Acquisition builds on the company’s revenue recovery portfolio with increased support for Amazon sellers Company to host conference call today at 5:00 p.m. ET MINNEAPOLIS, Jan. 02, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced that it has reached an agreement to acquire Carbon6 Technologies, Inc. (Carbon6), a provider of software tools to Amazon sellers, including specialized offerings for revenue recovery for both first-party (1P ...

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with SPS Commerce (SPSC) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [2][8]. Group 1: Earnings Growth - SPS Commerce has a historical EPS growth rate of 19.7%, with projected EPS growth of 21.4% for the current year, significantly outperforming the industry average of 5.6% [4]. Group 2: Cash Flow Growth - The year-over-year cash flow growth for SPS Commerce stands at 20.6%, which is substantially higher than the industry average of 1.7% [5]. - Over the past 3-5 years, the annualized cash flow growth rate for SPS Commerce has been 26.6%, compared to the industry average of 10.8% [6]. Group 3: Earnings Estimate Revisions - The current-year earnings estimates for SPS Commerce have been revised upward, with the Zacks Consensus Estimate increasing by 3% over the past month, indicating a positive trend in earnings estimate revisions [7]. Group 4: Overall Positioning - SPS Commerce has achieved a Growth Score of B and holds a Zacks Rank 2, positioning it well for potential outperformance in the growth stock category [8][9].

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Core Viewpoint - SPS Commerce (SPSC) is experiencing significant selling pressure, having declined 9.8% over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, with analysts predicting better earnings than previously expected [1]. Group 1: Stock Performance and Indicators - The stock's Relative Strength Index (RSI) is at 27.53, indicating it is oversold, which suggests a potential reversal in trend as selling pressure may be exhausting [3]. - A stock is generally considered oversold when its RSI falls below 30, which helps investors identify potential entry points for a rebound [2]. Group 2: Earnings Estimates and Analyst Consensus - Over the last 30 days, the consensus EPS estimate for SPSC has increased by 2.2%, indicating a positive trend in earnings revisions that typically correlates with price appreciation [3]. - SPS Commerce holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [3].

Company Performance - SPS Commerce reported quarterly earnings of $0.92 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, and up from $0.75 per share a year ago, representing an earnings surprise of 10.84% [1] - The company achieved revenues of $163.69 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.22% and increasing from $135.66 million year-over-year [1] - Over the last four quarters, SPS Commerce has consistently surpassed consensus EPS and revenue estimates [1] Future Outlook - The stock's immediate price movement will largely depend on management's commentary during the earnings call and the sustainability of earnings expectations [2][3] - Current consensus EPS estimate for the upcoming quarter is $0.89 on revenues of $167.28 million, and for the current fiscal year, it is $3.39 on revenues of $630.6 million [4] - The estimate revisions trend for SPS Commerce is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [4] Industry Context - The Business - Services industry, to which SPS Commerce belongs, is currently in the bottom 40% of over 250 Zacks industries, which may impact stock performance [5] - Another company in the same industry, APi, is expected to report quarterly earnings of $0.51 per share, reflecting a year-over-year increase of 6.3%, with revenues projected at $1.86 billion, up 4% from the previous year [5]

Financial Performance - Revenues increased by 21% to $163.7 million for the three months ended September 30, 2024, compared to $135.7 million for the same period in 2023[59] - Gross profit rose by 24% to $112.1 million, with a gross margin of 68% for the three months ended September 30, 2024[59] - Recurring revenues increased by 21% to $154.5 million, accounting for 94% of total revenues for the three months ended September 30, 2024[60] - Net income increased by 39% to $23.5 million for the three months ended September 30, 2024, compared to $16.8 million for the same period in 2023[59] - Revenues increased by 19% to $466.9 million for the nine months ended September 30, 2024, compared to $391.9 million for the same period in 2023[67] - Net income rose by 27% to $59.5 million for the nine months ended September 30, 2024, compared to $46.8 million for the same period in 2023[67] - Recurring revenues increased by 20% to $438.1 million, accounting for 94% of total revenues for the nine months ended September 30, 2024[67] - Adjusted EBITDA for the three months ended September 30, 2024, was $48.4 million, compared to $40.5 million for the same period in 2023[63] - Adjusted EBITDA increased by 18% to $137.0 million for the nine months ended September 30, 2024, compared to $115.7 million for the same period in 2023[71] - Non-GAAP income per share, diluted, increased to $2.58 for the nine months ended September 30, 2024, compared to $2.10 for the same period in 2023[73] Customer Metrics - The number of recurring revenue customers grew by 2% to approximately 45,200 as of September 30, 2024, driven by sales and marketing efforts and recent acquisitions[59] - The average wallet share per recurring revenue customer increased by 16% to approximately $13,000 for the nine months ended September 30, 2024[67] - Wallet share increased by 18% to approximately $13,700 for the three months ended September 30, 2024, from approximately $11,650 for the same period in 2023[59] Operating Expenses - Total operating expenses rose by 24% to $86.5 million, primarily due to increased headcount across various departments[61] - Operating expenses increased by 21% to $247.6 million for the nine months ended September 30, 2024, primarily due to increased headcount[68] - The increase in cost of revenues was primarily due to a $14.1 million rise in personnel-related costs[68] Cash Flow and Liquidity - Net cash provided by operating activities increased to $116.8 million for the nine months ended September 30, 2024, compared to $99.5 million for the same period in 2023, reflecting a $25.0 million increase in net income adjusted for non-cash expenses[76][77] - Cash used in investing activities rose to $110.2 million, primarily due to an increase of $77.2 million in cash used for business acquisitions year-over-year[78] - Cash used in financing activities increased to $27.7 million, driven by a $37.6 million rise in cash used for share repurchases year-over-year[79] - As of September 30, 2024, the company's principal sources of liquidity included cash and cash equivalents and short-term investments totaling $205.8 million, along with net accounts receivable of $55.6 million[75] Future Outlook - The company plans to continue expanding its international presence and developing new products and applications to drive growth[57] - Future capital requirements will depend on factors such as costs for new product development, market penetration efforts, and potential acquisitions, with expectations of continued increases in expenditures as the business expands[81] Risk Factors - The company has no off-balance sheet arrangements or variable interest rate outstanding debt as of September 30, 2024, indicating no material risk exposure to interest rate fluctuations[82][84] - As of September 30, 2024, 15% of the company's total cash and cash equivalents and investments were maintained in foreign currencies, primarily exposing it to fluctuations in exchange rates[85] - The company does not expect inflation or changing prices to materially affect its business in the foreseeable future[83]

[SPS Commerce Third Quarter 2024 Financial Results](index=1&type=section&id=SPS%20Commerce%20Reports%20Third%20Quarter%202024%20Financial%20Results) [Third Quarter 2024 Financial Highlights](index=1&type=section&id=Financial%20Highlights) SPS Commerce achieved its 95th consecutive quarter of revenue growth, with Q3 2024 revenue increasing 21% to $163.7 million and net income rising 40% Q3 2024 Key Financial Metrics (YoY Comparison) | Metric | Q3 2024 | Q3 2023 | Growth | | :--- | :--- | :--- | :--- | | Revenue | $163.7M | $135.7M | 21% | | Recurring Revenue | - | - | 21% | | Net Income | $23.5M | $16.8M | 40% | | Net Income per Diluted Share | $0.62 | $0.45 | 38% | | Non-GAAP Income per Diluted Share | $0.92 | $0.75 | 23% | | Adjusted EBITDA | $48.4M | $40.5M (from recon) | 19% | - The company has now achieved **95 consecutive quarters of topline growth**, demonstrating consistent performance[1](index=1&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized digital transformation and supply chain resilience as key growth drivers, alongside a balanced growth approach - CEO Chad Collins stated that evolving retail dynamics continue to drive digital transformation, and customers prioritize supply chain resilience and efficient collaboration[3](index=3&type=chunk) - CFO Kim Nelson noted the company's commitment to a balanced growth approach and its comprehensive product portfolio that helps customers navigate supply chain complexity[3](index=3&type=chunk) [Future Outlook and Guidance](index=1&type=section&id=Guidance) [Fourth Quarter 2024 Guidance](index=1&type=section&id=Fourth%20Quarter%202024%20Guidance) SPS Commerce projects Q4 2024 revenue between $168.5 million and $169.5 million, with adjusted EBITDA ranging from $48.0 million to $48.7 million Q4 2024 Guidance | Metric | Expected Range | | :--- | :--- | | Revenue | $168.5M - $169.5M | | YoY Revenue Growth | 16% - 17% | | Net Income per Diluted Share | $0.46 - $0.47 | | Non-GAAP Income per Diluted Share | $0.83 - $0.84 | | Adjusted EBITDA | $48.0M - $48.7M | [Fiscal Year 2024 Guidance](index=2&type=section&id=Fiscal%20Year%202024%20Guidance) The company raised its full-year 2024 guidance, forecasting revenue between $635.4 million and $636.4 million and adjusted EBITDA between $185.0 million and $185.7 million Fiscal Year 2024 Guidance | Metric | Expected Range | | :--- | :--- | | Revenue | $635.4M - $636.4M | | YoY Revenue Growth | 18% - 19% | | Net Income per Diluted Share | $2.03 - $2.04 | | Non-GAAP Income per Diluted Share | $3.41 - $3.42 | | Adjusted EBITDA | $185.0M - $185.7M | | YoY Adjusted EBITDA Growth | 17% - 18% | [Financial Statements](index=7&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of September 30, 2024, total assets reached $1.003 billion, driven by increased goodwill, with total liabilities at $173.9 million Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 (unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $198,842 | $219,081 | | Goodwill | $423,508 | $249,176 | | Total assets | $1,003,300 | $823,844 | | Total liabilities | $173,935 | $156,369 | | Total stockholders' equity | $829,365 | $667,475 | [Condensed Consolidated Statements of Income](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q3 2024 revenues grew 21% to $163.7 million, with net income reaching $23.5 million, while nine-month revenues totaled $466.9 million Income Statement Summary - Three Months Ended Sep 30 (in thousands) | Metric | 2024 | 2023 | Growth | | :--- | :--- | :--- | :--- | | Revenues | $163,686 | $135,661 | 20.7% | | Gross Profit | $112,062 | $90,140 | 24.3% | | Income from Operations | $25,571 | $20,599 | 24.1% | | Net Income | $23,460 | $16,842 | 39.3% | Income Statement Summary - Nine Months Ended Sep 30 (in thousands) | Metric | 2024 | 2023 | Growth | | :--- | :--- | :--- | :--- | | Revenues | $466,858 | $391,945 | 19.1% | | Gross Profit | $311,729 | $258,916 | 20.4% | | Income from Operations | $64,139 | $54,363 | 18.0% | | Net Income | $59,495 | $46,813 | 27.1% | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operations for the nine months ended September 30, 2024, was $116.8 million, with $110.2 million used in investing activities Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $116,836 | $99,512 | | Net cash used in investing activities | ($110,227) | ($93,448) | | Net cash provided by (used in) financing activities | ($27,697) | $10,005 | | Net (decrease) increase in cash | ($20,239) | $15,809 | | Cash and cash equivalents at end of period | $198,842 | $178,702 | [Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP measures like Adjusted EBITDA and non-GAAP income per share to offer additional insights into financial and business trends - Adjusted EBITDA is defined as net income adjusted for items including income tax, depreciation, amortization, stock-based compensation, and other specific adjustments[11](index=11&type=chunk) - Non-GAAP income per share adjusts net income for stock-based compensation, amortization of intangibles, and other items, along with their corresponding tax impacts[13](index=13&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=12&type=section&id=NON-GAAP%20RECONCILIATION) Q3 2024 Adjusted EBITDA was $48.4 million with a 30% margin, while non-GAAP income per diluted share was $0.92 Adjusted EBITDA Reconciliation - Q3 2024 vs Q3 2023 (in thousands) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $23,460 | $16,842 | | Adjustments (Taxes, D&A, Stock Comp, etc.) | $24,941 | $23,661 | | Adjusted EBITDA (Non-GAAP) | $48,401 | $40,503 | | Adjusted EBITDA Margin | 30% | 30% | Non-GAAP Income Per Share Reconciliation - Q3 2024 vs Q3 2023 | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income per share, diluted (GAAP) | $0.62 | $0.45 | | Non-GAAP adjustments per share, diluted | $0.30 | $0.30 | | Non-GAAP income per share, diluted | $0.92 | $0.75 |

Core Viewpoint - SPS Commerce, Inc. will release its financial results for Q3 2024 on October 24, 2024, after market close, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the third quarter ended September 30, 2024, will be announced after market close on October 24, 2024 [1]. - A conference call to discuss the results is scheduled for 3:30 p.m. Central Time on the same day [1]. Group 2: Accessing the Conference Call - Participants can join the call by dialing 1-833-816-1382 or 1-412-317-0475 for international calls, at least 15 minutes prior to the start time [2]. - A live webcast of the call will be available on the SPS Commerce investor relations website [2]. Group 3: Company Overview - SPS Commerce is a leader in retail supply chain cloud services, connecting trading partners globally to optimize supply chain operations [3]. - The company supports over 120,000 retail, grocery, distribution, supply, and logistics companies, achieving 94 consecutive quarters of revenue growth [3].

Core Viewpoint - SPS Commerce has announced the acquisition of SupplyPike, enhancing its product portfolio with automated invoice deduction management and prevention solutions [1][2] Acquisition Details - The acquisition was valued at approximately $119 million in cash and $87 million in SPS Commerce stock [4] - For Q3 2024, the acquisition is expected to contribute around $3.0 million in revenue, with an anticipated negative impact of approximately $750,000 on Adjusted EBITDA [4] - For fiscal year 2024, the company expects an additional $8.0 million in revenue and a negative impact of about $1.5 million on Adjusted EBITDA [5] - For fiscal year 2025, the expected revenue contribution is approximately $25.0 million, with a breakeven in Adjusted EBITDA [5] Strategic Importance - The acquisition aims to improve collaboration between trading partners in the retail supply chain, providing suppliers with tools to meet customer expectations through automated monitoring and dispute resolution [3] - The integration of SupplyPike is expected to create an industry-leading knowledge base to reduce supply chain errors and enhance supplier-customer relationships [3] Company Background - SPS Commerce is a leader in retail supply chain cloud services, connecting over 120,000 companies globally to optimize supply chain operations [7] - The company has achieved 94 consecutive quarters of revenue growth and is headquartered in Minneapolis [7]

Core Viewpoint - SPS Commerce has acquired SupplyPike, enhancing its product portfolio with automated invoice deduction management and prevention solutions [1][2] Acquisition Details - The acquisition cost approximately $119 million in cash and $87 million in SPS Commerce stock [4] - For Q3 2024, the acquisition is expected to contribute approximately $3.0 million in revenue, with an anticipated negative impact of about $750,000 on Adjusted EBITDA [4] - For fiscal year 2024, the company expects an additional $8.0 million in revenue and a negative impact of approximately $1.5 million on Adjusted EBITDA [5] - For fiscal year 2025, the expected revenue increase is approximately $25.0 million, with a breakeven in Adjusted EBITDA [5] Strategic Importance - The acquisition allows SPS Commerce to provide suppliers with tools to better meet retail customer expectations through automated monitoring, education, and dispute resolution [3] - The combination of SupplyPike and SPS Commerce aims to reduce supply chain errors and strengthen supplier-customer relationships [3] Company Background - SPS Commerce is a leader in retail supply chain cloud services, connecting over 120,000 companies globally [7] - The company has achieved 94 consecutive quarters of revenue growth and is headquartered in Minneapolis [7]