• SPS Commerce Reports Third Quarter 2023 Financial Results

    Источник: Nasdaq GlobeNewswire / 26 окт 2023 16:05:00   America/New_York

    Company delivers 91st consecutive quarter of topline growth

    Revenue growth of 18% year-over-year; Recurring revenue growth of 20% year-over-year

    MINNEAPOLIS, Oct. 26, 2023 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the third quarter ended September 30, 2023.

    Third Quarter 2023 Financial Highlights

    • Revenue was $135.7 million in the third quarter of 2023, compared to $114.5 million in the third quarter of 2022, reflecting 18% growth.
    • Recurring revenue grew 20% from the third quarter of 2022.
    • Net income was $16.8 million or $0.45 per diluted share, compared to net income of $15.9 million or $0.43 per diluted share in the third quarter of 2022.
    • Non-GAAP income per diluted share was $0.75, compared to non-GAAP income per diluted share of $0.63 in the third quarter of 2022.
    • Adjusted EBITDA for the third quarter of 2023 increased 17% to $40.5 million compared to the third quarter of 2022.

    “SPS Commerce’s third quarter performance reflects the ongoing investments in optimization and automation across the retail industry, and the role we play in helping our customers achieve operational efficiencies while scaling their businesses,” said Archie Black, Executive Chair of the Board. “I have had the privilege to work with and lead an exceptionally talented workforce and I’m proud that together we built a company that has consistently delivered exceptional results for our customers and shareholders, and I am confident SPS is positioned for continued success with Chad Collins at the helm.”

    “I am thrilled to join SPS Commerce at such an important time for the company and the industry, and I want to thank the management team and the board for their trust in me to lead SPS in its next chapter of growth,” said Chad Collins, CEO of SPS Commerce. “As I engage with customers and spend time with SPS employees across the globe, I look forward to building relationships and reinforcing the culture that has established SPS as a successful organization with a very exciting future.”

    “SPS continues to grow its global network, strengthening our competitive position and expanding our leadership across various industries,” said Kim Nelson, CFO of SPS Commerce. “I would like to welcome Chad to the SPS team and look forward to working together as we execute on SPS’ strategy to be the world’s retail network, and continue to deliver sustained, profitable growth.”

    Guidance

    Fourth Quarter 2023 Guidance

    • Revenue is expected to be in the range of $142.2 million to $143.2 million.
    • Net income per diluted share is expected to be in the range of $0.40 to $0.42, with fully diluted weighted average shares outstanding of 37.7 million shares.
    • Non-GAAP income per diluted share is expected to be in the range of $0.67 to $0.69.
    • Adjusted EBITDA is expected to be in the range of $40.5 million to $41.3 million.
    • Non-cash, share-based compensation expense is expected to be $10.0 million, depreciation expense is expected to be $5.1 million, and amortization expense is expected to be $4.5 million.

    Full Year 2023 Guidance

    • Revenue is expected to be in the range of $534.2 million to $535.2 million, representing 18% to 19% growth over 2022.
    • Net income per diluted share is expected to be in the range of $1.65 to $1.67, with fully diluted weighted average shares outstanding of 37.5 million shares.
    • Non-GAAP income per diluted share is expected to be in the range of $2.77 to $2.79.
    • Adjusted EBITDA is expected to be in the range of $156.2 to $157.0 million, representing 18% to 19% growth over 2022.
    • Non-cash, share-based compensation expense is expected to be $46.1 million, depreciation expense is expected to be $19.0 million, and amortization expense is expected to be $15.6 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 2023 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 115,000 companies in retail, distribution, grocery and e-commerce have chosen SPS as their retail network. SPS has achieved 91 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 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 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 or loss, and other adjustments as necessary for a fair presentation. In the three months ended September 30, 2023, other adjustments included the expense impact from acquisition-related employee severance costs. In the nine months ended September 30, 2023, other adjustments included the expense impacts from acquisition-related employee severance costs and 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, 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. In the three months ended September 30, 2023, other adjustments included the expense impact from acquisition-related employee severance costs. In the nine months ended September 30, 2023, other adjustments included the expense impacts from acquisition-related employee severance costs and disposals of certain capitalized internally developed software. 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 2023, 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, 2022, 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
    (Unaudited; in thousands, except shares)
        
     September 30,
    2023
     December 31,
    2022
    ASSETS   
    Current assets   
    Cash and cash equivalents$               178,702  $               162,893 
    Short-term investments                    60,628                      51,412 
    Accounts receivable                    48,218                      42,501 
    Allowance for credit losses                    (3,077)                     (3,066)
       Accounts receivable, net                    45,141                      39,435 
    Deferred costs                    59,525                      52,755 
    Other assets                    15,743                      16,319 
       Total current assets                  359,739                    322,814 
    Property and equipment, net                    36,209                      35,458 
    Operating lease right-of-use assets                     8,315                       9,170 
    Goodwill                  252,045                    197,284 
    Intangible assets, net                  103,597                      88,352 
    Other assets   
    Deferred costs, non-current                    19,521                      17,424 
    Deferred income tax assets                     6,805                          227 
    Other assets, non-current                     1,177                       2,185 
       Total assets$               787,408  $               672,914 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities   
    Accounts payable$                  6,195  $                 11,256 
    Accrued compensation                    41,474                      30,235 
    Accrued expenses                     8,900                       7,451 
    Deferred revenue                    71,853                      57,423 
    Operating lease liabilities                     4,449                       4,277 
       Total current liabilities                  132,871                    110,642 
    Other liabilities   
    Deferred revenue, non-current                     6,849                       4,771 
    Operating lease liabilities, non-current                    10,563                      13,009 
    Deferred income tax liabilities                    10,281                       7,419 
       Total liabilities                  160,564                    135,841 
    Commitments and contingencies   
    Stockholders' equity   
    Common stock                          39                            38 
    Treasury Stock                (128,892)                 (128,892)
    Additional paid-in capital                  520,313                    476,117 
    Retained earnings                  240,034                    193,221 
    Accumulated other comprehensive loss                    (4,650)                     (3,411)
       Total stockholders’ equity                  626,844                    537,073 
          Total liabilities and stockholders’ equity$               787,408  $               672,914 


     
    SPS COMMERCE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (Unaudited; in thousands, except per share amounts)
     
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2023  2022   2023  2022 
    Revenues$            135,661 $            114,486  $        391,945 $       328,857 
    Cost of revenues                 45,521                  38,605              133,029            111,524 
    Gross profit                 90,140                  75,881              258,916            217,333 
    Operating expenses       
    Sales and marketing                 30,289                  25,334                89,722              74,571 
    Research and development                 13,558                  11,135                39,438              33,268 
    General and administrative                 21,906                  16,724                64,275              49,390 
    Amortization of intangible assets                    3,788                     2,998                11,118                7,936 
     Total operating expenses                 69,541                  56,191              204,553            165,165 
    Income from operations                 20,599                  19,690                54,363              52,168 
    Other income (expense), net                    1,702                      (695)                 4,859              (1,610)
    Income before income taxes                 22,301                  18,995                59,222              50,558 
    Income tax expense                    5,459                     3,132                12,409              11,339 
    Net income$              16,842 $              15,863  $          46,813 $         39,219 
            
    Net income per share       
    Basic$                   0.46 $                   0.44  $               1.28 $              1.09 
    Diluted$                   0.45 $                   0.43  $               1.25 $              1.06 
            
    Weighted average common shares used to compute net income per share       
    Basic                 36,728                  36,093                36,584              36,104 
    Diluted                 37,584                  36,915                37,417              36,942 


     
    SPS COMMERCE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited; in thousands)
      
     Nine Months Ended
    September 30,
      2023   2022 
    Cash flows from operating activities   
    Net income$             46,813  $             39,219 
    Reconciliation of net income to net cash provided by operating activities   
    Deferred income taxes               (11,906)                  (2,092)
    Depreciation and amortization of property and equipment                 13,964                   11,983 
    Amortization of intangible assets                 11,118                     7,936 
    Provision for credit losses                   4,004                     2,889 
    Stock-based compensation                 36,097                   25,636 
    Other, net                   1,711                           43 
    Changes in assets and liabilities   
       Accounts receivable                 (8,800)                  (3,999)
       Deferred costs                 (7,543)                  (7,174)
       Other current and non-current assets                   2,814                     2,202 
       Accounts payable                 (5,289)                       129 
       Accrued compensation                   8,073                   (4,388)
       Accrued expenses                     (169)                  (3,035)
       Deferred revenue                 10,042                     8,261 
       Operating leases                 (1,417)                  (1,127)
    Net cash provided by operating activities                 99,512                   76,483 
    Cash flows from investing activities   
    Purchases of property and equipment               (15,467)                (13,894)
    Purchases of investments             (102,763)              (134,276)
    Maturities of investments                 95,000                 132,500 
    Acquisition of business, net               (70,218)                (44,923)
    Net cash used in investing activities               (93,448)                (60,593)
    Cash flows from financing activities   
    Repurchases of common stock                         —                 (42,700)
    Net proceeds from exercise of options to purchase common stock                   5,524                     2,457 
    Net proceeds from employee stock purchase plan activity                   4,481                     3,588 
    Net cash provided by (used in) financing activities                 10,005                 (36,655)
    Effect of foreign currency exchange rate changes                     (260)                      (557)
    Net increase (decrease) in cash and cash equivalents                 15,809                 (21,322)
    Cash and cash equivalents at beginning of period               162,893                 207,552 
    Cash and cash equivalents at end of period$           178,702  $           186,230 


     
    SPS COMMERCE, INC.
    NON-GAAP RECONCILIATION
    (Unaudited; in thousands, except per share amounts)
     
    Adjusted EBITDA
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2023   2022   2023   2022 
    Net income$               16,842  $               15,863  $               46,813  $               39,219 
    Income tax expense                   5,459                     3,132                    12,409                    11,339 
    Depreciation and amortization of property and equipment                   4,675                     4,169                    13,964                    11,983 
    Amortization of intangible assets                   3,788                     2,998                    11,118                     7,936 
    Stock-based compensation expense                  11,436                     7,960                    36,097                    25,636 
    Realized (gain) loss from foreign currency on cash and investments held                      (98)                    1,151                       (525)                    2,010 
    Investment income                  (2,635)                      (586)                   (5,372)                      (806)
    Other                   1,036                          —                     1,170                          — 
    Adjusted EBITDA$               40,503  $               34,687  $             115,674  $               97,317 


    Adjusted EBITDA Margin
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2023   2022   2023   2022 
    Revenue$             135,661  $             114,486  $           391,945  $             328,857 
            
    Net income                16,842                  15,863                  46,813                  39,219 
    Margin      12%       14%       12%       12%
            
    Adjusted EBITDA                40,503                  34,687                115,674                  97,317 
    Adjusted EBITDA Margin      30%       30%       30%       30%


    Non-GAAP Income per Share
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2023   2022   2023   2022 
    Net income$              16,842  $              15,863  $              46,813  $              39,219 
    Stock-based compensation expense                 11,436                     7,960                   36,097                   25,636 
    Amortization of intangible assets                   3,788                     2,998                   11,118                     7,936 
    Realized (gain) loss from foreign currency on cash and investments held                      (98)                    1,151                      (525)                    2,010 
    Other                   1,036                          —                     1,170                          — 
    Income tax effects of adjustments                 (4,981)                  (4,866)                (16,089)                (11,576)
    Non-GAAP income$              28,023  $              23,106  $              78,584  $              63,225 
            
    Shares used to compute net income and non-GAAP income per share       
    Basic                 36,728                   36,093                   36,584                   36,104 
    Diluted                 37,584                   36,915                   37,417                   36,942 
            
    Net income per share, basic$                 0.46  $                 0.44  $                 1.28  $                 1.09 
    Non-GAAP adjustments to net income per share, basic                    0.30                      0.20                      0.86                      0.66 
    Non-GAAP income per share, basic$                 0.76  $                 0.64  $                 2.14  $                 1.75 
            
    Net income per share, diluted$                 0.45  $                 0.43  $                 1.25  $                 1.06 
    Non-GAAP adjustments to net income per share, diluted                    0.30                      0.20                      0.86                      0.66 
    Non-GAAP income per share, diluted$                 0.75  $                 0.63  $                 2.11  $                 1.72 
            

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

     


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