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SPS Commerce Reports First Quarter 2023 Financial Results


Company delivers 89th consecutive quarter of topline growth
Revenue growth of 20% year-over-year; Recurring revenue growth of 20% year-over-year

MINNEAPOLIS, April 26, 2023 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the first quarter ended March 31, 2023.

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First Quarter 2023 Financial Highlights

Revenue was $125.9 million in the first quarter of 2023, compared to $105.2 million in the first quarter of 2022, reflecting 20% growth.Recurring revenue grew 20% from the first quarter of 2022.Net income was $15.3 million or $0.41 per diluted share, compared to net income of $12.6 million or $0.34 per diluted share in the first quarter of 2022.Non-GAAP income per diluted share was $0.67, compared to non-GAAP income per diluted share of $0.55 in the first quarter of 2022.Adjusted EBITDA for the first quarter of 2022 increased 16% to $37.0 million compared to the first quarter of 2022.

“The ongoing expansion of our network is a reflection of SPS’ ability to help retailers, suppliers and emerging brands successfully and cost effectively adapt to omnichannel retail while they future-proof their investments in supply chain automation,” said Archie Black, CEO of SPS Commerce. “I believe our strategy and our people position SPS Commerce for continued success as we capitalize on the growth opportunities ahead of us.”

“SPS Commerce’s history of strong financial performance and 89 quarters of consecutive revenue growth underscore the stability of our business model and our consistent execution. Despite ongoing macro dynamics, we believe we are better positioned than ever to deliver on our long-term targets and sustained, profitable growth,” said Kim Nelson, CFO of SPS Commerce.


Second Quarter 2023 Guidance

Revenue is expected to be in the range of $128.0 million to $128.8 million.Net income per diluted share is expected to be in the range of $0.30 to $0.31, 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 $0.62 to $0.63.Adjusted EBITDA is expected to be in the range of $36.4 million to $37.0 million.Non-cash, share-based compensation expense is expected to be $12.8 million, depreciation expense is expected to be $5.0 million, and amortization expense is expected to be $3.9 million.

Full Year 2023 Guidance

Revenue is expected to be in the range of $525.5 million to $527.6 million, representing 17% growth over 2022.Net income per diluted share is expected to be in the range of $1.55 to $1.58, with fully diluted weighted average shares outstanding of 37.4 million shares.Non-GAAP income per diluted share is expected to be in the range of $2.67 to $2.70.Adjusted EBITDA is expected to be in the range of $154.2 to $155.8 million, representing 17% to 18% growth over 2022.Non-cash, share-based compensation expense is expected to be $45.0 million, depreciation expense is expected to be $19.8 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 Q1 2023 conference call. A live webcast of the call will also be available at under the Events and Presentations menu.   The replay will also be available on our website at

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 89 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit

SPS COMMERCE, SPS, SPS logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, MASTERING THE RETAIL GAME and RSX are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. These marks may be registered or otherwise protected in other countries. 


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.

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.

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 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.

(Unaudited; in thousands, except shares)

 March 31,
2023 December 31,
2022ASSETS   Current assets   Cash and cash equivalents$182,304  $162,893 Short-term investments 51,146   51,412 Accounts receivable 46,654   42,501 Allowance for credit losses (3,217)  (3,066)Accounts receivable, net 43,437   39,435 Deferred costs 53,844   52,755 Other assets 15,651   16,319 Total current assets 346,382   322,814 Property and equipment, net 35,078   35,458 Operating lease right-of-use assets 8,451   9,170 Goodwill 199,001   197,284 Intangible assets, net 84,536   88,352 Other assets   Deferred costs, non-current 17,965   17,424 Deferred income tax assets 3,365   227 Other assets, non-current 2,149   2,185 Total assets$696,927  $672,914 LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities   Accounts payable$5,339  $11,256 Accrued compensation 26,431   30,235 Accrued expenses 8,163   7,451 Deferred revenue 62,907   57,423 Operating lease liabilities 4,121   4,277 Total current liabilities 106,961   110,642 Other liabilities   Deferred revenue, non-current 5,105   4,771 Operating lease liabilities, non-current 11,994   13,009 Deferred income tax liabilities 6,977   7,419 Total liabilities 131,037   135,841 Commitments and contingencies   Stockholders’ equity   Common stock 39   38 Treasury Stock (128,892)  (128,892)Additional paid-in capital 489,716   476,117 Retained earnings 208,510   193,221 Accumulated other comprehensive loss (3,483)  (3,411)Total stockholders’ equity 565,890   537,073 Total liabilities and stockholders’ equity$696,927  $672,914         

(Unaudited; in thousands, except per share amounts)

 Three Months Ended
March 31,  2023   2022 Revenues$125,868  $105,193 Cost of revenues 42,964   35,389 Gross profit 82,904   69,804 Operating expenses   Sales and marketing 29,083   24,655 Research and development 12,563   10,701 General and administrative 20,677   15,468 Amortization of intangible assets 3,851   2,470 Total operating expenses 66,174   53,294 Income from operations 16,730   16,510 Other income, net 1,276   423 Income before income taxes 18,006   16,933 Income tax expense 2,717   4,330 Net income$15,289  $12,603     Net income per share   Basic$0.42  $0.35 Diluted$0.41  $0.34     Weighted average common shares used to compute net income per share   Basic 36,427   36,136 Diluted 37,155   36,989         

(Unaudited; in thousands)

 Three Months Ended
March 31,  2023   2022 Cash flows from operating activities   Net income$15,289  $12,603 Reconciliation of net income to net cash provided by operating activities   Deferred income taxes (5,147)  (269)Depreciation and amortization of property and equipment 4,626   3,864 Amortization of intangible assets 3,851   2,470 Provision for credit losses 1,206   1,144 Stock-based compensation 11,780   9,015 Other, net 502   (7)Changes in assets and liabilities   Accounts receivable (6,220)  (5,563)Deferred costs (1,679)  (2,797)Other current and non-current assets 602   (6,736)Accounts payable (4,849)  (3,229)Accrued compensation (4,417)  (10,495)Accrued expenses 721   (1,746)Deferred revenue 5,818   6,349 Operating leases (452)  (256)Net cash provided by operating activities 21,631   4,347 Cash flows from investing activities   Purchases of property and equipment (5,261)  (4,355)Purchases of investments (34,329)  (54,977)Maturities of investments 35,000   65,000 Net cash provided by (used in) investing activities (4,590)  5,668 Cash flows from financing activities   Repurchases of common stock —   (15,226)Net proceeds from exercise of options to purchase common stock 2,184   504 Net proceeds from employee stock purchase plan activity 241   147 Net cash provided by (used in) financing activities 2,425   (14,575)Effect of foreign currency exchange rate changes (55)  96 Net increase (decrease) in cash and cash equivalents 19,411   (4,464)Cash and cash equivalents at beginning of period 162,893   207,552 Cash and cash equivalents at end of period$182,304  $203,088         

(Unaudited; in thousands, except per share amounts)

Adjusted EBITDA Three Months Ended
March 31,  2023   2022 Net income$15,289  $12,603 Income tax expense 2,717   4,330 Depreciation and amortization of property and equipment 4,626   3,864 Amortization of intangible assets 3,851   2,470 Stock-based compensation expense 11,780   9,015 Realized gain from foreign currency on cash and investments held (137)  (468)Investment income (1,127)  (48)Adjusted EBITDA$36,999  $31,766          Adjusted EBITDA Margin Three Months Ended
March 31,  2023   2022 Revenue$125,868  $105,193     Net income 15,289   12,603 Margin 12%  12%    Adjusted EBITDA 36,999   31,766 Adjusted EBITDA Margin 29%  30%         Non-GAAP Income Three Months Ended
March 31,  2023   2022 Net income$15,289  $12,603 Stock-based compensation expense 11,780   9,015 Amortization of intangible assets 3,851   2,470 Realized gain from foreign currency on cash and investments held (137)  (468)Income tax effects of adjustments (5,909)  (3,219)Non-GAAP income$24,874  $20,401 Shares used to compute non-GAAP income per share   Basic 36,427   36,136 Diluted 37,155   36,989 Non-GAAP income per share   Basic$0.68  $0.56 Diluted$0.67  $0.55         

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The Blueshirt Group
Irmina Blaszczyk & Lisa Laukkanen

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