10/24/2024 | Press release | Distributed by Public on 10/24/2024 14:17
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 41-2015127 |
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class | Trading Symbol | Name of exchange on which registered |
Common Stock, par value $0.001 per share | SPSC |
The Nasdaq Stock Market LLC (Nasdaq Global Market)
|
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
Emerging growth company | o |
Page | ||
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements (unaudited)
|
3
|
Condensed Consolidated Balance Sheets
|
3
|
|
Condensed Consolidated Statements of Comprehensive Income
|
4
|
|
Condensed Consolidated Statements of Stockholders' Equity
|
5
|
|
Condensed Consolidated Statements of Cash Flows
|
7
|
|
Notes to Condensed Consolidated Financial Statements
|
8
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
19
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
28
|
Item 4.
|
Controls and Procedures
|
28
|
PART II. OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
29
|
Item 1A.
|
Risk Factors
|
29
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
29
|
Item 3.
|
Defaults Upon Senior Securities
|
29
|
Item 4.
|
Mine Safety Disclosures
|
29
|
Item 5.
|
Other Information
|
30
|
Item 6.
|
Exhibits
|
30
|
SIGNATURES
|
31
|
SPS COMMERCE, INC.
|
2
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
(in thousands, except shares) |
September 30, 2024 |
December 31, 2023 |
||
ASSETS | (unaudited) | |||
Current assets | ||||
Cash and cash equivalents | $ | 198,842 | $ | 219,081 |
Short-term investments | 6,931 | 56,359 | ||
Accounts receivable | 60,044 | 50,160 | ||
Allowance for credit losses | (4,474) | (3,320) | ||
Accounts receivable, net | 55,570 | 46,840 | ||
Deferred costs | 64,665 | 62,403 | ||
Other assets | 18,639 | 16,758 | ||
Total current assets | 344,647 | 401,441 | ||
Property and equipment, net | 36,148 | 36,043 | ||
Operating lease right-of-use assets | 8,412 | 7,862 | ||
Goodwill | 423,508 | 249,176 | ||
Intangible assets, net | 168,131 | 107,344 | ||
Other assets | ||||
Deferred costs, non-current | 20,802 | 20,347 | ||
Deferred income tax assets | 412 | 505 | ||
Other assets, non-current | 1,240 | 1,126 | ||
Total assets | $ | 1,003,300 | $ | 823,844 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities | ||||
Accounts payable | $ | 8,107 | $ | 7,420 |
Accrued compensation | 46,010 | 41,588 | ||
Accrued expenses | 8,968 | 8,014 | ||
Deferred revenue | 78,883 | 69,187 | ||
Operating lease liabilities | 4,363 | 4,460 | ||
Total current liabilities | 146,331 | 130,669 | ||
Other liabilities | ||||
Deferred revenue, non-current | 6,550 | 6,930 | ||
Operating lease liabilities, non-current | 8,807 | 9,569 | ||
Deferred income tax liabilities | 11,607 | 8,972 | ||
Other liabilities, non-current | 640 | 229 | ||
Total liabilities | 173,935 | 156,369 | ||
Commitments and contingencies | ||||
Stockholders' equity | ||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
|
- | - | ||
Common stock, $0.001 par value; 110,000,000 shares authorized; 39,495,411 and 38,971,146 shares issued; and 37,566,443 and 36,820,048 shares outstanding, respectively
|
39 | 39 | ||
Treasury stock, at cost; 1,928,968 and 2,151,098 shares, respectively
|
(99,748) | (128,892) | ||
Additional paid-in capital | 611,719 | 537,061 | ||
Retained earnings | 318,540 | 259,045 | ||
Accumulated other comprehensive gain (loss) | (1,185) | 222 | ||
Total stockholders' equity | 829,365 | 667,475 | ||
Total liabilities and stockholders' equity | $ | 1,003,300 | $ | 823,844 |
SPS COMMERCE, INC.
|
3
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands, except per share amounts) (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||
Revenues | $ | 163,686 | $ | 135,661 | $ | 466,858 | $ | 391,945 |
Cost of revenues | 51,624 | 45,521 | 155,129 | 133,029 | ||||
Gross profit | 112,062 | 90,140 | 311,729 | 258,916 | ||||
Operating expenses | ||||||||
Sales and marketing | 37,577 | 30,289 | 109,700 | 89,722 | ||||
Research and development | 15,292 | 13,558 | 45,667 | 39,438 | ||||
General and administrative | 27,152 | 21,906 | 76,575 | 64,275 | ||||
Amortization of intangible assets | 6,470 | 3,788 | 15,648 | 11,118 | ||||
Total operating expenses | 86,491 | 69,541 | 247,590 | 204,553 | ||||
Income from operations | 25,571 | 20,599 | 64,139 | 54,363 | ||||
Other income, net | 3,778 | 1,702 | 10,966 | 4,859 | ||||
Income before income taxes | 29,349 | 22,301 | 75,105 | 59,222 | ||||
Income tax expense | 5,889 | 5,459 | 15,610 | 12,409 | ||||
Net income | $ | 23,460 | $ | 16,842 | $ | 59,495 | $ | 46,813 |
Other comprehensive income (expense) | ||||||||
Foreign currency translation adjustments | 3,332 | (2,966) | (886) | (1,446) | ||||
Unrealized gain on investments, net of tax of $28, $190, $363 and $459, respectively
|
84 | 570 | 1,089 | 1,376 | ||||
Reclassification of gain on investments into earnings, net of tax of $(83), $(137), $(537) and $(390), respectively
|
(248) | (412) | (1,610) | (1,169) | ||||
Total other comprehensive income (expense) | 3,168 | (2,808) | (1,407) | (1,239) | ||||
Comprehensive income | $ | 26,628 | $ | 14,034 | $ | 58,088 | $ | 45,574 |
Net income per share | ||||||||
Basic | $ | 0.63 | $ | 0.46 | $ | 1.60 | $ | 1.28 |
Diluted | $ | 0.62 | $ | 0.45 | $ | 1.57 | $ | 1.25 |
Weighted average common shares used to compute net income per share | ||||||||
Basic | 37,447 | 36,728 | 37,192 | 36,584 | ||||
Diluted | 37,996 | 37,584 | 37,785 | 37,417 |
SPS COMMERCE, INC.
|
4
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Common Stock | Treasury Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Total Stockholders' Equity |
|||||||||
(in thousands, except shares) (unaudited) | Shares | Amount | Shares | Amount | ||||||||||
Balances, June 30, 2023 | 36,646,819 | $ | 39 | 2,151,098 | $ | (128,892) | $ | 508,484 | $ | 223,192 | $ | (1,842) | $ | 600,981 |
Stock-based compensation | - | - | - | - | 10,780 | - | - | 10,780 | ||||||
Shares issued pursuant to stock awards | 45,952 | - | - | - | 705 | - | - | 705 | ||||||
Employee stock purchase plan activity | 3,159 | - | - | - | 344 | - | - | 344 | ||||||
Net income | - | - | - | - | - | 16,842 | - | 16,842 | ||||||
Foreign currency translation adjustments | - | - | - | - | - | - | (2,966) | (2,966) | ||||||
Unrealized gain on investments, net of tax | - | - | - | - | - | - | 570 | 570 | ||||||
Reclassification of gain on investments into earnings, net of tax | - | - | - | - | - | - | (412) | (412) | ||||||
Balances, September 30, 2023 | 36,695,930 | $ | 39 | 2,151,098 | $ | (128,892) | $ | 520,313 | $ | 240,034 | $ | (4,650) | $ | 626,844 |
Balances, June 30, 2024 | 37,086,627 | $ | 39 | 2,333,099 | $ | (162,187) | $ | 574,842 | $ | 295,080 | $ | (4,353) | $ | 703,421 |
Stock-based compensation | - | - | - | - | 9,996 | - | - | 9,996 | ||||||
Shares issued pursuant to stock awards | 72,852 | - | - | - | 1,884 | - | - | 1,884 | ||||||
Employee stock purchase plan activity | 2,833 | - | - | - | 453 | - | - | 453 | ||||||
Repurchases of common stock, net of costs | (456) | - | 456 | (84) | - | - | - | (84) | ||||||
Reissuances of treasury stock | 404,587 | - | (404,587) | 62,523 | 24,544 | - | - | 87,067 | ||||||
Net income | - | - | - | - | - | 23,460 | - | 23,460 | ||||||
Foreign currency translation adjustments | - | - | - | - | - | - | 3,332 | 3,332 | ||||||
Unrealized gain on investments, net of tax | - | - | - | - | - | - | 84 | 84 | ||||||
Reclassification of gain on investments into earnings, net of tax | - | - | - | - | - | - | (248) | (248) | ||||||
Balances, September 30, 2024 | 37,566,443 | $ | 39 | 1,928,968 | $ | (99,748) | $ | 611,719 | $ | 318,540 | $ | (1,185) | $ | 829,365 |
SPS COMMERCE, INC.
|
5
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Common Stock | Treasury Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Gain (Loss) |
Total Stockholders' Equity |
|||||||||
(in thousands, except shares) (unaudited) | Shares | Amount | Shares | Amount | ||||||||||
Balances, December 31, 2022 | 36,158,046 | $ | 38 | 2,151,098 | $ | (128,892) | $ | 476,117 | $ | 193,221 | $ | (3,411) | $ | 537,073 |
Stock-based compensation | - | - | - | - | 34,192 | - | - | 34,192 | ||||||
Shares issued pursuant to stock awards | 496,500 | 1 | - | - | 5,523 | - | - | 5,524 | ||||||
Employee stock purchase plan activity | 41,384 | - | - | - | 4,481 | - | - | 4,481 | ||||||
Net income | - | - | - | - | - | 46,813 | - | 46,813 | ||||||
Foreign currency translation adjustments | - | - | - | - | - | - | (1,446) | (1,446) | ||||||
Unrealized gain on investments, net of tax | - | - | - | - | - | - | 1,376 | 1,376 | ||||||
Reclassification of gain on investments into earnings, net of tax | - | - | - | - | - | - | (1,169) | (1,169) | ||||||
Balances, September 30, 2023 | 36,695,930 | $ | 39 | 2,151,098 | $ | (128,892) | $ | 520,313 | $ | 240,034 | $ | (4,650) | $ | 626,844 |
Balances, December 31, 2023 | 36,820,048 | $ | 39 | 2,151,098 | $ | (128,892) | $ | 537,061 | $ | 259,045 | $ | 222 | $ | 667,475 |
Stock-based compensation | - | - | - | - | 40,075 | - | - | 40,075 | ||||||
Shares issued pursuant to stock awards | 488,849 | - | - | - | 4,198 | - | - | 4,198 | ||||||
Employee stock purchase plan activity | 35,416 | - | - | - | 5,672 | - | - | 5,672 | ||||||
Repurchases of common stock, net of costs | (205,331) | - | 205,331 | (37,567) | - | - | - | (37,567) | ||||||
Reissuances of treasury stock | 427,461 | - | (427,461) | 66,711 | 24,713 | - | - | 91,424 | ||||||
Net income | - | - | - | - | - | 59,495 | - | 59,495 | ||||||
Foreign currency translation adjustments | - | - | - | - | - | - | (886) | (886) | ||||||
Unrealized gain on investments, net of tax | - | - | - | - | - | - | 1,089 | 1,089 | ||||||
Reclassification of gain on investments into earnings, net of tax | - | - | - | - | - | - | (1,610) | (1,610) | ||||||
Balances, September 30, 2024 | 37,566,443 | $ | 39 | 1,928,968 | $ | (99,748) | $ | 611,719 | $ | 318,540 | $ | (1,185) | $ | 829,365 |
SPS COMMERCE, INC.
|
6
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Nine Months Ended September 30, |
||||
(in thousands) (unaudited) | 2024 | 2023 | ||
Cash flows from operating activities | ||||
Net income | $ | 59,495 | $ | 46,813 |
Reconciliation of net income to net cash provided by operating activities | ||||
Deferred income taxes | (9,918) | (11,906) | ||
Depreciation and amortization of property and equipment | 14,010 | 13,964 | ||
Amortization of intangible assets | 15,648 | 11,118 | ||
Provision for credit losses | 6,239 | 4,004 | ||
Stock-based compensation | 42,264 | 36,097 | ||
Other, net | (925) | 1,711 | ||
Changes in assets and liabilities, net of effects of acquisitions | ||||
Accounts receivable | (11,456) | (8,800) | ||
Deferred costs | (2,240) | (7,543) | ||
Other assets and liabilities | (2,258) | 2,814 | ||
Accounts payable | 665 | (5,289) | ||
Accrued compensation | 458 | 8,073 | ||
Accrued expenses | 842 | (169) | ||
Deferred revenue | 5,424 | 10,042 | ||
Operating leases | (1,412) | (1,417) | ||
Net cash provided by operating activities | 116,836 | 99,512 | ||
Cash flows from investing activities | ||||
Purchases of property and equipment | (13,832) | (15,467) | ||
Purchases of investments | (85,759) | (102,763) | ||
Maturities of investments | 136,765 | 95,000 | ||
Acquisition of businesses, net | (147,401) | (70,218) | ||
Net cash used in investing activities | (110,227) | (93,448) | ||
Cash flows from financing activities | ||||
Repurchases of common stock | (37,567) | - | ||
Net proceeds from exercise of options to purchase common stock | 4,198 | 5,524 | ||
Net proceeds from employee stock purchase plan activity | 5,672 | 4,481 | ||
Net cash provided by (used in) financing activities | (27,697) | 10,005 | ||
Effect of foreign currency exchange rate changes | 849 | (260) | ||
Net increase (decrease) in cash and cash equivalents | (20,239) | 15,809 | ||
Cash and cash equivalents at beginning of period | 219,081 | 162,893 | ||
Cash and cash equivalents at end of period | $ | 198,842 | $ | 178,702 |
SPS COMMERCE, INC.
|
7
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Standard | Date of Issuance | Description | Date of Adoption | Effect on the Financial Statements |
ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures
|
November 2023 | This amendment requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. | 2024 | The adoption will result in additional disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024. |
ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures
|
December 2023 | This amendment requires that an entity disclose specific categories in the effective tax rate reconciliation table as well as provide disclosure of disaggregated information related to income tax expense, income before income taxes, and income taxes paid. | 2025 | We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure. |
SPS COMMERCE, INC.
|
8
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
(in thousands) | ||
Cash paid | $ | 124,769 |
Equity consideration | 87,156 | |
Total consideration | $ | 211,925 |
Estimated fair value of assets and liabilities acquired: | ||
Cash | $ | 6,118 |
Other assets | 3,659 | |
Intangible assets | ||
Subscriber relationships | 16,500 | |
Developed technology | 49,500 | |
Deferred revenue | (2,297) | |
Other liabilities | (2,643) | |
Deferred income tax liabilities, net | (11,580) | |
Total fair value of assets and liabilities acquired | $ | 59,257 |
Goodwill | $ | 152,668 |
Useful Life | |
Subscriber relationships | 7.0 years |
Developed technology | 8.0 years |
SPS COMMERCE, INC.
|
9
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Recurring revenues: | ||||||||
Fulfillment | $ | 135,290 | $ | 110,900 | $ | 382,654 | $ | 318,069 |
Analytics | 13,838 | 13,098 | 41,361 | 38,177 | ||||
Other | 5,328 | 3,373 | 14,107 | 9,949 | ||||
Recurring revenues | 154,456 | 127,371 | 438,122 | 366,195 | ||||
One-time revenues | 9,230 | 8,290 | 28,736 | 25,750 | ||||
Total revenue | $ | 163,686 | $ | 135,661 | $ | 466,858 | $ | 391,945 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
2024 | 2023 | 2024 | 2023 | |||||
Domestic revenue | 83 | % | 84 | % | 83 | % | 84 | % |
SPS COMMERCE, INC.
|
10
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Balance, beginning of period | $ | 18,360 | $ | 16,978 | $ | 17,603 | $ | 14,999 |
Invoiced set-up fees | 3,866 | 4,496 | 13,387 | 14,493 | ||||
Recognized set-up fees | (4,519) | (4,225) | (13,283) | (12,243) | ||||
Balance, end of period | $ | 17,707 | $ | 17,249 | $ | 17,707 | $ | 17,249 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Balance, beginning of period | $ | 84,928 | $ | 75,255 | $ | 82,750 | $ | 70,179 |
Incurred deferred costs | 22,532 | 20,094 | 67,483 | 57,632 | ||||
Amortized deferred costs | (21,993) | (16,303) | (64,766) | (48,765) | ||||
Balance, end of period | $ | 85,467 | $ | 79,046 | $ | 85,467 | $ | 79,046 |
SPS COMMERCE, INC.
|
11
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
September 30, 2024 | December 31, 2023 | |||||||||||||
Fair Value Level | Amortized Cost | Unrealized Gains (Losses), net | Fair Value | Fair Value Level | Amortized Cost | Unrealized Gains (Losses), net | Fair Value | |||||||
(in thousands) | ||||||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | Level 1 | $ | 135,700 | $ | - | $ | 135,700 | Level 1 | $ | 161,233 | $ | - | $ | 161,233 |
Investments: | ||||||||||||||
Certificates of deposit | Level 2 | 6,931 | - | 6,931 | Level 1 | 6,805 | - | 6,805 | ||||||
Marketable securities: | ||||||||||||||
Commercial paper | Level 2 | - | - | - | Level 2 | 48,860 | 694 | 49,554 | ||||||
$ | 142,631 | $ | - | $ | 142,631 | $ | 216,898 | $ | 694 | $ | 217,592 |
Nine Months Ended September 30, |
||||
(in thousands) | 2024 | 2023 | ||
Balance, beginning of period | $ | 3,320 | $ | 3,066 |
Provision for credit losses | 6,239 | 4,004 | ||
Write-offs, net of recoveries | (5,085) | (3,993) | ||
Balance, end of period | $ | 4,474 | $ | 3,077 |
(in thousands) | September 30, 2024 | December 31, 2023 | ||
Internally developed software | $ | 69,727 | $ | 60,396 |
Computer equipment | 35,904 | 34,402 | ||
Leasehold improvements | 15,381 | 15,387 | ||
Office equipment and furniture | 10,980 | 10,966 | ||
Property and equipment, cost | 131,992 | 121,151 | ||
Less: accumulated depreciation and amortization | (95,844) | (85,108) | ||
Total property and equipment, net | $ | 36,148 | $ | 36,043 |
September 30, 2024 | December 31, 2023 | |||
International property and equipment | 18 | % | 15 | % |
SPS COMMERCE, INC.
|
12
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
(in thousands) |
Nine Months Ended September 30, 2024 |
|
Balance, beginning of period | $ | 249,176 |
Addition from business acquisitions | 173,164 | |
Foreign currency translation | (649) | |
Remeasurement from provisional purchase accounting amount | 1,817 | |
Balance, end of period | $ | 423,508 |
September 30, 2024 | |||||||||
($ in thousands) |
Gross Carrying Amount |
Accumulated Amortization |
Foreign Currency Translation |
Net | Weighted Average Remaining Amortization Period | ||||
Subscriber relationships | $ | 126,423 | $ | (41,513) | $ | (138) | $ | 84,772 | 6.2 years |
Developed technology | 105,518 | (22,151) | (8) | 83,359 | 6.6 years | ||||
$ | 231,941 | $ | (63,664) | $ | (146) | $ | 168,131 | 6.4 years |
December 31, 2023 | |||||||||
($ in thousands) |
Gross Carrying Amount |
Accumulated Amortization |
Foreign Currency Translation |
Net | Weighted Average Remaining Amortization Period | ||||
Subscriber relationships | $ | 105,228 | $ | (32,097) | $ | 724 | $ | 73,855 | 6.6 years |
Developed technology | 48,843 | (15,669) | 315 | 33,489 | 5.0 years | ||||
$ | 154,071 | $ | (47,766) | $ | 1,039 | $ | 107,344 | 6.1 years |
(in thousands) | ||
Remainder of 2024 | $ | 7,231 |
2025 | 28,792 | |
2026 | 27,788 | |
2027 | 27,314 | |
2028 | 25,974 | |
Thereafter | 51,032 | |
Total future amortization | $ | 168,131 |
SPS COMMERCE, INC.
|
13
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Operating lease cost | $ | 884 | $ | 729 | $ | 2,496 | $ | 2,306 |
Variable lease cost | 824 | 909 | 2,743 | 2,787 | ||||
$ | 1,708 | $ | 1,638 | $ | 5,239 | $ | 5,093 |
Nine Months Ended September 30, |
||||
(in thousands) | 2024 | 2023 | ||
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating cash outflows from operating leases | $ | 3,801 | $ | 3,835 |
Right-of-use assets obtained in exchange for operating lease liabilities | 2,554 | 1,072 |
September 30, 2024 | December 31, 2023 | |||
Weighted-average remaining lease term | 2.6 years | 3.1 years | ||
Weighted-average discount rate | 4.2 | % | 4.0 | % |
(in thousands) | ||
Remainder of 2024 | $ | 1,716 |
2025 | 5,460 | |
2026 | 4,784 | |
2027 | 1,740 | |
Thereafter | 240 | |
Total future gross payments | $ | 13,940 |
Less: imputed interest | (770) | |
Total operating lease liabilities | $ | 13,170 |
(in thousands) | ||
Remainder of 2024 | $ | 2,890 |
2025 | 14,187 | |
2026 | 4,692 | |
Total estimated future purchases | $ | 21,769 |
SPS COMMERCE, INC.
|
14
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
(in thousands) | Effective Date | Expiration Date | Share Value Authorized for Repurchase | Share Value Repurchased | Unused & Expired Share Repurchase Value | Share Value Available for Future Repurchase | |||
2022 Program | August 2022 | July 2024 | $ | 50,000 | $ | 40,556 | $ | 9,444 | N/A |
2024 Program | August 2024 | July 2026 | 100,000 | - | N/A | $ | 100,000 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands, except shares and per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||
Number of shares repurchased | 456 | - | 205,331 | - | ||||
Total share repurchased cost | $ | 84 | $ | - | $ | 37,567 | $ | - |
Average total cost per repurchased share | $ | 184.21 | $ | - | $ | 182.96 | $ | - |
SPS COMMERCE, INC.
|
15
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Cost of revenues | $ | 1,412 | $ | 2,506 | $ | 8,224 | $ | 7,595 |
Operating expenses | ||||||||
Sales and marketing | 2,820 | 2,428 | 9,776 | 7,379 | ||||
Research and development | 1,939 | 1,798 | 7,001 | 5,387 | ||||
General and administrative | 4,581 | 4,704 | 17,263 | 15,736 | ||||
$ | 10,752 | $ | 11,436 | $ | 42,264 | $ | 36,097 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Stock options | $ | 514 | $ | 487 | $ | 1,517 | $ | 1,472 |
PSUs | 2,260 | 2,812 | 7,149 | 10,236 | ||||
RSUs & DSUs | 6,309 | 6,722 | 28,751 | 20,165 | ||||
RSAs | 112 | 122 | 329 | 345 | ||||
ESPP | 800 | 637 | 2,323 | 1,974 | ||||
401(k) stock match | 757 | 656 | 2,195 | 1,905 | ||||
$ | 10,752 | $ | 11,436 | $ | 42,264 | $ | 36,097 |
Nine Months Ended September 30, 2024 |
|||
Options (#) |
Weighted Average Exercise Price ($/share) |
||
Outstanding, beginning of period | 346,822 | $ | 80.02 |
Granted | 36,993 | 197.42 | |
Exercised | (85,364) | 49.18 | |
Forfeited | (2,094) | 158.63 | |
Outstanding, end of period | 296,357 | $ | 103.01 |
SPS COMMERCE, INC.
|
16
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Life (in years) | 4.1 | |
Volatility | 36.7 | % |
Dividend yield | - | |
Risk-free interest rate | 4.3 | % |
Nine Months Ended September 30, 2024 |
|||
# |
Weighted Average Grant Date Fair Value ($/share) |
||
Outstanding, beginning of period | 773,414 | $ | 147.50 |
Granted | 409,843 | 185.73 | |
Vested and common stock issued | (403,291) | 124.30 | |
Forfeited | (33,725) | 180.49 | |
Outstanding, end of period | 746,241 | $ | 179.54 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands, except shares) | 2024 | 2023 | 2024 | 2023 | ||||
Amounts for shares purchased | $ | 453 | $ | 344 | $ | 5,672 | $ | 4,481 |
Shares purchased | 2,833 | 3,159 | 35,416 | 41,384 |
Life (in years) | 0.5 | |
Volatility | 30.9 | % |
Dividend yield | - | |
Risk-free interest rate | 5.3 | % |
SPS COMMERCE, INC.
|
17
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||
Investment income | $ | 2,704 | $ | 2,635 | $ | 8,377 | $ | 5,372 |
Realized gain from foreign currency on cash and investments held | 1,077 | 98 | 2,636 | 525 | ||||
Other expense, net | (3) | (1,031) | (47) | (1,038) | ||||
Total other income, net | $ | 3,778 | $ | 1,702 | $ | 10,966 | $ | 4,859 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||
Numerator | ||||||||
Net income | $ | 23,460 | $ | 16,842 | $ | 59,495 | $ | 46,813 |
Denominator | ||||||||
Weighted average common shares outstanding, basic | 37,447 | 36,728 | 37,192 | 36,584 | ||||
Options to purchase common stock and ESPP | 145 | 256 | 159 | 279 | ||||
PSUs, RSUs, RSAs, and DSUs | 404 | 600 | 434 | 554 | ||||
Weighted average common shares outstanding, diluted | 37,996 | 37,584 | 37,785 | 37,417 | ||||
Net income per share | ||||||||
Basic | $ | 0.63 | $ | 0.46 | $ | 1.60 | $ | 1.28 |
Diluted | $ | 0.62 | $ | 0.45 | $ | 1.57 | $ | 1.25 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
(in thousands) | 2024 | 2023 | 2024 | 2023 |
Anti-dilutive shares | 130 | 40 | 118 | 43 |
SPS COMMERCE, INC.
|
18
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
SPS COMMERCE, INC.
|
19
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, | ||||||||||||
2024 | 2023 | Change | ||||||||||
($ in thousands) | $ |
% of revenue(1)
|
$ |
% of revenue(1)
|
$ |
%(2)
|
||||||
Revenues | $ | 163,686 | 100 | % | $ | 135,661 | 100 | % | $ | 28,025 | 21 | % |
Cost of revenues | 51,624 | 32 | 45,521 | 34 | 6,103 | 13 | ||||||
Gross profit | 112,062 | 68 | 90,140 | 66 | 21,922 | 24 | ||||||
Operating expenses | ||||||||||||
Sales and marketing | 37,577 | 23 | 30,289 | 22 | 7,288 | 24 | ||||||
Research and development | 15,292 | 9 | 13,558 | 10 | 1,734 | 13 | ||||||
General and administrative | 27,152 | 17 | 21,906 | 16 | 5,246 | 24 | ||||||
Amortization of intangible assets | 6,470 | 4 | 3,788 | 3 | 2,682 | 71 | ||||||
Total operating expenses | 86,491 | 53 | 69,541 | 51 | 16,950 | 24 | ||||||
Income from operations | 25,571 | 16 | 20,599 | 15 | 4,972 | 24 | ||||||
Other income, net | 3,778 | 2 | 1,702 | 1 | 2,076 | NM | ||||||
Income before income taxes | 29,349 | 18 | 22,301 | 16 | 7,048 | 32 | ||||||
Income tax expense | 5,889 | 4 | 5,459 | 4 | 430 | 8 | ||||||
Net income | $ | 23,460 | 14 | % | $ | 16,842 | 12 | % | $ | 6,618 | 39 | % |
(1) Amounts in column may not foot due to rounding | ||||||||||||
(2) NM = not meaningful |
SPS COMMERCE, INC.
|
20
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
||||
(in thousands) | 2024 | 2023 | ||
Net income | $ | 23,460 | $ | 16,842 |
Income tax expense | 5,889 | 5,459 | ||
Depreciation and amortization of property and equipment | 4,633 | 4,675 | ||
Amortization of intangible assets | 6,470 | 3,788 | ||
Stock-based compensation expense | 10,752 | 11,436 | ||
Realized gain from foreign currency on cash and investments held | (1,077) | (98) | ||
Investment income | (2,704) | (2,635) | ||
Other | 978 | 1,036 | ||
Adjusted EBITDA | $ | 48,401 | $ | 40,503 |
SPS COMMERCE, INC.
|
21
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Three Months Ended September 30, |
||||
(in thousands, except Margin and Adjusted EBITDA Margin) | 2024 | 2023 | ||
Revenue | $ | 163,686 | $ | 135,661 |
Net income | 23,460 | 16,842 | ||
Margin | 14 | % | 12 | % |
Adjusted EBITDA | 48,401 | 40,503 | ||
Adjusted EBITDA Margin | 30 | % | 30 | % |
Three Months Ended September 30, |
||||
(in thousands, except per share amounts) | 2024 | 2023 | ||
Net income | $ | 23,460 | $ | 16,842 |
Stock-based compensation expense | 10,752 | 11,436 | ||
Amortization of intangible assets | 6,470 | 3,788 | ||
Realized gain from foreign currency on cash and investments held | (1,077) | (98) | ||
Other | 978 | 1,036 | ||
Income tax effects of adjustments | (5,514) | (4,981) | ||
Non-GAAP income | $ | 35,069 | $ | 28,023 |
Shares used to compute net income and non-GAAP income per share | ||||
Basic | 37,447 | 36,728 | ||
Diluted | 37,996 | 37,584 | ||
Net income per share, basic | $ | 0.63 | $ | 0.46 |
Non-GAAP adjustments to net income per share, basic | 0.31 | 0.30 | ||
Non-GAAP income per share, basic | $ | 0.94 | $ | 0.76 |
Net income per share, diluted | $ | 0.62 | $ | 0.45 |
Non-GAAP adjustments to net income per share, diluted | 0.30 | 0.30 | ||
Non-GAAP income per share, diluted | $ | 0.92 | $ | 0.75 |
SPS COMMERCE, INC.
|
22
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Nine Months Ended September 30, | ||||||||||||
2024 | 2023 | Change | ||||||||||
($ in thousands) | $ |
% of revenue(1)
|
$ |
% of revenue(1)
|
$ |
%(2)
|
||||||
Revenues | $ | 466,858 | 100 | % | $ | 391,945 | 100 | % | $ | 74,913 | 19 | % |
Cost of revenues | 155,129 | 33 | 133,029 | 34 | 22,100 | 17 | ||||||
Gross profit | 311,729 | 67 | 258,916 | 66 | 52,813 | 20 | ||||||
Operating expenses | ||||||||||||
Sales and marketing | 109,700 | 23 | 89,722 | 23 | 19,978 | 22 | ||||||
Research and development | 45,667 | 10 | 39,438 | 10 | 6,229 | 16 | ||||||
General and administrative | 76,575 | 16 | 64,275 | 16 | 12,300 | 19 | ||||||
Amortization of intangible assets | 15,648 | 3 | 11,118 | 3 | 4,530 | 41 | ||||||
Total operating expenses | 247,590 | 53 | 204,553 | 52 | 43,037 | 21 | ||||||
Income from operations | 64,139 | 14 | 54,363 | 14 | 9,776 | 18 | ||||||
Other income, net | 10,966 | 2 | 4,859 | 1 | 6,107 | NM | ||||||
Income before income taxes | 75,105 | 16 | 59,222 | 15 | 15,883 | 27 | ||||||
Income tax expense | 15,610 | 3 | 12,409 | 3 | 3,201 | 26 | ||||||
Net income | $ | 59,495 | 13 | % | $ | 46,813 | 12 | % | $ | 12,682 | 27 | % |
(1) Amounts in column may not foot due to rounding | ||||||||||||
(2) NM = "not meaningful" |
SPS COMMERCE, INC.
|
23
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Nine Months Ended September 30, |
||||
(in thousands) | 2024 | 2023 | ||
Net income | $ | 59,495 | $ | 46,813 |
Income tax expense | 15,610 | 12,409 | ||
Depreciation and amortization of property and equipment | 14,010 | 13,964 | ||
Amortization of intangible assets | 15,648 | 11,118 | ||
Stock-based compensation expense | 42,264 | 36,097 | ||
Realized gain from foreign currency on cash and investments held | (2,636) | (525) | ||
Investment income | (8,377) | (5,372) | ||
Other | 978 | 1,170 | ||
Adjusted EBITDA | $ | 136,992 | $ | 115,674 |
SPS COMMERCE, INC.
|
24
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Nine Months Ended September 30, |
||||
(in thousands, except Margin and Adjusted EBITDA Margin) | 2024 | 2023 | ||
Revenue | $ | 466,858 | $ | 391,945 |
Net income | 59,495 | 46,813 | ||
Margin | 13 | % | 12 | % |
Adjusted EBITDA | 136,992 | 115,674 | ||
Adjusted EBITDA Margin | 29 | % | 30 | % |
Nine Months Ended September 30, |
||||
(in thousands, except per share amounts) | 2024 | 2023 | ||
Net income | $ | 59,495 | $ | 46,813 |
Stock-based compensation expense | 42,264 | 36,097 | ||
Amortization of intangible assets | 15,648 | 11,118 | ||
Realized gain from foreign currency on cash and investments held | (2,636) | (525) | ||
Other | 978 | 1,170 | ||
Income tax effects of adjustments | (18,134) | (16,089) | ||
Non-GAAP income | $ | 97,615 | $ | 78,584 |
Shares used to compute net income and non-GAAP income per share | ||||
Basic | 37,192 | 36,584 | ||
Diluted | 37,785 | 37,417 | ||
Net income per share, basic | $ | 1.60 | $ | 1.28 |
Non-GAAP adjustments to net income per share, basic | 1.02 | 0.87 | ||
Non-GAAP income per share, basic | $ | 2.62 | $ | 2.15 |
Net income per share, diluted | $ | 1.57 | $ | 1.25 |
Non-GAAP adjustments to net income per share, diluted | 1.01 | 0.85 | ||
Non-GAAP income per share, diluted | $ | 2.58 | $ | 2.10 |
SPS COMMERCE, INC.
|
25
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Nine Months Ended September 30, |
||||
(in thousands) | 2024 | 2023 | ||
Net cash provided by operating activities | $ | 116,836 | $ | 99,512 |
Net cash used in investing activities | (110,227) | (93,448) | ||
Net cash provided by (used in) financing activities | (27,697) | 10,005 |
SPS COMMERCE, INC.
|
26
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Payments Due by Period | ||||||||||
(in thousands) |
Less Than 1 Year |
1-3 Years | 3-5 Years |
More Than 5 Years |
Total | |||||
Operating lease obligations, including imputed interest | $ | 5,474 | $ | 8,125 | $ | 284 | $ | 57 | $ | 13,940 |
Purchase commitments | 13,799 | 7,970 | - | - | 21,769 | |||||
Total | $ | 19,273 | $ | 16,095 | $ | 284 | $ | 57 | $ | 35,709 |
SPS COMMERCE, INC.
|
27
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
SPS COMMERCE, INC.
|
28
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Program(1)(2)
|
Approximate
Dollar Value of
Shares that
May Yet be
Purchased
Under the
Program (1)(2)
|
||
July 1 - 31, 2024 | 456 | $ | 184.21 | 456 | $ | 9,445,000 |
August 1 - 31, 2024 | - | - | - | 100,000,000 | ||
September 1 - 30, 2024 | - | - | - | 100,000,000 | ||
Total | 456 | $ | 184.21 | 456 | $ | 100,000,000 |
SPS COMMERCE, INC.
|
29
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Name | Title | Adoption Date | Earliest Sale Date | Expiration or Termination Date |
Aggregate Number of Shares of the Company's Common Stock to be Sold(1)
|
Marty Reaume | Director | August 22, 2024 | January 2, 2025 | May 14, 2025 | 7,558 |
Jamie Thingelstad | Chief Technology Officer | September 5, 2024 | December 31, 2024 | May 23, 2025 | 18,537 |
Number | Description |
3.1 | |
3.2 | |
10.1 | |
31.1 |
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith).
|
31.2 |
Certification of Principal Financial Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith).
|
32.1 |
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
101 |
Interactive Data Files Pursuant to Rule 405 of Regulation S-T (filed herewith). The XBRL instance document does not appear in the Interactive Data File because its tags are embedded within the Inline XBRL document.
|
104 |
The cover page from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL.
|
SPS COMMERCE, INC.
|
30
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|
Date: October 24, 2024 | SPS COMMERCE, INC. |
/s/ KIMBERLY NELSON | |
Kimberly Nelson | |
Executive Vice President and Chief Financial Officer | |
(principal financial and accounting officer) |
SPS COMMERCE, INC.
|
31
|
Form 10-Q for the Quarterly Period ended September 30, 2024
|