• SPS Commerce Reports First Quarter 2023 Financial Results

    المصدر: Nasdaq GlobeNewswire / 26 أبريل 2023 16:05:21   America/New_York

    Company delivers 89th consecutive quarter of topline growth
    Revenue growth of 20% year-over-year; Recurring revenue growth of 20% year-over-year

    MINNEAPOLIS, April 26, 2023 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the first quarter ended March 31, 2023.

    First Quarter 2023 Financial Highlights

    • Revenue was $125.9 million in the first quarter of 2023, compared to $105.2 million in the first quarter of 2022, reflecting 20% growth.
    • Recurring revenue grew 20% from the first quarter of 2022.
    • Net income was $15.3 million or $0.41 per diluted share, compared to net income of $12.6 million or $0.34 per diluted share in the first quarter of 2022.
    • Non-GAAP income per diluted share was $0.67, compared to non-GAAP income per diluted share of $0.55 in the first quarter of 2022.
    • Adjusted EBITDA for the first quarter of 2022 increased 16% to $37.0 million compared to the first quarter of 2022.

    “The ongoing expansion of our network is a reflection of SPS’ ability to help retailers, suppliers and emerging brands successfully and cost effectively adapt to omnichannel retail while they future-proof their investments in supply chain automation,” said Archie Black, CEO of SPS Commerce. “I believe our strategy and our people position SPS Commerce for continued success as we capitalize on the growth opportunities ahead of us.”

    “SPS Commerce’s history of strong financial performance and 89 quarters of consecutive revenue growth underscore the stability of our business model and our consistent execution. Despite ongoing macro dynamics, we believe we are better positioned than ever to deliver on our long-term targets and sustained, profitable growth,” said Kim Nelson, CFO of SPS Commerce.

    Guidance

    Second Quarter 2023 Guidance

    • Revenue is expected to be in the range of $128.0 million to $128.8 million.
    • Net income per diluted share is expected to be in the range of $0.30 to $0.31, with fully diluted weighted average shares outstanding of 37.5 million shares.
    • Non-GAAP income per diluted share is expected to be in the range of $0.62 to $0.63.
    • Adjusted EBITDA is expected to be in the range of $36.4 million to $37.0 million.
    • Non-cash, share-based compensation expense is expected to be $12.8 million, depreciation expense is expected to be $5.0 million, and amortization expense is expected to be $3.9 million.

    Full Year 2023 Guidance

    • Revenue is expected to be in the range of $525.5 million to $527.6 million, representing 17% growth over 2022.
    • Net income per diluted share is expected to be in the range of $1.55 to $1.58, with fully diluted weighted average shares outstanding of 37.4 million shares.
    • Non-GAAP income per diluted share is expected to be in the range of $2.67 to $2.70.
    • Adjusted EBITDA is expected to be in the range of $154.2 to $155.8 million, representing 17% to 18% growth over 2022.
    • Non-cash, share-based compensation expense is expected to be $45.0 million, depreciation expense is expected to be $19.8 million, and amortization expense is expected to be $15.6 million.

    The forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially. The Company does not present a reconciliation of the forward-looking non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, and non-GAAP income per share, to the most directly comparable GAAP financial measures because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized.

    Quarterly Conference Call

    To access the call, please dial 1-833-816-1382, or outside the U.S. 1-412-317-0475 at least 15 minutes prior to the 3:30 p.m. CT start time. Please ask to join the SPS Commerce Q1 2023 conference call. A live webcast of the call will also be available at http://investors.spscommerce.com under the Events and Presentations menu.   The replay will also be available on our website at http://investors.spscommerce.com.

    About SPS Commerce

    SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service and accessible experts so our customers can focus on what they do best. To date, more than 115,000 companies in retail, distribution, grocery and e-commerce have chosen SPS as their retail network. SPS has achieved 89 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit www.spscommerce.com.

    SPS COMMERCE, SPS, SPS logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, MASTERING THE RETAIL GAME and RSX are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. These marks may be registered or otherwise protected in other countries. 

    SPS-F

    Use of Non-GAAP Financial Measures

    To supplement our consolidated financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures. We believe that these non-GAAP financial measures provide useful information to our management, Board of Directors, and investors regarding certain financial and business trends relating to our financial condition and results of operations.

    Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses and planning purposes. Adjusted EBITDA is also used for purposes of determining executive and senior management incentive compensation. We believe these non-GAAP financial measures are useful to an investor as they are widely used in evaluating operating performance. Adjusted EBITDA and Adjusted EBITDA Margin are used to measure operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

    These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our consolidated financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release.

    Adjusted EBITDA Measures:

    Adjusted EBITDA consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from foreign currency on cash and investments held, investment income or loss, and other adjustments as necessary for a fair presentation.

    Adjusted EBITDA Margin consists of Adjusted EBITDA divided by revenue. Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue.

    Non-GAAP Income Per Share Measure:

    Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, other adjustments as necessary for a fair presentation, and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period.

    To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments. The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.

    Forward-Looking Statements

    This press release may contain forward-looking statements, including information about management's view of SPS Commerce's future expectations, plans and prospects, including our views regarding future execution within our business, the opportunity we see in the retail supply chain world and our performance for the second quarter and full year of 2023, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of SPS Commerce to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are included in documents SPS Commerce files with the Securities and Exchange Commission, including but not limited to, SPS Commerce's Annual Report on Form 10-K for the year ended December 31, 2022, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on SPS Commerce's future results. The forward-looking statements included in this press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

    SPS COMMERCE, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited; in thousands, except shares)

     March 31,
    2023    		 December 31,
    2022
    ASSETS   
    Current assets   
    Cash and cash equivalents$182,304  $162,893 
    Short-term investments 51,146   51,412 
    Accounts receivable 46,654   42,501 
    Allowance for credit losses (3,217)  (3,066)
    Accounts receivable, net 43,437   39,435 
    Deferred costs 53,844   52,755 
    Other assets 15,651   16,319 
    Total current assets 346,382   322,814 
    Property and equipment, net 35,078   35,458 
    Operating lease right-of-use assets 8,451   9,170 
    Goodwill 199,001   197,284 
    Intangible assets, net 84,536   88,352 
    Other assets   
    Deferred costs, non-current 17,965   17,424 
    Deferred income tax assets 3,365   227 
    Other assets, non-current 2,149   2,185 
    Total assets$696,927  $672,914 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities   
    Accounts payable$5,339  $11,256 
    Accrued compensation 26,431   30,235 
    Accrued expenses 8,163   7,451 
    Deferred revenue 62,907   57,423 
    Operating lease liabilities 4,121   4,277 
    Total current liabilities 106,961   110,642 
    Other liabilities   
    Deferred revenue, non-current 5,105   4,771 
    Operating lease liabilities, non-current 11,994   13,009 
    Deferred income tax liabilities 6,977   7,419 
    Total liabilities 131,037   135,841 
    Commitments and contingencies   
    Stockholders' equity   
    Common stock 39   38 
    Treasury Stock (128,892)  (128,892)
    Additional paid-in capital 489,716   476,117 
    Retained earnings 208,510   193,221 
    Accumulated other comprehensive loss (3,483)  (3,411)
    Total stockholders’ equity 565,890   537,073 
    Total liabilities and stockholders’ equity$696,927  $672,914 
            

    SPS COMMERCE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (Unaudited; in thousands, except per share amounts)

     Three Months Ended
    March 31,
      2023   2022 
    Revenues$125,868  $105,193 
    Cost of revenues 42,964   35,389 
    Gross profit 82,904   69,804 
    Operating expenses   
    Sales and marketing 29,083   24,655 
    Research and development 12,563   10,701 
    General and administrative 20,677   15,468 
    Amortization of intangible assets 3,851   2,470 
    Total operating expenses 66,174   53,294 
    Income from operations 16,730   16,510 
    Other income, net 1,276   423 
    Income before income taxes 18,006   16,933 
    Income tax expense 2,717   4,330 
    Net income$15,289  $12,603 
        
    Net income per share   
    Basic$0.42  $0.35 
    Diluted$0.41  $0.34 
        
    Weighted average common shares used to compute net income per share   
    Basic 36,427   36,136 
    Diluted 37,155   36,989 
            

    SPS COMMERCE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited; in thousands)

     Three Months Ended
    March 31,
      2023   2022 
    Cash flows from operating activities   
    Net income$15,289  $12,603 
    Reconciliation of net income to net cash provided by operating activities   
    Deferred income taxes (5,147)  (269)
    Depreciation and amortization of property and equipment 4,626   3,864 
    Amortization of intangible assets 3,851   2,470 
    Provision for credit losses 1,206   1,144 
    Stock-based compensation 11,780   9,015 
    Other, net 502   (7)
    Changes in assets and liabilities   
    Accounts receivable (6,220)  (5,563)
    Deferred costs (1,679)  (2,797)
    Other current and non-current assets 602   (6,736)
    Accounts payable (4,849)  (3,229)
    Accrued compensation (4,417)  (10,495)
    Accrued expenses 721   (1,746)
    Deferred revenue 5,818   6,349 
    Operating leases (452)  (256)
    Net cash provided by operating activities 21,631   4,347 
    Cash flows from investing activities   
    Purchases of property and equipment (5,261)  (4,355)
    Purchases of investments (34,329)  (54,977)
    Maturities of investments 35,000   65,000 
    Net cash provided by (used in) investing activities (4,590)  5,668 
    Cash flows from financing activities   
    Repurchases of common stock —   (15,226)
    Net proceeds from exercise of options to purchase common stock 2,184   504 
    Net proceeds from employee stock purchase plan activity 241   147 
    Net cash provided by (used in) financing activities 2,425   (14,575)
    Effect of foreign currency exchange rate changes (55)  96 
    Net increase (decrease) in cash and cash equivalents 19,411   (4,464)
    Cash and cash equivalents at beginning of period 162,893   207,552 
    Cash and cash equivalents at end of period$182,304  $203,088 
            

    SPS COMMERCE, INC.
    NON-GAAP RECONCILIATION
    (Unaudited; in thousands, except per share amounts)

    Adjusted EBITDA
     Three Months Ended
    March 31,
      2023   2022 
    Net income$15,289  $12,603 
    Income tax expense 2,717   4,330 
    Depreciation and amortization of property and equipment 4,626   3,864 
    Amortization of intangible assets 3,851   2,470 
    Stock-based compensation expense 11,780   9,015 
    Realized gain from foreign currency on cash and investments held (137)  (468)
    Investment income (1,127)  (48)
    Adjusted EBITDA$36,999  $31,766 
            


    Adjusted EBITDA Margin
     Three Months Ended
    March 31,
      2023   2022 
    Revenue$125,868  $105,193 
        
    Net income 15,289   12,603 
    Margin 12%  12%
        
    Adjusted EBITDA 36,999   31,766 
    Adjusted EBITDA Margin 29%  30%
            


    Non-GAAP Income
     Three Months Ended
    March 31,
      2023   2022 
    Net income$15,289  $12,603 
    Stock-based compensation expense 11,780   9,015 
    Amortization of intangible assets 3,851   2,470 
    Realized gain from foreign currency on cash and investments held (137)  (468)
    Income tax effects of adjustments (5,909)  (3,219)
    Non-GAAP income$24,874  $20,401 
    Shares used to compute non-GAAP income per share   
    Basic 36,427   36,136 
    Diluted 37,155   36,989 
    Non-GAAP income per share   
    Basic$0.68  $0.56 
    Diluted$0.67  $0.55 
            

    Contact:
    Investor Relations
    The Blueshirt Group
    Irmina Blaszczyk & Lisa Laukkanen
    SPSC@blueshirtgroup.com
    415-217-4962


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