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SPS Commerce Reports Second Quarter 2025 Financial Results

1. SPS Commerce achieved 98 consecutive quarters of revenue growth. 2. Q2 2025 revenue rose 22% year-over-year to $187.4 million. 3. Recurring revenue grew 24%, showcasing strong business performance. 4. Q2 net income increased to $19.7 million; $0.52 per diluted share. 5. Third quarter guidance predicts 17%-18% growth in revenue.

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Why Very Bullish?

SPSC's sustained revenue growth and positive projections bolster investor confidence. Historical examples show similar reports often lead to price increases.

How important is it?

The announcement details impressive growth metrics and future outlook, critical for SPSC's valuation.

Why Long Term?

Consistent growth trends position SPSC favorably for sustained long-term appreciation, with robust market demand.

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July 30, 2025 16:05 ET  | Source: SPS Commerce, Inc. Company delivers 98th consecutive quarter of topline growth Second quarter 2025 revenue grew 22% and recurring revenue grew 24% from the second quarter of 2024 MINNEAPOLIS, July 30, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the second quarter ended June 30, 2025. Financial Highlights Second Quarter 2025 Financial Highlights Revenue was $187.4 million in the second quarter of 2025, compared to $153.6 million in the second quarter of 2024, reflecting 22% growth.Recurring revenue grew 24% from the second quarter of 2024.Net income was $19.7 million or $0.52 per diluted share, compared to net income of $18.0 million or $0.48 per diluted share in the second quarter of 2024.Non-GAAP income per diluted share was $1.00, compared to non-GAAP income per diluted share of $0.80 in the second quarter of 2024.Adjusted EBITDA for the second quarter of 2025 increased 27% to $56.1 million compared to the second quarter of 2024.Share repurchases in the second quarter of 2025 totaled $20.0 million. “SPS Commerce is the only full-service EDI solution on the market uniquely positioned to help suppliers effortlessly maintain EDI compliance with retailers’ frequently changing requirements,” said Chad Collins, CEO of SPS Commerce. “Our product portfolio enables a stronger collaboration between trading partners, unlocking greater efficiency, cost savings, and shared success. These are dynamics that we believe position SPS for long-term growth.” “We delivered strong second-quarter performance, and we remain confident in our full-year 2025 outlook,” said Kim Nelson, CFO of SPS Commerce. “In the long term, we are well positioned to capitalize on the growth opportunities across our large addressable market, while we continue to demonstrate strong operating leverage and the resilience of our business model.” Guidance Third Quarter 2025 Guidance Revenue is expected to be in the range of $191.7 million to $193.2 million, representing 17% to 18% year-over-year growth.Net income per diluted share is expected to be in the range of $0.50 to $0.54, with fully diluted weighted average shares outstanding of 38.5 million shares.Non-GAAP income per diluted share is expected to be in the range of $0.96 to $1.00.Adjusted EBITDA is expected to be in the range of $57.9 million to $59.9 million.Non-cash, share-based compensation expense is expected to be $16.0 million, depreciation expense is expected to be $5.6 million, and amortization expense is expected to be $9.5 million. Fiscal Year 2025 Guidance Revenue is expected to be in the range of $759.0 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 $2.17 to $2.22, with fully diluted weighted average shares outstanding of 38.3 million shares.Non-GAAP income per diluted share is expected to be in the range of $3.99 to $4.04.Adjusted EBITDA is expected to be in the range of $230.7 million to $233.7 million, representing 24% to 25% growth over 2024.Non-cash, share-based compensation expense is expected to be $60.9 million, depreciation expense is expected to be $21.8 million, and amortization expense is expected to be $37.1 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 Q2 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 98 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 June 30, 2025 included the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 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 June 30, 2025 the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 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 third 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. Contact:Investor RelationsThe Blueshirt GroupIrmina Blaszczyk & Lisa LaukkanenSPSC@blueshirtgroup.com415-217-4962  SPS COMMERCE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except shares)  June 30,2025 December 31,2024ASSETS(unaudited)  Current assets   Cash and cash equivalents$107,603  $241,017 Accounts receivable 72,798   56,214 Allowance for credit losses (5,286)  (4,179)Accounts receivable, net 67,512   52,035 Deferred costs 66,809   65,342 Other assets 27,453   23,513 Total current assets 269,377   381,907 Property and equipment, net 40,150   37,547 Operating lease right-of-use assets 7,395   8,192 Goodwill 543,514   399,180 Intangible assets, net 237,105   181,294 Other assets   Deferred costs, non-current 21,095   20,572 Deferred income tax assets 645   505 Other assets, non-current 1,823   2,033 Total assets$1,121,104  $1,031,230 LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities   Accounts payable$11,604  $8,577 Accrued compensation 38,708   47,160 Accrued expenses 12,710   12,108 Deferred revenue 79,198   74,256 Operating lease liabilities 5,749   4,583 Total current liabilities 147,969   146,684 Other liabilities   Deferred revenue, non-current 5,477   6,189 Operating lease liabilities, non-current 5,049   7,885 Deferred income tax liabilities 12,533   15,541 Other liabilities, non-current 296   241 Total liabilities 171,324   176,540 Commitments and contingencies   Stockholders' equity   Common stock 40   40 Treasury stock (122,096)  (99,748)Additional paid-in capital 693,113   627,982 Retained earnings 378,028   336,099 Accumulated other comprehensive gain (loss) 695   (9,683)Total stockholders’ equity 949,780   854,690 Total liabilities and stockholders’ equity$1,121,104  $1,031,230   SPS COMMERCE, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited; in thousands, except per share amounts)     Three Months EndedJune 30, Six Months EndedJune 30,  2025   2024   2025   2024 Revenues$187,400  $153,596  $368,949  $303,172 Cost of revenues 59,826   52,018   116,740   103,505 Gross profit 127,574   101,578   252,209   199,667 Operating expenses       Sales and marketing 43,434   35,691   85,068   72,123 Research and development 17,271   14,366   34,710   30,375 General and administrative 30,890   23,516   61,908   49,423 Amortization of intangible assets 9,509   4,840   18,097   9,178 Total operating expenses 101,104   78,413   199,783   161,099 Income from operations 26,470   23,165   52,426   38,568 Other income, net 773   4,056   2,980   7,188 Income before income taxes 27,243   27,221   55,406   45,756 Income tax expense 7,510   9,189   13,477   9,721 Net income$19,733  $18,032  $41,929  $36,035         Net income per share       Basic$0.52  $0.49  $1.10  $0.97 Diluted$0.52  $0.48  $1.10  $0.96         Weighted average common shares used to compute net income per share       Basic 37,965   37,078   37,978   37,063 Diluted 38,099   37,683   38,132   37,690   SPS COMMERCE, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited; in thousands)  Six Months EndedJune 30,  2025   2024 Cash flows from operating activities   Net income$41,929  $36,035 Reconciliation of net income to net cash provided by operating activities   Deferred income taxes (5,914)  (8,172)Depreciation and amortization of property and equipment 9,948   9,377 Amortization of intangible assets 18,097   9,178 Provision for credit losses 4,111   3,646 Stock-based compensation 28,865   31,512 Other, net 274   (907)Changes in assets and liabilities, net of effects of acquisitions   Accounts receivable (13,713)  (11,407)Deferred costs (412)  (1,996)Other assets and liabilities (2,258)  1,899 Accounts payable 2,082   (1,450)Accrued compensation (11,006)  (10,763)Accrued expenses (1,833)  1,489 Deferred revenue 3,012   5,965 Operating leases (876)  (900)Net cash provided by operating activities 72,306   63,506 Cash flows from investing activities   Purchases of property and equipment (12,815)  (8,592)Purchases of investments —   (78,994)Maturities of investments —   105,000 Acquisition of business, net (142,628)  (29,343)Net cash used in investing activities (155,443)  (11,929)Cash flows from financing activities   Repurchases of common stock (59,558)  (37,483)Net proceeds from exercise of options to purchase common stock 2,406   2,314 Net proceeds from employee stock purchase plan activity 5,426   5,219 Net cash used in financing activities (51,726)  (29,950)Effect of foreign currency exchange rate changes 1,449   (476)Net increase (decrease) in cash and cash equivalents (133,414)  21,151 Cash and cash equivalents at beginning of period 241,017   219,081 Cash and cash equivalents at end of period$107,603  $240,232   SPS COMMERCE, INC.NON-GAAP RECONCILIATIONS(Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts) Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30,  2025   2024   2025   2024 Net income$19,733  $18,032  $41,929  $36,035 Income tax expense 7,510   9,189   13,477   9,721 Depreciation and amortization of property and equipment 4,991   4,683   9,948   9,377 Amortization of intangible assets 9,509   4,840   18,097   9,178 Stock-based compensation expense 14,998   11,494   28,865   31,512 Realized gain from investments held and foreign currency impact on cash and investments (107)   (1,255)   (473)   (1,559) Investment income (688)   (2,794)   (2,537)   (5,673) Other 106   —   1,119   — Adjusted EBITDA$56,052  $44,189  $110,425  $88,591  Adjusted EBITDA Margin Three Months Ended June 30, Six Months Ended June 30,  2025   2024   2025   2024 Revenue$187,400  $153,596  $368,949  $303,172                 Net income 19,733   18,032   41,929   36,035 Margin 11%  12%  11%  12%                Adjusted EBITDA 56,052   44,189   110,425   88,591 Adjusted EBITDA Margin 30%  29%  30%  29% Non-GAAP Income per Share Three Months Ended June 30, Six Months Ended June 30,  2025   2024   2025   2024 Net income$19,733  $18,032  $41,929  $36,035 Stock-based compensation expense 14,998   11,494   28,865   31,512 Amortization of intangible assets 9,509   4,840   18,097   9,178 Realized gain from investments held and foreign currency impact on cash and investments (107)  (1,255)  (473)  (1,559)Other 106   —   1,119   — Income tax effects of adjustments (6,285)  (3,066)  (13,570)  (12,620)Non-GAAP income$37,954  $30,045  $75,967  $62,546                 Shares used to compute net income and non-GAAP income per share               Basic 37,965   37,078   37,978   37,063 Diluted 38,099   37,683   38,132   37,690                 Net income per share, basic$0.52  $0.49  $1.10  $0.97 Non-GAAP adjustments to net income per share, basic 0.48   0.32   0.90   0.72 Non-GAAP income per share, basic$1.00  $0.81  $2.00  $1.69                 Net income per share, diluted$0.52  $0.48  $1.10  $0.96 Non-GAAP adjustments to net income per share, diluted 0.48   0.32   0.89   0.70 Non-GAAP income per share, diluted$1.00  $0.80  $1.99  $1.66  The annual per share amounts may not cross-sum due to rounding.

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