On July 25, 2024, SPS Commerce Inc (SPSC, Financial) released its 8-K filing for the second quarter of 2024, showcasing robust financial performance and continued growth. SPS Commerce Inc is a provider of cloud-based supply chain management services for retailers, grocers, distributors, suppliers, and logistics firms to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience.
Financial Highlights
SPS Commerce Inc reported revenue of $153.6 million for Q2 2024, surpassing the analyst estimate of $151.92 million and reflecting an 18% year-over-year growth from $130.4 million in Q2 2023. Recurring revenue also grew by 18% compared to the same period last year. Net income for the quarter was $18.0 million, or $0.48 per diluted share, exceeding the estimated earnings per share of $0.45. Non-GAAP income per diluted share was $0.80, up from $0.69 in Q2 2023. Adjusted EBITDA increased by 16% to $44.2 million.
Performance Analysis
The company's strong performance is attributed to the consistent demand for its cloud-based supply chain management solutions, which are critical for suppliers and retailers in the evolving retail industry. As CEO Chad Collins stated, "The mission-critical nature of our solutions fuels consistent demand for our product portfolio, and we remain confident in the growth opportunity ahead of us as e-commerce and omnichannel retail continue to grow."
“SPS Commerce delivered a strong second quarter performance and the 94th consecutive quarter of revenue growth,” said Kim Nelson, CFO of SPS Commerce. “Retail dynamics continue to play a key role in the expansion of our addressable markets, and we believe our balanced growth approach is the right strategy to consistently deliver on our near-term and long-term financial targets.”
Financial Achievements
SPS Commerce Inc's financial achievements are significant for the software industry, particularly in the retail supply chain sector. The company's ability to maintain a high growth rate and profitability underscores its strong market position and the effectiveness of its solutions. The announcement of a new share repurchase program, authorizing up to $100 million in stock buybacks, further demonstrates the company's confidence in its financial health and future prospects.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $153.6 million | $130.4 million |
| Net Income | $18.0 million | $14.7 million |
| EPS (Diluted) | $0.48 | $0.39 |
| Non-GAAP EPS (Diluted) | $0.80 | $0.69 |
| Adjusted EBITDA | $44.2 million | $38.2 million |
Income Statement and Balance Sheet Highlights
The income statement reveals a gross profit of $101.6 million, up from $85.9 million in Q2 2023, with operating expenses totaling $78.4 million. The balance sheet shows total assets of $854.5 million, including $240.2 million in cash and cash equivalents. Total liabilities stand at $151.1 million, with stockholders' equity at $703.4 million.
Cash Flow and Share Repurchase Program
Net cash provided by operating activities was $63.5 million for the first six months of 2024. The company repurchased $17.5 million worth of common stock in Q2 2024 and announced a new share repurchase program of up to $100 million, effective from August 23, 2024, to July 24, 2026.
Guidance
For Q3 2024, SPS Commerce Inc expects revenue between $157.6 million and $158.6 million, with net income per diluted share ranging from $0.52 to $0.53. For the full fiscal year 2024, the company projects revenue between $624.2 million and $626.0 million, representing 16% to 17% growth over 2023, and net income per diluted share between $2.03 and $2.05.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from SPS Commerce Inc for further details.
