Core Insights - SPS Commerce (SPSC) reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $0.99 per share, and up from $0.92 per share a year ago [1] - The earnings surprise was +14.14%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Revenue for the quarter was $189.9 million, slightly missing the Zacks Consensus Estimate by 1.33%, but up from $163.69 million year-over-year [3] Earnings Performance - The company has consistently outperformed consensus EPS estimates, achieving this in four consecutive quarters [2] - The revenue performance has also been strong, with three out of the last four quarters exceeding consensus revenue estimates [3] Stock Performance and Outlook - SPS Commerce shares have declined approximately 42.8% year-to-date, contrasting with a 17.2% gain in the S&P 500 [4] - The current Zacks Rank for SPS Commerce is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Earnings Expectations - The consensus EPS estimate for the upcoming quarter is $1.04, with projected revenues of $199.85 million, and for the current fiscal year, the EPS estimate is $4.04 on revenues of $761.27 million [8] Industry Context - The Business - Services industry, to which SPS Commerce belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, which may negatively impact stock performance [9]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $189.9 million, representing a 16% increase year-over-year, marking the 99th consecutive quarter of revenue growth [12] - Recurring revenue grew 18% year-over-year, with approximately 54,950 recurring revenue customers, an increase of 450 from the previous quarter [12] - Adjusted EBITDA increased 25% to $60.5 million compared to $48.4 million in Q3 of the previous year [12] - Total cash and investments at the end of the quarter were $134 million, with a share repurchase of $30 million [12] Business Line Data and Key Metrics Changes - The fulfillment business grew 20% year-over-year, while revenue recovery was approximately $3 million below expectations due to seasonality and changes in Amazon's inventory policy [4][5] - The company completed its combined go-to-market strategy ahead of schedule, positioning itself to unlock the potential of the revenue recovery product category [5] Market Data and Key Metrics Changes - The company reported a net increase of 450 customers in Q3, driven by strong retail relationship management programs [4] - The revenue recovery business represents a $750 million addressable market across 1P U.S. sellers, indicating significant cross-selling opportunities [5] Company Strategy and Development Direction - SPS Commerce aims to capitalize on long-term growth opportunities driven by an evolving retail ecosystem, with strategic acquisitions made over the past two years to expand its product portfolio [6][7] - The company is focused on enhancing trading partner collaboration to improve supply chain efficiencies, positioning itself as the industry's most broadly adopted retail cloud services platform [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainty and spend scrutiny affecting customer groups, but remains optimistic about the evolving retail ecosystem driving supply chain efficiencies [9] - For Q4 2025, the company expects revenue in the range of $192.7 million to $194.7 million, representing approximately 13% to 14% year-over-year growth [14] Other Important Information - Dan Juknis, the Chief Revenue Officer, will retire at the end of the year, with Eduardo Rossini joining as Chief Commercial Officer to enhance customer relationships and lifecycle management [10][11] Q&A Session Summary Question: Insights on revenue recovery seasonality and impact on fiscal 2026 guidance - Management noted that visibility on shipment volumes into Amazon warehouses became apparent late in Q3, leading to lower-than-expected revenue recovery [20] - The impact of revenue recovery on Q4 guidance was similar to Q3, with ongoing invoice scrutiny and delayed purchases also affecting revenue [21][22] Question: Expectations for the new Chief Commercial Officer - The new CCO is expected to refine the go-to-market strategy and enhance cross-selling opportunities, leveraging his experience with mid-market ERPs [24][25] Question: Impact of invoice scrutiny on customer spending - Management indicated that spend scrutiny is primarily driven by suppliers absorbing costs and seeking cost savings, affecting customer sentiment [44] Question: Performance comparison between SupplyPike and Carbon6 - Management expressed confidence in the long-term potential of the revenue recovery opportunity, with strong interest from fulfillment customers [46] Question: Initial guidance for 2026 and macro environment assumptions - The initial guidance reflects current dynamics, with optimism for business opportunities in 2026 despite challenges faced in 2025 [50] Question: Customer acquisition and churn rates - The company reported a net increase of 1,100 customers in the first three quarters, with expectations for flat to slightly down net customer adds in Q4 due to timing [58]

Financial Position - As of September 30, 2025, the company reported cash and cash equivalents of $133.7 million and net accounts receivable of $67.4 million[91]. - Total contractual obligations as of September 30, 2025, amounted to $27.6 million, with $19.6 million due within one year[96]. - The company believes its cash and cash flows will be sufficient to meet working capital and capital expenditure requirements for at least the next twelve months[98]. Operating Activities - Net cash provided by operating activities for the nine months ended September 30, 2025, was $132.9 million, an increase from $116.8 million in the same period of 2024[92]. - There were no changes in critical accounting policies or estimates during the nine months ended September 30, 2025[90]. Investing Activities - The company used $161.5 million in investing activities during the nine months ended September 30, 2025, compared to $110.2 million in 2024[92]. Financing Activities - Cash used in financing activities increased to $80.2 million in the nine months ended September 30, 2025, primarily due to a $52.0 million increase in share repurchases year-over-year[95]. Revenue Metrics - The company defines recurring revenue as active contracts during the reporting period, excluding non-recurring components[82]. - Annual Revenue Per User (ARPU) is calculated by dividing annualized recurring revenues by the average number of recurring revenue customers[84]. Growth Strategy - The company plans to continue growing by penetrating the supply chain management market and selectively pursuing acquisitions[81].

Financial Performance - Revenue for Q3 2025 was $189.9 million, reflecting a 16% increase from $163.7 million in Q3 2024[6] - Recurring revenue grew 18% compared to Q3 2024[6] - Net income for Q3 2025 was $25.6 million, or $0.67 per diluted share, up from $23.5 million, or $0.62 per diluted share in Q3 2024[6] - Adjusted EBITDA increased 25% to $60.5 million in Q3 2025 compared to the same quarter in 2024[6] - Gross profit for Q3 2025 was $132.0 million, up 18% from $112.1 million in Q3 2024[27] - Net income for Q3 2025 was $25.6 million, compared to $23.5 million in Q3 2024, reflecting a 9% increase[27] - Adjusted EBITDA for Q3 2025 was $60.5 million, representing a 25% increase from $48.4 million in Q3 2024[32] Future Guidance - Fourth quarter 2025 revenue guidance is projected to be between $192.7 million and $194.7 million, representing 13% to 14% year-over-year growth[14] - Fiscal year 2025 revenue is expected to be in the range of $751.6 million to $753.6 million, indicating an 18% growth over 2024[14] - Non-GAAP income per diluted share for Q4 2025 is expected to be between $0.98 and $1.02[14] - Adjusted EBITDA for fiscal year 2025 is expected to be between $229.7 million and $231.7 million, representing 23% to 24% growth over 2024[14] Shareholder Actions - The company announced a new share repurchase program to buy back up to $100.0 million of common stock, effective December 1, 2025[9] - The company repurchased $89.6 million of common stock during the nine months ended September 30, 2025[29] Management Changes - The company appointed Eduardo Rosini as the new Chief Commercial Officer, effective December 1, 2025[5] Balance Sheet - Total assets as of September 30, 2025, were $1.16 billion, an increase from $1.03 billion at the end of 2024[25] - Cash and cash equivalents decreased to $133.7 million from $241.0 million at the end of 2024[29] - Total liabilities increased to $199.7 million as of September 30, 2025, from $176.5 million at the end of 2024[25] - Operating expenses for Q3 2025 totaled $100.8 million, up from $86.5 million in Q3 2024[27]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if ad-blockers are enabled, suggesting the need to disable them for a better experience [1]

Moving the world of Commerce forward October 2025 Forward-Looking Statements and Non-GAAP Financial Measures *Source: TAM Analysis and Market Penetration Study leveraging US Census NAICS Codes across Retail (42 Wholesalers), Distribution (42 Wholesalers), CPG/Finished Goods (31-33 Manufacturing), Retailers/Stores acting as suppliers (44-45 Retail Trade) as of February 2025. This presentation contains forward-looking statements, including information about management's view of SPS Commerce's future expectati ...

Core Insights - SPS Commerce achieved its 99th consecutive quarter of revenue growth, with third quarter 2025 revenue increasing by 16% to $189.9 million compared to $163.7 million in the same quarter of 2024 [1][6] - Recurring revenue for the same period grew by 18% year-over-year [1][6] - The company appointed Eduardo Rosini as the new Chief Commercial Officer, succeeding Dan Juckniess, who will retire at the end of 2025 [1][4][5] - A new share repurchase program was announced, authorizing the repurchase of up to $100 million of common stock [1][6] Financial Performance - Net income for Q3 2025 was $25.6 million, or $0.67 per diluted share, compared to $23.5 million, or $0.62 per diluted share in Q3 2024 [6][25] - Non-GAAP income per diluted share increased to $1.13 from $0.92 in the same quarter last year [6][31] - Adjusted EBITDA rose by 25% to $60.5 million compared to Q3 2024 [6][30] Executive Changes - Eduardo Rosini brings over 30 years of experience in growth and customer lifecycle management, previously serving in leadership roles at Sage, Intuit, and Microsoft [4][5] - The transition in leadership is expected to support the company's next phase of growth [5] Share Repurchase Program - The share repurchase program will be effective from December 1, 2025, and will expire on December 1, 2027 [6][7] - The company plans to finance the repurchase program using cash on hand [7] Market Position and Outlook - SPS Commerce is positioned as a leader in retail supply chain cloud services, emphasizing collaboration and automation among trading partners [3] - The company expresses confidence in its sustainable and profitable growth, supported by multiple growth drivers and a large addressable market [3]

Core Viewpoint - The Alger Weatherbie Specialized Growth Fund's third-quarter 2025 investor letter indicates that while equity markets, particularly the S&P 500 Index, experienced significant growth, the fund's Class A shares underperformed compared to the Russell 2500 Growth Index [1] Company Summary - SPS Commerce, Inc. (NASDAQ:SPSC) is highlighted as a key stock in the fund's portfolio, providing cloud-based supply chain management solutions [2][3] - The stock had a one-month return of 5.62% but saw a significant decline of 36.35% over the past 52 weeks, closing at $109.99 per share with a market capitalization of $4.17 billion as of October 28, 2025 [2] - In the second quarter of 2025, SPS Commerce reported a revenue growth of 22%, reaching $187.4 million, and raised its full-year outlook while also announcing a share repurchase program [3][4] - Despite these positive developments, the company's shares detracted from performance due to management's lowered medium-term organic revenue growth rate, attributed to cautious customer spending and longer decision cycles amid macroeconomic uncertainty [3]

Core Insights - Conestoga Capital Advisors reported that equity markets reached new all-time highs in Q3 2025, but their Small Cap Composite underperformed the Russell 2000 Growth Index, returning -1.4% compared to the Index's 12.2% gain [1] - The gains in the Index were primarily driven by low-quality stocks, particularly unprofitable, high-beta names [1] Company Overview: SPS Commerce, Inc. - SPS Commerce, Inc. provides cloud-based supply chain management solutions and reported a one-month return of 1.74%, but its shares have decreased by 43.44% over the past 52 weeks [2] - As of October 17, 2025, SPS Commerce's stock closed at $109.05, with a market capitalization of $4.134 billion [2] Financial Performance and Outlook - In Q2 2025, SPS Commerce's revenue grew by 22% to $187.4 million, exceeding expectations [4] - Management provided medium-term guidance of "at least" high-single digit revenue growth and margin expansion annually, which surprised some investors [3] - An investor day was held to emphasize the durability of growth and a larger addressable market, but investors are still cautious about the execution and pace of revenue growth [3] Hedge Fund Interest - At the end of Q2 2025, 34 hedge fund portfolios held SPS Commerce, an increase from 31 in the previous quarter [4] - Despite the potential of SPS Commerce as an investment, some analysts believe that certain AI stocks may offer greater upside potential with less downside risk [4]

Core Viewpoint - SPS Commerce, Inc. will release its financial results for Q3 2025 on October 30, 2025, 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, 2025, will be announced after market close on October 30, 2025 [1] - A conference call to discuss these 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 leading retail network that connects trading partners globally to enhance supply chain operations [3] - The company supports over 50,000 recurring revenue customers across various sectors, including retail, grocery, and logistics [3] - SPS Commerce has achieved 98 consecutive quarters of revenue growth and is headquartered in Minneapolis [3]