SPS Commerce Reports Second Quarter 2025 Financial Results

Rhea-AI Summary

SPS Commerce (NASDAQ: SPSC) reported strong Q2 2025 financial results, marking its 98th consecutive quarter of revenue growth. Revenue reached $187.4 million, up 22% year-over-year, while recurring revenue grew 24%. The company posted net income of $19.7 million ($0.52 per diluted share).

For full-year 2025, SPS Commerce expects revenue between $759.0-$763.0 million (19-20% growth) and adjusted EBITDA of $230.7-$233.7 million (24-25% growth). The company maintains its position as the only full-service EDI solution provider, serving over 50,000 recurring revenue customers across retail, grocery, distribution, and logistics sectors.

The company completed $20.0 million in share repurchases during Q2 2025, demonstrating confidence in its business model and commitment to shareholder returns.

Positive

• Revenue grew 22% year-over-year to $187.4 million
• Recurring revenue increased 24% compared to Q2 2024
• Adjusted EBITDA grew 27% to $56.1 million
• 98 consecutive quarters of revenue growth achieved
• Strong guidance with expected 19-20% revenue growth for 2025
• $20.0 million in share repurchases completed in Q2

Negative

• Operating expenses increased 29% to $101.1 million
• Cash and cash equivalents decreased from $241.0M to $107.6M since December 2024

Insights

Financial Analyst

SPS Commerce delivered strong Q2 results with 22% revenue growth and raised guidance, showing healthy expansion and operational efficiency.

SPS Commerce reported impressive second quarter results with $187.4 million in revenue, representing 22% year-over-year growth. The company achieved its 98th consecutive quarter of topline growth, demonstrating remarkable consistency in its business model. Recurring revenue, which investors typically value more highly, grew even faster at 24%, indicating strong retention and expansion within the existing customer base.

The company's profitability metrics showed meaningful improvement. Net income reached $19.7 million ($0.52 per diluted share), up from $18.0 million in Q2 2024. Non-GAAP earnings per share increased 25% to $1.00, significantly outpacing revenue growth. Adjusted EBITDA grew 27% to $56.1 million, demonstrating substantial operating leverage in the business model.

The company's guidance for Q3 2025 projects continued strong performance with revenue expected between $191.7-$193.2 million (17-18% growth) and full-year 2025 revenue of $759.0-$763.0 million (19-20% growth). These projections suggest management's confidence in sustaining growth momentum.

SPS Commerce's business model appears resilient with over 50,000 recurring revenue customers across diverse retail sectors. The company's capital allocation includes both growth investments and shareholder returns, as evidenced by $20.0 million in share repurchases during the quarter.

The balance sheet remains healthy with $107.6 million in cash and cash equivalents, though this represents a decrease from $241.0 million at year-end 2024, likely due to acquisition activity as indicated by increases in goodwill and intangible assets. The 27% Adjusted EBITDA growth outpacing 22% revenue growth demonstrates effective scaling of operations and improving margins.

Company delivers 98th consecutive quarter of topline growth

Second quarter 2025 revenue grew 22% and recurring revenue grew 24% from the second quarter of 2024

MINNEAPOLIS, July 30, 2025 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the second quarter ended June 30, 2025.

Financial Highlights

Second Quarter 2025 Financial Highlights

• Revenue was $187.4 million in the second quarter of 2025, compared to $153.6 million in the second quarter of 2024, reflecting 22% growth.
• Recurring revenue grew 24% from the second quarter of 2024.
• Net income was $19.7 million or $0.52 per diluted share, compared to net income of $18.0 million or $0.48 per diluted share in the second quarter of 2024.
• Non-GAAP income per diluted share was $1.00, compared to non-GAAP income per diluted share of $0.80 in the second quarter of 2024.
• Adjusted EBITDA for the second quarter of 2025 increased 27% to $56.1 million compared to the second quarter of 2024.
• Share repurchases in the second quarter of 2025 totaled $20.0 million.

“SPS Commerce is the only full-service EDI solution on the market uniquely positioned to help suppliers effortlessly maintain EDI compliance with retailers’ frequently changing requirements,” said Chad Collins, CEO of SPS Commerce. “Our product portfolio enables a stronger collaboration between trading partners, unlocking greater efficiency, cost savings, and shared success. These are dynamics that we believe position SPS for long-term growth.”

“We delivered strong second-quarter performance, and we remain confident in our full-year 2025 outlook,” said Kim Nelson, CFO of SPS Commerce. “In the long term, we are well positioned to capitalize on the growth opportunities across our large addressable market, while we continue to demonstrate strong operating leverage and the resilience of our business model.”

Guidance

Third Quarter 2025 Guidance

• Revenue is expected to be in the range of $191.7 million to $193.2 million, representing 17% to 18% year-over-year growth.
• Net income per diluted share is expected to be in the range of $0.50 to $0.54, with fully diluted weighted average shares outstanding of 38.5 million shares.
• Non-GAAP income per diluted share is expected to be in the range of $0.96 to $1.00.
• Adjusted EBITDA is expected to be in the range of $57.9 million to $59.9 million.
• Non-cash, share-based compensation expense is expected to be $16.0 million, depreciation expense is expected to be $5.6 million, and amortization expense is expected to be $9.5 million.
  

Fiscal Year 2025 Guidance

• Revenue is expected to be in the range of $759.0 million to $763.0 million, representing 19% to 20% growth over 2024.
• Net income per diluted share is expected to be in the range of $2.17 to $2.22, with fully diluted weighted average shares outstanding of 38.3 million shares.
• Non-GAAP income per diluted share is expected to be in the range of $3.99 to $4.04.
• Adjusted EBITDA is expected to be in the range of $230.7 million to $233.7 million, representing 24% to 25% growth over 2024.
• Non-cash, share-based compensation expense is expected to be $60.9 million, depreciation expense is expected to be $21.8 million, and amortization expense is expected to be $37.1 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 join the SPS Commerce Q2 2025 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. Over 50,000 recurring revenue customers in retail, grocery, distribution, supply, manufacturing, and logistics are using SPS as their retail network. SPS has achieved 98 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 and INFINITE RETAIL POWER are marks of SPS Commerce, Inc. and registered in the U.S. Patent and Trademark Office, along with other SPS marks. Such marks may also be registered or otherwise protected in other countries. 

SPS-F

Use of Non-GAAP Financial Measures

To supplement our condensed 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 condensed 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 investments held and foreign currency impact on cash and investments, investment income, and other adjustments as necessary for a fair presentation. Other adjustments for the three months ended June 30, 2025 included the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 2025 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs. Net income is the comparable GAAP measure of financial performance.

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 investments held and foreign currency impact on cash and investments, other adjustments as necessary for a fair presentation, including for the three months ended June 30, 2025 the expense impact from disposals of certain capitalized internally developed software and for the six months ended June 30, 2025 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs, 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. Net income per share, the comparable GAAP measure of financial performance, consists of 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 third quarter and full year of 2025, 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, 2024, 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

SPS COMMERCE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except shares)
	June 30, 2025				December 31, 2024
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	107,603			$	241,017
Accounts receivable		72,798				56,214
Allowance for credit losses		(5,286	)			(4,179	)
Accounts receivable, net		67,512				52,035
Deferred costs		66,809				65,342
Other assets		27,453				23,513
Total current assets		269,377				381,907
Property and equipment, net		40,150				37,547
Operating lease right-of-use assets		7,395				8,192
Goodwill		543,514				399,180
Intangible assets, net		237,105				181,294
Other assets
Deferred costs, non-current		21,095				20,572
Deferred income tax assets		645				505
Other assets, non-current		1,823				2,033
Total assets	$	1,121,104			$	1,031,230
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	11,604			$	8,577
Accrued compensation		38,708				47,160
Accrued expenses		12,710				12,108
Deferred revenue		79,198				74,256
Operating lease liabilities		5,749				4,583
Total current liabilities		147,969				146,684
Other liabilities
Deferred revenue, non-current		5,477				6,189
Operating lease liabilities, non-current		5,049				7,885
Deferred income tax liabilities		12,533				15,541
Other liabilities, non-current		296				241
Total liabilities		171,324				176,540
Commitments and contingencies
Stockholders' equity
Common stock		40				40
Treasury stock		(122,096	)			(99,748	)
Additional paid-in capital		693,113				627,982
Retained earnings		378,028				336,099
Accumulated other comprehensive gain (loss)		695				(9,683	)
Total stockholders’ equity		949,780				854,690
Total liabilities and stockholders’ equity	$	1,121,104			$	1,031,230

SPS COMMERCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited; in thousands, except per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenues	$	187,400			$	153,596			$	368,949			$	303,172
Cost of revenues		59,826				52,018				116,740				103,505
Gross profit		127,574				101,578				252,209				199,667
Operating expenses
Sales and marketing		43,434				35,691				85,068				72,123
Research and development		17,271				14,366				34,710				30,375
General and administrative		30,890				23,516				61,908				49,423
Amortization of intangible assets		9,509				4,840				18,097				9,178
Total operating expenses		101,104				78,413				199,783				161,099
Income from operations		26,470				23,165				52,426				38,568
Other income, net		773				4,056				2,980				7,188
Income before income taxes		27,243				27,221				55,406				45,756
Income tax expense		7,510				9,189				13,477				9,721
Net income	$	19,733			$	18,032			$	41,929			$	36,035
Net income per share
Basic	$	0.52			$	0.49			$	1.10			$	0.97
Diluted	$	0.52			$	0.48			$	1.10			$	0.96
Weighted average common shares used to compute net income per share
Basic		37,965				37,078				37,978				37,063
Diluted		38,099				37,683				38,132				37,690

SPS COMMERCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in thousands)
	Six Months Ended June 30,
		2025				2024
Cash flows from operating activities
Net income	$	41,929			$	36,035
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes		(5,914	)			(8,172	)
Depreciation and amortization of property and equipment		9,948				9,377
Amortization of intangible assets		18,097				9,178
Provision for credit losses		4,111				3,646
Stock-based compensation		28,865				31,512
Other, net		274				(907	)
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable		(13,713	)			(11,407	)
Deferred costs		(412	)			(1,996	)
Other assets and liabilities		(2,258	)			1,899
Accounts payable		2,082				(1,450	)
Accrued compensation		(11,006	)			(10,763	)
Accrued expenses		(1,833	)			1,489
Deferred revenue		3,012				5,965
Operating leases		(876	)			(900	)
Net cash provided by operating activities		72,306				63,506
Cash flows from investing activities
Purchases of property and equipment		(12,815	)			(8,592	)
Purchases of investments		—				(78,994	)
Maturities of investments		—				105,000
Acquisition of business, net		(142,628	)			(29,343	)
Net cash used in investing activities		(155,443	)			(11,929	)
Cash flows from financing activities
Repurchases of common stock		(59,558	)			(37,483	)
Net proceeds from exercise of options to purchase common stock		2,406				2,314
Net proceeds from employee stock purchase plan activity		5,426				5,219
Net cash used in financing activities		(51,726	)			(29,950	)
Effect of foreign currency exchange rate changes		1,449				(476	)
Net increase (decrease) in cash and cash equivalents		(133,414	)			21,151
Cash and cash equivalents at beginning of period		241,017				219,081
Cash and cash equivalents at end of period	$	107,603			$	240,232

SPS COMMERCE, INC. NON-GAAP RECONCILIATIONS (Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts)
Adjusted EBITDA
	Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Net income	$	19,733			$	18,032			$	41,929			$	36,035
Income tax expense		7,510				9,189				13,477				9,721
Depreciation and amortization of property and equipment		4,991				4,683				9,948				9,377
Amortization of intangible assets		9,509				4,840				18,097				9,178
Stock-based compensation expense		14,998				11,494				28,865				31,512
Realized gain from investments held and foreign currency impact on cash and investments		(107)				(1,255)				(473)				(1,559)
Investment income		(688)				(2,794)				(2,537)				(5,673)
Other		106				—				1,119				—
Adjusted EBITDA	$	56,052			$	44,189			$	110,425			$	88,591

Adjusted EBITDA Margin
	Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenue	$	187,400			$	153,596			$	368,949			$	303,172
Net income		19,733				18,032				41,929				36,035
Margin		11	%			12	%			11	%			12	%
Adjusted EBITDA		56,052				44,189				110,425				88,591
Adjusted EBITDA Margin		30	%			29	%			30	%			29	%

Non-GAAP Income per Share
	Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Net income	$	19,733			$	18,032			$	41,929			$	36,035
Stock-based compensation expense		14,998				11,494				28,865				31,512
Amortization of intangible assets		9,509				4,840				18,097				9,178
Realized gain from investments held and foreign currency impact on cash and investments		(107	)			(1,255	)			(473	)			(1,559	)
Other		106				—				1,119				—
Income tax effects of adjustments		(6,285	)			(3,066	)			(13,570	)			(12,620	)
Non-GAAP income	$	37,954			$	30,045			$	75,967			$	62,546
Shares used to compute net income and non-GAAP income per share
Basic		37,965				37,078				37,978				37,063
Diluted		38,099				37,683				38,132				37,690
Net income per share, basic	$	0.52			$	0.49			$	1.10			$	0.97
Non-GAAP adjustments to net income per share, basic		0.48				0.32				0.90				0.72
Non-GAAP income per share, basic	$	1.00			$	0.81			$	2.00			$	1.69
Net income per share, diluted	$	0.52			$	0.48			$	1.10			$	0.96
Non-GAAP adjustments to net income per share, diluted		0.48				0.32				0.89				0.70
Non-GAAP income per share, diluted	$	1.00			$	0.80			$	1.99			$	1.66

The annual per share amounts may not cross-sum due to rounding.

FAQ

What were SPS Commerce (SPSC) key financial results for Q2 2025?

SPS Commerce reported Q2 2025 revenue of $187.4 million (22% growth), net income of $19.7 million ($0.52 per share), and Adjusted EBITDA of $56.1 million (27% growth).

What is SPSC's revenue guidance for fiscal year 2025?

SPS Commerce expects FY2025 revenue between $759.0-$763.0 million, representing 19-20% growth over 2024.

How much did SPS Commerce spend on share repurchases in Q2 2025?

SPS Commerce completed $20.0 million in share repurchases during the second quarter of 2025.

What is SPS Commerce's consecutive revenue growth streak?

SPS Commerce has achieved 98 consecutive quarters of revenue growth, demonstrating consistent performance.

What is SPSC's expected Adjusted EBITDA for 2025?

SPS Commerce expects Adjusted EBITDA between $230.7-$233.7 million for 2025, representing 24-25% growth over 2024.