Company delivers 88th consecutive quarter of topline growth

Fourth quarter 2022 revenue grew 19% and recurring revenue grew 20% from the fourth quarter of 2021

MINNEAPOLIS, Feb. 09, 2023 (GLOBE NEWSWIRE) --  SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the fourth quarter and year ended December 31, 2022.

Financial Highlights

Fourth Quarter 2022 Financial Highlights

• Revenue was $122.0 million in the fourth quarter of 2022, compared to $102.8 million in the fourth quarter of 2021, reflecting 19% growth.
• Recurring revenue grew 20% from the fourth quarter of 2021.
• Net income was $15.9 million or $0.43 per diluted share, compared to net income of $12.8 million or $0.34 per diluted share in the fourth quarter of 2021, reflecting 25% growth in period over period net income.
• Non-GAAP income per diluted share was $0.63, compared to non-GAAP income per diluted share of $0.46 in the fourth quarter of 2021.
• Adjusted EBITDA for the fourth quarter of 2022 increased 26% to $35.0 million compared to the fourth quarter of 2021.
  

Fiscal Year 2022 Financial Highlights

• Revenue was $450.9 million for the year ended December 31, 2022, compared to $385.3 million for the year ended December 31, 2021, reflecting 17% growth.
• Recurring revenue grew 18% from the year ended December 31, 2021.
• Net income was $55.1 million or $1.49 per diluted share for the year ended December 31, 2022, compared to net income of $44.6 million or $1.21 per diluted share, for the comparable period in 2021, reflecting 24% growth in year over year net income.
• Non-GAAP income per diluted share was $2.35, compared to non-GAAP income per diluted share of $1.82 in the year ended December 31, 2021.
• Adjusted EBITDA for the year ended December 31, 2022 increased 24% to $132.3 million, compared to the year ended December 31, 2021.

“Over the years, SPS Commerce has consistently executed on our mission to connect all retail trading partners through the easiest-to-join and use network,” said Archie Black, CEO of SPS Commerce. “We remained laser focused on improving customer experience and made strategic investments which helped us build the world’s largest cloud retail network and position SPS Commerce for continued success.”

“SPS Commerce achieved strong fourth quarter and full year 2022 results. We continued to deliver profitable growth and invest in the future to capitalize on existing and new opportunities across our expanding addressable market,” said Kim Nelson, CFO of SPS Commerce.

Guidance

First Quarter 2023 Guidance

• Revenue is expected to be in the range of $123.3 million to $124.3 million.
• Net income per diluted share is expected to be in the range of $0.26 to $0.27, with fully diluted weighted average shares outstanding of 37.2 million shares.
• Non-GAAP income per diluted share is expected to be in the range of $0.56 to $0.57.
• Adjusted EBITDA is expected to be in the range of $35.0 million to $35.7 million.
• Non-cash, share-based compensation expense is expected to be $12.0 million, depreciation expense is expected to be $4.8 million, and amortization expense is expected to be $3.9 million.
  

Fiscal Year 2023 Guidance

• Revenue is expected to be in the range of $523.0 million to $526.0 million, representing 16% to 17% growth over 2022.
• Net income per diluted share is expected to be in the range of $1.49 to $1.55, with fully diluted weighted average shares outstanding of 37.3 million shares.
• Non-GAAP income per diluted share is expected to be in the range of $2.63 to $2.69.
• Adjusted EBITDA is expected to be in the range of $152.5 to $154.5 million, representing 15% to 17% 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 be joined into the SPS Commerce Q4 2022 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, grocery, distribution, supply, and logistics have chosen SPS as their retail network. SPS has achieved 88 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. 

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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 first quarter and fiscal 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, 2021, 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.

Results presented are unaudited and thus, are subject to adjustment. Audited results will be included within the 10-K filing.

Results presented are unaudited and thus, are subject to adjustment. Audited results will be included within the 10-K filing.

Results presented are unaudited and thus, are subject to adjustment. Audited results will be included within the 10-K filing.

Results presented are unaudited and thus, are subject to adjustment. Audited results will be included within the 10-K filing.

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