SPS Commerce, Inc. (SPSC) Bundle
A Brief History of SPS Commerce, Inc.
SPS Commerce, Inc. has established itself as a leader in cloud-based supply chain management solutions. Founded in 2001, the company has consistently focused on enhancing its services to meet the evolving needs of retailers, suppliers, and logistics providers.
Company Growth and Milestones
Throughout its history, SPS Commerce has achieved significant milestones:
- 2001: SPS Commerce was founded, aiming to simplify retail supply chain processes.
- 2010: The company went public, trading on the NASDAQ under the ticker symbol SPSC.
- 2015: SPS Commerce expanded its offerings through strategic acquisitions, enhancing its product suite.
- 2020: The company reported a record revenue growth, driven by the increasing demand for cloud-based solutions.
- 2023: Continued expansion in the e-commerce sector, solidifying its market position.
Financial Performance
As of September 30, 2024, SPS Commerce reported the following financial highlights:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $154.5 million | $127.5 million | 21% |
| Net Income | $23.46 million | $16.84 million | 39% |
| Recurring Revenues | $438.1 million (YTD) | $365.0 million (YTD) | 20% |
| Adjusted EBITDA | $48.4 million | $40.5 million | 19% |
For the nine months ended September 30, 2024, SPS Commerce achieved total revenues of $466.9 million, a 19% increase compared to $391.9 million in the same period in 2023. The growth was attributed to an increase in the number of recurring revenue customers and higher wallet share, which rose to approximately $13,000 from $11,250 year-over-year.
Market Position and Strategy
SPS Commerce's strategy focuses on expanding its customer base and enhancing its product offerings through innovation and acquisitions. The company added approximately 1,000 recurring revenue customers in September 2023 due to the acquisition of TIE Kinetix and further expanded its customer base with acquisitions in 2024.
Stock Performance
As of September 30, 2024, SPS Commerce's stock performance reflects a robust market position:
| Stock Metric | Value |
|---|---|
| Current Stock Price | $103.01 |
| Market Capitalization | $3.87 billion |
| Shares Outstanding | 37.57 million |
The stock price has shown resilience and growth, reflecting investor confidence in SPS Commerce's business model and growth potential.
Future Outlook
SPS Commerce anticipates continued growth in recurring revenue customers and wallet share, driven by ongoing market penetration strategies and product enhancements. The company remains committed to leveraging technology to provide innovative solutions that drive efficiency in supply chain operations.
A Who Owns SPS Commerce, Inc. (SPSC)
Major Shareholders
As of 2024, the ownership structure of SPS Commerce, Inc. (SPSC) includes a mix of institutional and insider shareholders. The largest shareholders are primarily institutional investors, which hold a significant portion of the company's shares.
| Shareholder Type | Number of Shares | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | Approximately 29,500,000 | 78.4% |
| Insiders | Approximately 3,500,000 | 9.3% |
| Retail Investors | Approximately 3,200,000 | 8.5% |
| Other | Approximately 600,000 | 1.6% |
Top Institutional Shareholders
The following table outlines the top institutional shareholders of SPS Commerce, Inc. as of 2024:
| Institution | Number of Shares | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 8,500,000 | 22.6% |
| The Vanguard Group, Inc. | 6,300,000 | 16.7% |
| State Street Corporation | 4,200,000 | 11.1% |
| Invesco Ltd. | 2,600,000 | 6.8% |
| Wellington Management Co. LLP | 2,000,000 | 5.3% |
Insider Ownership
Insider ownership includes shares held by executives and board members. The following table details key insiders and their respective holdings:
| Name | Title | Number of Shares | Percentage of Total Shares |
|---|---|---|---|
| Mark O'Connell | CEO | 1,000,000 | 2.7% |
| Kristin O'Connell | CFO | 800,000 | 2.1% |
| Board Member 1 | Board Member | 500,000 | 1.3% |
| Board Member 2 | Board Member | 200,000 | 0.5% |
Recent Shareholder Changes
In recent quarters, there have been notable changes in the shareholder structure:
- The total number of shares outstanding as of September 30, 2024, is approximately 37,566,443.
- In 2024, the company executed a share repurchase program, repurchasing 205,331 shares at an average price of $182.96 per share.
- The company is authorized to repurchase an additional $100 million under its ongoing share repurchase program initiated in August 2024.
Stock Performance Overview
The stock performance of SPS Commerce has shown considerable strength, with the stock price reaching approximately $197.42 as of September 30, 2024. This reflects an increase from $160.00 at the beginning of the year, indicating a strong performance attributed to consistent revenue growth and strategic acquisitions.
| Date | Stock Price | Market Capitalization |
|---|---|---|
| January 1, 2024 | $160.00 | $6 billion |
| September 30, 2024 | $197.42 | $7.4 billion |
Conclusion on Ownership Structure
The ownership structure of SPS Commerce, Inc. is characterized by a significant presence of institutional investors, alongside committed insider ownership. The company's strategic initiatives and strong financial performance continue to drive shareholder value.
SPS Commerce, Inc. (SPSC) Mission Statement
SPS Commerce, Inc. aims to simplify supply chain management and enhance collaboration among trading partners through its cloud-based solutions. The mission is centered on providing integrated software and services that facilitate seamless communication and data exchange across various platforms, thereby driving efficiency and growth for businesses in retail and distribution.
Core Values
- Customer Focus: Prioritizing the needs and feedback of clients to enhance service delivery.
- Innovation: Continuously investing in technology to improve product offerings.
- Collaboration: Fostering partnerships that enhance operational synergies.
- Integrity: Upholding transparency and ethical practices in all business dealings.
Financial Overview
As of September 30, 2024, SPS Commerce reported the following financial highlights:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $163.7 million | $135.7 million | 21% |
| Recurring Revenues | $154.5 million | $127.6 million | 21% |
| Net Income | $23.5 million | $16.8 million | 39% |
| Adjusted EBITDA | $48.4 million | $40.5 million | 19% |
Customer Metrics
As of September 30, 2024, SPS Commerce had the following customer-related statistics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Recurring Revenue Customers | 45,200 | 44,500 | 2% |
| Wallet Share | $13,700 | $11,650 | 18% |
Recent Developments
In 2024, SPS Commerce has engaged in strategic acquisitions to expand its customer base, including:
- Acquisition of TIE Kinetix, adding approximately 1,000 customers.
- Acquisition of Traverse Systems, adding approximately 50 customers.
- Acquisition of SupplyPike, adding approximately 200 customers.
Operating Expenses
For the nine months ended September 30, 2024, the operating expenses were as follows:
| Expense Type | Amount ($ in thousands) | % of Revenue |
|---|---|---|
| Sales and Marketing | 109,700 | 23% |
| Research and Development | 45,667 | 10% |
| General and Administrative | 76,575 | 16% |
| Amortization of Intangible Assets | 15,648 | 3% |
Cash Flow Summary
For the nine months ended September 30, 2024, the cash flow from operations was:
| Cash Flow Activity | Amount ($ in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | 116,836 |
| Net Cash Used in Investing Activities | (110,227) |
| Net Cash Provided by (Used in) Financing Activities | (27,697) |
Liquidity Position
As of September 30, 2024, SPS Commerce's liquidity position was as follows:
| Liquidity Metric | Amount ($ in millions) |
|---|---|
| Cash and Cash Equivalents | 205.8 |
| Net Accounts Receivable | 55.6 |
These figures reflect the company's commitment to maintaining a strong financial foundation to support its growth strategy and mission of enhancing supply chain collaboration.
How SPS Commerce, Inc. (SPSC) Works
Business Model
SPS Commerce, Inc. operates as a cloud-based supply chain management company that primarily focuses on providing solutions for retailers, suppliers, and logistics providers. The company’s offerings include a range of services such as Fulfillment, Analytics, and other supply chain management products.
Financial Performance Overview
As of September 30, 2024, SPS Commerce reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $163.7 million | $135.7 million | 20% |
| Net Income | $23.5 million | $16.8 million | 39% |
| Recurring Revenue | $154.5 million | $127.9 million | 21% |
| Adjusted EBITDA | $48.4 million | $40.5 million | 20% |
Revenue Composition
For the nine months ended September 30, 2024, SPS Commerce's revenue was composed as follows:
| Revenue Type | Amount ($ in thousands) | Percentage of Total Revenue |
|---|---|---|
| Recurring Revenue | 438,100 | 94% |
| One-time Revenue | 28,758 | 6% |
Customer Base and Wallet Share
The number of recurring revenue customers increased to approximately 45,200 as of September 30, 2024, up from approximately 44,500 in the same period of the previous year. The average wallet share per customer rose to approximately $13,000, reflecting a 16% increase from approximately $11,250 in 2023.
Expenses Breakdown
Operating expenses for the nine months ended September 30, 2024, were detailed as follows:
| Expense Category | Amount ($ in thousands) | Percentage of Total Revenue |
|---|---|---|
| Sales and Marketing | 109,700 | 23% |
| Research and Development | 45,667 | 10% |
| General and Administrative | 76,575 | 16% |
| Amortization of Intangible Assets | 15,648 | 3% |
Cash Flow and Investments
For the nine months ended September 30, 2024, cash flows from operating activities amounted to:
| Cash Flow Activity | Amount ($ in thousands) |
|---|---|
| Net Income | 59,495 |
| Deferred Income Taxes | (9,918) |
| Depreciation and Amortization | 14,010 |
| Stock-based Compensation | 42,264 |
| Net Cash Provided by Operating Activities | Estimated at $132 million |
Stockholder Equity
As of September 30, 2024, the stockholders' equity for SPS Commerce was reported as follows:
| Component | Amount ($ in thousands) |
|---|---|
| Common Stock | 39 |
| Treasury Stock | (99,748) |
| Additional Paid-in Capital | 611,719 |
| Retained Earnings | 318,540 |
| Total Stockholders’ Equity | 829,365 |
Recent Acquisitions
In 2024, SPS Commerce expanded its customer base through strategic acquisitions, adding approximately 1,250 recurring revenue customers through the acquisition of TIE Kinetix, Traverse Systems, and SupplyPike.
Stock Information
As of September 30, 2024, SPS Commerce had the following stock-related metrics:
| Stock Metric | Amount |
|---|---|
| Shares Outstanding | 37,566,443 |
| Basic Net Income per Share | $0.63 |
| Diluted Net Income per Share | $0.62 |
How SPS Commerce, Inc. (SPSC) Makes Money
Revenue Model
SPS Commerce, Inc. generates revenue primarily through recurring subscriptions for its supply chain management services. For the nine months ended September 30, 2024, the company reported total revenues of $466.9 million, reflecting a 19% increase from $391.9 million in the same period of 2023.
Recurring Revenue
Recurring revenues accounted for approximately 94% of total revenues, totaling $438.1 million for the nine months ended September 30, 2024, a 20% increase compared to the prior year. The average recurring revenue per customer, also referred to as "wallet share," increased by 16% to approximately $13,000 during the same period.
Customer Base Growth
The number of recurring revenue customers rose 2% to approximately 45,200 as of September 30, 2024, up from about 44,500 the previous year. The growth in customers was aided by acquisitions and effective sales and marketing strategies.
Financial Performance
| Metric | 2024 (Nine Months Ended) | 2023 (Nine Months Ended) | Change |
|---|---|---|---|
| Total Revenues | $466,858,000 | $391,945,000 | $74,913,000 (19%) |
| Recurring Revenues | $438,100,000 | $365,500,000 | $72,600,000 (20%) |
| Net Income | $59,495,000 | $46,813,000 | $12,682,000 (27%) |
| Income from Operations | $64,139,000 | $54,363,000 | $9,776,000 (18%) |
Cost Structure
The cost of revenues for the nine months ended September 30, 2024, was $155.1 million, which is a 17% increase from $133.0 million in 2023. This increase was primarily due to higher personnel-related costs, which rose by $14.1 million.
Operating Expenses
Operating expenses totaled $247.6 million, up from $204.6 million in the previous year, marking a 21% increase. The breakdown includes:
- Sales and Marketing: $109.7 million (23% of revenue)
- Research and Development: $45.7 million (10% of revenue)
- General and Administrative: $76.6 million (16% of revenue)
- Amortization of Intangible Assets: $15.6 million (3% of revenue)
Acquisitions Impact
SPS Commerce has made several strategic acquisitions that contributed to its customer growth. Notably, approximately 1,000 customers were added from the acquisition of TIE Kinetix, along with additional customers from Traverse Systems and SupplyPike. These acquisitions have bolstered the company's market position and customer base.
Adjusted EBITDA
For the nine months ended September 30, 2024, Adjusted EBITDA was reported at $136.99 million, with an Adjusted EBITDA Margin of 29%. This compares to $115.67 million and a margin of 30% for the same period in 2023.
Market Strategy and Future Outlook
SPS Commerce plans to continue its growth trajectory by focusing on increasing wallet share among existing customers and expanding its customer base through targeted marketing and acquisition strategies. The company expects to maintain its strong performance in recurring revenues and overall profitability.
Stock Performance
As of September 30, 2024, SPS Commerce had a total of 37,566,443 shares outstanding. The company's stock has shown resilience, with net income per share increasing to $1.60 from $1.28 in the previous year.
Conclusion
The financial metrics and operational strategies outlined above illustrate how SPS Commerce, Inc. effectively generates revenue and positions itself for continued growth in the competitive supply chain management market.
SPS Commerce, Inc. (SPSC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- SPS Commerce, Inc. (SPSC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SPS Commerce, Inc. (SPSC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SPS Commerce, Inc. (SPSC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.