FALSE0001092699333 South Seventh StreetSuite 1000MinneapolisMinnesotaNasdaq Global Market00010926992024-07-252024-07-25


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
July 25, 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 July 25, 2024, we issued a press release disclosing our results of operations and financial condition for our three and six months ended June 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 8.01. Other Events.
On July 25, 2024, we announced that our board of directors has authorized a program to repurchase shares of our common stock in the open market or in privately negotiated purchases, or both, in an aggregate amount not to exceed $100 million. The timing and amount of any share repurchases will be based on the price of our common stock, general business and market conditions and other investment considerations and factors. The share repurchase program becomes effective on August 23, 2024 and expires on July 24, 2026. Our current share repurchase program terminates on July 26, 2024. We currently expect to fund the repurchase program from existing cash and cash equivalents and future cash flows.

Cautionary Statements Regarding Forward-Looking Information
Certain statements in this report may contain forward-looking statements within the meaning of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 including, but not limited to, the Company's plans to repurchase shares of its common stock, the timing and amount of any share repurchases under the program, if any, and the effects of the repurchase program on our future results of operations or financial condition. 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 report 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.


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: July 25, 2024By:/s/ KIMBERLY NELSON
Kimberly Nelson
Executive Vice President and Chief Financial Officer






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

SPS Commerce Reports Second Quarter 2024 Financial Results
Company delivers 94th consecutive quarter of topline growth
Revenue and recurring revenue growth of 18% year-over-year
Announces new Share Repurchase Program

MINNEAPOLIS, July 25, 2024 (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, 2024.
Financial Highlights
Second Quarter 2024 Financial Highlights
•Revenue was $153.6 million in the second quarter of 2024, compared to $130.4 million in the second quarter of 2023, reflecting 18% growth.
•Recurring revenue grew 18% from the second quarter of 2023.
•Net income was $18.0 million or $0.48 per diluted share, compared to net income of $14.7 million or $0.39 per diluted share in the second quarter of 2023.
•Non-GAAP income per diluted share was $0.80, compared to non-GAAP income per diluted share of $0.69 in the second quarter of 2023.
•Adjusted EBITDA for the second quarter of 2024 increased 16% to $44.2 million compared to the second quarter of 2023.
•Share repurchases in the second quarter of 2024 totaled $17.5 million.

“As the retail industry continues to evolve, SPS is uniquely positioned to help suppliers, large and small, digitize their trading partner connections to achieve efficiencies and scalability,” said Chad Collins, CEO of SPS Commerce. “The mission-critical nature of our solutions fuels consistent demand for our product portfolio, and we remain confident in the growth opportunity ahead of us as e-commerce and omnichannel retail continue to grow.”

“SPS Commerce delivered a strong second quarter performance and the 94th consecutive quarter of revenue growth,” said Kim Nelson, CFO of SPS Commerce. “Retail dynamics continue to play a key role in the expansion of our addressable markets, and we believe our balanced growth approach is the right strategy to consistently deliver on our near-term and long-term financial targets.”

Share Repurchase Program
The Company also announced today that the Board of Directors of SPS Commerce authorized a new program to repurchase up to $100.0 million of common stock. Under the program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors. The share repurchase program becomes effective on August 23, 2024, and expires on July 24, 2026. The Company’s August 2022 program that previously authorized repurchase of up to $50.0 million terminates on July 26, 2024. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. The Company had 37.0 million shares of outstanding common stock as of June 30, 2024. The Company intends to finance the share repurchase program with cash on hand.


Guidance
Third Quarter 2024 Guidance
•Revenue is expected to be in the range of $157.6 million to $158.6 million.
•Net income per diluted share is expected to be in the range of $0.52 to $0.53, 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 $0.83 to $0.84.
•Adjusted EBITDA is expected to be in the range of $46.9 million to $47.7 million.
•Non-cash, share-based compensation expense is expected to be $11.6 million, depreciation expense is expected to be $4.7 million, and amortization expense is expected to be $5.0 million.

Fiscal Year 2024 Guidance
•Revenue is expected to be in the range of $624.2 million to $626.0 million, representing 16% to 17% growth over 2023.
•Net income per diluted share is expected to be in the range of $2.03 to $2.05, with fully diluted weighted average shares outstanding of 37.8 million shares.
•Non-GAAP income per diluted share is expected to be in the range of $3.63 to $3.66.
•Adjusted EBITDA is expected to be in the range of $185.5 to $187.0 million, representing 18% to 19% growth over 2023.
•Non-cash, share-based compensation expense is expected to be $55.6 million, depreciation expense is expected to be $19.2 million, and amortization expense is expected to be $19.2 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 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 94 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 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 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 third 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)

June 30,
2024		December 31,
2023
ASSETS(unaudited)
Current assets
Cash and cash equivalents$240,232 $219,081 
Short-term investments31,554 56,359 
Accounts receivable59,355 50,160 
Allowance for credit losses(3,958)(3,320)
Accounts receivable, net55,397 46,840 
Deferred costs64,318 62,403 
Other assets15,437 16,758 
Total current assets406,938 401,441 
Property and equipment, net35,083 36,043 
Operating lease right-of-use assets7,076 7,862 
Goodwill268,872 249,176 
Intangible assets, net107,519 107,344 
Other assets
Deferred costs, non-current20,610 20,347 
Deferred income tax assets7,347 505 
Other assets, non-current1,076 1,126 
Total assets$854,521 $823,844 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$5,877 $7,420 
Accrued compensation32,236 41,588 
Accrued expenses9,446 8,014 
Deferred revenue76,393 69,187 
Operating lease liabilities4,594 4,460 
Total current liabilities128,546 130,669 
Other liabilities
Deferred revenue, non-current7,111 6,930 
Operating lease liabilities, non-current7,751 9,569 
Deferred income tax liabilities7,012 8,972 
Other liabilities, non-current680 229 
Total liabilities151,100 156,369 
Commitments and contingencies
Stockholders' equity
Common stock39 39 
Treasury stock(162,187)(128,892)
Additional paid-in capital574,842 537,061 
Retained earnings295,080 259,045 
Accumulated other comprehensive gain (loss)(4,353)222 
Total stockholders’ equity703,421 667,475 
Total liabilities and stockholders’ equity$854,521 $823,844 






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

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenues$153,596 $130,416 $303,172 $256,284 
Cost of revenues52,018 44,544 103,505 87,508 
Gross profit101,578 85,872 199,667 168,776 
Operating expenses
Sales and marketing35,691 30,349 72,123 59,433 
Research and development14,366 13,318 30,375 25,880 
General and administrative23,516 21,693 49,423 42,369 
Amortization of intangible assets4,840 3,479 9,178 7,330 
Total operating expenses78,413 68,839 161,099 135,012 
Income from operations23,165 17,033 38,568 33,764 
Other income, net4,056 1,882 7,188 3,157 
Income before income taxes27,221 18,915 45,756 36,921 
Income tax expense9,189 4,233 9,721 6,950 
Net income$18,032 $14,682 $36,035 $29,971 
Net income per share
Basic$0.49 $0.40 $0.97 $0.82 
Diluted$0.48 $0.39 $0.96 $0.80 
Weighted average common shares used to compute net income per share
Basic37,078 36,593 37,063 36,511 
Diluted37,683 37,426 37,690 37,327 























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

Six Months Ended
June 30,
20242023
Cash flows from operating activities
Net income$36,035 $29,971 
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes(8,172)(8,654)
Depreciation and amortization of property and equipment9,377 9,289 
Amortization of intangible assets9,178 7,330 
Provision for credit losses3,646 2,491 
Stock-based compensation31,512 24,661 
Other, net(907)1,143 
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable(11,407)(9,937)
Deferred costs(1,996)(5,136)
Other assets and liabilities1,899 3,614 
Accounts payable(1,450)(4,414)
Accrued compensation(10,763)(2,910)
Accrued expenses1,489 (728)
Deferred revenue5,965 9,909 
Operating leases(900)(959)
Net cash provided by operating activities63,506 55,670 
Cash flows from investing activities
Purchases of property and equipment(8,592)(9,769)
Purchases of investments(78,994)(68,579)
Maturities of investments105,000 60,000 
Acquisition of businesses, net(29,343)— 
Net cash used in investing activities(11,929)(18,348)
Cash flows from financing activities
Repurchases of common stock(37,483)— 
Net proceeds from exercise of options to purchase common stock2,314 4,819 
Net proceeds from employee stock purchase plan activity5,219 4,136 
Net cash provided by (used in) financing activities(29,950)8,955 
Effect of foreign currency exchange rate changes(476)94 
Net increase in cash and cash equivalents21,151 46,371 
Cash and cash equivalents at beginning of period219,081 162,893 
Cash and cash equivalents at end of period$240,232 $209,264 




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

Adjusted EBITDA
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$18,032 $14,682 $36,035 $29,971 
Income tax expense9,189 4,233 9,721 6,950 
Depreciation and amortization of property and equipment4,683 4,663 9,377 9,289 
Amortization of intangible assets4,840 3,479 9,178 7,330 
Stock-based compensation expense11,494 12,881 31,512 24,661 
Realized gain from foreign currency on cash and investments held(1,255)(290)(1,559)(427)
Investment income(2,794)(1,611)(5,673)(2,737)
Other— 134 — 134 
Adjusted EBITDA$44,189 $38,171 $88,591 $75,171 

Adjusted EBITDA Margin
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenue$153,596$130,416$303,172$256,284
Net income18,03214,68236,03529,971
Margin12 %11 %12 %12 %
Adjusted EBITDA44,18938,17188,59175,171
Adjusted EBITDA Margin29 %29 %29 %29 %

Non-GAAP Income per Share
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$18,032 $14,682 $36,035 $29,971 
Stock-based compensation expense11,494 12,881 31,512 24,661 
Amortization of intangible assets4,840 3,479 9,178 7,330 
Realized gain from foreign currency on cash and investments held(1,255)(290)(1,559)(427)
Other— 134 — 134 
Income tax effects of adjustments(3,066)(5,199)(12,620)(11,108)
Non-GAAP income$30,045 $25,687 $62,546 $50,561 
Shares used to compute net income and non-GAAP income per share
Basic37,078 36,593 37,063 36,511 
Diluted37,683 37,426 37,690 37,327 
Net income per share, basic$0.49 $0.40 $0.97 $0.82 
Non-GAAP adjustments to net income per share, basic0.32 0.30 0.72 0.56 
Non-GAAP income per share, basic$0.81 $0.70 $1.69 $1.38 
Net income per share, diluted$0.48 $0.39 $0.96 $0.80 
Non-GAAP adjustments to net income per share, diluted0.32 0.30 0.70 0.55 
Non-GAAP income per share, diluted$0.80 $0.69 $1.66 $1.35 


v3.24.2
Cover
Jul. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 25, 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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