The historical rank and industry rank for SPS Commerce's Gross Margin % or its related term are showing as below:
SPSC'
s Gross Margin % Range Over the Past 10 Years
Min: 65.82 Med: 66.82 Max: 68.74
Current: 66.09
During the past 13 years, the highestGross Margin % of SPS Commerce was 68.74%. The lowest was 65.82%. And the median was 66.82%.
SPSC's Gross Margin % is ranked better than 74.62% of 2628
companies
in the Software industry
Industry Median: 41.71
vs SPSC: 66.09
SPS Commerce had a gross margin of 66.17% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for SPS Commerce was -0.40% per year.
SPS Commerce Gross Margin % Historical Data
The historical data trend for SPS Commerce's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of SPS Commerce's Gross Margin %
For the Software - Infrastructure subindustry, SPS Commerce's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
SPS Commerce's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, SPS Commerce's Gross Margin % distribution charts can be found below:
* The bar in red indicates where SPS Commerce's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
SPS Commerce had a gross margin of 66.17% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
SPS Commerce Gross Margin % Related Terms
Thank you for viewing the detailed overview of SPS Commerce's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
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. Its solutions are delivered through the SPS Commerce platform and provide integrations and retail performance analytics to its customers. Its products are; Fulfillment, Analytics, and Other products like Assortment and Community also it provides one-time services such as professional services and testing and certification. The group derives revenue from recurring monthly fees and set-up fees.
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