SPS Commerce Reports First Quarter 2025 Financial Results

April 24, 2025 16:05 ET | Source: SPS Commerce, Inc. Company delivers 97th consecutive quarter of topline growthFirst quarter 2025 revenue grew 21% and recurring revenue grew 23% from the first quarter of 2024 MINNEAPOLIS, April 24, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the first quarter ended March 31, 2025. Financial Highlights First Quarter 2025 Financial Highlights Revenue was $181.5 million in the first quarter of 2025, compared to $149.6 million in the first quarter of 2024, reflecting 21% growth.Recurring revenue grew 23% from the first quarter of 2024.Net income was $22.2 million or $0.58 per diluted share, compared to net income of $18.0 million or $0.48 per diluted share in the first quarter of 2024.Non-GAAP income per diluted share was $1.00, compared to non-GAAP income per diluted share of $0.86 in the first quarter of 2024.Adjusted EBITDA for the first quarter of 2025 increased 22% to $54.4 million compared to the first quarter of 2024.Share repurchases in the first quarter of 2025 totaled $40.0 million. “SPS Commerce operates a network of over 50,000 suppliers, logistics companies and buying organizations across retail, distribution, grocery, and manufacturing, and we are uniquely positioned to support all trading relationships,” said Chad Collins, CEO of SPS Commerce. “With an $11 billion total addressable market, we have a tremendous opportunity to transform how trading partners work together as they continue to advance their supply chain technologies.” “We delivered strong first-quarter performance, and the 97th consecutive quarter of revenue growth,” said Kim Nelson, CFO of SPS Commerce. “Despite ongoing uncertainty in the macro environment, we remain confident in our full-year 2025 growth outlook and margin expansion profile, which underscores the resilience of our business model and the mission critical nature of our solutions, designed to improve collaboration across the global retail supply chain.” Guidance Second Quarter 2025 Guidance Revenue is expected to be in the range of $184.5 million to $186.2 million, representing 20% to 21% year-over-year growth. Net income per diluted share is expected to be in the range of $0.41 to $0.44, with fully diluted weighted average shares outstanding of 38.8 million shares.Non-GAAP income per diluted share is expected to be in the range of $0.87 to $0.90.Adjusted EBITDA is expected to be in the range of $53.0 million to $54.5 million.Non-cash, share-based compensation expense is expected to be $15.5 million, depreciation expense is expected to be $5.5 million, and amortization expense is expected to be $9.8 million. Fiscal Year 2025 Guidance Revenue is expected to be in the range of $758.5 million to $763.0 million, representing 19% to 20% growth over 2024.Net income per diluted share is expected to be in the range of $2.06 to $2.13, with fully diluted weighted average shares outstanding of 38.7 million shares.Non-GAAP income per diluted share is expected to be in the range of $3.86 to $3.93.Adjusted EBITDA is expected to be in the range of $229.4 million to $232.9 million, representing 23% to 25% growth over 2024.Non-cash, share-based compensation expense is expected to be $61.4 million, depreciation expense is expected to be $23.0 million, and amortization expense is expected to be $38.0 million. The forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially. The Company does not present a reconciliation of the forward-looking non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, and non-GAAP income per share, to the most directly comparable GAAP financial measures because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized. Quarterly Conference Call To access the call, please dial 1-833-816-1382, or outside the U.S. 1-412-317-0475 at least 15 minutes prior to the 3:30 p.m. CT start time. Please ask to join the SPS Commerce Q1 2025 conference call. A live webcast of the call will also be available at http://investors.spscommerce.com under the Events and Presentations menu. The replay will also be available on our website at http://investors.spscommerce.com. About SPS Commerce SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service, and accessible experts so our customers can focus on what they do best. Over 50,000 recurring revenue customers in retail, grocery, distribution, supply, manufacturing, and logistics are using SPS as their retail network. SPS has achieved 97 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit www.spscommerce.com. SPS COMMERCE, SPS, SPS logo and INFINITE RETAIL POWER are marks of SPS Commerce, Inc. and registered in the U.S. Patent and Trademark Office, along with other SPS marks. Such marks may also be registered or otherwise protected in other countries. SPS-F Use of Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures. We believe that these non-GAAP financial measures provide useful information to our management, Board of Directors, and investors regarding certain financial and business trends relating to our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses and planning purposes. Adjusted EBITDA is also used for purposes of determining executive and senior management incentive compensation. We believe these non-GAAP financial measures are useful to an investor as they are widely used in evaluating operating performance. Adjusted EBITDA and Adjusted EBITDA Margin are used to measure operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of capital structure and the method by which assets were acquired. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our condensed consolidated financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release. Adjusted EBITDA Measures: Adjusted EBITDA consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from investments held and foreign currency impact on cash and investments, investment income, and other adjustments as necessary for a fair presentation. Other adjustments for the three months ended March 31, 2025 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs. Net income is the comparable GAAP measure of financial performance. Adjusted EBITDA Margin consists of Adjusted EBITDA divided by revenue. Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue. Non-GAAP Income Per Share Measure: Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from investments held and foreign currency impact on cash and investments, other adjustments as necessary for a fair presentation, including for the three months ended March 31, 2025 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs, and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period. Net income per share, the comparable GAAP measure of financial performance, consists of net income divided by the weighted average number of shares of common and diluted stock outstanding during each period. To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments. The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments. Forward-Looking Statements This press release may contain forward-looking statements, including information about management's view of SPS Commerce's future expectations, plans and prospects, including our views regarding future execution within our business, the opportunity we see in the retail supply chain world and our performance for the second quarter and full year of 2025, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of SPS Commerce to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are included in documents SPS Commerce files with the Securities and Exchange Commission, including but not limited to, SPS Commerce's Annual Report on Form 10-K for the year ended December 31, 2024, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on SPS Commerce's future results. The forward-looking statements included in this press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. SPS COMMERCE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except shares) March 31,2025 December 31,2024ASSETS(unaudited) Current assets Cash and cash equivalents$94,921 $241,017 Accounts receivable 68,183 56,214 Allowance for credit losses (4,793) (4,179)Accounts receivable, net 63,390 52,035 Deferred costs 67,107 65,342 Other assets 26,417 23,513 Total current assets 251,835 381,907 Property and equipment, net 38,687 37,547 Operating lease right-of-use assets 8,424 8,192 Goodwill 533,940 399,180 Intangible assets, net 252,280 181,294 Other assets Deferred costs, non-current 21,416 20,572 Deferred income tax assets 562 505 Other assets, non-current 1,906 2,033 Total assets$1,109,050 $1,031,230 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable$11,255 $8,577 Accrued compensation 40,747 47,160 Accrued expenses 16,640 12,108 Deferred revenue 78,620 74,256 Operating lease liabilities 6,162 4,583 Total current liabilities 153,424 146,684 Other liabilities Deferred revenue, non-current 5,748 6,189 Operating lease liabilities, non-current 6,101 7,885 Deferred income tax liabilities 20,298 15,541 Other liabilities, non-current 2,558 241 Total liabilities 188,129 176,540 Commitments and contingencies Stockholders' equity Common stock 40 40 Treasury stock (102,096) (99,748)Additional paid-in capital 672,138 627,982 Retained earnings 358,295 336,099 Accumulated other comprehensive loss (7,456) (9,683)Total stockholders’ equity 920,921 854,690 Total liabilities and stockholders’ equity$1,109,050 $1,031,230 SPS COMMERCE, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited; in thousands, except per share amounts) Three Months Ended March 31, 2025 2024Revenues$181,549 $149,576Cost of revenues 56,914 51,487Gross profit 124,635 98,089Operating expenses Sales and marketing 41,634 36,432Research and development 17,439 16,009General and administrative 31,018 25,907Amortization of intangible assets 8,588 4,338Total operating expenses 98,679 82,686Income from operations 25,956 15,403Other income, net 2,207 3,132Income before income taxes 28,163 18,535Income tax expense 5,967 532Net income$22,196 $18,003 Net income per share Basic$0.58 $0.49Diluted$0.58 $0.48 Weighted average common shares used to compute net income per share Basic 37,990 37,049Diluted 38,163 37,686 SPS COMMERCE, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited; in thousands) Three Months EndedMarch 31, 2025 2024 Cash flows from operating activities Net income$22,196 $18,003 Reconciliation of net income to net cash provided by operating activities Deferred income taxes (4,418) (7,070)Depreciation and amortization of property and equipment 4,957 4,694 Amortization of intangible assets 8,588 4,338 Provision for credit losses 1,822 1,408 Stock-based compensation 13,867 20,018 Other, net 168 (431)Changes in assets and liabilities, net of effects of acquisition Accounts receivable (7,443) (6,759)Deferred costs (1,247) (1,651)Other assets and liabilities 1,174 3,030 Accounts payable 1,677 5,098 Accrued compensation (7,948) (9,518)Accrued expenses 3,868 (674)Deferred revenue 3,160 4,129 Operating leases (438) (551)Net cash provided by operating activities 39,983 34,064 Cash flows from investing activities Purchases of property and equipment (6,150) (3,533)Purchases of investments — (44,412)Maturities of investments — 45,000 Acquisition of business, net (141,636) — Net cash used in investing activities (147,786) (2,945)Cash flows from financing activities Repurchases of common stock (40,000) (16,540)Net proceeds from exercise of options to purchase common stock 635 1,260 Net proceeds from employee stock purchase plan activity 411 391 Net cash used in financing activities (38,954) (14,889)Effect of foreign currency exchange rate changes 661 (674)Net increase (decrease) in cash and cash equivalents (146,096) 15,556 Cash and cash equivalents at beginning of period 241,017 219,081 Cash and cash equivalents at end of period$94,921 $234,637 SPS COMMERCE, INC.NON-GAAP RECONCILIATIONS(Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts) Adjusted EBITDA Three Months EndedMarch 31, 2025 2024Net income$22,196 $18,003 Income tax expense 5,967 532 Depreciation and amortization of property and equipment 4,957 4,694 Amortization of intangible assets 8,588 4,338 Stock-based compensation expense 13,867 20,018 Realized gain from investments held and foreign currency impact on cash and investments (366) (304)Investment income (1,849) (2,879)Other 1,013 — Adjusted EBITDA$54,373 $44,402 Adjusted EBITDA Margin Three Months EndedMarch 31, 2025 2024Revenue$181,549 $149,576 Net income 22,196 18,003 Margin 12% 12% Adjusted EBITDA 54,373 44,402 Adjusted EBITDA Margin 30% 30% Non-GAAP Income per Share Three Months EndedMarch 31, 2025 2024Net income$22,196 $18,003 Stock-based compensation expense 13,867 20,018 Amortization of intangible assets 8,588 4,338 Realized gain from investments held and foreign currency impact on cash and investments (366) (304)Other 1,013 — Income tax effects of adjustments (7,285) (9,554)Non-GAAP income$38,013 $32,501 Shares used to compute net income and non-GAAP income per share Basic 37,990 37,049 Diluted 38,163 37,686 Net income per share, basic$0.58 $0.49 Non-GAAP adjustments to net income per share, basic 0.42 0.39 Non-GAAP income per share, basic$1.00 $0.88 Net income per share, diluted$0.58 $0.48 Non-GAAP adjustments to net income per share, diluted 0.42 0.38 Non-GAAP income per share, diluted$1.00 $0.86 The annual per share amounts may not cross-sum due to rounding. Contact:Investor RelationsThe Blueshirt GroupIrmina Blaszczyk & Lisa LaukkanenSPSC@blueshirtgroup.com415-217-4962

SPS Commerce Reports First Quarter 2025 Financial Results

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