SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud
services, today announced financial results for the first quarter
ended March 31, 2021.
Revenue was $90.1 million in the first quarter of 2021, compared
to $74.2 million in the first quarter of 2020, reflecting 21%
growth in revenue from the first quarter of 2020. Recurring revenue
grew 18% from the first quarter of 2020.
Net income in the first quarter of 2021 was $10.2 million or
$0.28 per diluted share, compared to net income of $9.5 million or
$0.26 per diluted share, in the first quarter of 2020. Non-GAAP net
income per diluted share was $0.43, compared to non-GAAP net income
per diluted share of $0.38 in the first quarter of 2020. Adjusted
EBITDA for the first quarter of 2021 increased 25% to $25.5 million
compared to the first quarter of 2020.
“The SPS team continues to work hard to support supply chain
continuity and improve efficiencies amid evolving industry
dynamics,” said Archie Black, President and CEO of SPS Commerce.
“Ongoing investments in our business have also paid dividends,
expanding our addressable market and strengthening our competitive
differentiation.”
“SPS Commerce delivered another strong quarter as the shift to
e-commerce continues to drive momentum in fulfillment,” said Kim
Nelson, CFO of SPS Commerce. “Our customer focus and product
portfolio are aligned with evolving retail dynamics, and we’re
excited about the growing market opportunities ahead of us.”
Guidance
Second quarter 2021 revenue is expected to be in the range of
$90.5 million to $91.5 million. Second quarter net income per
diluted share is expected to be in the range of $0.20 to $0.21 with
fully diluted weighted average shares outstanding of approximately
37.0 million shares. Non-GAAP net income per diluted share is
expected to be in the range of $0.39 to $0.40. Adjusted EBITDA is
expected to be in the range of $24.8 million to $25.5 million.
Non-cash, share-based compensation expense is expected to be
approximately $7.2 million, depreciation expense is expected to be
approximately $4.0 million and amortization expense is expected to
be approximately $2.7 million.
For the full year of 2021, revenue is expected to be in the
range of $371.1 million to $373.6 million, representing 19% to 20%
growth over 2020. Full year net income per diluted share is
expected to be in the range of $0.97 to $1.00, with fully diluted
weighted average shares outstanding of approximately 37.0 million
shares. Non-GAAP income per diluted share is expected to be in the
range of $1.65 to $1.68. Adjusted EBITDA is expected to be in the
range of $102.5 to $104.0 million, representing 18% to 20% growth
over 2020. Non-cash, share-based compensation expense is expected
to be approximately $26.9 million, depreciation expense is expected
to be approximately $15.9 million and amortization expense is
expected to be approximately $10.5 million.
Quarterly Conference Call
SPS Commerce will discuss its quarterly and annual results today
via teleconference at 3:30 p.m. CT (4:30 p.m. ET). To access the
call, please dial (877) 312-7508, or outside the U.S. (253)
237-1184, with Conference ID #9643214 at least five minutes prior
to the 3:30 p.m. CT start time. 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 95,000 companies in retail,
distribution, grocery and e-commerce have chosen SPS as their
retail network. SPS has achieved 81 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, 1=INFINITY 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. IN:FLUENCE, and others are further marks of SPS
Commerce, Inc. These marks may be registered or otherwise
protected in other countries.
SPS-F
Use of Non-GAAP Financial Measures
To supplement its financial statements, SPS
Commerce also provides investors with Adjusted EBITDA,
Adjusted EBITDA Margin, and non-GAAP net income per share, which
are non-GAAP financial measures. SPS Commerce believes
that these non-GAAP measures provide useful information to
management and investors regarding certain financial and business
trends relating to its financial condition and results of
operations. SPS Commerce's management uses these non-GAAP
measures to compare the company's performance to that of prior
periods for trend analyses and planning purposes. It uses Adjusted
EBITDA for purposes of determining executive and senior management
incentive compensation. These measures are also presented to the
company's board of directors.
Adjusted EBITDA consists of net income adjusted for depreciation
and amortization expense, investment income or loss, realized gain
or loss from foreign currency on cash and investments held, income
tax expense, stock-based compensation expense, 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.
SPS Commerce uses Adjusted EBITDA and Adjusted EBITDA
Margin as measures of operating performance because they assist the
company in comparing performance on a consistent basis, as they
remove from operating results the impact of the company's capital
structure. SPS Commerce believes Adjusted EBITDA and
Adjusted EBITDA Margin are useful to an investor in evaluating the
company's operating performance because they are widely used to
measure a company's 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
the company's capital structure and the method by which assets were
acquired.
Non-GAAP income per share consists of net income plus
stock-based compensation expense, amortization expense related to
intangible assets, realized gain or loss from foreign currency on
cash and investments held, and other adjustments as necessary for a
fair presentation, divided by the weighted average number of shares
of common stock outstanding during each period. SPS
Commerce believes non-GAAP income per share is useful to an
investor because it is widely used to measure a company's operating
performance.
These non-GAAP measures should not be considered a substitute
for, or superior to, financial measures calculated in accordance
with generally accepted accounting principles in the United
States. These non-GAAP financial measures exclude significant
expenses and income that are required by GAAP to be recorded in the
company's financial statements and are subject to inherent
limitations. SPS Commerce urges investors to review the
reconciliation of its non-GAAP financial measures to the comparable
GAAP financial measures that are included in this press
release.
SPS Commerce includes an adjustment to non-GAAP income to
reflect the income tax effects of the adjustments to GAAP net
income, as discussed above. To quantify these tax
effects, SPS Commerce recalculates income tax expense
excluding the direct book and tax effects of the specific items
constituting the non-GAAP adjustments (e.g., stock-based
compensation expense). 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 2021, 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, 2020, 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, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
169,274 |
|
|
$ |
149,692 |
|
Short-term investments |
|
|
39,174 |
|
|
|
37,786 |
|
Accounts receivable |
|
|
39,271 |
|
|
|
37,811 |
|
Allowance for credit losses |
|
|
(4,001 |
) |
|
|
(4,233 |
) |
Accounts receivable, net |
|
|
35,270 |
|
|
|
33,578 |
|
Deferred costs |
|
|
38,666 |
|
|
|
37,988 |
|
Other assets |
|
|
14,490 |
|
|
|
12,312 |
|
Total current assets |
|
|
296,874 |
|
|
|
271,356 |
|
PROPERTY AND EQUIPMENT, less
accumulated depreciation of $62,947 and $59,152, respectively |
|
|
26,606 |
|
|
|
26,432 |
|
OPERATING LEASE RIGHT-OF-USE
ASSETS |
|
|
15,296 |
|
|
|
15,581 |
|
GOODWILL |
|
|
135,263 |
|
|
|
134,853 |
|
INTANGIBLE ASSETS, net |
|
|
57,594 |
|
|
|
60,230 |
|
INVESTMENTS |
|
|
2,500 |
|
|
|
2,500 |
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
Deferred costs, non-current |
|
|
12,874 |
|
|
|
12,607 |
|
Deferred income tax assets |
|
|
210 |
|
|
|
194 |
|
Other assets, non-current |
|
|
2,620 |
|
|
|
2,705 |
|
Total assets |
|
$ |
549,837 |
|
|
$ |
526,458 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,081 |
|
|
$ |
5,354 |
|
Accrued compensation |
|
|
20,428 |
|
|
|
22,872 |
|
Accrued expenses |
|
|
10,018 |
|
|
|
11,161 |
|
Deferred revenue |
|
|
44,481 |
|
|
|
37,947 |
|
Operating lease liabilities |
|
|
3,424 |
|
|
|
2,798 |
|
Total current liabilities |
|
|
83,432 |
|
|
|
80,132 |
|
OTHER LIABILITIES |
|
|
|
|
|
|
|
|
Deferred revenue, non-current |
|
|
4,027 |
|
|
|
2,996 |
|
Operating lease liabilities, non-current |
|
|
18,743 |
|
|
|
19,672 |
|
Deferred income tax liabilities |
|
|
3,112 |
|
|
|
2,937 |
|
Total liabilities |
|
|
109,314 |
|
|
|
105,737 |
|
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;
37,474,834 and 37,100,467 shares issued; and 35,861,584 and
35,487,217 outstanding, respectively |
|
|
37 |
|
|
|
37 |
|
Treasury stock, at cost; 1,613,250 shares |
|
|
(65,247 |
) |
|
|
(65,247 |
) |
Additional paid-in capital |
|
|
402,860 |
|
|
|
393,462 |
|
Retained earnings |
|
|
103,690 |
|
|
|
93,490 |
|
Accumulated other comprehensive loss |
|
|
(817 |
) |
|
|
(1,021 |
) |
Total stockholders’ equity |
|
|
440,523 |
|
|
|
420,721 |
|
Total liabilities and stockholders’ equity |
|
$ |
549,837 |
|
|
$ |
526,458 |
|
|
|
|
|
|
|
|
|
|
Subject to reclassification
SPS COMMERCE, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
(Unaudited; in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
Revenues |
|
$ |
90,094 |
|
|
$ |
74,192 |
|
Cost of revenues |
|
|
29,970 |
|
|
|
23,544 |
|
Gross profit |
|
|
60,124 |
|
|
|
50,648 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
21,355 |
|
|
|
18,299 |
|
Research and development |
|
|
8,706 |
|
|
|
7,568 |
|
General and administrative |
|
|
14,737 |
|
|
|
11,909 |
|
Amortization of intangible assets |
|
|
2,664 |
|
|
|
1,336 |
|
Total operating expenses |
|
|
47,462 |
|
|
|
39,112 |
|
Income from operations |
|
|
12,662 |
|
|
|
11,536 |
|
Other expense, net |
|
|
(325 |
) |
|
|
(673 |
) |
Income before income taxes |
|
|
12,337 |
|
|
|
10,863 |
|
Income tax expense |
|
|
2,137 |
|
|
|
1,348 |
|
Net income |
|
$ |
10,200 |
|
|
$ |
9,515 |
|
|
|
|
|
|
|
|
|
|
Net income per share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.29 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.28 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to compute net income per share |
|
|
|
|
|
|
|
|
Basic |
|
|
35,751 |
|
|
|
35,072 |
|
Diluted |
|
|
36,722 |
|
|
|
35,926 |
|
Per share amounts may not foot due to
rounding.
SPS COMMERCE, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash flows from operating
activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
10,200 |
|
|
$ |
9,515 |
|
Reconciliation of net income to net cash provided by operating
activities |
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
163 |
|
|
|
668 |
|
Change in earn-out liability |
|
|
— |
|
|
|
72 |
|
Depreciation and amortization of property and equipment |
|
|
3,765 |
|
|
|
3,138 |
|
Amortization of intangible assets |
|
|
2,664 |
|
|
|
1,336 |
|
Provision for credit losses |
|
|
1,205 |
|
|
|
1,285 |
|
Stock-based compensation |
|
|
6,925 |
|
|
|
4,344 |
|
Other, net |
|
|
76 |
|
|
|
(105 |
) |
Changes in assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(2,828 |
) |
|
|
(1,053 |
) |
Deferred costs |
|
|
(986 |
) |
|
|
(256 |
) |
Other current and non-current assets |
|
|
(2,257 |
) |
|
|
2,041 |
|
Accounts payable |
|
|
(828 |
) |
|
|
655 |
|
Accrued compensation |
|
|
(2,988 |
) |
|
|
(9,302 |
) |
Accrued expenses |
|
|
(1,052 |
) |
|
|
(615 |
) |
Deferred revenue |
|
|
7,565 |
|
|
|
3,396 |
|
Operating leases |
|
|
(19 |
) |
|
|
(452 |
) |
Net cash provided by operating activities |
|
|
21,605 |
|
|
|
14,667 |
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(3,263 |
) |
|
|
(3,965 |
) |
Purchases of investments |
|
|
(14,039 |
) |
|
|
(12,460 |
) |
Maturities of investments |
|
|
12,500 |
|
|
|
15,875 |
|
Net cash used in investing activities |
|
|
(4,802 |
) |
|
|
(550 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
|
|
Repurchases of common stock |
|
|
— |
|
|
|
(12,000 |
) |
Net proceeds from exercise of options to purchase common stock |
|
|
2,802 |
|
|
|
3,683 |
|
Net proceeds from employee stock purchase plan |
|
|
105 |
|
|
|
87 |
|
Payment for earn-out liability |
|
|
(164 |
) |
|
|
(688 |
) |
Net cash provided by (used in) financing activities |
|
|
2,743 |
|
|
|
(8,918 |
) |
Effect of foreign currency
exchange rate changes |
|
|
36 |
|
|
|
33 |
|
Net increase in cash and cash
equivalents |
|
|
19,582 |
|
|
|
5,232 |
|
Cash and cash equivalents at
beginning of period |
|
|
149,692 |
|
|
|
179,252 |
|
Cash and cash equivalents at
end of period |
|
$ |
169,274 |
|
|
$ |
184,484 |
|
|
|
|
|
|
|
|
|
|
Subject to reclassification
SPS COMMERCE, INC. |
|
NON-GAAP RECONCILIATION |
|
(Unaudited; in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
Net
income |
|
$ |
10,200 |
|
|
$ |
9,515 |
|
Depreciation and amortization of property |
|
|
|
|
|
|
|
|
and equipment |
|
|
3,765 |
|
|
|
3,138 |
|
Amortization of intangible assets |
|
|
2,664 |
|
|
|
1,336 |
|
Investment income |
|
|
(97 |
) |
|
|
(640 |
) |
Realized loss from foreign currency on cash and investments
held |
|
|
289 |
|
|
|
1,243 |
|
Income tax expense |
|
|
2,137 |
|
|
|
1,348 |
|
Stock-based compensation expense |
|
|
6,925 |
|
|
|
4,344 |
|
Other |
|
|
(426 |
) |
|
|
72 |
|
Adjusted EBITDA |
|
$ |
25,457 |
|
|
$ |
20,356 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
Net income |
|
$ |
10,200 |
|
|
$ |
9,515 |
|
Revenue |
|
|
90,094 |
|
|
|
74,192 |
|
Net Income Margin |
|
|
11 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
25,457 |
|
|
$ |
20,356 |
|
Revenue |
|
|
90,094 |
|
|
|
74,192 |
|
Adjusted EBITDA Margin |
|
|
28 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP Income |
|
Net income |
|
$ |
10,200 |
|
|
$ |
9,515 |
|
Stock-based compensation expense |
|
|
6,925 |
|
|
|
4,344 |
|
Amortization of intangible assets |
|
|
2,664 |
|
|
|
1,336 |
|
Realized loss from foreign currency on cash and investments
held |
|
|
289 |
|
|
|
1,243 |
|
Other |
|
|
(426 |
) |
|
|
72 |
|
Income tax effects of adjustments |
|
|
(3,975 |
) |
|
|
(3,026 |
) |
Non-GAAP income |
|
$ |
15,677 |
|
|
$ |
13,484 |
|
|
|
|
|
|
|
|
|
|
Shares used to compute non-GAAP
income per share |
|
|
|
|
|
|
|
|
Basic |
|
|
35,751 |
|
|
|
35,072 |
|
Diluted |
|
|
36,722 |
|
|
|
35,926 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP income per share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.44 |
|
|
$ |
0.38 |
|
Diluted |
|
$ |
0.43 |
|
|
$ |
0.38 |
|
Per share amounts may not foot due to rounding.
Contact:
Investor RelationsThe Blueshirt GroupIrmina BlaszczykLisa
LaukkanenSPSC@blueshirtgroup.com415-217-4962
SPS Commerce (NASDAQ:SPSC)
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From May 2024 to Jun 2024
SPS Commerce (NASDAQ:SPSC)
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From Jun 2023 to Jun 2024