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 - First quarter revenue grew 21% to $181.5 million, marking the 97th consecutive quarter of revenue growth [8][16] - Recurring revenue increased by 23% year-over-year, with approximately 54,150 recurring revenue customers and an average revenue per user (ARPU) of approximately $13,850 [16] - Adjusted EBITDA rose 22% to $54.4 million compared to $44.4 million in Q1 of the previous year [17] - The company ended the quarter with total cash and investments of $95 million and repurchased approximately $40 million of its shares [18] Business Line Data and Key Metrics Changes - The analytics segment experienced a slight decline of approximately 2% year-over-year, which is attributed to economic conditions and tariff uncertainties [30][32] - The acquisition of CarbonSix added approximately 8,500 customers, exceeding initial estimates, and is expected to impact ARPU in the following quarter [17][94] Market Data and Key Metrics Changes - SPS Commerce operates a network of over 50,000 suppliers, logistics companies, and buying organizations across various sectors, including retail and manufacturing, within an $11 billion total addressable market [15] - The company is closely monitoring how current trade dynamics are impacting the retail sector amid economic uncertainties [14][19] Company Strategy and Development Direction - SPS Commerce aims to enhance trading partner relationships through a diverse product portfolio, including fulfillment, analytics, e-invoicing, and supply chain performance solutions [9][10] - The company is focused on automation and operational efficiencies as priorities for trading partners, which are expected to drive future growth [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year 2025 growth outlook despite ongoing macroeconomic uncertainties, emphasizing the resilience of their business model [21] - The company is not currently seeing a decline in the volume of enablement programs, indicating a stable demand environment [37] Other Important Information - The company expects revenue for Q2 2025 to be in the range of $184.5 million to $186.2 million, representing approximately 20% to 21% year-over-year growth [18] - For the full year 2025, revenue is expected to be between $758.5 million and $763 million, reflecting a growth rate of 19% to 20% over 2024 [20] Q&A Session Summary Question: Insights on cross-sell potential from recent acquisitions - Management noted that the ideal customer profiles for revenue recovery and fulfillment products align well, indicating potential for cross-selling opportunities [26][28] Question: Performance of the analytics business - The analytics segment saw a slight decline, attributed to economic conditions, with expectations for it to remain flat for the year [30][31] Question: Impact of tariffs on enablement campaigns - Management confirmed that while tariffs are a concern, they have not yet seen a decline in the pipeline for enablement programs [37][38] Question: Customer growth from CarbonSix acquisition - The acquisition added more customers than initially expected, with a rigorous review process revealing approximately 8,500 customers [94][95] Question: Organic customer growth expectations - Management indicated that organic customer growth is expected to remain stable, with strong community enablement activity anticipated for the year [99] Question: Broader economic indicators being monitored - Key indicators include the pipeline of community enablement campaigns and the health of the supplier base, with no current signs of slowdown in ERP and WMS projects [112][116]

Financial Data and Key Metrics Changes - First quarter revenue grew 21% to $181.5 million, marking the 97th consecutive quarter of revenue growth [6][13] - Recurring revenue increased by 23% year over year [6][13] - Adjusted EBITDA rose 22% to $54.4 million compared to $44.4 million in Q1 of the previous year [14] - Total cash and investments at the end of the quarter were $95 million, with approximately $40 million of shares repurchased [14] Business Line Data and Key Metrics Changes - The total number of recurring revenue customers in Q1 was approximately 54,150, with an average revenue per user (ARPU) of approximately $13,850 [13] - The analytics business slightly declined year over year by approximately 2%, which is expected to remain flat for the year [22][24] Market Data and Key Metrics Changes - The company operates a network of over 50,000 suppliers, logistics companies, and buying organizations across various sectors [11] - The total addressable market is estimated at $11 billion, indicating significant growth potential [12] Company Strategy and Development Direction - The company is focused on enhancing automation and operational efficiencies across supply chains, which are seen as critical for trading partners [16][18] - The acquisition of CarbonSix is expected to enhance the company's portfolio and position in the revenue recovery category [8][14] - The company is closely monitoring trade dynamics and their impact on the retail industry, while remaining committed to supporting partners through challenging macro environments [11][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year 2025 growth outlook despite ongoing macroeconomic uncertainties [17][18] - The company anticipates revenue growth in the range of $758.5 million to $763 million for the full year, representing approximately 19% to 20% growth over 2024 [17] - Management noted that the demand for mission-critical services remains strong, with automation being a priority for trading partners [16][18] Other Important Information - The company expects adjusted EBITDA for the full year to be in the range of $229.4 million to $232.9 million, reflecting growth of approximately 23% to 25% over 2024 [17] - Stock-based compensation expense is anticipated to be approximately $61.4 million for the year [17] Q&A Session Summary Question: Insights on cross-sell potential from recent acquisitions - Management indicated that the ideal customer profiles for revenue recovery and fulfillment products align well, suggesting positive cross-sell opportunities [20][21] Question: Decline in analytics business - The analytics segment saw a slight decline due to economic conditions, with expectations for it to remain flat for the year [22][24] Question: Impact of tariffs on enablement campaigns - Management noted that while tariffs are a concern, there has not been a decline in the volume of enablement programs or the speed of moving opportunities through the pipeline [28] Question: Organic customer growth and enablement campaigns - The company reported a net addition of 300 organic customers, driven by strong community enablement programs [34][70] Question: Future growth expectations excluding acquisitions - Management reiterated confidence in achieving the stated growth targets for 2025, but did not provide specific guidance for 2026 at this time [58][59]