MINNEAPOLIS, Sept. 09, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced that it will host its Investor Day on Tuesday, September 23, 2025. SPS Commerce Chief Executive Officer Chad Collins and Chief Financial Officer Kim Nelson, as well as other members of the senior leadership team, will provide an overview of strategic investments and growth opportunities, followed by a live Q&A session. Presentations will begin at 8:30 a.m. Centra ...

Company Overview - SPS Commerce operates a cloud-based network that connects retailers and distributors with their suppliers to facilitate the exchange of supply chain information [2] - The company claims to have the world's largest retail network for supply chain data exchange, utilizing a network-based approach to solve related problems [2] Unique Selling Proposition - SPS Commerce's go-to-market strategy involves working directly with retailers to enable digital connections with their suppliers, many of whom are not digitally connected [2] - The company has successfully added over 50,000 suppliers to its network, with many suppliers trading with multiple partners across the network [2]

Summary of SPS Commerce (SPSC) 2025 Conference Call Company Overview - SPS Commerce operates a cloud-based network connecting retailers and distributors with suppliers to exchange supply chain information, claiming to have the world's largest retail network for this purpose [2][3] Market Opportunity - The Total Addressable Market (TAM) for SPS Commerce is estimated at $11 billion, with significant opportunities to add suppliers who are not digitally connected to retailers [4] - There is potential for increasing average revenue per customer through more connections and cross-selling of the product portfolio [4] Macro Environment - The company has experienced macro headwinds affecting mid-market customers, particularly due to global trade uncertainties, leading to prolonged sales cycles [5][8] - Despite these challenges, demand from retailers remains steady, and customer additions have been strong in 2025 [7][10] Growth and Margin Targets - SPS Commerce targets at least high single-digit organic growth and 2% annual EBITDA margin expansion [11][13] - The growth outlook excludes M&A activities, focusing on organic growth opportunities [14] Revenue Recovery Strategy - The company has acquired SupplyPike and Carbon Six to enhance its revenue recovery solutions for suppliers facing penalties from retailers [22][26] - Integration of these acquisitions is ongoing, with a unified go-to-market strategy that covers multiple retailers [27][28] - Early cross-selling opportunities have been identified, with expectations for ramp-up in 2026 [29][31] International Expansion - SPS Commerce has established a presence in Australia and is expanding into Europe and Asia, with retail enablement programs underway [36][39] - Challenges in Europe include navigating different supplier-retailer dynamics and operational complexities across multiple languages and cultures [41][42] Analytics Product - The analytics business has faced slower growth due to its discretionary nature, but improvements in product offerings and partnerships are expected to stabilize growth [43][44] AI Initiatives - SPS Commerce is exploring AI applications for transaction quality assurance and customer engagement, which are expected to enhance operational efficiencies and contribute to margin improvements [46][50] Competitive Landscape - The company competes with legacy incumbents transitioning to network-based solutions, as well as new entrants in the market [51][52] Gross Margin Expansion - Historical gross margins have been in the mid-60s, with a goal of reaching low to mid-70s through operational efficiencies and AI integration [54][57] Conclusion - Overall, SPS Commerce is optimistic about its growth trajectory, driven by a robust TAM, strategic acquisitions, and a focus on enhancing customer experience and operational efficiencies. The company is navigating macroeconomic challenges while positioning itself for long-term success in the retail supply chain space [10][11][13]

Company Overview - SPS Commerce is a leader in retail supply chain cloud services, connecting trading partners globally to optimize supply chain operations for retail partners [2] - The company supports over 50,000 recurring revenue customers across various sectors including retail, grocery, distribution, supply, manufacturing, and logistics [2] - SPS Commerce has achieved 98 consecutive quarters of revenue growth, indicating strong financial performance [2] Upcoming Events - Management will present at Citi's 2025 Global TMT Conference on September 4, 2025, at 8:10 AM E.T. [1] - A webcast of the presentation will be available on the company's investor relations website [1]

Core Viewpoint - SPS Commerce (NASDAQ: SPSC) has experienced a slower pace of growth, which may present a more compelling investment opportunity following a 25% pullback in its share price [1]. Group 1 - The investment group "Value In Corporate Events" focuses on identifying opportunities related to IPOs, mergers & acquisitions, earnings reports, and changes in corporate capital allocation [2]. - The group covers approximately 10 major events each month, aiming to find the best investment opportunities [2]. Group 2 - The article emphasizes that past performance does not guarantee future results, and no specific investment recommendations are provided [3].

Core Viewpoint - Growth stocks are appealing due to their above-average financial growth, but identifying strong growth stocks is challenging due to inherent volatility and risks [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - SPS Commerce (SPSC) is currently highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth seen as indicative of strong future prospects [3] - SPS Commerce has a historical EPS growth rate of 21.1%, with projected EPS growth of 13.4% this year, surpassing the industry average of 11.9% [4] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, enabling expansion without reliance on external funding [5] - SPS Commerce's year-over-year cash flow growth stands at 22.6%, significantly higher than the industry average of 1.4% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 21.2%, compared to the industry average of 7.1% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - Current-year earnings estimates for SPS Commerce have increased by 0.6% over the past month, indicating a positive outlook [7] Group 5: Overall Assessment - SPS Commerce has achieved a Growth Score of A and a Zacks Rank 2, suggesting it is a potential outperformer and a solid choice for growth investors [9]

Core Insights - SPS Commerce reported quarterly earnings of $1 per share, exceeding the Zacks Consensus Estimate of $0.9 per share, and showing an increase from $0.8 per share a year ago, resulting in an earnings surprise of +11.11% [1] - The company achieved revenues of $187.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.15% and up from $153.6 million year-over-year [2] - SPS Commerce has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +19.05%, with actual earnings of $1 compared to an expected $0.84 per share [1] - The company has topped consensus revenue estimates four times in the last four quarters [2] Stock Performance - SPS Commerce shares have declined approximately 23.9% since the beginning of the year, contrasting with the S&P 500's gain of 8.3% [3] - The current Zacks Rank for SPS Commerce is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.98 on revenues of $193.67 million, and for the current fiscal year, it is $3.93 on revenues of $760.64 million [7] - The outlook for the industry, particularly the Business - Services sector, is currently in the top 37% of Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $187.4 million, a 22% increase year-over-year, marking the 98th consecutive quarter of revenue growth [6][14] - Recurring revenue grew 24% year-over-year, with approximately 54,500 recurring revenue customers and an average revenue per user (ARPU) of approximately $13,200 [14] - Adjusted EBITDA increased 27% to $56.1 million compared to $44.2 million in Q2 of the previous year [15] - Total cash and investments at the end of the quarter were $108 million, with $20 million in share repurchases [15] Business Line Data and Key Metrics Changes - The company is focused on supporting suppliers through uncertain times, which is expected to drive technology investments [6][7] - The product portfolio enables stronger collaboration between trading partners, enhancing efficiency and cost savings [8][12] - The revenue recovery solutions acquired are beginning to deliver value to fulfillment customers, with a unified platform approach being a competitive differentiator [11][12] Market Data and Key Metrics Changes - Demand remains strong on the retail side, driven by digitized connections to suppliers and optimized supply chain performance management [18] - Supplier dynamics show heightened spend scrutiny and delayed purchasing decisions, particularly affecting mid-market ERP purchases [19][28] - The company expects revenue growth rates to be at least in the high single digits beyond 2025, with ongoing uncertainties in the macro environment considered [19] Company Strategy and Development Direction - The company aims to capitalize on growth opportunities across an $11 billion total addressable market, adding new customers and driving higher ARPU through cross-selling [19][20] - The strategy includes maintaining a disciplined M&A approach to enhance growth and strengthen market leadership [19] - The company anticipates expanding adjusted EBITDA margins by two percentage points annually through improved gross margins and operational efficiencies [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment has led to increased cost-saving measures among suppliers, impacting spending decisions [28][29] - There is confidence in the 2025 guidance despite current uncertainties, with expectations for increased spending from suppliers as conditions normalize [36][37] - The company is optimistic about the potential for growth as macro dynamics stabilize, with a focus on improving customer experience and onboarding efficiency [55][56] Other Important Information - The company has provided guidance for 2025, expecting revenue between $759 million and $763 million, representing approximately 19% to 20% growth over 2024 [17] - Non-GAAP diluted income per share is expected to be in the range of $3.99 to $4.40 for the full year 2025 [17] Q&A Session Summary Question: Can you elaborate on the organic revenue growth rate post-2025? - Management indicated that the high single-digit growth rate considers the current product portfolio, with fulfillment driving growth more than analytics [24][25] Question: How has the macro environment affected customer behavior? - Management observed that while retailer enablement activity remains strong, suppliers are focusing on cost-saving measures, leading to slower deal cycles [28][29] Question: Are there differences in behavior between larger and mid-market customers? - There is more pressure in the mid-market ERP area, with prolonged decision-making observed among customers with revenues between $10 million and $300 million [33] Question: What is the outlook for customer adds and ARPU growth? - Management expects growth from both customer adds and ARPU, with community enablement being a significant driver for new customers [58][79] Question: How is the integration of acquired companies progressing? - The post-merger integration of Supply Pike and Carbon6 is going well, with efforts to consolidate go-to-market teams for better value propositions [47][48]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $187.4 million, representing a 22% increase year-over-year, marking the 98th consecutive quarter of revenue growth [14] - Recurring revenue grew 24% year-over-year, with approximately 54,500 recurring revenue customers and an average revenue per user (ARPU) of approximately $13,200 [14] - Adjusted EBITDA increased by 27% to $56.1 million compared to $44.2 million in Q2 of the previous year [15] - Total cash and investments at the end of the quarter were $108 million, with $20 million in share repurchases [15] Business Line Data and Key Metrics Changes - The company’s product portfolio supports stronger collaboration between trading partners, which is expected to unlock greater efficiency and cost savings [7] - The revenue recovery solutions acquired are beginning to deliver value to fulfillment customers, with a focus on cross-selling opportunities [11] Market Data and Key Metrics Changes - Demand remains strong on the retail side, driven by retailers realizing the value of digitized connections to suppliers [18] - Supplier dynamics are impacted by heightened spend scrutiny and delayed purchasing decisions, particularly in the U.S. market [19][60] Company Strategy and Development Direction - The company aims to empower participants in the retail network to work better together while building resilience against future challenges [13] - The strategy includes a disciplined M&A approach to enhance growth and strengthen market leadership [19] - The company expects to expand adjusted EBITDA margin by two percentage points annually, driven by improvements in gross margin and operational efficiencies [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macro environment has led to increased scrutiny on spending among suppliers, affecting purchasing decisions [28] - The company remains optimistic about returning to normal conditions as global trade dynamics stabilize [28] - Beyond 2025, the company expects revenue growth rates to be at least in the high single digits, excluding future acquisitions [19] Other Important Information - The company is focused on improving customer experience and onboarding efficiency, which is expected to enhance gross margin [52] - The integration of acquired companies is progressing well, with a focus on consolidating go-to-market teams for better market reach [45] Q&A Session Summary Question: What is the expected organic revenue growth rate post-2025? - Management indicated that the high single digits growth rate considers the current product portfolio and community enablement activity [22][23] Question: How has the macro environment affected customer behavior? - Management observed that while retailer activity remains strong, suppliers are focusing on cost-saving measures, leading to slower deal cycles [26][28] Question: Are there differences in behavior between larger and smaller customers? - There is more pressure in the mid-market segment, with larger enterprise customers showing healthier demand [32] Question: What is the outlook for adjusted EBITDA margin? - The expectation is for at least a two percentage point increase annually, excluding acquisitions [61] Question: How is the company addressing the integration of acquired products? - The integration of go-to-market teams from recent acquisitions is ongoing, with a focus on cross-selling opportunities [45] Question: What is the health of the SMB customer base? - Customer churn remains consistent, with no significant increase in cancellations, but there is pressure on existing customers to reduce costs [70]

Moving the world of Commerce forward July 2025 Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains 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, our positioning for the future, our future performance, and any statements about customers or the global economy and our ...