SPS(US:SPSC)2023-10-27 01:15Financial Data and Key Metrics Changes - Total revenue in Q3 was $135.7 million, which grew 18% year-over-year, while recurring revenue grew 20% [18][40] - Adjusted EBITDA grew 17% to $40.5 million compared to $34.7 million in Q3 of last year [21] - For the full year, revenue is expected to be in the range of $534.2 million to $535.2 million, representing approximately 18% to 19% growth over 2022 [22] - Adjusted EBITDA for the full year is expected to be in the range of $156.2 million to $157 million, representing growth of approximately 18% to 19% [22] - The company expects fully diluted earnings per share to be in the range of $1.65 to $1.67 [22] Business Line Data and Key Metrics Changes - The total number of recurring revenue customers increased 13% year-over-year to approximately 44,500, and wallet share increased 7% to 11,650 [40] - The acquisition of TIE Kinetix added approximately 1,000 customers to the network [21] Market Data and Key Metrics Changes - The company is focusing on geographic expansion, particularly in Europe, following the acquisition of TIE Kinetix [28][100] - The retail enablement campaigns continue to be a significant driver for customer additions, especially in uncertain economic conditions [91] Company Strategy and Development Direction - The company aims to leverage its differentiated network and data to enhance customer offerings and expand into new categories [8] - The strategy includes a focus on omni-channel retail dynamics to capitalize on growth opportunities [17] - The company maintains a target model for adjusted EBITDA margin of 35% in the long term [23] Management's Comments on Operating Environment and Future Outlook - Management noted mixed signals in the retail landscape, with some positive consumer dynamics but overall uncertainty affecting demand [49] - The company expects adjusted EBITDA dollar growth of 15% to 25% beyond 2024 as it invests in the business [23] - Management expressed confidence in the company's ability to navigate the current economic environment and continue delivering growth [49][86] Other Important Information - The company completed the acquisition of the Order Exchange, enhancing its technology capabilities in Australia [39] - The new CEO, Chad Collins, emphasized the importance of networks in unlocking value for trading partners and plans to engage with customers and employees to reinforce company culture [16][35] Q&A Session Summary Question: What is the impact of recent acquisitions on adjusted EBITDA guidance? - Management indicated that the guidance is on the lower end due to investments and the impact of the TIE acquisition, which is expected to be breakeven in EBITDA for 2024 [70][79] Question: How does the company plan to grow internationally? - The company plans to leverage the TIE acquisition as a foundation for expansion into Europe and other markets, focusing on the unique invoicing capabilities [28][100] Question: What are the opportunities for product expansion? - Management highlighted the potential for expanding into logistics and order management, considering both organic development and strategic acquisitions [81][82] Question: How is the demand environment affecting customer growth? - The company noted that community enablement campaigns remain a significant contributor to customer growth, even in uncertain economic conditions [51][91] Question: What is the outlook for the fourth quarter? - The company expects revenue in the range of $142.2 million to $143.2 million, representing approximately 17% year-over-year growth [66]