spsc-20220930
000109269912-312022Q3false00010926992022-01-012022-09-3000010926992022-10-20xbrli:shares00010926992022-09-30iso4217:USD00010926992021-12-31iso4217:USDxbrli:shares00010926992022-07-012022-09-3000010926992021-07-012021-09-3000010926992021-01-012021-09-300001092699us-gaap:CommonStockMember2021-06-300001092699us-gaap:TreasuryStockMember2021-06-300001092699us-gaap:AdditionalPaidInCapitalMember2021-06-300001092699us-gaap:RetainedEarningsMember2021-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000010926992021-06-300001092699us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001092699us-gaap:CommonStockMember2021-07-012021-09-300001092699us-gaap:TreasuryStockMember2021-07-012021-09-300001092699us-gaap:RetainedEarningsMember2021-07-012021-09-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001092699us-gaap:CommonStockMember2021-09-300001092699us-gaap:TreasuryStockMember2021-09-300001092699us-gaap:AdditionalPaidInCapitalMember2021-09-300001092699us-gaap:RetainedEarningsMember2021-09-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000010926992021-09-300001092699us-gaap:CommonStockMember2022-06-300001092699us-gaap:TreasuryStockMember2022-06-300001092699us-gaap:AdditionalPaidInCapitalMember2022-06-300001092699us-gaap:RetainedEarningsMember2022-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000010926992022-06-300001092699us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001092699us-gaap:CommonStockMember2022-07-012022-09-300001092699us-gaap:EmployeeStockMember2022-07-012022-09-300001092699us-gaap:TreasuryStockMember2022-07-012022-09-300001092699us-gaap:RetainedEarningsMember2022-07-012022-09-300001092699us-gaap:CommonStockMember2022-09-300001092699us-gaap:TreasuryStockMember2022-09-300001092699us-gaap:AdditionalPaidInCapitalMember2022-09-300001092699us-gaap:RetainedEarningsMember2022-09-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001092699us-gaap:CommonStockMember2020-12-310001092699us-gaap:TreasuryStockMember2020-12-310001092699us-gaap:AdditionalPaidInCapitalMember2020-12-310001092699us-gaap:RetainedEarningsMember2020-12-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100010926992020-12-310001092699us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001092699us-gaap:CommonStockMember2021-01-012021-09-300001092699us-gaap:TreasuryStockMember2021-01-012021-09-300001092699us-gaap:RetainedEarningsMember2021-01-012021-09-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001092699us-gaap:CommonStockMember2021-12-310001092699us-gaap:TreasuryStockMember2021-12-310001092699us-gaap:AdditionalPaidInCapitalMember2021-12-310001092699us-gaap:RetainedEarningsMember2021-12-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001092699us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001092699us-gaap:CommonStockMember2022-01-012022-09-300001092699us-gaap:EmployeeStockMember2022-01-012022-09-300001092699us-gaap:TreasuryStockMember2022-01-012022-09-300001092699us-gaap:RetainedEarningsMember2022-01-012022-09-300001092699spsc:GCommerceIncMember2022-07-192022-07-190001092699spsc:GCommerceIncMember2022-07-190001092699spsc:GCommerceIncMemberus-gaap:CustomerRelationshipsMember2022-07-190001092699spsc:GCommerceIncMemberus-gaap:CustomerRelationshipsMember2022-07-192022-07-190001092699spsc:GCommerceIncMemberus-gaap:TechnologyBasedIntangibleAssetsMember2022-07-190001092699spsc:GCommerceIncMemberus-gaap:TechnologyBasedIntangibleAssetsMember2022-07-192022-07-190001092699spsc:InterTradeSystemsIncMemberus-gaap:SubsequentEventMember2022-10-042022-10-040001092699spsc:RecurringRevenuesMemberspsc:FulfillmentMember2022-07-012022-09-300001092699spsc:RecurringRevenuesMemberspsc:FulfillmentMember2021-07-012021-09-300001092699spsc:RecurringRevenuesMemberspsc:FulfillmentMember2022-01-012022-09-300001092699spsc:RecurringRevenuesMemberspsc:FulfillmentMember2021-01-012021-09-300001092699spsc:AnalyticsMemberspsc:RecurringRevenuesMember2022-07-012022-09-300001092699spsc:AnalyticsMemberspsc:RecurringRevenuesMember2021-07-012021-09-300001092699spsc:AnalyticsMemberspsc:RecurringRevenuesMember2022-01-012022-09-300001092699spsc:AnalyticsMemberspsc:RecurringRevenuesMember2021-01-012021-09-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2022-07-012022-09-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2021-07-012021-09-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2022-01-012022-09-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2021-01-012021-09-300001092699spsc:RecurringRevenuesMember2022-07-012022-09-300001092699spsc:RecurringRevenuesMember2021-07-012021-09-300001092699spsc:RecurringRevenuesMember2022-01-012022-09-300001092699spsc:RecurringRevenuesMember2021-01-012021-09-300001092699spsc:OneTimeRevenuesMember2022-07-012022-09-300001092699spsc:OneTimeRevenuesMember2021-07-012021-09-300001092699spsc:OneTimeRevenuesMember2022-01-012022-09-300001092699spsc:OneTimeRevenuesMember2021-01-012021-09-300001092699srt:MinimumMember2022-01-012022-09-300001092699srt:MaximumMember2022-01-012022-09-300001092699spsc:SetUpFeesMember2022-06-300001092699spsc:SetUpFeesMember2021-06-300001092699spsc:SetUpFeesMember2021-12-310001092699spsc:SetUpFeesMember2020-12-310001092699spsc:SetUpFeesMember2022-07-012022-09-300001092699spsc:SetUpFeesMember2021-07-012021-09-300001092699spsc:SetUpFeesMember2022-01-012022-09-300001092699spsc:SetUpFeesMember2021-01-012021-09-300001092699spsc:SetUpFeesMember2022-09-300001092699spsc:SetUpFeesMember2021-09-300001092699us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2022-09-300001092699us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:CertificatesOfDepositMember2022-09-300001092699us-gaap:CertificatesOfDepositMember2021-12-310001092699spsc:MarketableSecuritiesMemberus-gaap:CommercialPaperMember2022-09-300001092699spsc:MarketableSecuritiesMemberus-gaap:CommercialPaperMember2021-12-310001092699spsc:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2022-09-300001092699spsc:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-09-300001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMember2022-09-300001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMember2021-12-310001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2022-09-300001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2021-12-310001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2022-09-300001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-300001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMember2022-09-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMember2021-12-310001092699spsc:InternallyDevelopedSoftwareMember2022-09-300001092699spsc:InternallyDevelopedSoftwareMember2021-12-310001092699us-gaap:ComputerEquipmentMember2022-09-300001092699us-gaap:ComputerEquipmentMember2021-12-310001092699us-gaap:LeaseholdImprovementsMember2022-09-300001092699us-gaap:LeaseholdImprovementsMember2021-12-310001092699spsc:OfficeEquipmentAndFurnitureMember2022-09-300001092699spsc:OfficeEquipmentAndFurnitureMember2021-12-310001092699us-gaap:CustomerRelationshipsMember2022-09-300001092699us-gaap:CustomerRelationshipsMember2021-01-012021-09-300001092699us-gaap:TechnologyBasedIntangibleAssetsMember2022-09-300001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-09-300001092699us-gaap:CustomerRelationshipsMember2021-12-310001092699us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-12-310001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-12-3100010926992021-01-012021-12-31xbrli:pure0001092699spsc:A2019StockRepurchaseProgramMemberus-gaap:CommonStockMember2022-09-300001092699spsc:A2019StockRepurchaseProgramMemberus-gaap:CommonStockMember2022-01-012022-09-300001092699us-gaap:CommonStockMemberspsc:A2021StockRepurchaseProgramMember2022-09-300001092699us-gaap:CommonStockMemberspsc:A2021StockRepurchaseProgramMember2022-01-012022-09-300001092699us-gaap:CommonStockMemberspsc:A2022StockRepurchaseProgramMember2022-09-300001092699us-gaap:CostOfSalesMember2022-07-012022-09-300001092699us-gaap:CostOfSalesMember2021-07-012021-09-300001092699us-gaap:CostOfSalesMember2022-01-012022-09-300001092699us-gaap:CostOfSalesMember2021-01-012021-09-300001092699us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001092699us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001092699us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001092699us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001092699us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001092699us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001092699us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001092699us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001092699us-gaap:PerformanceSharesMember2022-07-012022-09-300001092699us-gaap:PerformanceSharesMember2021-07-012021-09-300001092699us-gaap:PerformanceSharesMember2022-01-012022-09-300001092699us-gaap:PerformanceSharesMember2021-01-012021-09-300001092699us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001092699us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001092699us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001092699us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2022-07-012022-09-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2021-07-012021-09-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2022-01-012022-09-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2021-01-012021-09-300001092699spsc:EmployeeStockPurchasePlanMember2022-07-012022-09-300001092699spsc:EmployeeStockPurchasePlanMember2021-07-012021-09-300001092699spsc:EmployeeStockPurchasePlanMember2022-01-012022-09-300001092699spsc:EmployeeStockPurchasePlanMember2021-01-012021-09-300001092699spsc:FourZeroOneKStockMatchMember2022-07-012022-09-300001092699spsc:FourZeroOneKStockMatchMember2021-07-012021-09-300001092699spsc:FourZeroOneKStockMatchMember2022-01-012022-09-300001092699spsc:FourZeroOneKStockMatchMember2021-01-012021-09-300001092699us-gaap:EmployeeStockOptionMember2022-09-300001092699us-gaap:PerformanceSharesMember2021-01-012021-03-310001092699us-gaap:PerformanceSharesMember2019-01-012019-03-310001092699us-gaap:PerformanceSharesMember2020-01-012020-03-310001092699us-gaap:PerformanceSharesMember2022-01-012022-03-310001092699srt:MaximumMemberus-gaap:PerformanceSharesMember2022-01-012022-03-310001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2021-12-310001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2022-01-012022-09-300001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2022-09-300001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMembersrt:MaximumMember2022-09-300001092699us-gaap:EmployeeStockMember2021-07-012021-09-300001092699us-gaap:EmployeeStockMember2021-01-012021-09-300001092699us-gaap:EmployeeStockMember2022-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMember2022-07-012022-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMember2021-07-012021-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMember2022-01-012022-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMember2021-01-012021-09-30spsc:jurisdiction0001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionForeignMembersrt:MaximumMember2022-01-012022-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionForeignMember2022-01-012022-09-300001092699us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionForeignMember2021-01-012021-12-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: September 30, 2022
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ________ to ________
Commission file number 001-34702
SPS COMMERCE, INC.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g1.jpg
(Exact Name of Registrant as Specified in its Charter)
Delaware41-2015127
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
333 South Seventh Street, Suite 1000, Minneapolis, MN 55402
(Address of principal executive offices, including Zip Code)
(612) 435-9400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.001 per shareSPSC
The Nasdaq Stock Market LLC (Nasdaq Global Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding at October 20, 2022 was 36,041,714 shares.


Table of Contents
SPS COMMERCE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
Item 1.
Unless the context otherwise requires, for purposes of the Quarterly Report on Form 10-Q, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
2
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
PART I. – FINANCIAL INFORMATION
Item 1. Financial Statements
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares)September 30,
2022
December 31,
2021
ASSETS(unaudited)
Current assets
Cash and cash equivalents$186,230 $207,552 
Short-term investments50,928 49,758 
Accounts receivable40,445 38,811 
Allowance for credit losses(3,658)(4,249)
Accounts receivable, net36,787 34,562 
Deferred costs50,082 44,529 
Other assets15,246 16,042 
Total current assets339,273 352,443 
Property and equipment, net32,923 31,901 
Operating lease right-of-use assets9,760 10,851 
Goodwill165,908 143,663 
Intangible assets, net70,742 58,587 
Other assets 
Deferred costs, non-current16,474 15,191 
Deferred income tax assets223 182 
Other assets, non-current1,787 3,028 
Total assets$637,090 $615,846 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current liabilities  
Accounts payable$8,200 $8,330 
Accrued compensation28,779 31,661 
Accrued expenses5,202 8,345 
Deferred revenue58,949 50,428 
Operating lease liabilities4,336 4,108 
Total current liabilities105,466 102,872 
Other liabilities  
Deferred revenue, non-current5,146 5,144 
Operating lease liabilities, non-current13,974 16,426 
Deferred income tax liabilities4,841 7,145 
Total liabilities129,427 131,587 
Commitments and contingencies
Stockholders' equity  
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
  
Common stock, $0.001 par value; 110,000,000 shares authorized; 38,184,747 and 37,798,610 shares issued; and 36,037,964 and 36,009,257 shares outstanding, respectively
38 38 
Treasury Stock, at cost; 2,146,783 and 1,789,353 shares, respectively
(128,377)(85,677)
Additional paid-in capital463,356 433,258 
Retained earnings177,306 138,087 
Accumulated other comprehensive loss(4,660)(1,447)
Total stockholders’ equity507,663 484,259 
Total liabilities and stockholders’ equity$637,090 $615,846 
See accompanying notes to these condensed consolidated financial statements.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
3
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except per share amounts) (unaudited)2022202120222021
Revenues$114,486 $97,887 $328,857 $282,520 
Cost of revenues38,605 34,343 111,524 96,043 
Gross profit75,881 63,544 217,333 186,477 
Operating expenses
Sales and marketing25,334 22,079 74,571 65,386 
Research and development11,135 10,854 33,268 28,459 
General and administrative16,724 14,691 49,390 45,186 
Amortization of intangible assets2,998 2,399 7,936 7,734 
Total operating expenses56,191 50,023 165,165 146,765 
Income from operations19,690 13,521 52,168 39,712 
Other expense, net(695)(716)(1,610)(1,424)
Income before income taxes18,995 12,805 50,558 38,288 
Income tax expense3,132 1,356 11,339 6,456 
Net income$15,863 $11,449 $39,219 $31,832 
Other comprehensive income (expense)
Foreign currency translation adjustments(2,296)(968)(3,309)(604)
Unrealized gain (loss) on investments, net of tax of $53, ($9), $49 and ($36), respectively
158 (27)147 (107)
Reclassification of (gain) loss on investments into earnings, net of tax of ($13), $16, ($17) and $46, respectively
(39)48 (51)138 
Total other comprehensive expense(2,177)(947)(3,213)(573)
Comprehensive income$13,686 $10,502 $36,006 $31,259 
Net income per share
Basic$0.44 $0.32 $1.09 $0.89 
Diluted$0.43 $0.31 $1.06 $0.86 
Weighted average common shares used to compute net income per share
Basic36,093 35,961 36,104 35,873 
Diluted36,915 37,015 36,942 36,898 
See accompanying notes to these condensed consolidated financial statements.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
4
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Common StockTreasury Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTotal
Stockholders'
Equity
(in thousands, except shares) (unaudited)Shares AmountSharesAmount
Balances, June 30, 202135,859,353 $38 1,676,765 $(71,697)$413,182 $113,873 $(647)$454,749 
Stock-based compensation— — — — 6,361 — — 6,361 
Shares issued pursuant to stock awards145,658  — — 2,997 — — 2,997 
Employee stock purchase plan activity1,526 — — — 130 — — 130 
Repurchases of common stock(42,299)— 42,299 (4,211)— — — (4,211)
Net income— — — — — 11,449 — 11,449 
Foreign currency translation adjustments— — — — — — (968)(968)
Unrealized loss on investments, net of tax— — — — — — (27)(27)
Reclassification of loss on investments into earnings, net of tax— — — — — — 48 48 
Balances, September 30, 202135,964,238 $38 1,719,064 $(75,908)$422,670 $125,322 $(1,594)$470,528 
Balances, June 30, 202236,029,477 $38 2,044,549 $(115,900)$453,922 $161,443 $(2,483)$497,020 
Stock-based compensation— — — — 7,429 — — 7,429 
Shares issued pursuant to stock awards108,240 — — — 1,767 — — 1,767 
Employee stock purchase plan activity2,481 — — — 238 — — 238 
Repurchases of common stock(102,234)— 102,234 (12,477)— — — (12,477)
Net income— — — — — 15,863 — 15,863 
Foreign currency translation adjustments— — — — — — (2,296)(2,296)
Unrealized gain on investments, net of tax— — — — — — 158 158 
Reclassification of gain on investments into earnings, net of tax— — — — — — (39)(39)
Balances, September 30, 202236,037,964 $38 2,146,783 $(128,377)$463,356 $177,306 $(4,660)$507,663 
Common StockTreasury Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTotal
Stockholders'
Equity
Shares AmountSharesAmount
Balances, December 31, 202035,487,217 $37 1,613,250 $(65,247)$393,462 $93,490 $(1,021)$420,721 
Stock-based compensation— — — — 19,866 — — 19,866 
Shares issued pursuant to stock awards555,160 1 — — 7,026 — — 7,027 
Employee stock purchase plan activity27,675 — — — 2,316 — — 2,316 
Repurchases of common stock(105,814)— 105,814 (10,661)— — — (10,661)
Net income— — — — — 31,832 — 31,832 
Foreign currency translation adjustments— — — — — — (604)(604)
Unrealized loss on investments, net of tax— — — — — — (107)(107)
Reclassification of loss on investments into earnings, net of tax— — — — — — 138 138 
Balances, September 30, 202135,964,238 $38 1,719,064 $(75,908)$422,670 $125,322 $(1,594)$470,528 
        
Balances, December 31, 202136,009,257 $38 1,789,353 $(85,677)$433,258 $138,087 $(1,447)$484,259 
Stock-based compensation— — — — 24,053 — — 24,053 
Shares issued pursuant to stock awards348,621 — — — 2,457 — — 2,457 
Employee stock purchase plan activity37,516 — — — 3,588 — — 3,588 
Repurchases of common stock(357,430)— 357,430 (42,700)— — — (42,700)
Net income— — — — — 39,219 — 39,219 
Foreign currency translation adjustments— — — — — — (3,309)(3,309)
Unrealized gain on investments, net of tax— — — — — — 147 147 
Reclassification of gain on investments into earnings, net of tax— — — — — — (51)(51)
Balances, September 30, 202236,037,964 $38 2,146,783 $(128,377)$463,356 $177,306 $(4,660)$507,663 
See accompanying notes to these condensed consolidated financial statements..
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
5
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
(in thousands) (unaudited)20222021
Cash flows from operating activities
Net income$39,219 $31,832 
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes(2,092)1,013 
Depreciation and amortization of property and equipment11,983 10,989 
Amortization of intangible assets7,936 7,734 
Provision for credit losses2,889 4,037 
Stock-based compensation25,636 21,273 
Other, net43 234 
Changes in assets and liabilities, net of effects of acquisition
Accounts receivable(3,999)(5,327)
Deferred costs(7,174)(5,686)
Other current and non-current assets2,202 (3,893)
Accounts payable129 (1,518)
Accrued compensation(4,388)6,617 
Accrued expenses(3,035)(174)
Deferred revenue8,261 13,401 
Operating leases(1,127)1,036 
Net cash provided by operating activities76,483 81,568 
Cash flows from investing activities
Purchases of property and equipment(13,894)(15,567)
Purchases of investments(134,276)(84,020)
Maturities of investments132,500 67,500 
Acquisition of business, net(44,923) 
Net cash used in investing activities(60,593)(32,087)
Cash flows from financing activities
Repurchases of common stock(42,700)(10,661)
Net proceeds from exercise of options to purchase common stock2,457 7,027 
Net proceeds from employee stock purchase plan activity3,588 2,316 
Payments for contingent consideration (2,042)
Net cash used in financing activities(36,655)(3,360)
Effect of foreign currency exchange rate changes(557)(10)
Net increase (decrease) in cash and cash equivalents(21,322)46,111 
Cash and cash equivalents at beginning of period207,552 149,692 
Cash and cash equivalents at end of period$186,230 $195,803 
See accompanying notes to these condensed consolidated financial statements.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
6
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
SPS COMMERCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A – General
Business Description
SPS Commerce is a leading provider of cloud-based supply chain management services across our global retail network. Our products make it easier for retailers, suppliers, grocers, distributors, and logistics firms to orchestrate the management of item data, order fulfillment, inventory control, and sales analytics across omnichannel retail channels. SPS Commerce delivers our products using a full-service model whereby our internal experts monitor, update, and boost network performance on our customers’ behalf.
The services offered by SPS Commerce eliminate the need for on-premise software and support staff by taking on that capability on the customer’s behalf. The services we provide enable our customers to increase their supply cycle agility, optimize their inventory levels and sell-through, reduce operational costs and gain increased visibility into customer orders, to help ensure that suppliers, grocers, distributors, and logistics firms can satisfy exacting retailer requirements.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
This interim financial information has been prepared under the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”). We have included all normal recurring adjustments considered necessary to provide a fair presentation of our financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Significant Accounting Policies
There were no material changes in our significant accounting policies during the nine months ended September 30, 2022. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding our significant accounting policies.
Accounting Pronouncements Not Yet Adopted
StandardDate of IssuanceDescriptionDate of Required AdoptionEffect on the Financial Statements
ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
October 2021This amendment requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, effective for all business combinations in the year of adoption and thereafter.
January 2023The adoption of this standard may have a material impact on the purchase accounting for business combinations depending on the specific amount of contract assets and liabilities being acquired.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
7
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
NOTE B – Business Acquisitions
GCommerce
Effective July 19, 2022, we acquired all of the outstanding equity ownership interests of GCommerce, Inc. ("GCommerce"), a leading EDI provider within the automotive aftermarket industry. Pursuant to the definitive agreement, the purchase price of $45 million was paid in cash at closing, and is subject to customary post-closing adjustments. The purchase accounting for the acquisition has not been finalized as of September 30, 2022. Provisional amounts are primarily related to intangible assets, net working capital, and tax positions. We expect to finalize the allocation of the purchase price within the one-year measurement period following the acquisition.
Purchase Price Allocation
We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
(in thousands)Estimated Fair Value
Cash$230 
Accounts receivable467 
Other current assets288 
Operating lease right-of-use asset934 
Goodwill24,556 
Intangible assets20,250 
Deferred income tax assets5,291 
Accounts payable(266)
Accrued compensation(321)
Deferred revenue(262)
Operating lease liability(934)
Deferred income tax liabilities(5,144)
$45,089 
Purchased Intangible Assets
The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives, each of which are subject to finalization:
($ in thousands)Estimated
Fair Value
Weighted Average
Estimated
Useful Life
Subscriber relationships$18,225 8.0 years
Acquired technology2,025 5.0 years
Total$20,250 
InterTrade
Effective October 4, 2022, we acquired all of the outstanding equity ownership interests of Canadian based InterTrade Systems Inc. ("InterTrade"), a leading EDI provider within the apparel and general merchandising markets. Pursuant to the definitive agreement, the purchase price of $49 million was paid in cash at closing, and is subject to customary post-closing adjustments.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
8
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
NOTE C – Revenue
We derive our revenues from the following revenue streams:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2022202120222021
Recurring revenues:
Fulfillment$92,952 $78,106 $265,570 $224,738 
Analytics11,902 10,858 34,846 31,383 
Other1,699 1,435 4,867 4,019 
Recurring revenues106,553 90,399 305,283 260,140 
One-time revenues7,933 7,488 23,574 22,380 
Total revenue$114,486 $97,887 $328,857 $282,520 
Revenues are the amount that reflects the consideration we are contractually and legally entitled to, as well as the amount we expect to collect, in exchange for those services.
Recurring Revenues
Recurring revenues consist of recurring subscriptions from customers that utilize our Fulfillment, Analytics, and Other supply chain management products. Revenue for these products is generally recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our contracts with our recurring revenue customers are recurring in nature, generally ranging from monthly to annual, and generally allow the customer to cancel the contract for any reason with 30 to 90 days’ notice. Timing of billings varies by customer and by contract type and generally are either in advance or within 30 days of the service being performed.
Given that the recurring revenue contracts are for one year or less, we have applied the optional exemption to not disclose information about the remaining performance obligations for recurring revenue contracts.
One-time Revenues
One-time revenues consist of set-up fees and miscellaneous fees from customers.
Set-up revenues
Set-up fees are specific for each connection a customer has with a trading partner. These nonrefundable fees are necessary for our customers to utilize our services and do not provide any standalone value. Many of our customers have connections with numerous trading partners.
Set-up fees constitute a material renewal option right that provide customers a significant future incentive that would not be otherwise available to that customer unless they entered into the contract, as the set-up fees will not be incurred again upon contract renewal. As such, set-up fees and related costs are deferred and recognized ratably over two years which is the estimated period for which a material right is present for our customers.
The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2022202120222021
Balance, beginning of period$15,309 $13,344 $14,459 $11,118 
Invoiced set-up fees3,715 3,622 11,776 11,832 
Recognized set-up fees(3,805)(3,245)(11,016)(9,229)
Balance, end of period$15,219 $13,721 $15,219 $13,721 
The entire balance of deferred set-up fees will be recognized within two years. Those that will be recognized within the next year are classified as current, whereas the remainder are classified as non-current.
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
9
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
Miscellaneous one-time revenues
Miscellaneous one-time fees consist of professional services and testing and certification.
The contract period for these one-time fees is for one year or less and recognized at the time service is provided. We have applied the optional exemption to not disclose information about the remaining performance obligations for miscellaneous one-time fee contracts since they have original durations of one year or less.
NOTE D – Deferred Costs
The deferred costs activity was as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2022202120222021
Balance, beginning of period$64,665 $53,841 $59,720 $50,595 
Incurred deferred costs17,442 16,459 52,860 45,922 
Amortized deferred costs(15,551)(14,207)(46,024)(40,424)
Balance, end of period$66,556 $56,093 $66,556 $56,093 
NOTE E – Financial Instruments
Cash Equivalents and Investments
Cash equivalents and investments consisted of the following:
September 30, 2022December 31, 2021
(in thousands)Amortized CostUnrealized Gains, netFair ValueAmortized CostUnrealized Gains (Losses), netFair Value
Cash equivalents:
Money market funds$111,498 $ $111,498 $138,205 $ $138,205 
Certificates of deposit6,437  6,437 7,268  7,268 
Marketable securities:
Commercial paper44,358 133 44,491 34,984 7 34,991 
U.S. treasury securities   7,500 (1)7,499 
$162,293 $133 $162,426 $187,957 $6 $187,963 
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
10
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
Recurring Fair Value Measurements
The following table details the fair value hierarchy of our assets and liabilities measured at a fair value on a recurring basis:
September 30, 2022December 31, 2021
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds$111,498 $ $ $111,498 $138,205 $ $ $138,205 
Certificates of deposit6,437   6,437 7,268   7,268 
Marketable securities:
Commercial paper 44,491  44,491  34,991  34,991 
U.S. treasury securities     7,499  7,499 
$117,935 $44,491 $ $162,426 $145,473 $42,490 $ $187,963 
See Note E to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding the three levels of inputs that may be used to measure fair value.
NOTE F – Allowance for Credit Losses
The allowance for credit losses activity, included in accounts receivable, net, was as follows:
Nine Months Ended
September 30,
(in thousands)20222021
Balance, beginning of period$4,249 $4,233 
Provision for credit losses2,889 4,037 
Write-offs, net of recoveries(3,480)(3,666)
Balance, end of period$3,658 $4,604 
NOTE G – Property and Equipment, Net
Property and equipment, net consisted of the following:
(in thousands)September 30,
2022
December 31, 2021
Internally developed software$50,311 $44,981 
Computer equipment32,520 29,329 
Leasehold improvements16,871 16,685 
Office equipment and furniture11,157 10,972 
Property and equipment, cost110,859 101,967 
Less: accumulated depreciation and amortization(77,936)(70,066)
Total property and equipment, net$32,923 $31,901 
https://cdn.kscope.io/d772934e8a9574cfe1d57c29159046a4-spsc-20220930_g2.jpgSPS COMMERCE, INC.
11
Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents
NOTE H – Goodwill and Intangible Assets, Net
Goodwill
The activity in goodwill was as follows:
Nine Months Ended
September 30,
(in thousands)20222021
Balance, beginning of period$143,663 $134,853 
Addition from business acquisition24,556  
Foreign currency translation(2,311)(441)
Remeasurement from provisional purchase accounting amount 268 
Balance, end of period$165,908 $134,680 
Intangible Assets
Intangible assets, net consisted of the following:
September 30, 2022
($ in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Foreign
Currency
Translation
NetWeighted Average Remaining Amortization Period
Subscriber relationships$