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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 was negatively impacted by mixed Q3 financial results, with earnings beating estimates but sales falling short. The company's guidance for Q4 and FY25 was also below estimates, leading analysts to slash their forecasts. Additionally, Conestoga Capital Advisors LLC reduced its stake in the company by 0.7% in Q2, selling 9,440 shares. Despite a solid earnings report, the market reacted negatively, causing the stock to crash. The company's slowing growth, driven by M&A and moderating organic momentum, has also raised concerns.

1.c. Company Highlights

2. SPS Commerce Delivers Solid Q3 2025 Results Amidst Macroeconomic Uncertainty

SPS Commerce reported revenue of $189.9 million, a 16% increase over Q3 2024, representing their 99th consecutive quarter of revenue growth. Recurring revenue grew 18% year-over-year, with the total number of recurring revenue customers reaching approximately 54,950, an increase of 450 from the prior quarter. Adjusted EBITDA increased 25% to $60.5 million compared to $48.4 million in Q3 2024. The company's actual EPS came out at $1.13, beating estimates of $0.99.

Publication Date: Nov -07

📋 Highlights
  • Revenue Growth:: Q3 revenue rose 16% YoY to $189.9 million, with recurring revenue up 18% to $152.2 million (based on 54,950 customers, +450 net increase).
  • Fulfillment Expansion:: Fulfillment business grew 20% YoY, driven by retailer relationship management programs.
  • Revenue Recovery Challenges:: Missed $3 million due to Amazon policy shifts and seasonality, but the $750 million addressable market remains a cross-selling opportunity.
  • Leadership Transition:: Dan Juckniess, CRO (10-year tenure), retiring; transition planned for 2026 with a new Chief Commercial Officer.
  • AI & Network Data Strategy:: Leveraging AI for customer experience and network monetization to build a competitive moat, with M&A focus on consolidation and expansion (e.g., Carbon6/SupplyPike added $65 million in 2025).

Segment Performance and Revenue Recovery

The fulfillment business grew 20% year-over-year, while the revenue recovery business came in approximately $3 million below expectations due to seasonality and Amazon policy changes affecting third-party sellers. Chad Collins mentioned that late in Q3, they picked up that the volume of shipments that their customers were sending into Amazon warehouses were a little bit lighter than expected. The company has taken these factors into consideration in their updated outlook for the revenue recovery business.

Guidance and Outlook

The company expects revenue to be in the range of $192.7 million to $194.7 million, representing approximately 13% to 14% year-over-year growth. Adjusted EBITDA is expected to be in the range of $58.8 million to $60.8 million, with fully diluted earnings per share in the range of $0.53 to $0.57. The guidance suggests a continued strong performance, albeit with some headwinds in the revenue recovery business.

Valuation and Growth Prospects

With a P/E Ratio of 35.86 and an EV/EBITDA of 21.43, the market seems to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 7.5%, which is lower than the current year's growth rate. The company's ROE of 9.23% and ROIC of 8.18% indicate a decent return on equity and invested capital. As the company continues to execute its go-to-market strategy and expand its revenue recovery business, investors will be watching to see if the company can meet its growth prospects.

3. NewsRoom

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Fisher Asset Management LLC Reduces Position in SPS Commerce, Inc. $SPSC

Dec -03

Source: defenseworld.net

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SPS Commerce to Present at the Nasdaq 53rd Investor Conference

Dec -02

Source: globenewswire.com

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Touchstone Small Company Fund Q3 2025 Performance Review

Nov -27

Source: seekingalpha.com

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Why I Keep Buying These 10 Incredible Growth Stocks

Nov -17

Source: fool.com

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Alger Weatherbie Specialized Growth Fund Q3 2025 Portfolio Update

Nov -12

Source: seekingalpha.com

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Best Buys Now: 3 Undervalued Stocks to Buy After Q3 Earnings

Nov -06

Source: 247wallst.com

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Ethic Inc. Takes Position in SPS Commerce, Inc. $SPSC

Nov -01

Source: defenseworld.net

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Why SPS Commerce Stock Is Crashing Today

Oct -31

Source: fool.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: 5.1/10

Value: 2.4

Growth: 8.0

Quality: 7.6

Yield: 0.0

Momentum: 5.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
AvidXchange

A-Score: 4.9/10

Value: 3.6

Growth: 6.4

Quality: 5.5

Yield: 0.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Shift4 Payments

A-Score: 4.2/10

Value: 3.4

Growth: 9.4

Quality: 5.4

Yield: 0.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
UiPath

A-Score: 3.9/10

Value: 3.4

Growth: 7.2

Quality: 4.8

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
SPS Commerce

A-Score: 3.6/10

Value: 1.9

Growth: 8.2

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: 3.4/10

Value: 4.6

Growth: 6.7

Quality: 4.2

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

83.63$

Current Price

83.63$

Potential

-0.00%

Expected Cash-Flows