Home IT SPS Commerce Reports Fourth Quarter and Full Year 2019 Financial Results

SPS Commerce Reports Fourth Quarter and Full Year 2019 Financial Results

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MINNEAPOLIS, Feb. 13, 2020 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (Nasdaq: SPSC), a leader in retail cloud services, today announced financial results for the fourth quarter and full year ended December 31, 2019.Revenue was $72.7 million in the fourth quarter of 2019, compared to $65.2 million in the fourth quarter of 2018, reflecting 12% growth in revenue from the fourth quarter of 2018. Recurring revenue grew 13% from the fourth quarter of 2018. Net income in the fourth quarter of 2019 was $9.2 million or $0.25 per diluted share, compared to net income of $7.1 million or $0.20 per diluted share, in the fourth quarter of 2018.  Non-GAAP net income per diluted share was $0.35, compared to non-GAAP net income per diluted share of $0.26 in the fourth quarter of 2018. Adjusted EBITDA for the fourth quarter of 2019 increased 35% to $18.9 million compared to the fourth quarter of 2018.“Our ongoing focus on sustained growth and profitability is inherent in our business model,” said Archie Black, President and CEO of SPS Commerce.  “Our ability to scale is unique as we leverage the lead-generation engine fueled by the power of our vast trading community, which positions SPS Commerce to become the world’s retail network.” Revenue for the full year ended December 31, 2019 was $279.1 million compared to $248.2 million for the full year ended December 31, 2018, reflecting 12% growth in revenue.  Recurring revenue grew 14% from the year ended December 31, 2018.Net income for the year ended December 31, 2019 was $33.7 million or $0.94 per diluted share, compared to net income of $23.9 million or $0.68 per diluted share, for the comparable period in 2018. Non-GAAP net income per diluted share for the year ended December 31, 2019 was $1.28, compared to non-GAAP net income per diluted share of $0.96 for the comparable period in 2018. Adjusted EBITDA for the full year ended December 31, 2019 increased 36% to $69.8 million, compared to the full year ended December 31, 2018.“SPS Commerce continues to deliver on its financial targets, capitalizing on the evolution of the retail industry and leveraging the power of our network to deliver profitable and sustained growth,” said Kim Nelson, CFO of SPS Commerce. “We serve a large and expanding addressable market and we are confident in our ability to continue to deliver ten percent or greater annual revenue growth and twenty percent annual adjusted EBITDA dollar growth.”GuidanceFirst quarter 2020 revenue is expected to be in the range of $73.6 million to $74.2 million.  Full year 2020 revenue is expected to be in the range of $306.5 million to $308.5 million, representing approximately 10% to 11% growth over 2019.First quarter 2020 net income per diluted share is expected to be in the range of $0.19 to $0.20 with fully diluted weighted average shares outstanding of approximately 36.2 million shares. Full year 2020 net income per diluted share is expected to be in the range of $0.85 to $0.88 with fully diluted weighted average shares outstanding of approximately 36.3 million shares.  First quarter 2020 non-GAAP net income per diluted share is expected to be in the range of $0.31 to $0.32.  Full year 2020 non-GAAP net income per diluted share is expected to be in the range of $1.34 to $1.37.First quarter 2020 Adjusted EBITDA is expected to be in the range of $19.2 to $19.8 million. Full year 2020 Adjusted EBITDA is expected to be in the range of $83.0 million to $84.5 million, representing approximately 19% to 21% growth over 2019.First quarter 2020 non-cash, share-based compensation expense is expected to be approximately $4.6 million.  Depreciation expense is expected to be approximately $3.3 million and amortization expense is expected to be approximately $1.4 million.Full year 2020 non-cash, share-based compensation expense is expected to be approximately $19.8 million. Depreciation expense is expected to be approximately $13.9 million and amortization expense is expected to be approximately $5.7 million. For 2020, we expect an annual effective tax rate of approximately 30%.Upcoming ConferenceSPS Commerce management will present at the JMP Securities Technology Conference in San Francisco, CA on Tuesday, February 25, 2020 at 9:00 AM P.T.A webcast of the presentation will be available on the company’s investor relations website at http://investors.spscommerce.com/events. Quarterly Conference CallSPS 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 #6593186 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 perfects the power of trading partner relationships with the industry’s most broadly adopted, retail cloud services platform. As a leader in cloud-based supply chain management solutions, we provide proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. SPS Commerce has achieved 76 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, please contact SPS Commerce 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, the discrete impact from tax law change 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, the discrete impact from tax law change 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 StatementsThis 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 full year of 2020, 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, 2018, 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

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