FALSE0001092699333 South Seventh StreetSuite 1000MinneapolisMinnesotaNasdaq Global Market00010926992024-10-242024-10-24


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
October 24, 2024
Date of report (Date of earliest event reported)
SPS COMMERCE, INC. 
(Exact Name of Registrant as Specified in its Charter)
Delaware001-3470241-2015127
(State of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)
333 South Seventh Street, Suite 1000
Minneapolis, Minnesota
55402
(Address of Principal Executive Offices)(Zip Code)

(612) 435-9400 
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.001 per shareSPSCThe Nasdaq Stock Market LLC
(Nasdaq Global Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, 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
☐ 


Item 2.02. Results of Operations and Financial Condition.

On October 24, 2024, we issued a press release disclosing our results of operations and financial condition for our three and nine months ended September 30, 2024. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in that filing.

Item 9.01. Financial Statements and Exhibits.
(d)    Exhibits
Exhibit No.Exhibit
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


SPS COMMERCE, INC.
Date: October 24, 2024By:/s/ KIMBERLY NELSON
Kimberly Nelson
Executive Vice President and Chief Financial Officer







spscommercelogoa.jpg
Exhibit 99
Contact:
Investor Relations
The Blueshirt Group
Irmina Blaszczyk & Lisa Laukkanen
SPSC@blueshirtgroup.com
415-217-4962

SPS Commerce Reports Third Quarter 2024 Financial Results
Company delivers 95th consecutive quarter of topline growth
Revenue and recurring revenue growth of 21% year-over-year

MINNEAPOLIS, October 24, 2024 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the third quarter ended September 30, 2024.
Financial Highlights
Third Quarter 2024 Financial Highlights
•Revenue was $163.7 million in the third quarter of 2024, compared to $135.7 million in the third quarter of 2023, reflecting 21% growth.
•Recurring revenue grew 21% from the third quarter of 2023.
•Net income was $23.5 million or $0.62 per diluted share, compared to net income of $16.8 million or $0.45 per diluted share in the third quarter of 2023.
•Non-GAAP income per diluted share was $0.92, compared to non-GAAP income per diluted share of $0.75 in the third quarter of 2023.
•Adjusted EBITDA for the third quarter of 2024 increased 19% to $48.4 million compared to the third quarter of 2023.

“The evolving dynamics of the retail industry continue to drive digital transformation. SPS Commerce has been a trusted partner to thousands of retailers, suppliers, logistics providers, and distributors over the years and we remain committed to our vision to be the world’s retail network,” said Chad Collins, CEO of SPS Commerce. “Our customers continue to prioritize supply chain resilience and recognize the value we bring to the table as they strive for efficient collaboration with their trading partners.”

“SPS Commerce delivered strong third quarter performance and the 95th consecutive quarter of revenue growth,” said Kim Nelson, CFO of SPS Commerce. “We remain committed to a balanced growth approach as we continue to support our customers with a comprehensive product portfolio that positions them to successfully navigate evolving omnichannel dynamics and overcome increasing supply chain complexity.”


Guidance
Fourth Quarter 2024 Guidance
•Revenue is expected to be in the range of $168.5 million to $169.5 million, representing 16% to 17% year-over-year growth.
•Net income per diluted share is expected to be in the range of $0.46 to $0.47, with fully diluted weighted average shares outstanding of 38.1 million shares.
•Non-GAAP income per diluted share is expected to be in the range of $0.83 to $0.84.
•Adjusted EBITDA is expected to be in the range of $48.0 million to $48.7 million.
•Non-cash, share-based compensation expense is expected to be $12.8 million, depreciation expense is expected to be $5.1 million, and amortization expense is expected to be $7.2 million.

Fiscal Year 2024 Guidance
•Revenue is expected to be in the range of $635.4 million to $636.4 million, representing 18% to 19% growth over 2023.
•Net income per diluted share is expected to be in the range of $2.03 to $2.04, with fully diluted weighted average shares outstanding of 37.9 million shares.
•Non-GAAP income per diluted share is expected to be in the range of $3.41 to $3.42.
•Adjusted EBITDA is expected to be in the range of $185.0 million to $185.7 million, representing 17% to 18% growth over 2023.
•Non-cash, share-based compensation expense is expected to be $55.1 million, depreciation expense is expected to be $19.1 million, and amortization expense is expected to be $22.8 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 Q3 2024 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. To date, more than 120,000 companies in retail, grocery, distribution, supply, and logistics have chosen SPS as their retail network. SPS has achieved 95 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 foreign currency on cash and investments held, investment income, and other adjustments as necessary for a fair presentation. Other adjustments for the three and nine months ended September 30, 2024 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs. Other adjustments for the three and nine months ended September 30, 2023 included the expense impact from acquisition-related employee severance costs, and for the nine months ended September 30, 2023, other adjustments also included the expense impact from disposals of certain capitalized internally developed software. 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 foreign currency on cash and investments held, other adjustments as necessary for a fair presentation, including for the three and nine months ended September 30, 2024 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs, for the three and nine months ended September 30, 2023 the expense impact from acquisition-related employee severance costs, and for the nine months ended September 30, 2023 the expense impact from disposals of certain capitalized internally developed software, 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 fourth quarter and full year of 2024, 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, 2023, 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)

September 30,
2024		December 31,
2023
ASSETS(unaudited)
Current assets
Cash and cash equivalents$198,842 $219,081 
Short-term investments6,931 56,359 
Accounts receivable60,044 50,160 
Allowance for credit losses(4,474)(3,320)
Accounts receivable, net55,570 46,840 
Deferred costs64,665 62,403 
Other assets18,639 16,758 
Total current assets344,647 401,441 
Property and equipment, net36,148 36,043 
Operating lease right-of-use assets8,412 7,862 
Goodwill423,508 249,176 
Intangible assets, net168,131 107,344 
Other assets
Deferred costs, non-current20,802 20,347 
Deferred income tax assets412 505 
Other assets, non-current1,240 1,126 
Total assets$1,003,300 $823,844 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$8,107 $7,420 
Accrued compensation46,010 41,588 
Accrued expenses8,968 8,014 
Deferred revenue78,883 69,187 
Operating lease liabilities4,363 4,460 
Total current liabilities146,331 130,669 
Other liabilities
Deferred revenue, non-current6,550 6,930 
Operating lease liabilities, non-current8,807 9,569 
Deferred income tax liabilities11,607 8,972 
Other liabilities, non-current640 229 
Total liabilities173,935 156,369 
Commitments and contingencies
Stockholders' equity
Common stock39 39 
Treasury stock(99,748)(128,892)
Additional paid-in capital611,719 537,061 
Retained earnings318,540 259,045 
Accumulated other comprehensive gain (loss)(1,185)222 
Total stockholders’ equity829,365 667,475 
Total liabilities and stockholders’ equity$1,003,300 $823,844 






SPS COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share amounts)

Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenues$163,686 $135,661 $466,858 $391,945 
Cost of revenues51,624 45,521 155,129 133,029 
Gross profit112,062 90,140 311,729 258,916 
Operating expenses
Sales and marketing37,577 30,289 109,700 89,722 
Research and development15,292 13,558 45,667 39,438 
General and administrative27,152 21,906 76,575 64,275 
Amortization of intangible assets6,470 3,788 15,648 11,118 
Total operating expenses86,491 69,541 247,590 204,553 
Income from operations25,571 20,599 64,139 54,363 
Other income, net3,778 1,702 10,966 4,859 
Income before income taxes29,349 22,301 75,105 59,222 
Income tax expense5,889 5,459 15,610 12,409 
Net income$23,460 $16,842 $59,495 $46,813 
Net income per share
Basic$0.63 $0.46 $1.60 $1.28 
Diluted$0.62 $0.45 $1.57 $1.25 
Weighted average common shares used to compute net income per share
Basic37,447 36,728 37,192 36,584 
Diluted37,996 37,584 37,785 37,417 























SPS COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)

Nine Months Ended
September 30,
20242023
Cash flows from operating activities
Net income$59,495 $46,813 
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes(9,918)(11,906)
Depreciation and amortization of property and equipment14,010 13,964 
Amortization of intangible assets15,648 11,118 
Provision for credit losses6,239 4,004 
Stock-based compensation42,264 36,097 
Other, net(925)1,711 
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable(11,456)(8,800)
Deferred costs(2,240)(7,543)
Other assets and liabilities(2,258)2,814 
Accounts payable665 (5,289)
Accrued compensation458 8,073 
Accrued expenses842 (169)
Deferred revenue5,424 10,042 
Operating leases(1,412)(1,417)
Net cash provided by operating activities116,836 99,512 
Cash flows from investing activities
Purchases of property and equipment(13,832)(15,467)
Purchases of investments(85,759)(102,763)
Maturities of investments136,765 95,000 
Acquisition of businesses, net(147,401)(70,218)
Net cash used in investing activities(110,227)(93,448)
Cash flows from financing activities
Repurchases of common stock(37,567)— 
Net proceeds from exercise of options to purchase common stock4,198 5,524 
Net proceeds from employee stock purchase plan activity5,672 4,481 
Net cash provided by (used in) financing activities(27,697)10,005 
Effect of foreign currency exchange rate changes849 (260)
Net increase (decrease) in cash and cash equivalents(20,239)15,809 
Cash and cash equivalents at beginning of period219,081 162,893 
Cash and cash equivalents at end of period$198,842 $178,702 




SPS COMMERCE, INC.
NON-GAAP RECONCILIATION
(Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts)

Adjusted EBITDA
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income$23,460 $16,842 $59,495 $46,813 
Income tax expense5,889 5,459 15,610 12,409 
Depreciation and amortization of property and equipment4,633 4,675 14,010 13,964 
Amortization of intangible assets6,470 3,788 15,648 11,118 
Stock-based compensation expense10,752 11,436 42,264 36,097 
Realized gain from foreign currency on cash and investments held(1,077)(98)(2,636)(525)
Investment income(2,704)(2,635)(8,377)(5,372)
Other978 1,036 978 1,170 
Adjusted EBITDA$48,401 $40,503 $136,992 $115,674 

Adjusted EBITDA Margin
Three Months Ended
September 30,		Six Months Ended
June 30,
2024202320242023
Revenue$163,686$135,661$466,858$391,945
Net income23,46016,84259,49546,813
Margin14 %12 %13 %12 %
Adjusted EBITDA48,40140,503136,992115,674
Adjusted EBITDA Margin30 %30 %29 %30 %

Non-GAAP Income per Share
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income$23,460 $16,842 $59,495 $46,813 
Stock-based compensation expense10,752 11,436 42,264 36,097 
Amortization of intangible assets6,470 3,788 15,648 11,118 
Realized gain from foreign currency on cash and investments held(1,077)(98)(2,636)(525)
Other978 1,036 978 1,170 
Income tax effects of adjustments(5,514)(4,981)(18,134)(16,089)
Non-GAAP income$35,069 $28,023 $97,615 $78,584 
Shares used to compute net income and non-GAAP income per share
Basic37,447 36,728 37,192 36,584 
Diluted37,996 37,584 37,785 37,417 
Net income per share, basic$0.63 $0.46 $1.60 $1.28 
Non-GAAP adjustments to net income per share, basic0.31 0.30 1.02 0.87 
Non-GAAP income per share, basic$0.94 $0.76 $2.62 $2.15 
Net income per share, diluted$0.62 $0.45 $1.57 $1.25 
Non-GAAP adjustments to net income per share, diluted0.30 0.30 1.01 0.85 
Non-GAAP income per share, diluted$0.92 $0.75 $2.58 $2.10 


v3.24.3
Cover
Oct. 24, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 24, 2024
Entity Registrant Name SPS COMMERCE, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-34702
Entity Tax Identification Number 41-2015127
Entity Address, Postal Zip Code 55402
Entity Address, Address Line One 333 South Seventh Street
Entity Address, Address Line Two Suite 1000
Entity Address, State or Province MN
Entity Address, City or Town Minneapolis
City Area Code 612
Local Phone Number 435-9400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.001 per share
Trading Symbol SPSC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001092699
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