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1. Company Snapshot

1.a. Company Description

SPS Commerce, Inc.provides cloud-based supply chain management solutions worldwide.It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships.


The company also provides Fulfillment solution that provides fulfillment automation and replaces or augments an organization's existing staff and trading partner electronic communication infrastructure by enabling easy compliance with retailers' rulebooks, automatic, and digital exchange of information among numerous trading partners through various protocols, and greater visibility into the journey of an order; and Analytics solution, which consists of data analytics applications that enables customers to enhance their visibility across supply chains through greater analytics capabilities.In addition, it offers various complimentary products, such as assortment product, which enables accurate order management and rapid fulfillment; and community product that accelerates vendor onboarding and ensures trading partner adoption of new supply chain requirements.The company was formerly known as St. Paul Software, Inc.


and changed its name to SPS Commerce, Inc.in May 2001.SPS Commerce, Inc.


was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

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1.b. Last Insights on SPSC

SPS Commerce's recent performance faced headwinds due to significant share sales by major investors. Nordea Investment Management AB trimmed its stake by 5.8%, while Granahan Investment Management sold 368,776 shares, valued at approximately $34.19 million. Despite Q4 earnings beating estimates at $1.14 per share, investor sentiment appears cautious. The company's robust free cash flow and $300 million buyback authorization may provide support, but short-term concerns persist. An upgrade to "Buy" by a recent analyst report cites AI-driven platform rollout and low valuation as potential recovery drivers.

1.c. Company Highlights

2. SPS Commerce Delivers Solid Q4 2025 Results Amid Challenging Macro Environment

SPS Commerce reported revenue of $192.7 million for Q4 2025, a 13% increase year-over-year, marking its 100th consecutive quarter of revenue growth. Recurring revenue grew 14% year-over-year, driven by fulfillment growth. Adjusted EBITDA increased 22% to $60.5 million. For the full year 2025, revenue grew 18% to $751.5 million, with recurring revenue growing 20%. The total number of recurring revenue customers was approximately 54,600. Adjusted EBITDA grew 24% to $231.4 million. EPS came in at $1.14, beating estimates of $1. The company's guidance for Q1 2026 expects revenue to be in the range of $191.6 million to $193.6 million, representing approximately 6% year-over-year growth at the midpoint.

Publication Date: Feb -16

📋 Highlights
  • Full-Year 2025 Revenue Growth:: Revenue reached $751.5 million, a 18% increase YoY, with recurring revenue up 20% year-over-year to $588.9 million.
  • Q4 2025 Performance:: Q4 revenue was $192.7 million (+13% YoY), while adjusted EBITDA hit $60.5 million (+22% YoY), marking the 100th consecutive quarter of revenue growth.
  • ARPU and Customer Base:: Average revenue per user (ARPU) rose to $14,350 in 2025, with 54,600 recurring revenue customers, though 3P customers declined by 350 sequentially.
  • 2026 Q1 Guidance:: Revenue expected between $191.6–$193.6 million (6% YoY growth at midpoint), with adjusted EBITDA guided to $55.5–$57.5 million.
  • EBITDA Margin Expansion:: 2026 EBITDA margin target of 2% expansion, driven by gross margin improvements and operational efficiencies, with adjusted EBITDA at $231.4 million in 2025 (+24% YoY).

Revenue Growth Drivers

The company's revenue growth was driven by an increase in ARPU, which rose to approximately $14,350 for the year. The number of 1P customers was flat sequentially, while the number of 3P customers declined by 350. Chad Collins noted that the company is "super-excited" about its new agentic capability, which has access to the network and proprietary information about retailers' supply chain requirements. As Kimberly Nelson stated, "we continue to expect that the majority of the revenue growth is coming from the ARPU side of the equation."

Margin Expansion

The company's adjusted EBITDA margin expanded due to efficient cost management. For 2026, SPS Commerce expects EBITDA margin expansion, driven by gross margin expansion. According to Kimberly Nelson, gross margin expansion is a "meaningful component of that overall anticipated 2% of EBITDA margin expansion."

Valuation

At current prices, the stock trades at a P/E Ratio of 25.02, P/B Ratio of 2.4, and EV/EBITDA of 12.41. Analysts estimate revenue growth at 7.2% for the next year. With a strong track record of revenue growth and expanding margins, the company's valuation multiples appear reasonable. However, investors should monitor the company's ability to execute on its growth initiatives and manage costs effectively.

Outlook

The company's guidance for 2026 suggests a continued focus on ARPU growth and cost management. Chad Collins mentioned that the company is "balancing out our factors, including integrating the revenue recovery business and share repurchase." With a strong pipeline of growth initiatives and a solid financial position, SPS Commerce is well-positioned for future growth.

3. NewsRoom

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Allspring Global Investments Holdings LLC Has $9.31 Million Stake in SPS Commerce, Inc. $SPSC

Apr -06

Source: defenseworld.net

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SPS Commerce, Inc. $SPSC Stake Lessened by Assenagon Asset Management S.A.

Mar -30

Source: defenseworld.net

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SPS Commerce, Inc. $SPSC Shares Sold by Nordea Investment Management AB

Mar -23

Source: defenseworld.net

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This Supply Chain Network Stock Down 50% Just Saw One Investor Sell Off $34 Million in Shares

Mar -10

Source: fool.com

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SPS Commerce, Inc. $SPSC Shares Sold by Fisher Asset Management LLC

Mar -06

Source: defenseworld.net

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SPS Commerce: Buybacks, AI Features, Low Valuation Support 2026 Recovery Potential (Upgrade)

Mar -05

Source: seekingalpha.com

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SPS Commerce, Inc. (SPSC) Presents at Morgan Stanley Technology, Media & Telecom Conference 2026 Transcript

Mar -04

Source: seekingalpha.com

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SPS Commerce to Present at the Morgan Stanley Technology, Media & Telecom Conference

Feb -25

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.39%)

6. Segments

Fulfillment

Expected Growth: 12%

Fulfillment from SPS Commerce, Inc. growth driven by increasing adoption of cloud-based supply chain management solutions, expansion into new markets, and strategic partnerships. Additionally, growing e-commerce demand, need for real-time inventory visibility, and rising importance of omnichannel retailing contribute to the 12% growth.

Analytics

Expected Growth: 10%

SPS Commerce's 10% growth driven by increasing adoption of cloud-based supply chain management solutions, expansion into new markets, and growing demand for omnichannel retailing. Additionally, strategic partnerships and investments in AI-powered analytics are enhancing customer experience, driving revenue growth.

One-time Revenues

Expected Growth: 8%

One-time revenues from SPS Commerce, Inc. grew 8% driven by increasing adoption of cloud-based supply chain management solutions, expansion into new industries, and strategic partnerships. Additionally, the company's focus on innovation, such as AI-powered analytics, and its ability to help businesses navigate complex global supply chains also contributed to this growth.

Other

Expected Growth: 6%

Strong demand for cloud-based supply chain management solutions, increasing adoption of omnichannel retailing, and growing need for inventory visibility and management drive SPS Commerce's growth. Additionally, the company's expanding partner network, innovative product offerings, and strategic acquisitions contribute to its rapid expansion.

7. Detailed Products

Full Circle

A comprehensive, cloud-based platform that enables businesses to manage their omnichannel retail operations, including order management, inventory management, and fulfillment.

Fulfillment

A solution that streamlines order fulfillment processes, enabling businesses to efficiently manage orders, inventory, and shipping operations.

Assortment

A product information management (PIM) solution that helps businesses centralize and manage their product data, ensuring accuracy and consistency across all sales channels.

Analytics

A business intelligence platform that provides insights and analytics to help businesses optimize their operations, improve supply chain efficiency, and increase revenue.

Community

A cloud-based platform that enables businesses to connect with their trading partners, exchange data, and collaborate on business processes.

EDI

A solution that enables businesses to exchange electronic data interchange (EDI) documents with their trading partners, streamlining business processes and improving supply chain efficiency.

8. SPS Commerce, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SPS Commerce, Inc. is medium because while there are some substitutes available, they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for SPS Commerce, Inc. is low because customers are fragmented and do not have significant bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for SPS Commerce, Inc. is medium because while suppliers have some bargaining power, the company has a diversified supplier base.

Threat Of New Entrants

The threat of new entrants for SPS Commerce, Inc. is high because the industry has low barriers to entry and new entrants can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for SPS Commerce, Inc. is high because the industry is highly competitive and there are many players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.06%
Debt Cost 3.95%
Equity Weight 97.94%
Equity Cost 7.99%
WACC 7.90%
Leverage 2.10%

11. Quality Control: SPS Commerce, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Box

A-Score: 5.0/10

Value: 2.6

Growth: 8.0

Quality: 7.4

Yield: 0.0

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
AvidXchange

A-Score: 4.5/10

Value: 3.6

Growth: 6.4

Quality: 5.6

Yield: 0.0

Momentum: 4.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Shift4 Payments

A-Score: 4.2/10

Value: 4.2

Growth: 9.4

Quality: 5.1

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
UiPath

A-Score: 4.0/10

Value: 1.7

Growth: 7.2

Quality: 7.8

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
SPS Commerce

A-Score: 3.6/10

Value: 2.0

Growth: 8.1

Quality: 7.8

Yield: 0.0

Momentum: 0.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
SentinelOne

A-Score: 3.3/10

Value: 5.1

Growth: 6.7

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

51.45$

Current Price

51.45$

Potential

-0.00%

Expected Cash-Flows