SPS Commerce Reports First Quarter 2020 Financial Results
Revenue was
Net income in the first quarter of 2020 was
Adjusted EBITDA for the first quarter of 2020 increased 24% to
“SPS Commerce plays a mission-critical role in the global supply chain. Our solutions are keeping trading partners connected, especially now during this time of crisis and disruption,” said
“We are pleased with our first quarter results as we continued to deliver uninterrupted, full-service solutions remotely, to new and existing customers worldwide. With proven operational leverage and a strong balance sheet, we are confident that
Guidance
For the second quarter of 2020, revenue is expected to be in the range of
Due to uncertainties related to the macroeconomic impact of the COVID-19 pandemic, we are withdrawing 2020 guidance until we can ascertain the scale of the impact on retail dynamics, and our business. However, given our history of strong operating leverage and the resilience of our SaaS business model, we remain confident in our ability to expand adjusted EBITDA margin in 2020.
For modeling purposes, we expect stock based compensation expense for the year of approximately
We will continue to monitor the macroeconomic impact on retail dynamics and reassess our visibility for the full year at the end of the second quarter.
Quarterly Conference Call
About
SPS-F
Use of Non-GAAP Financial Measures
To supplement its financial statements,
Adjusted EBITDA consists of net income adjusted for depreciation and amortization, interest expense, interest income, income tax expense, stock-based compensation expense, realized loss from foreign currency on cash and investments held, and other adjustments as necessary for a fair presentation.
Non-GAAP income per share consists of net income plus stock-based compensation expense, amortization expense related to intangible assets, realized loss from foreign currency on cash and investments held, and other adjustments as necessary for a fair presentation, divided by the weighted average number of shares of common stock outstanding during each period.
Forward-Looking Statements
This press release contains forward-looking statements, including information about management's view of
Contact:
Investor Relations
SPSC@blueshirtgroup.com
415-217-4962
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited; in thousands, except share and per share amounts) | ||||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 184,484 | $ | 179,252 | ||||
| Short-term investments | 30,074 | 34,284 | ||||||
| Accounts receivable | 33,275 | 33,001 | ||||||
| Allowance for credit losses | (2,939 | ) | (1,469 | ) | ||||
| Accounts receivable, net | 30,336 | 31,532 | ||||||
| Deferred costs | 35,543 | 35,274 | ||||||
| Other assets | 9,417 | 11,279 | ||||||
| Total current assets | 289,854 | 291,621 | ||||||
| PROPERTY AND EQUIPMENT, less accumulated depreciation of |
24,035 | 23,752 | ||||||
| OPERATING LEASE RIGHT-OF-USE ASSET | 15,170 | 15,744 | ||||||
| 74,463 | 76,845 | |||||||
| INTANGIBLE ASSETS, net | 20,857 | 22,668 | ||||||
| OTHER ASSETS | ||||||||
| Deferred costs, non-current | 11,393 | 11,667 | ||||||
| Deferred income tax assets | 1,837 | 2,630 | ||||||
| Other assets, non-current | 2,210 | 2,513 | ||||||
| Total assets | $ | 439,819 | $ | 447,440 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 4,602 | $ | 4,274 | ||||
| Accrued compensation | 13,132 | 22,303 | ||||||
| Accrued expenses | 5,374 | 6,207 | ||||||
| Deferred revenue | 34,929 | 31,463 | ||||||
| Operating lease liabilities | 3,866 | 3,783 | ||||||
| Total current liabilities | 61,903 | 68,030 | ||||||
| OTHER LIABILITIES | ||||||||
| Deferred revenue, non-current | 2,781 | 2,851 | ||||||
| Operating lease liabilities, non-current | 18,957 | 20,085 | ||||||
| Deferred income tax liabilities | 990 | 1,193 | ||||||
| Other liabilities, non-current | — | 405 | ||||||
| Total liabilities | 84,631 | 92,564 | ||||||
| COMMITMENTS and CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, |
36 | 36 | ||||||
| (58,297 | ) | (46,297 | ) | |||||
| Additional paid-in capital | 361,853 | 354,115 | ||||||
| Retained earnings | 57,419 | 48,973 | ||||||
| Accumulated other comprehensive loss | (5,823 | ) | (1,951 | ) | ||||
| Total stockholders’ equity | 355,188 | 354,876 | ||||||
| Total liabilities and stockholders’ equity | $ | 439,819 | $ | 447,440 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Unaudited; in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| 2020 | 2019 | |||||||
| Revenues | $ | 74,192 | $ | 66,934 | ||||
| Cost of revenues | 23,544 | 21,367 | ||||||
| Gross profit | 50,648 | 45,567 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 18,299 | 17,922 | ||||||
| Research and development | 7,568 | 6,192 | ||||||
| General and administrative | 11,909 | 12,770 | ||||||
| Amortization of intangible assets | 1,336 | 1,304 | ||||||
| Total operating expenses | 39,112 | 38,188 | ||||||
| Income from operations | 11,536 | 7,379 | ||||||
| Other income (expense) | ||||||||
| Interest income, net | 640 | 577 | ||||||
| Other expense, net | (1,241 | ) | (47 | ) | ||||
| Change in earn-out liability | (72 | ) | (56 | ) | ||||
| Total other income (expense), net | (673 | ) | 474 | |||||
| Income before income taxes | 10,863 | 7,853 | ||||||
| Income tax expense | 1,348 | 1,040 | ||||||
| Net income | $ | 9,515 | $ | 6,813 | ||||
| Net income per share | ||||||||
| Basic | $ | 0.27 | $ | 0.19 | ||||
| Diluted | $ | 0.26 | $ | 0.19 | ||||
| Weighted average common shares used to compute net income per share | ||||||||
| Basic | 35,072 | 34,942 | ||||||
| Diluted | 35,926 | 35,984 | ||||||
Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited; in thousands) | ||||||||
| Three Months Ended | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 9,515 | $ | 6,813 | ||||
| Reconciliation of net income to net cash provided by operating activities | ||||||||
| Deferred income taxes | 668 | 838 | ||||||
| Change in earn-out liability | 72 | 56 | ||||||
| Depreciation and amortization of property and equipment | 3,138 | 2,637 | ||||||
| Amortization of intangible assets | 1,336 | 1,304 | ||||||
| Provision for credit losses | 1,285 | 655 | ||||||
| Stock-based compensation | 4,344 | 5,294 | ||||||
| Other, net | (105 | ) | (240 | ) | ||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | (1,053 | ) | (1,328 | ) | ||||
| Deferred costs | (256 | ) | (414 | ) | ||||
| Other current and non-current assets | 2,041 | (337 | ) | |||||
| Accounts payable | 655 | 353 | ||||||
| Accrued compensation | (9,302 | ) | (8,843 | ) | ||||
| Accrued expenses | (615 | ) | 60 | |||||
| Deferred revenue | 3,396 | 3,698 | ||||||
| Operating leases | (452 | ) | (345 | ) | ||||
| Net cash provided by operating activities | 14,667 | 10,201 | ||||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (3,965 | ) | (2,899 | ) | ||||
| Purchases of investments | (12,460 | ) | (12,447 | ) | ||||
| Maturities of investments | 15,875 | 15,225 | ||||||
| Net cash used in investing activities | (550 | ) | (121 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repurchases of common stock | (12,000 | ) | (2,966 | ) | ||||
| Net proceeds from exercise of options to purchase common stock | 3,683 | 2,472 | ||||||
| Net proceeds from employee stock purchase plan | 87 | — | ||||||
| Payment for earn-out liability | (688 | ) | — | |||||
| Net cash used in financing activities | (8,918 | ) | (494 | ) | ||||
| Effect of foreign currency exchange rate changes | 33 | 270 | ||||||
| Net increase in cash and cash equivalents | 5,232 | 9,856 | ||||||
| Cash and cash equivalents at beginning of period | 179,252 | 133,859 | ||||||
| Cash and cash equivalents at end of period | $ | 184,484 | $ | 143,715 | ||||
| NON-GAAP RECONCILIATION | ||||||||
| (Unaudited; in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| 2020 | 2019 | |||||||
| Net income | $ | 9,515 | $ | 6,813 | ||||
| Depreciation and amortization of property | ||||||||
| and equipment | 3,138 | 2,637 | ||||||
| Amortization of intangible assets | 1,336 | 1,304 | ||||||
| Interest income, net | (640 | ) | (577 | ) | ||||
| Income tax expense | 1,348 | 1,040 | ||||||
| Stock-based compensation expense | 4,344 | 5,294 | ||||||
| Realized loss from foreign currency on cash and investments held | 1,243 | - | ||||||
| Other | 72 | (61 | ) | |||||
| Adjusted EBITDA | $ | 20,356 | $ | 16,450 | ||||
| Net income | $ | 9,515 | $ | 6,813 | ||||
| Stock-based compensation expense | 4,344 | 5,294 | ||||||
| Amortization of intangible assets | 1,336 | 1,304 | ||||||
| Realized loss from foreign currency on cash and investments held | 1,243 | - | ||||||
| Other | 72 | (61 | ) | |||||
| Income tax effects of adjustments | (3,026 | ) | (2,643 | ) | ||||
| Non-GAAP income | $ | 13,484 | $ | 10,707 | ||||
| Shares used to compute non-GAAP income per share | ||||||||
| Basic | 35,072 | 34,942 | ||||||
| Diluted | 35,926 | 35,984 | ||||||
| Non-GAAP income per share | ||||||||
| Basic | $ | 0.38 | $ | 0.31 | ||||
| Diluted | $ | 0.38 | $ | 0.30 | ||||
Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective
Source: SPS Commerce, Inc.