0001092699-22-000015 | 10-Q | XBRL Viewer

Revenue

We derive our revenues from the following revenue streams:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Recurring revenues:
Fulfillment	$	92,952	$	78,106	$	265,570	$	224,738
Analytics	11,902		10,858		34,846		31,383
Other	1,699		1,435		4,867		4,019
Recurring revenues	106,553		90,399		305,283		260,140
One-time revenues	7,933		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)	2022		2021		2022		2021
Balance, beginning of period	$	15,309	$	13,344	$	14,459	$	11,118
Invoiced set-up fees	3,715		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.

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.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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Allowance for Credit Loss [Abstract]

Deferred Costs

9 Months Ended

Sep. 30, 2022

Deferred Costs [Abstract]

Deferred Costs

The deferred costs activity was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Balance, beginning of period	$	64,665	$	53,841	$	59,720	$	50,595
Incurred deferred costs	17,442		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

Financial Instruments

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Financial Instruments

Cash Equivalents and Investments

Cash equivalents and investments consisted of the following:


	September 30, 2022						December 31, 2021
(in thousands)	Amortized Cost		Unrealized Gains, net		Fair Value		Amortized Cost		Unrealized Gains (Losses), net		Fair Value
Cash equivalents:
Money market funds	$	111,498	$	—	$	111,498	$	138,205	$	—	$	138,205
Certificates of deposit	6,437		—		6,437		7,268		—		7,268
Marketable securities:
Commercial paper	44,358		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

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, 2022								December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	111,498	$	—	$	—	$	111,498	$	138,205	$	—	$	—	$	138,205
Certificates of deposit	6,437		—		—		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.

Allowance for Credit Losses

9 Months Ended

Sep. 30, 2022

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)	2022		2021
Balance, beginning of period	$	4,249	$	4,233
Provision for credit losses	2,889		4,037
Write-offs, net of recoveries	(3,480)		(3,666)
Balance, end of period	$	3,658	$	4,604

Property and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, NetProperty and equipment, net consisted of the following:


(in thousands)	September 30, 2022		December 31, 2021
Internally developed software	$	50,311	$	44,981
Computer equipment	32,520		29,329
Leasehold improvements	16,871		16,685
Office equipment and furniture	11,157		10,972
Property and equipment, cost	110,859		101,967
Less: accumulated depreciation and amortization	(77,936)		(70,066)
Total property and equipment, net	$	32,923	$	31,901

Goodwill and Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

The activity in goodwill was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Balance, beginning of period	$	143,663	$	134,853
Addition from business acquisition	24,556		—
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		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	79,365	$	(35,823)	$	(159)	$	43,383	6.6 years
Acquired technology	37,351		(9,992)		—		27,359		6.0 years
	$	116,716	$	(45,815)	$	(159)	$	70,742	6.4 years


	December 31, 2021
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	61,270	$	(29,866)	$	(1,395)	$	30,009	6.4 years
Acquired technology	35,316		(6,738)		—		28,578		6.8 years
	$	96,586	$	(36,604)	$	(1,395)	$	58,587	6.6 years

The estimated future annual amortization expense related to intangible assets is as follows:


(in thousands)
Remainder of 2022	$	3,112
2023	12,379
2024	11,217
2025	11,079
2026	10,075
Thereafter	22,880
Total future amortization	$	70,742

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Leases

The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Operating lease cost	$	788	$	873	$	2,287	$	2,309
Variable lease cost	963		976		2,612		2,694
	$	1,751	$	1,849	$	4,899	$	5,003

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,399	$	2,488
Right-of-use assets obtained in exchange for operating lease liabilities	934		—

Supplemental balance sheet information related to operating leases was as follows:


	September 30, 2022		December 31, 2021
Weighted-average remaining lease term	4.2 years		4.8 years
Weighted-average discount rate	4.0	%	4.0	%

At September 30, 2022, our future minimum payments under operating leases were as follows:


(in thousands)
Remainder of 2022	$	1,515
2023	4,871
2024	4,474
2025	4,088
2026	3,760
Thereafter	1,266
Total future gross payments	$	19,974
Less: imputed interest	(1,664)
Total operating lease liabilities	$	18,310

Purchase Commitments

We have entered into separate noncancelable agreements with computing infrastructure, customer relationship management, and performance and security data analytics vendors for services through 2025. At September 30, 2022, the total remaining purchase commitments were $7.4 million

Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Share Repurchase Programs

Our board of directors has authorized multiple non-concurrent programs to repurchase our common stock. Details of the programs and activity thereunder through September 30, 2022 were as follows:


(in thousands)	Effective Date	Expiration Date	Share Value Authorized for Repurchase		Share Value Repurchased		Unused & Expired Share Repurchase Value		Share Value Available for Future Repurchase
2019 Program	November 2019	November 2021	$	50,000	$	29,611	$	20,389	N/A
2021 Program	November 2021	August 2022	50,000		49,992		8		N/A
2022 Program	August 2022	July 2024	50,000		2,477		N/A		$	47,523

The share repurchase activity by period was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except shares and per share amounts)	2022		2021		2022		2021
Number of shares repurchased	102,234		42,299		357,430		105,814
Shares repurchased cost	$	12,477	$	4,211	$	42,700	$	10,661
Average price per repurchased share	$	122.04	$	99.55	$	119.46	$	100.75

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation

Our equity compensation plans provide for the grant of incentive and nonqualified stock options, as well as other stock-based awards including performance share units (“PSUs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and deferred stock units (“DSUs”), to employees, non-employee directors and other consultants who provide services to us. We also provide an employee stock purchase plan (“ESPP”) and 401(k) match to eligible participants.

We recognize stock-based compensation expense based on grant date award fair value. This cost is recognized over the period for which the employee is required to provide service in exchange for the award or the award performance period, except for expenses relating to retirement-eligible employees that have not given their required notice, which is recognized on a pro-rata basis over the notice period prior to retirement. At September 30, 2022, there were 13.2 million shares available for grant under approved equity compensation plans.

Stock-based compensation expense was allocated in the condensed consolidated statements of comprehensive income as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost of revenues	$	2,146	$	1,696	$	6,477	$	4,945
Operating expenses
Sales and marketing	1,845		1,634		5,835		4,854
Research and development	1,396		1,195		4,250		3,212
General and administrative	2,573		2,324		9,074		8,262
	$	7,960	$	6,849	$	25,636	$	21,273

Stock-based compensation expense by grant type or plan was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Stock options	$	461	$	496	$	1,401	$	1,569
PSUs	1,541		1,342		6,244		5,357
RSUs	4,735		4,039		14,467		11,577
RSAs & DSUs	110		109		328		325
ESPP	577		376		1,609		1,038
401(k) stock match	536		487		1,587		1,407
	$	7,960	$	6,849	$	25,636	$	21,273

As of September 30, 2022, there was $42.1 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a primarily straight-line basis over a weighted average period of 2.5 years.

Stock Options

Our stock option activity was as follows:


	Nine Months Ended September 30, 2022
	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding, beginning of period	678,650	$	44.76
Granted	49,085	122.64
Exercised	(79,089)	31.07
Forfeited	(6,711)	89.21
Outstanding, end of period	641,935	$	51.94

Of the total outstanding options at September 30, 2022, 0.5 million were exercisable. The outstanding and exercisable options had a weighted average exercise price of $43.96 per share and a weighted average remaining contractual life of 2.9 years.

The weighted average grant date fair value of options granted during the nine months ended September 30, 2022 was $40.95 per share. This was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


Life (in years)	4.3
Volatility	37.5	%
Dividend yield	—
Risk-free interest rate	2.2	%

Performance Share Units, Restricted Stock Units and Awards, and Deferred Stock Units

In each of the quarters ended March 31, 2022, 2021, 2020, and 2019 we granted PSU awards with a target performance level. These awards are earned based upon our Company’s total shareholder return as compared to an indexed total shareholder return over the course of a fiscal based three-year performance period, starting in the year of grant. Earned awards vest in the quarter following the conclusion of the performance period. In the three months ended March 31, 2022, PSU awards granted in 2019 vested at the maximum performance level and less than 0.1 million shares of common stock were issued.

Activity for our PSUs, RSUs, RSAs, and DSUs in aggregate was as follows:


	Nine Months Ended September 30, 2022
	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding, beginning of period	702,160	$	78.03
Granted	284,739	126.88
Vested and common stock issued	(268,607)	63.04
Forfeited	(21,114)	96.81
Outstanding, end of period	697,178	$	103.19

The number of PSUs, RSUs, RSAs, and DSUs outstanding at September 30, 2022 included less than 0.1 million units that have vested, but the shares of common stock have not yet been issued, pursuant to the terms of the underlying agreements.

Employee Stock Purchase Plan

Our ESPP activity was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except shares)	2022		2021		2022		2021
Amounts for shares purchased	$	238	$	130	$	3,588	$	2,316
Shares purchased	2,481		1,526		37,516		27,675

A total of 1.8 million shares of common stock are reserved for issuance under the ESPP as of September 30, 2022.

The fair value was estimated based on the market price of our common stock at the beginning of the offering period using the following assumptions:


Life (in years)	0.5
Volatility	37.4	%
Dividend yield	—
Risk-free interest rate	0.2	%

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesWe record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pre-tax income and adjust the provision for discrete tax items recorded in the period. Differences between our effective tax rate and statutory tax rates are primarily due to the impact of permanently non-deductible expenses partially offset by the federal research and development credits and tax benefits associated with foreign-derived intangible income. Additionally, excess tax benefits generated upon settlement or exercise of stock awards are recognized as a reduction to income tax expense as a discrete tax item in the quarter that the event occurs, creating potentially significant fluctuation in tax expense by quarter and by year. Our provisions for income taxes includes current federal, state, and foreign income tax expense, as well as deferred tax expense.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Other Income and Expenses [Abstract]

Other Income and Expense

9 Months Ended

Sep. 30, 2022

Other Income and Expense

Other expense, net included the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Investment income	$	586	$	66	$	806	$	242
Realized loss from foreign currency on cash and investments held	(1,151)		(854)		(2,010)		(1,492)
Other income (expense), net	(130)		72		(406)		(174)
Total other expense, net	$	(695)	$	(716)	$	(1,610)	$	(1,424)

Net Income Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income Per Share

The components and computation of basic and diluted net income per share were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Numerator
Net income	$	15,863	$	11,449	$	39,219	$	31,832
Denominator
Weighted average common shares outstanding, basic	36,093		35,961		36,104		35,873
Options to purchase common stock	379		520		396		533
PSUs, RSUs, RSAs, and DSUs	443		534		442		492
Weighted average common shares outstanding, diluted	36,915		37,015		36,942		36,898
Net income per share
Basic	$	0.44	$	0.32	$	1.09	$	0.89
Diluted	$	0.43	$	0.31	$	1.06	$	0.86

The number of outstanding potential common shares that were excluded from the calculation of diluted net income per share as they were anti-dilutive was as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2022	2021	2022	2021
Anti-dilutive shares	107	34	222	46

Geographic Information

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Geographic Information

Revenue

The percentage of domestic revenue, which we define as the percentage of consolidated revenue that was attributable to customers based within the U.S., was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Domestic revenue	85	%	84	%	84	%	84	%

No single jurisdiction outside of the U.S. had revenues in excess of 10%.

Property and Equipment

The percentage of property and equipment, net located at subsidiary and office locations outside of the U.S. was as follows:


	September 30, 2022		December 31, 2021
International property and equipment	13	%	12	%

General (Policies)	9 Months Ended
General (Policies)	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Description	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	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	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	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.

General (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Pronouncements Note Yet Adopted

Accounting Pronouncements Not Yet Adopted

Standard

Date of Issuance

Description

Date of Required Adoption

Effect on the Financial Statements

ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

October 2021

January 2023

The 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.

Business Acquisitions (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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 receivable	467
Other current assets	288
Operating lease right-of-use asset	934
Goodwill	24,556
Intangible assets	20,250
Deferred income tax assets	5,291
Accounts payable	(266)
Accrued compensation	(321)
Deferred revenue	(262)
Operating lease liability	(934)
Deferred income tax liabilities	(5,144)
	$	45,089

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

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 technology

2,025

5.0 years

Total

20,250

Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Revenues by Revenue Stream

We derive our revenues from the following revenue streams:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Recurring revenues:
Fulfillment	$	92,952	$	78,106	$	265,570	$	224,738
Analytics	11,902		10,858		34,846		31,383
Other	1,699		1,435		4,867		4,019
Recurring revenues	106,553		90,399		305,283		260,140
One-time revenues	7,933		7,488		23,574		22,380
Total revenue	$	114,486	$	97,887	$	328,857	$	282,520

Summary of Deferred Revenue Liability Relating to Set-Up Fees

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)	2022		2021		2022		2021
Balance, beginning of period	$	15,309	$	13,344	$	14,459	$	11,118
Invoiced set-up fees	3,715		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

Deferred Costs (Tables)

9 Months Ended

Sep. 30, 2022

Deferred Costs [Abstract]

Summary of Deferred Costs and Amortization of Deferred Costs

The deferred costs activity was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Balance, beginning of period	$	64,665	$	53,841	$	59,720	$	50,595
Incurred deferred costs	17,442		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

Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Cash Equivalents and Investments

Cash equivalents and investments consisted of the following:


	September 30, 2022						December 31, 2021
(in thousands)	Amortized Cost		Unrealized Gains, net		Fair Value		Amortized Cost		Unrealized Gains (Losses), net		Fair Value
Cash equivalents:
Money market funds	$	111,498	$	—	$	111,498	$	138,205	$	—	$	138,205
Certificates of deposit	6,437		—		6,437		7,268		—		7,268
Marketable securities:
Commercial paper	44,358		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

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table details the fair value hierarchy of our assets and liabilities measured at a fair value on a recurring basis:


	September 30, 2022								December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	111,498	$	—	$	—	$	111,498	$	138,205	$	—	$	—	$	138,205
Certificates of deposit	6,437		—		—		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

Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2022

Allowance for Credit Loss [Abstract]

Schedule of Allowance for Credit Losses Activity Included in Accounts Receivable Net

The allowance for credit losses activity, included in accounts receivable, net, was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Balance, beginning of period	$	4,249	$	4,233
Provision for credit losses	2,889		4,037
Write-offs, net of recoveries	(3,480)		(3,666)
Balance, end of period	$	3,658	$	4,604

Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property and equipment, net consisted of the following:


(in thousands)	September 30, 2022		December 31, 2021
Internally developed software	$	50,311	$	44,981
Computer equipment	32,520		29,329
Leasehold improvements	16,871		16,685
Office equipment and furniture	11,157		10,972
Property and equipment, cost	110,859		101,967
Less: accumulated depreciation and amortization	(77,936)		(70,066)
Total property and equipment, net	$	32,923	$	31,901

Goodwill and Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Net Carrying Amount of Goodwill

Goodwill

The activity in goodwill was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Balance, beginning of period	$	143,663	$	134,853
Addition from business acquisition	24,556		—
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		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	79,365	$	(35,823)	$	(159)	$	43,383	6.6 years
Acquired technology	37,351		(9,992)		—		27,359		6.0 years
	$	116,716	$	(45,815)	$	(159)	$	70,742	6.4 years


	December 31, 2021
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	61,270	$	(29,866)	$	(1,395)	$	30,009	6.4 years
Acquired technology	35,316		(6,738)		—		28,578		6.8 years
	$	96,586	$	(36,604)	$	(1,395)	$	58,587	6.6 years

Estimated Future Annual Amortization Expense Related to Intangible Assets Subject to Amortization

The estimated future annual amortization expense related to intangible assets is as follows:


(in thousands)
Remainder of 2022	$	3,112
2023	12,379
2024	11,217
2025	11,079
2026	10,075
Thereafter	22,880
Total future amortization	$	70,742

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Components of Lease Expense

The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Operating lease cost	$	788	$	873	$	2,287	$	2,309
Variable lease cost	963		976		2,612		2,694
	$	1,751	$	1,849	$	4,899	$	5,003

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,399	$	2,488
Right-of-use assets obtained in exchange for operating lease liabilities	934		—

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to operating leases was as follows:


	September 30, 2022		December 31, 2021
Weighted-average remaining lease term	4.2 years		4.8 years
Weighted-average discount rate	4.0	%	4.0	%

Schedule of Future Minimum Payments Under Operating Leases

At September 30, 2022, our future minimum payments under operating leases were as follows:


(in thousands)
Remainder of 2022	$	1,515
2023	4,871
2024	4,474
2025	4,088
2026	3,760
Thereafter	1,266
Total future gross payments	$	19,974
Less: imputed interest	(1,664)
Total operating lease liabilities	$	18,310

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stock Repurchase Activity

Our board of directors has authorized multiple non-concurrent programs to repurchase our common stock. Details of the programs and activity thereunder through September 30, 2022 were as follows:


(in thousands)	Effective Date	Expiration Date	Share Value Authorized for Repurchase		Share Value Repurchased		Unused & Expired Share Repurchase Value		Share Value Available for Future Repurchase
2019 Program	November 2019	November 2021	$	50,000	$	29,611	$	20,389	N/A
2021 Program	November 2021	August 2022	50,000		49,992		8		N/A
2022 Program	August 2022	July 2024	50,000		2,477		N/A		$	47,523

The share repurchase activity by period was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except shares and per share amounts)	2022		2021		2022		2021
Number of shares repurchased	102,234		42,299		357,430		105,814
Shares repurchased cost	$	12,477	$	4,211	$	42,700	$	10,661
Average price per repurchased share	$	122.04	$	99.55	$	119.46	$	100.75

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Stock-based compensation expense was allocated in the condensed consolidated statements of comprehensive income as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost of revenues	$	2,146	$	1,696	$	6,477	$	4,945
Operating expenses
Sales and marketing	1,845		1,634		5,835		4,854
Research and development	1,396		1,195		4,250		3,212
General and administrative	2,573		2,324		9,074		8,262
	$	7,960	$	6,849	$	25,636	$	21,273

Stock-based compensation expense by grant type or plan was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Stock options	$	461	$	496	$	1,401	$	1,569
PSUs	1,541		1,342		6,244		5,357
RSUs	4,735		4,039		14,467		11,577
RSAs & DSUs	110		109		328		325
ESPP	577		376		1,609		1,038
401(k) stock match	536		487		1,587		1,407
	$	7,960	$	6,849	$	25,636	$	21,273

Stock Option Activity

Our stock option activity was as follows:


	Nine Months Ended September 30, 2022
	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding, beginning of period	678,650	$	44.76
Granted	49,085	122.64
Exercised	(79,089)	31.07
Forfeited	(6,711)	89.21
Outstanding, end of period	641,935	$	51.94

Weighted Average Grant Date Fair Value of Options Granted, Assumptions


Life (in years)	4.3
Volatility	37.5	%
Dividend yield	—
Risk-free interest rate	2.2	%

PSU, RSU, RSA, and DSU

Activity for our PSUs, RSUs, RSAs, and DSUs in aggregate was as follows:


	Nine Months Ended September 30, 2022
	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding, beginning of period	702,160	$	78.03
Granted	284,739	126.88
Vested and common stock issued	(268,607)	63.04
Forfeited	(21,114)	96.81
Outstanding, end of period	697,178	$	103.19

Summary of ESPP Activity

Our ESPP activity was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except shares)	2022		2021		2022		2021
Amounts for shares purchased	$	238	$	130	$	3,588	$	2,316
Shares purchased	2,481		1,526		37,516		27,675

Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Assumptions

The fair value was estimated based on the market price of our common stock at the beginning of the offering period using the following assumptions:


Life (in years)	0.5
Volatility	37.4	%
Dividend yield	—
Risk-free interest rate	0.2	%

Other Income and Expense (Tables)

9 Months Ended

Sep. 30, 2022

Other Income and Expenses [Abstract]

Summary of Other Income (Expense), Net

Other expense, net included the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Investment income	$	586	$	66	$	806	$	242
Realized loss from foreign currency on cash and investments held	(1,151)		(854)		(2,010)		(1,492)
Other income (expense), net	(130)		72		(406)		(174)
Total other expense, net	$	(695)	$	(716)	$	(1,610)	$	(1,424)

Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Components and Computation of Basic and Diluted Net Income Per Share

The components and computation of basic and diluted net income per share were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Numerator
Net income	$	15,863	$	11,449	$	39,219	$	31,832
Denominator
Weighted average common shares outstanding, basic	36,093		35,961		36,104		35,873
Options to purchase common stock	379		520		396		533
PSUs, RSUs, RSAs, and DSUs	443		534		442		492
Weighted average common shares outstanding, diluted	36,915		37,015		36,942		36,898
Net income per share
Basic	$	0.44	$	0.32	$	1.09	$	0.89
Diluted	$	0.43	$	0.31	$	1.06	$	0.86

Schedule of Anti-dilutive Common Shares Excluded from Calculation of Diluted Net Income Per Share

The number of outstanding potential common shares that were excluded from the calculation of diluted net income per share as they were anti-dilutive was as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2022	2021	2022	2021
Anti-dilutive shares	107	34	222	46

Geographic Information (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Domestic Revenue

The percentage of domestic revenue, which we define as the percentage of consolidated revenue that was attributable to customers based within the U.S., was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Domestic revenue	85	%	84	%	84	%	84	%

Schedule Of Percentage Of Property And Equipment Net

The percentage of property and equipment, net located at subsidiary and office locations outside of the U.S. was as follows:


	September 30, 2022		December 31, 2021
International property and equipment	13	%	12	%

Business Acquisitions - Narrative (Details) - USD ($) $ in Millions	Oct. 04, 2022	Jul. 19, 2022
GCommerce Inc
Business Acquisition [Line Items]
Purchase price		$ 45
Measurement period		1 year
InterTrade Systems Inc. \| Subsequent Event
Business Acquisition [Line Items]
Purchase price	$ 49

Business Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jul. 19, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Goodwill	$ 165,908		$ 143,663	$ 134,680	$ 134,853
GCommerce Inc
Business Acquisition [Line Items]
Cash		$ 230
Accounts receivable		467
Other current assets		288
Operating lease right-of-use asset		934
Goodwill		24,556
Intangible assets		20,250
Deferred income tax assets		5,291
Accounts payable		(266)
Accrued compensation		(321)
Deferred revenue		(262)
Operating lease liability		(934)
Deferred income tax liabilities		(5,144)
Assets acquired and liabilities assumed, net		$ 45,089

Business Acquisitions - Intangible Assets Acquired (Details) - GCommerce Inc $ in Thousands	Jul. 19, 2022 USD ($)
Business Acquisition [Line Items]
Estimated Fair Value	$ 20,250
Subscriber relationships
Business Acquisition [Line Items]
Estimated Fair Value	$ 18,225
Weighted Average Estimated Useful Life	8 years
Acquired technology
Business Acquisition [Line Items]
Estimated Fair Value	$ 2,025
Weighted Average Estimated Useful Life	5 years

Revenue - Summary of Revenues by Revenue Stream (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue Recognition [Line Items]
Revenues	$ 114,486	$ 97,887	$ 328,857	$ 282,520
Recurring revenues
Revenue Recognition [Line Items]
Revenues	106,553	90,399	305,283	260,140
One-time revenues
Revenue Recognition [Line Items]
Revenues	7,933	7,488	23,574	22,380
Fulfillment \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	92,952	78,106	265,570	224,738
Analytics \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	11,902	10,858	34,846	31,383
Other \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	$ 1,699	$ 1,435	$ 4,867	$ 4,019

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Revenue - Narrative (Detail)	9 Months Ended
Revenue - Narrative (Detail)	Sep. 30, 2022
Disaggregation Of Revenue [Line Items]
Latest timing of billings	30 days
Contract term maximum	1 year
Set up fees recognized period	2 years
Maximum recognition period for miscellaneous one-time fee	1 year
Minimum
Disaggregation Of Revenue [Line Items]
Customer contract cancellation period	30 days
Maximum
Disaggregation Of Revenue [Line Items]
Customer contract cancellation period	90 days

Revenue - Summary of Deferred Revenue Liability Relating to Set-Up Fees (Detail) - Set-Up Fees - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Deferred Revenue Arrangement [Roll Forward]
Balance, beginning of period	$ 15,309	$ 13,344	$ 14,459	$ 11,118
Invoiced set-up fees	3,715	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

Deferred Costs (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Deferred Costs (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Deferred Costs [Roll Forward]
Balance, beginning of period	$ 64,665	$ 53,841	$ 59,720	$ 50,595
Incurred deferred costs	17,442	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

Financial Instruments - Summary of Cash Equivalents and Investments (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Schedule of Financial Instruments [Line Items]
Amortized Cost	$ 162,293	$ 187,957
Unrealized Gains (Losses), net	133	6
Fair Value	162,426	187,963
Certificates of deposit
Schedule of Financial Instruments [Line Items]
Amortized Cost	6,437	7,268
Unrealized Gains (Losses), net	0	0
Fair Value	6,437	7,268
Cash Equivalents \| Money market funds
Schedule of Financial Instruments [Line Items]
Amortized Cost	111,498	138,205
Unrealized Gains (Losses), net	0	0
Fair Value	111,498	138,205
Marketable Securities \| Commercial paper
Schedule of Financial Instruments [Line Items]
Amortized Cost	44,358	34,984
Unrealized Gains (Losses), net	133	7
Fair Value	44,491	34,991
Marketable Securities \| U.S. treasury securities
Schedule of Financial Instruments [Line Items]
Amortized Cost	0	7,500
Unrealized Gains (Losses), net	0	(1)
Fair Value	$ 0	$ 7,499

Financial Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	$ 162,426	$ 187,963
Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	111,498	138,205
Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	6,437	7,268
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	44,491	34,991
U.S. treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	7,499
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	117,935	145,473
Level 1 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	111,498	138,205
Level 1 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	6,437	7,268
Level 1 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 1 \| U.S. treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	44,491	42,490
Level 2 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 2 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 2 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	44,491	34,991
Level 2 \| U.S. treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	7,499
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 3 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 3 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 3 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	0	0
Level 3 \| U.S. treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets fair value	$ 0	$ 0

Allowance for Credit Losses (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 4,249	$ 4,233
Provision for credit losses	2,889	4,037
Write-offs, net of recoveries	(3,480)	(3,666)
Balance, end of period	$ 3,658	$ 4,604

Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 110,859	$ 101,967
Less: accumulated depreciation and amortization	(77,936)	(70,066)
Property and equipment, net	32,923	31,901
Internally developed software
Property, Plant and Equipment [Line Items]
Property and equipment, cost	50,311	44,981
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, cost	32,520	29,329
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, cost	16,871	16,685
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 11,157	$ 10,972

Goodwill and Intangible Assets, Net - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Goodwill [Roll Forward]
Balance, beginning of period	$ 143,663	$ 134,853
Addition from business acquisition	24,556	0
Foreign currency translation	(2,311)	(441)
Remeasurement from provisional purchase accounting amount	0	268
Balance, end of period	$ 165,908	$ 134,680