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 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]