SPS Commerce Reports Second Quarter 2025 Financial Results
Company delivers 98th consecutive quarter of topline growth
Second quarter 2025 revenue grew 22% and recurring revenue grew 24% from the second quarter of 2024
MINNEAPOLIS, July 30, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the second quarter ended June 30, 2025.
Financial Highlights
Second Quarter 2025 Financial Highlights
•Revenue was $187.4 million in the second quarter of 2025, compared to $153.6 million in the second quarter of 2024, reflecting 22% growth.
•Recurring revenue grew 24% from the second quarter of 2024.
•Net income was $19.7 million or $0.52 per diluted share, compared to net income of $18.0 million or $0.48 per diluted share in the second quarter of 2024.
•Non-GAAP income per diluted share was $1.00, compared to non-GAAP income per diluted share of $0.80 in the second quarter of 2024.
•Adjusted EBITDA for the second quarter of 2025 increased 27% to $56.1 million compared to the second quarter of 2024.
•Share repurchases in the second quarter of 2025 totaled $20.0 million.
“SPS Commerce is the only full-service EDI solution on the market uniquely positioned to help suppliers effortlessly maintain EDI compliance with retailers’ frequently changing requirements,” said Chad Collins, CEO of SPS Commerce. “Our product portfolio enables a stronger collaboration between trading partners, unlocking greater efficiency, cost savings, and shared success. These are dynamics that we believe position SPS for long-term growth.”
“We delivered strong second-quarter performance, and we remain confident in our full-year 2025 outlook,” said Kim Nelson, CFO of SPS Commerce. “In the long term, we are well positioned to capitalize on the growth opportunities across our large addressable market, while we continue to demonstrate strong operating leverage and the resilience of our business model.”
Guidance
Third Quarter 2025 Guidance
•Revenue is expected to be in the range of $191.7 million to $193.2 million, representing 17% to 18% year-over-year growth.
•Net income per diluted share is expected to be in the range of $0.50 to $0.54, with fully diluted weighted average shares outstanding of 38.5 million shares.
•Non-GAAP income per diluted share is expected to be in the range of $0.96 to $1.00.
•Adjusted EBITDA is expected to be in the range of $57.9 million to $59.9 million.
•Non-cash, share-based compensation expense is expected to be $16.0 million, depreciation expense is expected to be $5.6 million, and amortization expense is expected to be $9.5 million.
Fiscal Year 2025 Guidance
•Revenue is expected to be in the range of $759.0 million to $763.0 million, representing 19% to 20% growth over 2024.
•Net income per diluted share is expected to be in the range of $2.17 to $2.22, with fully diluted weighted average shares outstanding of 38.3 million shares.
•Non-GAAP income per diluted share is expected to be in the range of $3.99 to $4.04.
•Adjusted EBITDA is expected to be in the range of $230.7 million to $233.7 million, representing 24% to 25% growth over 2024.
•Non-cash, share-based compensation expense is expected to be $60.9 million, depreciation expense is expected to be $21.8 million, and amortization expense is expected to be $37.1 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 Q2 2025 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. Over 50,000 recurring revenue customers in retail, grocery, distribution, supply, manufacturing, and logistics are using SPS as their retail network. SPS has achieved 98 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 and INFINITE RETAIL POWER are marks of SPS Commerce, Inc. and registered in the U.S. Patent and Trademark Office, along with other SPS marks. Such marks may also be registered or otherwise protected in other countries.
SPS-F
Use of Non-GAAP Financial Measures
To supplement our condensed 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 condensed 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 investments held and foreign currency impact on cash and investments, investment income, and other adjustments as necessary for a fair presentation. Other adjustments for the three months ended June 30, 2025 included the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 2025 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs. Net income is the comparable GAAP measure of financial performance.
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 investments held and foreign currency impact on cash and investments, other adjustments as necessary for a fair presentation, including for the three months ended June 30, 2025 the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 2025 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs, 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. Net income per share, the comparable GAAP measure of financial performance, consists of 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 third quarter and full year of 2025, 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, 2024, 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
(In thousands, except shares)
June 30, 2025
December 31, 2024
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
107,603
$
241,017
Accounts receivable
72,798
56,214
Allowance for credit losses
(5,286)
(4,179)
Accounts receivable, net
67,512
52,035
Deferred costs
66,809
65,342
Other assets
27,453
23,513
Total current assets
269,377
381,907
Property and equipment, net
40,150
37,547
Operating lease right-of-use assets
7,395
8,192
Goodwill
543,514
399,180
Intangible assets, net
237,105
181,294
Other assets
Deferred costs, non-current
21,095
20,572
Deferred income tax assets
645
505
Other assets, non-current
1,823
2,033
Total assets
$
1,121,104
$
1,031,230
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
11,604
$
8,577
Accrued compensation
38,708
47,160
Accrued expenses
12,710
12,108
Deferred revenue
79,198
74,256
Operating lease liabilities
5,749
4,583
Total current liabilities
147,969
146,684
Other liabilities
Deferred revenue, non-current
5,477
6,189
Operating lease liabilities, non-current
5,049
7,885
Deferred income tax liabilities
12,533
15,541
Other liabilities, non-current
296
241
Total liabilities
171,324
176,540
Commitments and contingencies
Stockholders' equity
Common stock
40
40
Treasury stock
(122,096)
(99,748)
Additional paid-in capital
693,113
627,982
Retained earnings
378,028
336,099
Accumulated other comprehensive gain (loss)
695
(9,683)
Total stockholders’ equity
949,780
854,690
Total liabilities and stockholders’ equity
$
1,121,104
$
1,031,230
SPS COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share amounts)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Revenues
$
187,400
$
153,596
$
368,949
$
303,172
Cost of revenues
59,826
52,018
116,740
103,505
Gross profit
127,574
101,578
252,209
199,667
Operating expenses
Sales and marketing
43,434
35,691
85,068
72,123
Research and development
17,271
14,366
34,710
30,375
General and administrative
30,890
23,516
61,908
49,423
Amortization of intangible assets
9,509
4,840
18,097
9,178
Total operating expenses
101,104
78,413
199,783
161,099
Income from operations
26,470
23,165
52,426
38,568
Other income, net
773
4,056
2,980
7,188
Income before income taxes
27,243
27,221
55,406
45,756
Income tax expense
7,510
9,189
13,477
9,721
Net income
$
19,733
$
18,032
$
41,929
$
36,035
Net income per share
Basic
$
0.52
$
0.49
$
1.10
$
0.97
Diluted
$
0.52
$
0.48
$
1.10
$
0.96
Weighted average common shares used to compute net income per share
Basic
37,965
37,078
37,978
37,063
Diluted
38,099
37,683
38,132
37,690
SPS COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Six Months Ended June 30,
2025
2024
Cash flows from operating activities
Net income
$
41,929
$
36,035
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes
(5,914)
(8,172)
Depreciation and amortization of property and equipment
9,948
9,377
Amortization of intangible assets
18,097
9,178
Provision for credit losses
4,111
3,646
Stock-based compensation
28,865
31,512
Other, net
274
(907)
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable
(13,713)
(11,407)
Deferred costs
(412)
(1,996)
Other assets and liabilities
(2,258)
1,899
Accounts payable
2,082
(1,450)
Accrued compensation
(11,006)
(10,763)
Accrued expenses
(1,833)
1,489
Deferred revenue
3,012
5,965
Operating leases
(876)
(900)
Net cash provided by operating activities
72,306
63,506
Cash flows from investing activities
Purchases of property and equipment
(12,815)
(8,592)
Purchases of investments
—
(78,994)
Maturities of investments
—
105,000
Acquisition of business, net
(142,628)
(29,343)
Net cash used in investing activities
(155,443)
(11,929)
Cash flows from financing activities
Repurchases of common stock
(59,558)
(37,483)
Net proceeds from exercise of options to purchase common stock
2,406
2,314
Net proceeds from employee stock purchase plan activity
5,426
5,219
Net cash used in financing activities
(51,726)
(29,950)
Effect of foreign currency exchange rate changes
1,449
(476)
Net increase (decrease) in cash and cash equivalents
(133,414)
21,151
Cash and cash equivalents at beginning of period
241,017
219,081
Cash and cash equivalents at end of period
$
107,603
$
240,232
SPS COMMERCE, INC.
NON-GAAP RECONCILIATIONS
(Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts)
Adjusted EBITDA
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net income
$
19,733
$
18,032
$
41,929
$
36,035
Income tax expense
7,510
9,189
13,477
9,721
Depreciation and amortization of property and equipment
4,991
4,683
9,948
9,377
Amortization of intangible assets
9,509
4,840
18,097
9,178
Stock-based compensation expense
14,998
11,494
28,865
31,512
Realized gain from investments held and foreign currency impact on cash and investments
(107)
(1,255)
(473)
(1,559)
Investment income
(688)
(2,794)
(2,537)
(5,673)
Other
106
—
1,119
—
Adjusted EBITDA
$
56,052
$
44,189
$
110,425
$
88,591
Adjusted EBITDA Margin
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Revenue
$
187,400
$
153,596
$
368,949
$
303,172
Net income
19,733
18,032
41,929
36,035
Margin
11
%
12
%
11
%
12
%
Adjusted EBITDA
56,052
44,189
110,425
88,591
Adjusted EBITDA Margin
30
%
29
%
30
%
29
%
Non-GAAP Income per Share
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net income
$
19,733
$
18,032
$
41,929
$
36,035
Stock-based compensation expense
14,998
11,494
28,865
31,512
Amortization of intangible assets
9,509
4,840
18,097
9,178
Realized gain from investments held and foreign currency impact on cash and investments
(107)
(1,255)
(473)
(1,559)
Other
106
—
1,119
—
Income tax effects of adjustments
(6,285)
(3,066)
(13,570)
(12,620)
Non-GAAP income
$
37,954
$
30,045
$
75,967
$
62,546
Shares used to compute net income and non-GAAP income per share
Basic
37,965
37,078
37,978
37,063
Diluted
38,099
37,683
38,132
37,690
Net income per share, basic
$
0.52
$
0.49
$
1.10
$
0.97
Non-GAAP adjustments to net income per share, basic
0.48
0.32
0.90
0.72
Non-GAAP income per share, basic
$
1.00
$
0.81
$
2.00
$
1.69
Net income per share, diluted
$
0.52
$
0.48
$
1.10
$
0.96
Non-GAAP adjustments to net income per share, diluted
0.48
0.32
0.89
0.70
Non-GAAP income per share, diluted
$
1.00
$
0.80
$
1.99
$
1.66
The annual per share amounts may not cross-sum due to rounding.
