SPS(SPSC) - 2025 Q1 - Quarterly Results

Financial Performance and Outlook SPS Commerce reported strong Q1 2025 financial results and provided forward-looking guidance for the upcoming quarter and full fiscal year First Quarter 2025 Financial Highlights SPS Commerce achieved its 97th consecutive quarter of revenue growth in Q1 2025, with revenue up 21% and strong profit gains - This marks the company's 97th consecutive quarter of revenue growth, underscoring the resilience of its business model and the mission-critical nature of its solutions[1][3] Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | Growth | | :--- | :--- | :--- | :--- | | Revenue | $181.5M | $149.6M | 21% | | Recurring Revenue Growth | 23% | N/A | N/A | | Net Income | $22.2M | $18.0M | 23% | | Diluted EPS | $0.58 | $0.48 | 21% | | Non-GAAP Diluted EPS | $1.00 | $0.86 | 16% | | Adjusted EBITDA | $54.4M | $44.4M | 22% | - The company repurchased $40.0 million of its common stock during the first quarter of 2025[4] - Management highlighted a large total addressable market of $11 billion, positioning the company to support trading relationships across retail, distribution, grocery, and manufacturing[3] Business Outlook The company provided Q2 and full fiscal year 2025 guidance, projecting continued strong growth in revenue and Adjusted EBITDA Second Quarter 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $184.5M - $186.2M (20%-21% YoY Growth) | | Net Income per Diluted Share | $0.41 - $0.44 | | Non-GAAP Income per Diluted Share | $0.87 - $0.90 | | Adjusted EBITDA | $53.0M - $54.5M | Fiscal Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $758.5M - $763.0M (19%-20% YoY Growth) | | Net Income per Diluted Share | $2.06 - $2.13 | | Non-GAAP Income per Diluted Share | $3.86 - $3.93 | | Adjusted EBITDA | $229.4M - $232.9M (23%-25% YoY Growth) | - The company does not provide a reconciliation for forward-looking non-GAAP financial measures to the most comparable GAAP measures, citing the impracticality of forecasting certain items without unreasonable effort[7] Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, income statements, and cash flow statements for the reported periods Condensed Consolidated Balance Sheets Total assets increased to $1.11 billion as of March 31, 2025, with cash decreasing due to acquisitions and share repurchases Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $94,921 | $241,017 | | Total current assets | $251,835 | $381,907 | | Goodwill | $533,940 | $399,180 | | Intangible assets, net | $252,280 | $181,294 | | Total assets | $1,109,050 | $1,031,230 | | Total current liabilities | $153,424 | $146,684 | | Total liabilities | $188,129 | $176,540 | | Total stockholders' equity | $920,921 | $854,690 | Condensed Consolidated Statements of Income SPS Commerce reported Q1 2025 revenues of $181.5 million, up 21.4%, with significant increases in gross profit and net income Income Statement Summary for Q1 (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenues | $181,549 | $149,576 | | Gross profit | $124,635 | $98,089 | | Income from operations | $25,956 | $15,403 | | Net income | $22,196 | $18,003 | | Diluted EPS | $0.58 | $0.48 | Condensed Consolidated Statements of Cash Flows In Q1 2025, operating cash flow increased, but overall cash decreased due to significant outflows from investing activities and share repurchases Cash Flow Summary for Q1 (in thousands) | Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $39,983 | $34,064 | | Net cash used in investing activities | ($147,786) | ($2,945) | | Net cash used in financing activities | ($38,954) | ($14,889) | | Net (decrease) increase in cash | ($146,096) | $15,556 | | Cash at end of period | $94,921 | $234,637 | Non-GAAP Financial Measures and Reconciliations This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their most comparable GAAP equivalents Use and Definition of Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA and non-GAAP income per share for financial analysis, excluding non-cash and non-recurring items - Management uses non-GAAP measures like Adjusted EBITDA for comparing performance across periods, for planning, and for determining executive and senior management incentive compensation[13] - Adjusted EBITDA is defined as net income adjusted for income tax, depreciation, amortization, stock-based compensation, investment gains/losses, and other specific items[15] - Non-GAAP income per share adjusts net income for stock-based compensation, amortization of intangibles, and other items, along with their corresponding tax impacts[17] Reconciliation of GAAP to Non-GAAP Measures For Q1 2025, GAAP Net Income was reconciled to Non-GAAP Adjusted EBITDA and Non-GAAP Income, primarily adjusting for stock-based compensation and amortization Reconciliation of Net Income to Adjusted EBITDA for Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | Net income (GAAP) | $22,196 | | Income tax expense | $5,967 | | Depreciation and amortization | $4,957 | | Amortization of intangible assets | $8,588 | | Stock-based compensation expense | $13,867 | | Other adjustments | ($1,199) | | Adjusted EBITDA (Non-GAAP) | $54,373 | Reconciliation of Net Income to Non-GAAP Income for Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | Net income (GAAP) | $22,196 | | Stock-based compensation expense | $13,867 | | Amortization of intangible assets | $8,588 | | Other adjustments | $647 | | Income tax effects of adjustments | ($7,285) | | Non-GAAP income | $38,013 | | Non-GAAP income per share, diluted | $1.00 |