MINNEAPOLIS, April 30, 2020 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the first quarter ended March 31, 2020.
Revenue was $74.2 million in the first quarter of 2020, compared to $66.9 million in the first quarter of 2019, reflecting 11% growth in revenue from the first quarter of 2019. Recurring revenue grew 12% from the first quarter of 2019. Net income in the first quarter of 2020 was $9.5 million or $0.26 per diluted share, compared to net income of $6.8 million or $0.19 per diluted share, in the first quarter of 2019. Non-GAAP income per diluted share was $0.38 compared to non-GAAP income per diluted share of $0.30 in the first quarter of 2019.Adjusted EBITDA for the first quarter of 2020 increased 24% to $20.4 million compared to the first quarter of 2019.“SPS Commerce plays a mission-critical role in the global supply chain. Our solutions are keeping trading partners connected, especially now during this time of crisis and disruption,” said Archie Black, President and CEO of SPS Commerce. “We’d like to thank our employees and our partners who delivered world class service as they responded to the needs of retailers impacted by macroeconomic effects of the pandemic, executing remote retail automation better and faster than ever. We remain fully committed to provide unwavering support to the suppliers and retailers that serve our communities in these challenging times.”“We are pleased with our first quarter results as we continued to deliver uninterrupted, full-service solutions remotely, to new and existing customers worldwide. With proven operational leverage and a strong balance sheet, we are confident that SPS Commerce is positioned to overcome near term uncertainties. We expect the current supply chain dynamics to amplify the need for e-commerce and EDI solutions in the long term, and we believe SPS Commerce is uniquely positioned to expand on its market leadership.” said Kim Nelson, CFO of SPS Commerce.GuidanceFor the second quarter of 2020, revenue is expected to be in the range of $73.8 million to $74.8 million. Second quarter net income per diluted share is expected to be in the range of $0.17 to $0.19 with fully diluted weighted average shares outstanding of approximately 36.2 million shares. Non-GAAP income per diluted share is expected to be in the range of $0.29 to $0.31. Adjusted EBITDA is expected to be in the range of $19.0 million to $20.0 million. Non-cash, share-based compensation expense is expected to be approximately $5.1 million, depreciation expense is expected to be approximately $3.5 million and amortization expense is expected to be approximately $1.4 million.Due to uncertainties related to the macroeconomic impact of the COVID-19 pandemic, we are withdrawing 2020 guidance until we can ascertain the scale of the impact on retail dynamics, and our business. However, given our history of strong operating leverage and the resilience of our SaaS business model, we remain confident in our ability to expand adjusted EBITDA margin in 2020. For modeling purposes, we expect stock based compensation expense for the year of approximately $19.7 million, depreciation expense of approximately $13.8 million, and amortization expense of approximately $5.6 million.We will continue to monitor the macroeconomic impact on retail dynamics and reassess our visibility for the full year at the end of the second quarter.Quarterly Conference CallSPS Commerce will discuss its quarterly 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 #5367429 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 CommerceSPS 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 90,000 companies in retail, distribution, grocery and e-commerce have chosen SPS as their retail network. SPS has achieved 77 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, RETAIL UNIVERSE, 1=INFINITY logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, RETAIL UNIVERSE are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. RSX, IN:FLUENCE, and others are further marks of SPS Commerce, Inc. These marks may be registered or otherwise protected in other countries.SPS-FUse of Non-GAAP Financial MeasuresTo supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA 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, interest expense, interest income, income tax expense, stock-based compensation expense, realized loss from foreign currency on cash and investments held, and other adjustments as necessary for a fair presentation. SPS Commerce uses Adjusted EBITDA as a measure of operating performance because it assists the company in comparing performance on a consistent basis, as it removes from operating results the impact of the company’s capital structure. SPS Commerce believes Adjusted EBITDA is useful to an investor in evaluating the company’s operating performance because it is 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 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 includes an adjustment to non-GAAP income to reflect the income tax effects of the adjustments to GAAP net income. 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.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.Forward-Looking StatementsThis press release contains 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, our positioning for the future, our performance for the second quarter and full year of 2020, and any statements about the future effect of the COVID-19 pandemic on our business, customers or the global economy and our business prospects, all of which fall 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, 2019, 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.Contact:
Investor Relations
The Blueshirt Group
Irmina Blaszczyk
Lisa Laukkanen
SPSC@blueshirtgroup.com
415-217-4962
Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective August 22, 2019. Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective August 22, 2019.
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