.0

million with a fair value of

$1.0

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

July 31, 2019

with

no

adjustments.

On

August 21, 2018,

Descartes acquired PinPoint GPS Solutions Inc. (“PinPoint”), a provider of fleet tracking and mobile workforce solutions. Canada-based PinPoint helps customers collect real-time location information on trucks and mobile workers using technology, including Geotab (telematics) and SkyBitz (trailer tracking). The purchase price for the acquisition was approximately

$11.0

million

(CAD

$14.4

million)

, net of cash acquired, which was funded from a combination of drawing on Descartes’ existing credit facility and issuing to the sellers less than

0.1

million Descartes common shares from treasury.

Additional contingent consideration of up to

$2.3

million (CAD

$3.0

million) in cash is payable if certain revenue performance targets are met by PinPoint in the

two

years following the acquisition. The fair value of the contingent consideration was valued at

$0.7

million at the acquisition date. The gross contractual amount of trade receivables acquired was

$0.5

million with a fair value of

$0.5

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

July 31, 2019

with

no

adjustments.

The final purchase price allocations for businesses we acquired during

2019

are as follows:

	Aljex		Velocity Mail		PinPoint		Total
Purchase price consideration:
Cash, less cash acquired related to Aljex ($193), Velocity Mail (nil) and PinPoint ($769)	32,382		26,107		9,443		67,932
Common shares issued	–		–		1,536		1,536
Contingent consideration	–		–		714		714
Net working capital adjustments (receivable) / payable	(152	)	(102	)	36		(218	)
	32,230		26,005		11,729		69,964
Allocated to:
Current assets, excluding cash acquired	607		1,407		599		2,613
Other long-term assets	–		501		–		501
Current liabilities	(266	)	(81	)	(559	)	(906	)
Deferred revenue	(1,024	)	(70	)	(574	)	(1,668	)
Deferred income tax liability	(4,200	)	–		(2,077	)	(6,277	)
Net tangible (liabilities) assets assumed	(4,883	)	1,757		(2,611	)	(5,737	)
Finite life intangible assets acquired:
Customer agreements and relationships	5,300		7,800		7,758		20,858
Existing technology	12,400		7,600		–		20,000
Tradenames	280		100		207		587
Non-compete covenants	230		300		69		599
Goodwill	18,903		8,448		6,306		33,657
	32,230		26,005		11,729		69,964

The acquired intangible assets are being amortized over their estimated useful lives as follows:

	Aljex (in years)	Velocity Mail (in years)	PinPoint (in years)
Customer agreements and relationships	13	12	9
Existing technology	5	5	N/A
Trade names	8	4	8
Non-compete covenants	5	5	5

The goodwill on the Aljex, Velocity Mail and PinPoint acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the Aljex and PinPoint acquisitions is

not

deductible for tax purposes. The goodwill from the Velocity Mail acquisition is deductible for tax purposes.

Fiscal

2018

Acquisitions

On

August 14, 2017,

we acquired MacroPoint LLC (“MacroPoint”), an electronic transportation network providing location-based truck tracking and predictive freight capacity data content. US-based MacroPoint runs a connected network helping transportation brokers, logistics service providers and shippers track the locations of deliveries in trucks as well as predictive freight capacity to help identify early opportunities for additional freight moves. The purchase price for the acquisition was approximately

$106.2

million, net of cash acquired, which was funded using

$20.0

million of our common shares,

$80.0

million from drawing on Descartes’ credit facility and the balance from cash on hand. The gross contractual amount of trade receivables acquired was

$2.0

million with a fair value of

$2.0

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

July 31, 2018

with

no

adjustments.

On

June 1, 2017,

we acquired substantially all of the assets of PCSTrac, Inc., including certain related assets of Progressive Computer Services Inc., doing business as PCS Technologies (collectively referred to as “PCSTrac”). US-based PCSTrac helps specialty retailers and their logistics service providers collaborate to improve carton-level visibility for shipments from distribution centers to stores. PCSTrac’s solutions provide visibility and insight into the store replenishment supply chain, helping increase sales, enhance loss prevention, and improve inventory control. The total purchase price for the acquisition was

$11.5

million, net of cash acquired, which was funded using cash on hand. The gross contractual amount of trade receivables acquired was

$0.4

million with a fair value of

$0.4

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

April 30, 2018

with

no

adjustments.

On

May 18, 2017,

we acquired Z-Firm LLC (“ShipRush”), a US-based provider of e-commerce multi-carrier parcel shipping solutions for small-to medium-sized businesses. The ShipRush platform helps customers streamline their supply chain and reduce transportation costs by automatically importing orders, comparing carrier rates, printing shipping labels for all major carriers, and tracking through final delivery. The purchase price for the acquisition was

$14.2

million, net of cash acquired, which was funded using cash on hand. Additional contingent consideration of up to

$3.0

million in cash is payable if certain revenue performance targets are met by ShipRush in the

two

years following the acquisition. The fair value of the contingent consideration was valued at

$1.2

million at the acquisition date. The gross contractual amount of trade receivables acquired was

$0.4

million with a fair value of

$0.4

million at the date of acquisition. Our acquisition date estimate of contractual cash flows

not

expected to be collected was nominal. The purchase price was finalized in the

three

month period ended

April 30, 2018

with

no

adjustments.

The final purchase price allocations for businesses we acquired during

2018

are as follows:

	ShipRush		PCSTrac		MacroPoint		Total
Purchase price consideration:
Cash, less cash acquired related to ShipRush ($253), PCSTrac (nil) and MacroPoint ($2,098)	14,198		11,492		86,177		111,867
Common shares issued	–		–		20,000		20,000
Contingent consideration	1,233		–		–		1,233
Net working capital adjustments payable	88		40		163		291
	15,519		11,532		106,340		133,391
Allocated to:
Current assets, excluding cash acquired	461		467		2,127		3,055
Current liabilities	(266	)	(10	)	(1,693	)	(1,969	)
Deferred revenue	(609	)	–		(5,787	)	(6,396	)
Net tangible (liabilities) assets assumed	(414	)	457		(5,353	)	(5,310	)
Finite life intangible assets acquired:
Customer agreements and relationships	2,400		1,850		26,030		30,280
Existing technology	4,710		3,270		17,170		25,150
In-process research and development	–		–		290		290
Tradenames	120		60		570		750
Non-compete covenants	100		80		2,420		2,600
Goodwill	8,603		5,815		65,213		79,631
	15,519		11,532		106,340		133,391

The acquired intangible assets are being amortized over their estimated useful lives as follows:

	ShipRush (in years)	PCSTrac (in years)	MacroPoint (in years)
Customer agreements and relationships	9	13	12
Existing technology	5	5	5
Trade names	8	4	8
Non-compete covenants	5	5	5

The goodwill on the ShipRush, PCSTrac and MacroPoint acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the PCSTrac, ShipRush and MacroPoint acquisitions is deductible for tax purposes.

Pro Forma Results of Operations (Unaudited)

The financial information in the table below summarizes selected results of operations on a pro forma basis as if we had acquired BestTransport, STEPcom, CORE, Visual Compliance, PinPoint, Velocity Mail, Aljex, MacroPoint, PCSTrac and ShipRush as of

February 1, 2017.

This pro forma information is for information purposes only and does

not

purport to represent what our actual results of operations for the periods presented would have been had the acquisitions of BestTransport, STEPcom, CORE, Visual Compliance, PinPoint, Velocity Mail, Aljex, MacroPoint, PCSTrac and ShipRush occurred at

February 1, 2017,

or to project our results of operations for any future period.

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Revenues	333,323	322,649	313,759
Net income	37,540	31,609	25,312
Earnings per share
Basic	0.46	0.41	0.33
Diluted	0.45	0.41	0.33

XML

Note 7 - Inventory

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

7

– Inventory

At

January 31, 2020

and

January 31, 2019,

inventory is entirely comprised of finished goods inventory. Finished goods inventory primarily consists of hardware and related parts for mobile asset units held for sale. For the years ended

January 31, 2020,

2019

and

2018,

a provision for excess or obsolete inventories has been recorded in cost of revenues of

nil,

nominal and

$0.1

million, respectively.

XML

Note 6 - Other Receivables (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Other Receivables [Table Text Block]

	January 31,	January 31,
	2020	2019
Net working capital adjustments receivable from acquisitions	–	55
Other receivables	7,294	4,276
	7,294	4,331

XML

Significant Accounting Policies (Policies)

12 Months Ended

Jan. 31, 2020

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

The accompanying consolidated financial statements are presented in United States (“US”) dollars and are prepared in accordance with generally accepted accounting principles in the US (“GAAP”) and the rules and regulations of the Canadian Securities Administrators and the US Securities and Exchange Commission (“SEC”) for the preparation of consolidated financial statements.

Our fiscal year commences on

February 1

st

of each year and ends on

January 31

st

of the following year. Our fiscal year, which ends on

January 31, 2020,

is referred to as the “current fiscal year”, “fiscal

2020”,

“2020”

or using similar words. Our previous fiscal year, which ended on

January 31, 2019,

is referred to as the “previous fiscal year”, “fiscal

2019”,

“2019”

or using similar words. Other fiscal years are referenced by the applicable year during which the fiscal year ends. For example,

“2021”

refers to the annual period ending

January 31, 2021

and the “fourth quarter of

2021”

refers to the quarter ending

January 31, 2021.

Consolidation, Policy [Policy Text Block]

Basis of consolidation

The consolidated financial statements include the financial statements of Descartes and our wholly-owned subsidiaries. We do

not

have any variable interests in variable interest entities. All intercompany accounts and transactions have been eliminated during consolidation.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign currency translation

The US dollar is the presentation currency of the Company. Assets and liabilities of our subsidiaries are translated into US dollars at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated into US dollars using daily exchange rates. Translation adjustments resulting from this process are accumulated in other comprehensive income (loss) as a separate component of shareholders’ equity. On substantial liquidation of a foreign operation, the component of accumulated other comprehensive income relating to that particular foreign operation is recognized in the consolidated statements of operations.

The functional currency of each of our entities is the local currency in which they operate. Transactions incurred in currencies other than the local currency of an entity are converted to the local currency at the transaction date. Monetary assets and liabilities denominated in foreign currencies are re-measured into the local currency at the exchange rate in effect at the balance sheet date. All foreign currency re-measurement gains and losses are included in net income. For the year ended

January 31, 2020,

foreign currency re-measurement loss of

$0.6

million was included in net income (

January 31, 2019 –

loss of

$0.4

million;

January 31, 2018 –

loss of

$0.4

million).

Use of Estimates, Policy [Policy Text Block]

Use of estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying note disclosures. Although these estimates and assumptions are based on management’s best knowledge of current events, actual results

may

be different from the estimates. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources.

Estimates and assumptions are used when accounting for items such as allocations of the purchase price and the fair value of net assets acquired in business combination transactions, useful lives of intangible assets and property and equipment, revenue related estimates including determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds, allowance for doubtful accounts, collectability of other receivables, provisions for excess or obsolete inventory, determining the Company’s incremental borrowing rate, restructuring accruals, fair value of stock-based compensation, assumptions embodied in the valuation of assets for impairment assessment, accounting for income taxes, valuation allowances for deferred income tax assets, realization of investment tax credits, uncertain tax positions and recognition of contingencies.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

Cash included highly liquid short-term deposits with original maturities of

three

months or less.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial instruments

Fair value of financial instruments

The carrying amounts of the Company’s cash, accounts receivable (net), accounts payable, accrued liabilities and income taxes payable approximate their fair value due to their short maturities.

Derivative instruments

We use derivative instruments to manage equity risk relating to our share-based compensation. We account for these instruments in accordance with ASC Topic

815

“Derivatives and Hedging” (Topic

815

), which requires that every derivative instrument be recorded on the balance sheet as either an asset or a liability measured at its fair value as of the reporting date. We do

not

designate our derivative instruments as hedges and as such the changes in our derivative financial instruments' fair values are recognized in earnings. The fair value of equity contract derivatives is determined utilizing a valuation model based on the quoted market value of our common shares at the balance sheet date.

Foreign exchange risk

We are exposed to foreign exchange risk because the Company transacts business in currencies other than the US dollar. Accordingly, our results are affected, and

may

be affected in the future, by exchange rate fluctuations of the US dollar relative to the Canadian dollar, euro, British pound sterling and various other foreign currencies.

Interest rate risk

Depending on the type of advance under the available facilities, interest on such borrowings will be charged based on either i) Canada or US prime rate; or ii) Banker’s Acceptance (BA); or iii) LIBOR. We are exposed to interest rate fluctuations to the extent that we borrow on our credit facility.

Credit risk

We are exposed to credit risk through our invested cash and accounts receivable. We hold our cash with reputable financial institutions. The lack of concentration of accounts receivable from a single customer and the dispersion of customers among industries and geographical locations mitigate our credit risk.

We do

not

use any type of speculative financial instruments, including but

not

limited to foreign exchange contracts, futures, swaps and option agreements, to manage our foreign exchange or interest rate risks. In addition, we do

not

hold or issue financial instruments for trading purposes.

Equity risk

We are exposed to equity risk through certain share-based compensation expenses that are fair valued at the balance sheet date. The Company enters into equity derivative contracts including floating-rate equity forwards to partially offset the potential fluctuations of certain future share-based compensation expenses. The Company does

not

hold derivatives for speculative purposes.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for doubtful accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make their required payments. Specifically, we consider the age of the receivables, customers’ payment history, historical write-offs, the creditworthiness of the customer, and current economic trends among other factors. Accounts receivable are written off, and the associated allowance is eliminated, if it is determined that the specific balance is

no

longer collectible. The allowance is maintained for

100%

of all accounts deemed to be uncollectible and, for those receivables

not

specifically identified as uncollectible, an allowance is maintained for a specific percentage of those receivables based upon the aging of accounts, our historical collection experience and current economic expectations. To date, the actual losses have been within our expectations.

No

single customer accounted for more than

10%

of the accounts receivable balance as of

January 31, 2020

and

2019.

Inventory, Policy [Policy Text Block]

Inventory

Finished goods inventories are stated at the lower of cost and net realizable value. The cost of finished goods is determined on the basis of average cost of units.

The valuation of inventory, including the determination of obsolete or excess inventory, requires management to estimate the future demand for our products within specified time horizons. We perform an assessment of inventory which includes a review of, among other factors, demand requirements, product life cycle and development plans, product pricing and quality issues. If the demand for our products indicates we are

no

longer able to sell inventories above cost or at all, we write down inventory to market or excess inventory is written off.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

Impairment of long-lived assets

We test long-lived assets or asset groups, such as property and equipment and finite life intangible assets, for recoverability when events or changes in circumstances indicate that there

may

be impairment. Circumstances which could trigger a review include, but are

not

limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset or asset group; and a current expectation that the asset or asset group will more likely than

not

be sold or disposed of before the end of its estimated useful life. An impairment loss is recognized when the estimate of undiscounted future cash flows generated by such asset or asset group is less than the carrying amount. Measurement of the impairment loss is based on the present value of the expected future cash flows.

No

impairment of long-lived assets has been identified or recorded in our consolidated statements of operations for any of the fiscal years presented.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and intangible assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is

not

subject to amortization.

We test for impairment of goodwill at least annually on

October 31

st

of each year and at any other time if any event occurs or circumstances change that would more likely than

not

reduce our fair value below our reporting unit’s carrying amount. Our operations are analyzed by management and our chief operating decision maker as being part of a single industry segment providing logistics technology solutions. Accordingly, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. We completed the qualitative assessment during our

third

quarter of

2020

and concluded that it was more likely than

not

that the fair value of the goodwill was greater than the carrying value. As a result,

no

impairment of goodwill was recorded in fiscal

2020

(

no

impairments were recorded for fiscal

2019

or fiscal

2018

).

We perform further quarterly analysis of whether any event has occurred that would more likely than

not

reduce our fair value below our reporting unit’s carrying amount and, if so, we perform a goodwill impairment test between the annual date. Any impairment adjustment is recognized as an expense in the period that the adjustment is identified.

Intangible assets related to our acquisitions are recorded at their fair value at the acquisition date. Intangible assets include customer agreements and relationships, non-compete covenants, existing technologies and trade names. Intangible assets are amortized on a straight-line basis over their estimated useful lives. We write down intangible asset or asset groups with a finite life to fair value when the related undiscounted cash flows are

not

expected to allow for recovery of the carrying value. Fair value of intangible asset or asset groups is determined by discounting the expected related future cash flows.

Amortization of our intangible assets is generally recorded at the following rates:

Customer agreements and relationships	Straight-line over three to twenty years
Existing technologies	Straight-line over two to twelve years
Trade names	Straight-line over one to fifteen years
Non-compete covenants	Straight-line over two to twelve years

Property, Plant and Equipment, Policy [Policy Text Block]

Property and equipment

Property and equipment is recorded at cost. Depreciation of our property and equipment is generally recorded at the following rates:

Computer equipment and software	30% declining balance
Furniture and fixtures	20% declining balance
Leasehold improvements	Straight-line over lesser of useful life or term of lease

Fully depreciated property and equipment are removed from the balance sheet when they are

no

longer in use.

Lessee, Leases [Policy Text Block]

Leases

At the inception of a contract we assess whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We have building lease agreements with lease and non-lease components, which are accounted for separately. For computer equipment and vehicle leases, we have elected to account for the lease and non-lease components as a single lease component.

We recognize a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The ROU asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentives received. The assets are depreciated to the earlier of the end of the useful life of the ROU asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option.

The lease liability is initially measured at the present value of the future lease payments at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU asset has been reduced to zero.

We have elected to apply the practical expedient

not

to recognize ROU assets and lease liabilities for short-term leases that have a lease term of

12

months or less. The lease payments associated with these leases is recognized as an expense on a straight-line basis over the lease term.

Revenue from Contract with Customer [Policy Text Block]

Revenue recognition

Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts that can include various combinations of goods and services, which are generally capable of being distinct within the context of the contract and accounted for as separate performance obligations. A product or service is distinct if the customer can benefit from it on its own or together with other readily available resources and the promise to transfer the good or service is separately identifiable from other promises in the contractual arrangement with the customer. Non-distinct goods and services are combined with other goods or services until they are distinct as a bundle and therefore form a single performance obligation.

The consideration (including any discounts) is allocated between separate goods and services in a bundle on a relative basis based on their SSP. The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. In addition to these general policies, the specific revenue recognition policies for each major category of revenue are included below.

License

Revenues for distinct licenses for on-premise or hosted software are derived from perpetual licenses granted to our customers for the right to use our software products. License revenues are billed on the effective date of a contract and revenue is recognized at the point in time when the customer is provided control of the respective software.

Services

Services, which allow customers to access hosted software over a contract term without taking possession of the software, is provided on a subscription and/or transactional fee basis. Revenues from hosted software subscriptions and maintenance are typically billed annually in advance and revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Transaction fees are typically billed and recognized as revenue on a monthly basis based on the customer usage for that period.

Professional Services & Other

Professional services are comprised of consulting, implementation and training services related to our services and products. These services are generally considered to be separate performance obligations as they provide incremental benefit to customers beyond providing access to the software. Professional services are typically billed on a time and materials basis and revenue is recognized over time as the services are performed. For professional services contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Revenue related to customer reimbursement of travel related expenses is recognized on a gross basis as incurred. Other revenues include hardware revenue and is generally billed, and revenue is recognized, when control of the product has transferred under the terms of an enforceable contract.

Costs to obtain a contract with a customer

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the costs to be recoverable. We have determined that certain sales incentive programs meet the requirements to be capitalized. These capitalized costs are amortized consistent with the pattern of transfer to the customer for the goods and services to which the asset relates, including specifically identifiable contract renewals. The period of benefit including renewals is determined to be generally between

four

to

six

years, taking into consideration our customer contracts, our technology, renewal behaviors and other factors. Amortization of the asset is included in sales and marketing expenses in the consolidated statements of operations. Applying the practical expedient, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is

one

year or less.

Contract assets and liabilities

The payment terms and conditions in our customer contracts

may

vary from the timing of revenue recognition. In some cases, customers pay in advance of delivery of products or services; in other cases, payment is due as services are performed or in arrears following delivery. Timing differences between revenue recognition and invoicing result in unbilled receivables, contract assets, or deferred revenue. Receivables are accrued when revenue is recognized prior to invoicing but the right to payment is unconditional (i.e., only the passage of time is required). This occurs most commonly when software term licenses recognized at a point in time are paid for periodically over the license term. Contract assets result when amounts allocated to distinct performance obligations are recognized when or as control of a product or service is transferred to the customer, but invoicing is contingent on performance of other performance obligations or on completion of contractual milestones and is presented as other receivables. Contract assets are transferred to receivables when the rights become unconditional, typically upon invoicing of the related performance obligations in the contract or upon achieving the requisite project milestone.

Contract liabilities primarily relate to the advance consideration received from customers and is presented as deferred revenue.

Deferred revenue results from customer payments in advance of our satisfaction of the associated performance obligation(s) and relates primarily to prepaid maintenance or other recurring services. Deferred revenues are relieved as revenue is recognized. Contract assets and deferred revenues are reported on a contract-by-contract basis at the end of each reporting period.

Revenue judgments and estimates

Our contracts with customers often include promises to transfer multiple goods and services to a customer. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately versus together

may

require judgment. Judgment is also needed in assessing the ability to collect the corresponding receivables.

Significant judgment is required to determine the SSP for each distinct performance obligation, which is needed to determine whether there is a discount that needs to be allocated based on the relative SSP of the various goods and services. In order to determine the SSP of its promised goods or services, we conduct a regular analysis to determine whether various goods or services have an observable standalone selling price. If the Company does

not

have an observable SSP for a particular good or service, then SSP for that particular good or service is estimated using reasonably available information and maximizing observable inputs with approaches including historical pricing, cost plus a margin, adjusted market assessment, and the residual approach.

Research, Development, and Computer Software, Policy [Policy Text Block]

Research and development costs

To date, we have

not

capitalized any costs related to research and development of our computer software products. Costs incurred between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers have historically been expensed as they have

not

been significant.

Share-based Payment Arrangement [Policy Text Block]

Stock-based compensation plans

Stock Options

We maintain stock option plans for non-employee directors, officers, employees and other service providers. Options to purchase our common shares are granted at an exercise price equal to the fair market value of our common shares as of the date of grant. This fair market value is determined using the closing price of our common shares on the TSX on the day immediately preceding the date of the grant.

Employee stock options generally vest over a

five

-year period starting from the grant date and expire

seven

years from the grant date. Non-employee directors’ and officers’ stock options generally have quarterly vesting over a

three

to

five

-year period. We issue new shares from treasury upon the exercise of a stock option.

The fair value of employee stock option grants that are ultimately expected to vest are amortized to expense in our consolidated statement of operations based on the straight-line attribution method. The fair value of stock option grants is calculated using the Black-Scholes Merton option-pricing model. Expected volatility is based on historical volatility of our common stock and other factors. The risk-free interest rates are based on Government of Canada average bond yields for a period consistent with the expected life of the option in effect at the time of the grant. The expected option life is based on the historical life of our granted options and other factors.

Effective as of

February 1, 2017,

the Company adopted a change in accounting policy in accordance with ASU

2016

-

09

to account for forfeitures as they occur. The change was applied on a modified retrospective basis, and

no

prior periods were restated as a result of this change in accounting policy.

Performance & Restricted Share Units

We maintain a performance and restricted share unit plan pursuant to which certain of our officers are eligible to receive grants of performance share units (“PSUs”) and restricted share units (“RSUs”).

PSUs vest at the end of a

three

-year performance period. The ultimate number of PSUs that vest is based on the total shareholder return (“TSR”) of our Company relative to the TSR of companies comprising a peer index group. TSR is calculated based on the weighted-average closing price of shares for the

five

trading days preceding the beginning and end of the performance period. The fair value of PSUs is expensed to stock-based compensation expense over the vesting period. PSUs expire

ten

years from the grant date. New shares are issued from treasury upon the redemption of a PSU.

PSUs are measured at fair value estimated using a Monte Carlo Simulation approach. Expected volatility is based on historical volatility of our common stock and other factors. The risk-free interest rates are based on the Government of Canada average bond yields for a period consistent with the expected life of the PSUs at the time of the grant. The expected PSU life is based on the historical life of our stock options and other factors.

RSUs vest annually over a

three

-year period starting from the grant date and expire

ten

years from the grant date. We issue new shares from treasury upon the redemption of an RSU.

RSUs are measured at fair value based on the closing price of our common shares for the day preceding the date of the grant and will be expensed to stock-based compensation expense over the vesting period.

Deferred Share Unit Plan

Our board of directors adopted a deferred share unit plan effective as of

June 28, 2004,

pursuant to which non-employee directors are eligible to receive grants of deferred share units (“DSUs”), each of which has an initial value equal to the weighted-average closing price of our common shares for the

five

trading days preceding the grant date. The plan allows each director to choose to receive, in the form of DSUs, all,

none

or a percentage of the eligible director’s fees which would otherwise be payable in cash. If a director has invested less than the minimum amount of equity in Descartes, as prescribed from time to time by the board of directors, then the director must take at least

50%

of the base annual fee for serving as a director in the form of DSUs. Each DSU fully vests upon award but is distributed only when the director ceases to be a member of the board of directors. Vested units are settled in cash based on our common share price when conversion takes place. Fair value of the liability is based on the closing price of our common shares at the balance sheet date.

Cash-Settled Restricted Share Unit Plan

Our board of directors adopted a cash-settled restricted share unit plan effective as of

May 23, 2007,

pursuant to which certain of our employees and non-employee directors are eligible to receive grants of cash-settled restricted share units (“CRSUs”), each of which has an initial value equal to the weighted-average closing price of our common shares for the

five

trading days preceding the date of the grant. The CRSUs generally vest based on continued employment and have annual vesting over

three

to

five

-year periods. Vested units are settled in cash based on our common share price when conversion takes place, which is within

30

days following a vesting date and in any event prior to

December 31

st

of the calendar year in which a vesting date occurs. Fair value of the liability is based on the closing price of our common shares at the balance sheet date.

Business Combinations Policy [Policy Text Block]

Business combinations

We apply the provisions of ASC Topic

805,

“Business Combinations” (Topic

805

), in the accounting for our acquisitions. It requires us to recognize separately from goodwill, the assets acquired and the liabilities assumed at their acquisition date fair values including certain identifiable intangible assets (other than goodwill). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. The determination of the acquisition date fair value of the intangible assets acquired required us to make significant estimates and assumptions regarding projected revenues, earnings before interest, taxes, depreciation and amortization, technology migration rates, customer attrition rates and discount rates.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which

may

be up to

one

year from the acquisition date, we

may

record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded to our consolidated statement of operations.

Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as termination and exit costs pursuant to ASC Topic

420,

“Exit or Disposal Cost Obligations” (Topic

420

) and are accounted for separately from the business combination.

For a given acquisition, we generally identify certain pre-acquisition contingencies as of the acquisition date and

may

extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts.

If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations.

Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did

not

exist at the acquisition date, are recorded in our provision for income taxes in our consolidated statement of operations.

Income Tax, Policy [Policy Text Block]

Income taxes

We use the liability method of income tax allocation to account for income taxes. Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than

not

that a deferred tax asset will

not

be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, our history of losses for tax purposes, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense.

We evaluate our uncertain tax positions by using a

two

-step approach to recognize and measure uncertain tax positions and provisions for income taxes. The

first

step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than

not,

based solely on the technical merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The

second

step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than

not

to be realized. The tax position is derecognized when it is

no

longer more likely than

not

that the position will be sustained on audit. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that give rise to a revision become known.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued during the period. The treasury stock method is used to compute the dilutive effect of stock-based compensation.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently adopted accounting pronouncements

In

May 2014,

the FASB issued Accounting Standards Update

2014

-

09,

“Revenue from Contracts with Customers” (“ASC

606”

). ASC

606

supersedes the revenue recognition requirements in ASC Topic

605,

“Revenue Recognition” ("ASC

605"

) and nearly all other existing revenue recognition guidance under US GAAP. The core principle of ASC

606

is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC

606

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017,

which is our fiscal year that began on

February 1, 2018 (

fiscal

2019

). The Company has adopted ASC

606

in the

first

quarter of fiscal

2019

using the cumulative effect method and therefore the comparative information has

not

been restated and continues to be reported under ASC

605.

The details of the significant changes and quantitative impact of the changes are set out below.

Term-based licenses

Under ASC

605,

revenue attributable to term-based arrangements was recognized ratably over the term of the arrangement because Vendor Specific Objective Evidence did

not

exist for the undelivered maintenance and support element of the arrangement. Under ASC

606,

the Company has deemed the licenses to be distinct from other performance obligations. Revenue allocated to the distinct license based on the SSP is recognized at the time that both the right-to-use the software has commenced for the term and the software has been made available to the customer.

Costs to obtain a contract

Under the Company’s previous accounting policies, the Company generally expensed commission costs paid to employees or

third

parties to obtain customer contracts as incurred. Under ASC

606,

the Company allocates these incremental commission costs to the various performance obligations to which they relate using the relative selling price allocation for bundled commissions. For performance obligations

not

delivered upfront, the allocated commissions are deferred and amortized over the pattern of transfer of the related performance obligation. If the expected amortization period for all performance obligations in a contract with a customer is

one

year or less, the commission fee is expensed when incurred. Capitalized costs to obtain a contract are included in other long-term assets on the consolidated balance sheet.

The adoption of ASC

606

resulted in an increase to contract assets of

$0.5

million, an increase to other long-term assets of

$4.2

million, an increase to the liability for deferred income taxes of

$1.1

million and a decrease to accumulated deficit of

$3.6

million, as of

February 1, 2018.

In

October 2016,

the FASB issued Accounting Standards Update

2016

-

16,

“Income Taxes (Topic

740

): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU

2016

-

16”

). ASU

2016

-

16

requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU

2016

-

16

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017,

which is our fiscal year that began on

February 1, 2018 (

fiscal

2019

). The Company adopted this guidance in the

first

quarter of fiscal

2019.

As a result of adoption, the balance of unamortized deferred tax charges was written-off and previously unrecognized deferred income tax assets in certain jurisdictions were recognized. The change was applied on a modified retrospective basis, and

no

prior periods were restated. Accordingly, we have recognized a decrease of

$4.0

million in accumulated deficit as a result of the adoption of this change in accounting policy, as of

February 1, 2018.

In

February 2016,

the FASB issued Accounting Standards Update

2016

-

02,

“Leases (Topic

842

)” (“ASU

2016

-

02”

) and issued subsequent amendments to the initial guidance during

2018,

collectively referred to as “ASC

842”.

These updates supersede the lease guidance in ASC Topic

840,

“Leases” (“ASC

840”

) and require the recognition of lease assets and lease liabilities by lessees for most leases previously classified as operating leases under ASC Topic

840.

Leases will continue to be classified as either operating or finance. ASC

842

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2018,

which is our fiscal year that began on

February 1, 2019 (

fiscal

2020

). The Company adopted ASC

842

as of

February 1, 2019

using the cumulative effect method and therefore the comparative information has

not

been restated and continues to be reported under ASC Topic

840.

The adoption of ASC

842

resulted in an increase to ROU assets and lease liabilities of

$

10.4

million as of

February 1, 2019.

The adoption of ASC

842

did

not

have a material impact on either our consolidated statement of operations or our consolidated statement of cash flows.

On adoption of ASC

842,

we have elected to apply the practical expedient to carry forward our current assessments of whether a contract contains a lease, lease classification, and amounts capitalized as initial direct costs. In addition, we have elected the hindsight practical expedient to determine lease term for existing leases.

Recently issued accounting pronouncements

In

June 2016,

the FASB issued Accounting Standards Update

2016

-

13,

“Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments” (“ASU

2016

-

13”

) and issued subsequent amendments to the initial guidance during the

2019

calendar year, collectively referred to as “ASC

326”.

ASC

326

requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASC

326

replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. These changes will result in earlier recognition of credit losses. ASC

326

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance using the cumulative effect method resulting in an adjustment to retained earnings in the

first

quarter of fiscal

2021

and will

not

restate comparative periods. We are currently implementing new credit loss models and updating our processes and controls in preparation for the adoption of ASC

326.

The effect on our consolidated financial statements is expected to largely depend on the composition and credit quality of our financial assets held at amortized cost and the economic conditions and forecasts at the time of adoption. The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

January 2017,

the FASB issued Accounting Standards Update

2017

-

04,

“Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment” (“ASU

2017

-

04”

). ASU

2017

-

04

simplifies how an entity is required to test goodwill for impairment. ASU

2017

-

04

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2021.

The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

August 2018,

the FASB issued Accounting Standards Update

2018

-

15,

“Intangibles – Goodwill and Other – Internal-Use Software (Subtopic

350

-

40

): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU

2018

-

15”

). ASU

2018

-

15

aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU

2018

-

15

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2019,

which will be our fiscal year beginning

February 1, 2020 (

fiscal

2021

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2021.

The adoption of this amendment is

not

expected to have a material impact on our results of operations or disclosures.

In

December 2019,

the FASB issued Accounting Standards Update

2019

-

12,

“Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes” (“ASU

2019

-

12”

). ASU

2019

-

12

simplifies how an entity accounts for income taxes. ASU

2019

-

12

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2020,

which will be our fiscal year beginning

February 1, 2021 (

fiscal

2022

). Early adoption is permitted. The Company will adopt this guidance in the

first

quarter of fiscal

2022.

We are currently evaluating the impact that the adoption will have on our results of operations, financial position and disclosures.

XML

Note 21 - Supplemental Cash Flow Information - Cash Flow Changes in Operating Asset and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Trade accounts receivable	$ 3,733	$ (135)	$ (1,963)
Other accounts receivable	(2,547)	(451)	16
Prepaid expenses and other	(5,942)	(4,466)	(1,772)
Inventory	(345)	74	52
Accounts payable	1,768	(1,065)	1,428
Accrued liabilities	3,265	2,570	(592)
Income taxes payable	(1,550)	(2,423)	6,326
Operating leases	546
Deferred revenue	(4,184)	2,047	902
Changes in operating assets and liabilities (Note 21)	$ (5,256)	$ (3,849)	$ 4,397

XML

Note 3 - Acquisitions - Preliminary Purchase Price Allocation for Businesses Acquired (Details) $ in Thousands, $ in Millions												12 Months Ended
	Aug. 20, 2019 USD ($)	Jun. 27, 2019 USD ($)	May 10, 2019 USD ($)	Feb. 12, 2019 USD ($)	Aug. 21, 2018 USD ($)	Aug. 21, 2018 CAD ($)	Jun. 22, 2018 USD ($)	Feb. 02, 2018 USD ($)	Aug. 14, 2017 USD ($)	Jun. 01, 2017 USD ($)	May 18, 2017 USD ($)	Jan. 31, 2020 USD ($)	Jan. 31, 2019 USD ($)	Jan. 31, 2018 USD ($)
Cash, net of cash acquired												$ 292,053	$ 67,932	$ 111,867
Goodwill												523,690	378,178	350,148
Cash, net of cash acquired												292,053	67,932	111,867
Visual Compliance [Member]
Cash, net of cash acquired				$ 248,900								239,863
Common shares issued												9,045
Contingent consideration
Net working capital adjustments (receivable) / payable												1,147
Purchase price consideration												250,055
Current assets, excluding cash acquired												6,403
Property and equipment												30
Deferred income tax asset												30,924
Right-of-use assets												1,188
Current liabilities												(840)
Deferred revenue												(10,267)
Lease obligations												1,188
Deferred income tax liability												(282)
Net tangible assets (liabilities) assumed												25,968
Goodwill												118,785
Cash, net of cash acquired				$ 248,900								239,863
Visual Compliance [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired												32,186
Visual Compliance [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired												69,422
Visual Compliance [Member] | Trade Names [Member]
Finite-lived intangible assets acquired												528
Visual Compliance [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired												3,166
Core Transport Technologies NZ Limited [Member]
Cash, net of cash acquired			$ 21,800									21,833
Common shares issued
Contingent consideration												1,450
Net working capital adjustments (receivable) / payable												62
Purchase price consideration												23,345
Current assets, excluding cash acquired												689
Property and equipment												2,048
Deferred income tax asset
Right-of-use assets												68
Current liabilities												(352)
Deferred revenue												(278)
Lease obligations												68
Deferred income tax liability												(3,332)
Net tangible assets (liabilities) assumed												(1,225)
Goodwill												12,670
Cash, net of cash acquired			$ 21,800									21,833
Core Transport Technologies NZ Limited [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired												4,600
Core Transport Technologies NZ Limited [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired												6,800
Core Transport Technologies NZ Limited [Member] | Trade Names [Member]
Finite-lived intangible assets acquired												200
Core Transport Technologies NZ Limited [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired												300
STEPcom [Member]
Cash, net of cash acquired		$ 18,600										18,639
Common shares issued
Contingent consideration
Net working capital adjustments (receivable) / payable												250
Purchase price consideration												18,889
Current assets, excluding cash acquired												1,470
Property and equipment												257
Deferred income tax asset
Right-of-use assets												232
Current liabilities												(874)
Deferred revenue												(813)
Lease obligations												232
Deferred income tax liability												(2,316)
Net tangible assets (liabilities) assumed												(2,276)
Goodwill												10,019
Cash, net of cash acquired		$ 18,600										18,639
STEPcom [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired												10,839
STEPcom [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired
STEPcom [Member] | Trade Names [Member]
Finite-lived intangible assets acquired												102
STEPcom [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired												205
BestTransport [Member]
Cash, net of cash acquired	$ 11,700											11,718
Common shares issued
Contingent consideration
Net working capital adjustments (receivable) / payable
Purchase price consideration												11,718
Current assets, excluding cash acquired												815
Property and equipment												35
Deferred income tax asset
Right-of-use assets												194
Current liabilities												(284)
Deferred revenue												(9)
Lease obligations												194
Deferred income tax liability												(1,352)
Net tangible assets (liabilities) assumed												(795)
Goodwill												5,513
Cash, net of cash acquired	$ 11,700											11,718
BestTransport [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired												3,000
BestTransport [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired												3,800
BestTransport [Member] | Trade Names [Member]
Finite-lived intangible assets acquired												50
BestTransport [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired												150
The 2020 Acquisitions [Member]
Cash, net of cash acquired												292,053
Common shares issued												9,045
Contingent consideration												1,450
Net working capital adjustments (receivable) / payable												1,459
Purchase price consideration												304,007
Current assets, excluding cash acquired												9,377
Property and equipment												2,370
Deferred income tax asset												30,924
Right-of-use assets												1,682
Current liabilities												(2,350)
Deferred revenue												(11,367)
Lease obligations												1,682
Deferred income tax liability												(7,282)
Net tangible assets (liabilities) assumed												21,672
Goodwill												146,987
Cash, net of cash acquired												292,053
The 2020 Acquisitions [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired												50,625
The 2020 Acquisitions [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired												80,022
The 2020 Acquisitions [Member] | Trade Names [Member]
Finite-lived intangible assets acquired												880
The 2020 Acquisitions [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired												$ 3,821
Aljex Software, Inc. [Member]
Cash, net of cash acquired								$ 32,400					32,382
Common shares issued
Contingent consideration
Net working capital adjustments (receivable) / payable													(152)
Purchase price consideration													32,230
Current assets, excluding cash acquired													607
Current liabilities													(266)
Deferred revenue													(1,024)
Deferred income tax liability													(4,200)
Net tangible assets (liabilities) assumed													(4,883)
Goodwill													18,903
Cash, net of cash acquired								$ 32,400					32,382
Other long-term assets
Aljex Software, Inc. [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired													5,300
Aljex Software, Inc. [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired													12,400
Aljex Software, Inc. [Member] | Trade Names [Member]
Finite-lived intangible assets acquired													280
Aljex Software, Inc. [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired													230
Velocity Mail [Member]
Cash, net of cash acquired							$ 26,100						26,107
Common shares issued
Contingent consideration
Net working capital adjustments (receivable) / payable													(102)
Purchase price consideration													26,005
Current assets, excluding cash acquired													1,407
Current liabilities													(81)
Deferred revenue													(70)
Deferred income tax liability
Net tangible assets (liabilities) assumed													1,757
Goodwill													8,448
Cash, net of cash acquired							$ 26,100						26,107
Other long-term assets													501
Velocity Mail [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired													7,800
Velocity Mail [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired													7,600
Velocity Mail [Member] | Trade Names [Member]
Finite-lived intangible assets acquired													100
Velocity Mail [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired													300
PinPoint [Member]
Cash, net of cash acquired													9,443
Common shares issued													1,536
Contingent consideration													714
Net working capital adjustments (receivable) / payable													36
Purchase price consideration					$ 11,000	$ 14.4							11,729
Current assets, excluding cash acquired													599
Current liabilities													(559)
Deferred revenue													(574)
Deferred income tax liability													(2,077)
Net tangible assets (liabilities) assumed													(2,611)
Goodwill													6,306
Cash, net of cash acquired													9,443
Other long-term assets
PinPoint [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired													7,758
PinPoint [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired
PinPoint [Member] | Trade Names [Member]
Finite-lived intangible assets acquired													207
PinPoint [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired													69
The 2019 Acquisitions [Member]
Cash, net of cash acquired													67,932
Common shares issued													1,536
Contingent consideration													714
Net working capital adjustments (receivable) / payable													(218)
Purchase price consideration													69,964
Current assets, excluding cash acquired													2,613
Current liabilities													(906)
Deferred revenue													(1,668)
Deferred income tax liability													(6,277)
Net tangible assets (liabilities) assumed													(5,737)
Goodwill													33,657
Cash, net of cash acquired													67,932
Other long-term assets													501
The 2019 Acquisitions [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired													20,858
The 2019 Acquisitions [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired													20,000
The 2019 Acquisitions [Member] | Trade Names [Member]
Finite-lived intangible assets acquired													587
The 2019 Acquisitions [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired													$ 599
ShipRush [Member]
Cash, net of cash acquired											$ 14,200			14,198
Common shares issued
Contingent consideration														1,233
Net working capital adjustments (receivable) / payable														88
Purchase price consideration														15,519
Current assets, excluding cash acquired														461
Current liabilities														(266)
Deferred revenue														(609)
Net tangible assets (liabilities) assumed														(414)
Goodwill														8,603
Cash, net of cash acquired											$ 14,200			14,198
ShipRush [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired														2,400
ShipRush [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired														4,710
ShipRush [Member] | In Process Research and Development [Member]
Finite-lived intangible assets acquired
ShipRush [Member] | Trade Names [Member]
Finite-lived intangible assets acquired														120
ShipRush [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired														100
PCSTrac, Inc. [Member]
Cash, net of cash acquired										$ 11,500				11,492
Common shares issued
Contingent consideration
Net working capital adjustments (receivable) / payable														40
Purchase price consideration														11,532
Current assets, excluding cash acquired														467
Current liabilities														(10)
Deferred revenue
Net tangible assets (liabilities) assumed														457
Goodwill														5,815
Cash, net of cash acquired										$ 11,500				11,492
PCSTrac, Inc. [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired														1,850
PCSTrac, Inc. [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired														3,270
PCSTrac, Inc. [Member] | In Process Research and Development [Member]
Finite-lived intangible assets acquired
PCSTrac, Inc. [Member] | Trade Names [Member]
Finite-lived intangible assets acquired														60
PCSTrac, Inc. [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired														80
MacroPoint LLC [Member]
Cash, net of cash acquired														86,177
Common shares issued									$ 20,000					20,000
Contingent consideration									80,000
Net working capital adjustments (receivable) / payable														163
Purchase price consideration									$ 106,200					106,340
Current assets, excluding cash acquired														2,127
Current liabilities														(1,693)
Deferred revenue														(5,787)
Net tangible assets (liabilities) assumed														(5,353)
Goodwill														65,213
Cash, net of cash acquired														86,177
MacroPoint LLC [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired														26,030
MacroPoint LLC [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired														17,170
MacroPoint LLC [Member] | In Process Research and Development [Member]
Finite-lived intangible assets acquired														290
MacroPoint LLC [Member] | Trade Names [Member]
Finite-lived intangible assets acquired														570
MacroPoint LLC [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired														2,420
The 2018 Acquisitions [Member]
Cash, net of cash acquired														111,867
Common shares issued														20,000
Contingent consideration														1,233
Net working capital adjustments (receivable) / payable														291
Purchase price consideration														133,391
Current assets, excluding cash acquired														3,055
Current liabilities														(1,969)
Deferred revenue														(6,396)
Net tangible assets (liabilities) assumed														(5,310)
Goodwill														79,631
Cash, net of cash acquired														111,867
The 2018 Acquisitions [Member] | Customer Relationships [Member]
Finite-lived intangible assets acquired														30,280
The 2018 Acquisitions [Member] | Existing Technology [Member]
Finite-lived intangible assets acquired														25,150
The 2018 Acquisitions [Member] | In Process Research and Development [Member]
Finite-lived intangible assets acquired														290
The 2018 Acquisitions [Member] | Trade Names [Member]
Finite-lived intangible assets acquired														750
The 2018 Acquisitions [Member] | Noncompete Agreements [Member]
Finite-lived intangible assets acquired														$ 2,600

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Note 4 - Fair Value Measurements (Details Textual) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Derivative Instrument, Shares of Common Stock Held	251,422
Derivative Instrument, Common Shares Held, Per Share	$ 22.37
General and Administrative Expense [Member]
Derivative, Gain on Derivative	$ 4.0	$ 1.2	$ 1.1

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Note 22 - Segmented Information - Long-lived Assets by Geographical Location (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Geograhical long-lived assets	$ 270,687	$ 188,804
UNITED STATES
Geograhical long-lived assets	114,980	119,958
EMEA [Member]
Geograhical long-lived assets	31,299	28,433
CANADA
Geograhical long-lived assets	111,264	40,413
Asia Pacific [Member]
Geograhical long-lived assets	$ 13,144

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Note 17 - Stock-based Compensation Plans - Options Outstanding and Options Exercisable (Details)	12 Months Ended
	Jan. 31, 2020 $ / shares shares
Weighted Average Exercise Price, Options Outstanding (in dollars per share)	$ 26.82
Number of Stock Options, Options Outstanding (in shares) | shares	1,127,822
Weighted Average Remaining Contractual Life, Options Outstanding (Year)	4 years 219 days
Weighted Average Exercise Price, Options Exercisable (in dollars per share)	$ 22.88
Number of Stock Options, Options Exercisable (in shares) | shares	718,169
Range 1 [Member]
Range of Exercise Prices, Lower Limit (in dollars per share)	$ 11.43
Range of Exercise Prices, Upper Limit (in dollars per share)	11.59
Weighted Average Exercise Price, Options Outstanding (in dollars per share)	$ 11.57
Number of Stock Options, Options Outstanding (in shares) | shares	126,500
Weighted Average Remaining Contractual Life, Options Outstanding (Year)	1 year 146 days
Weighted Average Exercise Price, Options Exercisable (in dollars per share)	$ 11.57
Number of Stock Options, Options Exercisable (in shares) | shares	126,500
Range 2 [Member]
Range of Exercise Prices, Lower Limit (in dollars per share)	$ 18.71
Range of Exercise Prices, Upper Limit (in dollars per share)	22.57
Weighted Average Exercise Price, Options Outstanding (in dollars per share)	$ 21.17
Number of Stock Options, Options Outstanding (in shares) | shares	397,014
Weighted Average Remaining Contractual Life, Options Outstanding (Year)	3 years 292 days
Weighted Average Exercise Price, Options Exercisable (in dollars per share)	$ 21.08
Number of Stock Options, Options Exercisable (in shares) | shares	357,014
Range 3 [Member]
Range of Exercise Prices, Lower Limit (in dollars per share)	$ 25.91
Range of Exercise Prices, Upper Limit (in dollars per share)	27.50
Weighted Average Exercise Price, Options Outstanding (in dollars per share)	$ 27.49
Number of Stock Options, Options Outstanding (in shares) | shares	247,935
Weighted Average Remaining Contractual Life, Options Outstanding (Year)	5 years 73 days
Weighted Average Exercise Price, Options Exercisable (in dollars per share)	$ 27.49
Number of Stock Options, Options Exercisable (in shares) | shares	140,461
Range 4 [Member]
Range of Exercise Prices, Lower Limit (in dollars per share)	$ 38.04
Range of Exercise Prices, Upper Limit (in dollars per share)	39.70
Weighted Average Exercise Price, Options Outstanding (in dollars per share)	$ 38.07
Number of Stock Options, Options Outstanding (in shares) | shares	356,373
Weighted Average Remaining Contractual Life, Options Outstanding (Year)	6 years 73 days
Weighted Average Exercise Price, Options Exercisable (in dollars per share)	$ 38.06
Number of Stock Options, Options Exercisable (in shares) | shares	94,194

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Note 13 - Leases - Lease Obligations (Details) $ in Thousands	Jan. 31, 2019 USD ($)
2020	$ 4,678
2021	3,048
2022	1,979
2023	1,470
2024	1,038
2025	737
2026	733
2027	271
	13,954
Operating Leases [Member]
2020	4,627
2021	3,046
2022	1,979
2023	1,470
2024	1,038
2025	737
2026	733
2027	271
	13,901
Capital Leases [Member]
2020	51
2021	2
	$ 53

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Note 12 - Debt - Schedule of Long-term Debt (Details) - Senior Secured Credit Facility [Member] - Revolving Operating Credit Facility [Member] - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Credit facility		$ 25,464
Available for use	$ 350,000	$ 324,536

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Note 17 - Stock-based Compensation Plans (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost	$ 700	$ 600
Share-based Payment Arrangement, Exercise of Option, Tax Benefit	$ 100	$ 200
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	1,127,822	879,338	657,209
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	367,173	272,144	274,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 8.99	$ 7.10	$ 5.26
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 2,000	$ 800	$ 2,500
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 3,500
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 292 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	$ 1,900
Performance Shares [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 2,700
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 182 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 2,600
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 1,300
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 255 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 1,100
Option Granted Outside of Shareholder-approved Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	1,021,322
Option Granted Outside of Shareholder-approved Stock Option Plan [Member] | Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	3,661,684
Outside of Shareholder-approved Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	106,500
Deferred Share Unit Plan [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 0	$ 0
Deferred Share Units Outstanding Number	251,422	277,390
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent	$ 11,300	$ 8,600
Deferred Share Units Grants In Period	25,373
Deferred Share Units Redeemed and Settled in Cash	51,341
Deferred Share Units Compensation Expense	$ 5,000	2,200	2,300
Cash-Settled Restricted Share Unit [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	1,100	800
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent	800	600
Cash Settled Restricted Share Units Compensation Expense	$ 900	$ 800	$ 1,000

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Note 16 - Earnings Per Share (Details Textual) - shares	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Stock Options, Treasury Stock Method [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	5,909	0	2,475
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	350,464	271,869	270,525

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Note 17 - Stock-based Compensation Plans - Summary of CRSU Plan Activity (Details) - shares	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Number of Units Outstanding, CRSU (in shares)	45,063	58,171
Weighted-Average Remaining Contractual Life, CRSU (Year)	1 year 219 days	1 year 219 days	1 year 182 days
Number of Units Granted, CRSU (in shares)	30,086	32,261
Number of Units Vested and settled in cash, CRSU (in shares)	(32,422)	(45,369)
Number of Units Outstanding, CRSU (in shares)	42,727	45,063	58,171
Non-vested, CRSU (in shares)	42,727
Non-vested, Weighted-Average Remaining Contractual Life, CRSU (Year)	1 year 219 days

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Note 18 - Income Taxes (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Year Ended	January 31,	January 31,	January 31,
	2020	2019	2018
Canada	19,557	16,715	17,964
United States	19,962	11,077	6,203
Other countries	8,516	11,718	10,581
	48,035	39,510	34,748

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Current income tax expense
Canada	1,020		3,037		1,243
United States	3,496		1,298		494
Other countries	779		1,707		4,835
	5,295		6,042		6,572
Deferred income tax expense (recovery)
Canada	5,008		2,531		2,051
United States	1,390		67		1,876
Other countries	(655	)	(407	)	(2,630	)
	5,743		2,191		1,297
	11,038		8,233		7,869

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	January 31,		January 31,
	2020		2019
Assets
Accrued liabilities not currently deductible	14,838		11,483
Accumulated net operating losses	10,579		11,081
Difference between tax and accounting basis of property and equipment	33,929		–
Research and development and other tax credits and expenses	756		911
Total deferred income tax assets	60,102		23,475
Liabilities
Difference between tax and accounting basis of intangible assets	(41,381	)	(23,974	)
Difference between tax and accounting basis of property and equipment	–		(909	)
Other temporary differences	(1,716	)	(574	)
Total deferred income tax liabilities	(43,097	)	(25,457	)
Net deferred income taxes	17,005		(1,982	)
Valuation allowance	(10,470	)	(9,927	)
Net deferred income taxes, net of valuation allowance	6,535		(11,909	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Year Ended	January 31,		January 31,		January 31,
	2020		2019		2018
Income before income taxes	48,033		39,510		34,748
Combined basic Canadian statutory rates	26.5	%	26.5	%	26.5	%
Income tax expense based on the above rates	12,729		10,470		9,207
Increase (decrease) in income taxes resulting from:
Permanent differences including amortization of intangible assets	(673	)	(133	)	(1,870	)
Effect of differences between Canadian and foreign tax rates	(274	)	(172	)	595
Effect of rate changes on current year timing differences	(609	)	(245	)	(571	)
Adjustments relating to previous periods	94		(973	)	(152	)
Increase (decrease) in accruals for uncertain tax positions	(1,042	)	(515	)	1,954
Valuation allowance	692		(344	)	(1,564	)
Stock based compensation	352		231		(135	)
Deferred tax charges	–		–		179
Other, including foreign exchange	(231	)	(86	)	226
Income tax expense	11,038		8,233		7,869

Summary of Operating Loss Carryforwards [Table Text Block]

Expiry year	Canada	United States	EMEA	Asia Pacific	Total
2021	–	–	–	585	585
2022	–	245	–	264	509
2023	–	253	651	46	950
2024	–	245	126	171	542
2025	–	245	–	–	245
Thereafter	1,609	5,026	42,865	3,070	52,570
	1,609	6,014	43,642	4,136	55,401

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	January 31,		January 31,
	2020		2019
Liability, beginning of year	7,824		8,977
Gross increases – current period	139		493
Lapsing due to statutes of limitations	(1,313	)	(1,646	)
Liability, end of year	6,650		7,824

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Note 13 - Leases (Tables)

12 Months Ended

Jan. 31, 2020

Notes Tables

Lease, Cost [Table Text Block]

Year Ended	January 31, 2020
Operating lease cost	4,902
Short-term lease cost	866
Total operating lease cost	5,768

Year Ended	January 31, 2020
Operating cash outflows from operating leases included in measurement of lease liabilities	4,150
Increase in ROU asset from non-cash activities, including lease modifications and new leases	6,439

	January 31, 2020
Weighted average remaining lease term (years)	4.3
Weighted average discount rate (%)	2.8

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Years Ended January 31,	Operating Leases
2021	4,343
2022	3,283
2023	2,508
2024	1,924
2025	1,252
2026 and thereafter	1,049
Total lease payments	14,359
Less: imputed interest	(954	)
Total lease obligations	13,405
Current	3,928
Long-term	9,477

Schedule of Future Minimum Rental Payments for Leases [Table Text Block]

Years Ended January 31,	Operating Leases	Capital Leases	Total
2020	4,627	51	4,678
2021	3,046	2	3,048
2022	1,979	–	1,979
2023	1,470	–	1,470
2024	1,038	–	1,038
2025	737	–	737
2026	733	–	733
2027	271	–	271
	13,901	53	13,954

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Note 20 - Other Charges - Other Charges Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Acquisition-related costs	$ 3,797		$ 3,778	$ 3,471
Restructuring plans			20	523
	$ 3,797	$ 3,797	$ 3,798	$ 3,994

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Note 12 - Debt (Details Textual) - USD ($) $ in Millions	Jan. 25, 2019	Jan. 31, 2020	Jan. 31, 2019	Jan. 24, 2019
Letters of Credit Outstanding, Amount		$ 0.2	$ 0.2
Revolving Operating Credit Facility [Member] | Senior Secured Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 150.0
Revolving Operating Credit Facility [Member] | Senior Secured Credit Facility [Member] | Minimum [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 350.0
Revolving Operating Credit Facility [Member] | Senior Secured Credit Facility [Member] | Maximum [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 500.0
Line of Credit Borrowings to Support Foreign Exchange and Interest Rate Hedging [Member] | Senior Secured Credit Facility [Member]
Debt Instrument, Term	5 years
Senior Secured Credit Facility [Member] | Minimum [Member]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.20%
Senior Secured Credit Facility [Member] | Minimum [Member] | Canada or US Prime Rate, BA, or LIBOR [Member]
Debt Instrument, Basis Spread on Variable Rate	0.00%
Senior Secured Credit Facility [Member] | Maximum [Member]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.40%
Senior Secured Credit Facility [Member] | Maximum [Member] | Canada or US Prime Rate, BA, or LIBOR [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%

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Note 18 - Income Taxes - Income Tax Expense (Recovery) Incurred by Jurisdictions (Details) - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Current income tax expense	$ 5,295	$ 5,295	$ 6,042	$ 6,572
Deferred tax expense	5,743	5,743	2,191	1,297
Income tax expense	11,038	$ 11,038	8,233	7,869
CANADA
Current income tax expense	1,020		3,037	1,243
Deferred tax expense	5,008		2,531	2,051
UNITED STATES
Current income tax expense	3,496		1,298	494
Deferred tax expense	1,390		67	1,876
Other Countries [Member]
Current income tax expense	779		1,707	4,835
Deferred tax expense	$ (655)		$ (407)	$ (2,630)

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Note 6 - Other Receivables (Details Textual) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Amounts Recoverable from Funds Held in Escrow	$ 0	$ 100

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Note 9 - Intangible Assets (Details Textual) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Finite-Lived Intangible Assets, Net, Ending Balance	$ 256,956	$ 176,192
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	52,700
Finite-Lived Intangible Assets, Amortization Expense, Year Two	48,300
Finite-Lived Intangible Assets, Amortization Expense, Year Three	40,700
Finite-Lived Intangible Assets, Amortization Expense, Year Four	28,900
Finite-Lived Intangible Assets, Amortization Expense, Year Five	25,900
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 60,500

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Note 18 - Income Taxes - Reconciliation of the Total Estimated Liability Associated With Uncertain Tax Provisions (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Liability, beginning of year	$ 7,824	$ 8,977
Gross increases – current period	139	493
Lapsing due to statutes of limitations	(1,313)	(1,646)
Liability, end of year	$ 6,650	$ 7,824

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
REVENUES	$ 325,791	$ 275,171	$ 237,439
COST OF REVENUES	85,721	74,994	63,704
GROSS MARGIN	240,070	200,177	173,735
EXPENSES
Sales and marketing	40,389	36,873	33,128
Research and development	53,513	47,872	41,804
General and administrative	34,628	30,012	25,448
Other charges (Note 20)	3,797	3,798	3,994
Amortization of intangible assets	55,485	40,179	33,477
	187,812	158,734	137,851
INCOME FROM OPERATIONS	52,258	41,443	35,884
INTEREST EXPENSE	(4,416)	(2,128)	(1,297)
INVESTMENT INCOME	193	195	161
INCOME BEFORE INCOME TAXES	48,033	39,510	34,748
INCOME TAX EXPENSE (Note 18)
Current	5,295	6,042	6,572
Deferred	5,743	2,191	1,297
	11,038	8,233	7,869
NET INCOME	$ 36,997	$ 31,277	$ 26,879
Earnings per share
Basic (in dollars per share)	$ 0.45	$ 0.41	$ 0.35
Diluted (in dollars per share)	$ 0.45	$ 0.40	$ 0.35
WEIGHTED AVERAGE SHARES OUTSTANDING (thousands)
Basic (in shares)	81,659	76,832	76,324
Diluted (in shares)	82,867	77,791	77,112

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
OPERATING ACTIVITIES
Net income	$ 36,997	$ 31,277	$ 26,879
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	6,037	4,544	4,101
Amortization of intangible assets	55,485	40,179	33,477
Stock-based compensation expense (Note 17)	4,909	3,710	2,807
Other non-cash operating activities	337	71	(784)
Deferred tax expense	5,743	2,191	1,297
Deferred tax charge		(49)	(31)
Changes in operating assets and liabilities (Note 21)	(5,256)	(3,849)	4,397
Cash provided by operating activities	104,252	78,074	72,143
INVESTING ACTIVITIES
Additions to property and equipment	(4,900)	(5,244)	(5,086)
Acquisition of subsidiaries, net of cash acquired (Note 3)	(292,053)	(67,932)	(111,867)
Cash used in investing activities	(296,953)	(73,176)	(116,953)
FINANCING ACTIVITIES
Proceeds from borrowing on the credit facility	297,015	68,468	80,000
Credit facility repayments	(322,634)	(78,659)	(43,000)
Payment of debt issuance costs	(1,400)
Issuance of common shares for cash, net of issuance costs (Note 15)	237,973	345	1,003
Payment of contingent consideration	(785)	(1,531)
Cash provided by (used in) financing activities	210,169	(11,377)	38,003
Effect of foreign exchange rate changes on cash	(363)	(1,368)	3,817
Increase (decrease) in cash	17,105	(7,847)	(2,990)
Cash, beginning of year	27,298	35,145	38,135
Cash, end of year	44,403	27,298	35,145
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	3,516	1,712	680
Cash paid during the year for income taxes	$ 8,946	$ 7,862	$ 3,887

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Note 15 - Share Capital

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Share Capital [Text Block]

Note

15

– Share Capital

On

June 6, 2018,

we filed a final short-form base shelf prospectus (the “Base Shelf Prospectus”), allowing us to offer and issue the following securities: (i) common shares; (ii) preferred shares; (iii) senior or subordinated unsecured debt securities; (iv) subscription receipts; (v) warrants; and (vi) securities comprised of more than

one

of the aforementioned common shares, preferred shares, debt securities, subscription receipts and/ or warrants offered together as a unit. These securities

may

be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in

one

or more shelf prospectus supplements. The aggregate initial offering price of securities that

may

be sold by us (or certain of our current or future shareholders) pursuant to the Base Shelf Prospectus during the

25

-month period that the Base Shelf Prospectus, including any amendments thereto, remains valid was limited to an aggregate of

$750

million.

On

June 10, 2019,

we completed a public offering of common shares in the United States and Canada at a price of

$35.50

per common share pursuant to the

short-form base shelf prospectus and related prospectus supplement filed in connection with the offering (the “Offering”)

. The total offering of

6,900,000

common shares included the exercise in full by the underwriters of the

15%

over-allotment option, for aggregate gross proceeds to Descartes of

$245.0

million. Net proceeds to Descartes were approximately

$236.6

million once expenses associated with the Offering were deducted inclusive of the related deferred tax benefit on share issuance costs. As a result of the Offering, the aggregate balance of securities that

may

be sold by us pursuant to the Base Shelf Prospectus has been reduced to an aggregate of

$505.0

million.

The following table sets forth the common shares outstanding (number of shares in thousands):

	January 31,	January 31,	January 31,
(thousands of shares)	2020	2019	2018
Balance, beginning of year	76,865	76,773	75,875
Shares issued:
Stock options and share units exercised	95	46	141
Issuance of common shares	6,900	–	–
Acquisitions (Note 3)	296	46	757
Balance, end of year	84,156	76,865	76,773

Cash flows provided from stock options and share units exercised

during

2020,

2019

and

2018

were approximately

$1.5

million,

$0.5

million and

$1.0

million, respectively.

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Note 19 - Contract Balances, Performance Obligations and Contract Costs

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note

19

– Contract Balances, Performance Obligations and Contract Costs

Deferred Revenue

The following table presents the changes in the deferred revenue balance as follows:

	Deferred Revenue
Balance at January 31, 2018	32,113
Recognition of previously deferred revenue	(27,252	)
Deferral of revenue	29,423
Increases from business combinations, net	1,789
Effect of movements in foreign exchange	(982	)
Balance at January 31, 2019	35,091
Recognition of previously deferred revenue	(30,580	)
Deferral of revenue	37,408
Increases from business combinations, net	551
Effect of movements in foreign exchange	(407	)
Balance at January 31, 2020	42,063
Current	41,143
Long-term	920

Performance Obligations

As of

January 31, 2020,

approximately

$216.9

million of revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. We expect to recognize revenue on approximately

80%

of these remaining performance obligations over the next

24

months with the balance recognized thereafter.

Contract Assets

The following table presents the changes in the contract assets balance as follows:

	Contract Assets
Balance at January 31, 2018	–
Adjustment for adoption of ASC 606	495
Balance at February 1, 2018	495
Transfers to trade receivables from contract assets	(266	)
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to trade receivables	606
Effect of movements in foreign exchange	(23	)
Balance at January 31, 2019	812
Transfers to trade receivables from contract assets	(490	)
Increases as a result of delivered term licenses recognized as revenue during the period, net of amounts transferred to trade receivables	791
Effect of movements in foreign exchange	(6	)
Balance at January 31, 2020	1,107

Contract Costs

Capitalized contract costs net of accumulated amortization is

$9.8

million at

January 31, 2020 (

$7.3

million at

January 31, 2019).

Capitalized contract costs are amortized consistent with the pattern of transfer to the customer for the goods and services to which the asset relates.

The total contract cost amortization included in sales and marketing expenses was

$2.5

million and

$1.8

million for the years ended

January 31, 2020

and

January 31, 2019,

respectively. There was

no

impairment loss in relation to the costs capitalized during the years ended

January 31, 2020

and

January 31, 2019,

respectively.