SPS(SPSC) - 2024 Q3 - Quarterly Results

SPS Commerce Third Quarter 2024 Financial Results Third Quarter 2024 Financial Highlights 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][3] Management Commentary 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] - 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] Future Outlook and Guidance Fourth Quarter 2024 Guidance 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 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 Condensed Consolidated Balance Sheets 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 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 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 Explanation of Non-GAAP Measures 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] - 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] Reconciliation of GAAP to Non-GAAP Measures 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 |