SPS Commerce Reports First Quarter 2016 Financial Results
MINNEAPOLIS, April 21, 2016 (GLOBE NEWSWIRE) -- SPS Commerce, Inc. (Nasdaq:SPSC), a leader in retail cloud services, today announced financial results for the first quarter ended March 31, 2016.
Revenue was $45.6 million in the first quarter of 2016, compared to $37.0 million in the first quarter of 2015, reflecting 23% growth in revenue from the first quarter of 2015. Recurring revenue grew 25% from the first quarter of 2015.
Net income in the first quarter of 2016 was $1.0 million or $0.06 per diluted share, compared to net income of $586,000 or $0.03 per diluted share, in the first quarter of 2015. Non-GAAP net income per diluted share was $0.22, compared to non-GAAP net income per diluted share of $0.17 in the first quarter of 2015. Adjusted EBITDA for the first quarter of 2016 increased 27% to $6.0 million compared to the first quarter of 2015.
“Our financial results for the first quarter marked a strong start to the year,” said Archie Black, President and CEO of SPS Commerce. “Today, the only way to meet the demands of the consumer and build loyalty is through a more agile supply chain. Our business success continues to be driven by the ever-expanding adoption of omnichannel strategies as we work as a strategic advisor to both retailers and suppliers to help them grow their businesses and stay ahead of the competitive curve.”
“We executed across all fronts in the first quarter, adding customers and increasing wallet share,” said Kim Nelson, CFO of SPS Commerce. “Looking to the rest of the year, we will continue to go after the large market opportunity ahead of us while working to expand our market leadership.”
For the second quarter of 2016, revenue is expected to be in the range of $46.7 million to $47.2 million. Second quarter net income per diluted share is expected to be approximately breakeven with fully diluted weighted average shares outstanding of approximately 17.3 million shares. Non-GAAP net income per diluted share is expected to be in the range of $0.19 to $0.20. Adjusted EBITDA is expected to be in the range of $5.1 million to $5.6 million. Non-cash, share-based compensation expense is expected to be approximately $2.2 million, depreciation expense is expected to be approximately $1.9 million and amortization expense is expected to be approximately $1.2 million.
For the full year of 2016, revenue is expected to be in the range of $192.1 million to $193.6 million, representing approximately 21% to 22% growth over 2015. Full year net income per diluted share is expected to be in the range of $0.18 to $0.21 with fully diluted weighted average shares outstanding of approximately 17.3 million shares. Non-GAAP net income per diluted share is expected to be in the range of $0.93 to $0.95. Adjusted EBITDA is expected to be in the range of $25.7 to $26.5 million. Non-cash, share-based compensation expense is expected to be approximately $8.5 million, depreciation expense is expected to be approximately $7.5 million and amortization expense is expected to be approximately $4.8 million. Also for the year, we expect an annual effective tax rate of approximately 40%, with cash taxes for the year to be minimal.
Quarterly Conference Call
SPS Commerce will discuss its quarterly results today via teleconference at 3:30 p.m. CT (4:30 p.m. ET). To access the call, please dial (877) 312-7508, or outside the U.S. (253) 237-1184, with Conference ID# 76760301 at least five minutes prior to the 3:30 p.m. CT start time. A live webcast of the call will also be available at investors.spscommerce.com under the Events and Presentations menu. The replay will also be available on our website at investors.spscommerce.com.
About SPS Commerce
SPS Commerce perfects the power of trading partner relationships with the industry's most broadly adopted, retail cloud services platform. As a leader in cloud-based supply chain management solutions, we provide proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. SPS Commerce has achieved 61 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, please contact SPS Commerce at 866-245-8100 or visit www.spscommerce.com.
SPS COMMERCE, SPS, and RETAIL UNIVERSE are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. 1=INFINITY logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, RETAIL UNIVERSE, RSX, SPS logo, and others are further marks of SPS Commerce, Inc. These marks may be registered or otherwise protected in other countries.
Use of Non-GAAP Financial Measures
To supplement its financial statements, SPS Commerce also provides investors with Adjusted EBITDA and non-GAAP net income per share, which are non-GAAP financial measures. SPS Commerce believes that these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. SPS Commerce's management uses these non-GAAP measures to compare the company's performance to that of prior periods for trend analyses and planning purposes. It uses Adjusted EBITDA for purposes of determining executive and senior management incentive compensation. These measures are also presented to the company's board of directors.
EBITDA consists of net income plus depreciation and amortization, interest expense, interest income, income tax expense and other adjustments as necessary for a fair presentation. Adjusted EBITDA consists of EBITDA plus non-cash, stock-based compensation expense. SPS Commerce uses Adjusted EBITDA as a measure of operating performance because it assists the company in comparing performance on a consistent basis, as it removes from operating results the impact of the company's capital structure. SPS Commerce believes Adjusted EBITDA is useful to an investor in evaluating the company's operating performance because it is widely used to measure a company's 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 the company's capital structure and the method by which assets were acquired.
Non-GAAP net income per share consists of net income plus non-cash, stock-based compensation expense, amortization expense related to intangible assets and other adjustments as necessary for a fair presentation divided by the weighted average number of shares of common stock outstanding during each period. SPS Commerce believes non-GAAP net income per share is useful to an investor because it is widely used to measure a company's operating performance.
These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the company's financial statements and are subject to inherent limitations. SPS Commerce urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release.
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 second quarter and full year of 2016, 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, 2015, 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.
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