0001092699-23-000035 | 10-Q | XBRL Viewer

Revenue

We derive our revenues from the following revenue streams:


	Three Months Ended March 31,
(in thousands)	2023		2022
Recurring revenues:
Fulfillment	$	101,668	$	84,731
Analytics	12,370		11,296
Other	3,263		1,540
Recurring revenues	117,301		97,567
One-time revenues	8,567		7,626
Total revenue	$	125,868	$	105,193

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 March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	14,999	$	14,459
Invoiced set-up fees	4,251		4,003
Recognized set-up fees	(3,963)		(3,524)
Balance, end of period	$	15,287	$	14,938

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

3 Months Ended

Mar. 31, 2023

Deferred Costs [Abstract]

Deferred Costs

The deferred costs activity was as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	70,179	$	59,720
Incurred deferred costs	18,234		17,781
Amortized deferred costs	(16,604)		(14,891)
Balance, end of period	$	71,809	$	62,610

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Cash Equivalents and Investments

Cash equivalents and investments, as measured at fair value on a recurring basis, consisted of the following:


		March 31, 2023						December 31, 2022
	Fair Value Level	Amortized Cost		Unrealized Gains (Losses), net		Fair Value		Amortized Cost		Unrealized Gains (Losses), net		Fair Value
(in thousands)
Cash equivalents:
Money market funds	Level 1	$	94,284	$	—	$	94,284	$	73,368	$	—	$	73,368
Investments:
Certificates of deposit	Level 1	6,687		—		6,687		6,813		—		6,813
Marketable securities:
Commercial paper	Level 2	34,228		353		34,581		44,224		375		44,599
U.S. treasury securities	Level 2	9,827		51		9,878		—		—		—
		$	145,026	$	404	$	145,430	$	124,405	$	375	$	124,780

Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Allowance for Credit Losses

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


	Three Months Ended March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	3,066	$	4,249
Provision for credit losses	1,206		1,144
Write-offs, net of recoveries	(1,055)		(1,106)
Balance, end of period	$	3,217	$	4,287

Property and Equipment, Net

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

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


(in thousands)	March 31, 2023		December 31, 2022
Internally developed software	$	53,530	$	49,994
Computer equipment	30,601		30,310
Leasehold improvements	16,603		16,531
Office equipment and furniture	11,113		10,981
Property and equipment, cost	111,847		107,816
Less: accumulated depreciation and amortization	(76,769)		(72,358)
Total property and equipment, net	$	35,078	$	35,458

Goodwill and Intangible Assets, Net

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

The activity in goodwill was as follows:


	Three Months Ended March 31,
(in thousands)	2023
Balance, beginning of period	$	197,284
Foreign currency translation	(71)

Remeasurement from provisional purchase accounting amount	1,788
Balance, end of period	$	199,001

Intangible Assets

Intangible assets, net consisted of the following:


	March 31, 2023
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	79,385	$	(24,205)	$	29	$	55,209	6.6 years
Acquired technology	40,612		(11,292)		7		29,327		5.5 years
	$	119,997	$	(35,497)	$	36	$	84,536	6.2 years


	December 31, 2022
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	80,101	$	(22,255)	$	(171)	$	57,675	6.8 years
Acquired technology	40,610		(9,934)		1		30,677		5.7 years
	$	120,711	$	(32,189)	$	(170)	$	88,352	6.4 years

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


(in thousands)
Remainder of 2023	$	11,450
2024	14,102
2025	13,964
2026	12,960
2027	12,497
Thereafter	19,563
Total future amortization	$	84,536

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Leases

The components of lease expense were as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Operating lease cost	$	798	$	759
Variable lease cost	928		793
	$	1,726	$	1,552

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,247	$	1,095

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


	March 31, 2023		December 31, 2022
Weighted-average remaining lease term	3.8 years		3.9 years
Weighted-average discount rate	4.0	%	4.0	%

At March 31, 2023, our future minimum payments under operating leases were as follows:


(in thousands)
Remainder of 2023	$	3,847
2024	4,471
2025	4,081
2026	3,763
2027	1,266

Total future gross payments	$	17,428
Less: imputed interest	(1,313)
Total operating lease liabilities	$	16,115

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 March 31, 2023, the total remaining purchase commitments were $4.3 million

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 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

2021 Program

November 2021

August 2022

50,000

49,992

N/A

2022 Program

August 2022

July 2024

50,000

2,992

N/A

47,008

The share repurchase activity by period was as follows:


	Three Months Ended March 31,
(in thousands, except shares and per share amounts)	2023		2022
Number of shares repurchased	—		121,544
Shares repurchased cost	$	—	$	15,226
Average price per repurchased share	$	—	$	125.27

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

3 Months Ended

Mar. 31, 2023

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 March 31, 2023, there were 12.8 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 March 31,
(in thousands)	2023		2022
Cost of revenues	$	2,503	$	2,179
Operating expenses
Sales and marketing	2,423		2,032
Research and development	1,777		1,474
General and administrative	5,077		3,330
	$	11,780	$	9,015

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


	Three Months Ended March 31,
(in thousands)	2023		2022
Stock options	$	490	$	477
PSUs	3,926		2,699
RSUs	6,062		4,638
RSAs & DSUs	108		108
ESPP	589		574
401(k) stock match	605		519
	$	11,780	$	9,015

As of March 31, 2023, there was $63.8 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 2.6 years.

Stock Options

Our stock option activity was as follows:


	Three Months Ended March 31, 2023
	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding, beginning of period	562,697	$	56.24
Granted	30,148	150.76
Exercised	(68,088)	32.06
Forfeited	(1,916)	123.49
Outstanding, end of period	522,841	$	64.60

Of the total outstanding options at March 31, 2023, 0.4 million were exercisable. The outstanding and exercisable options had a weighted average exercise price of $53.22 per share and a weighted average remaining contractual life of 3.0 years.

The weighted average grant date fair value of options granted during the three months ended March 31, 2023 was $54.53 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)	3.9
Volatility	39.7	%
Dividend yield	—
Risk-free interest rate	4.2	%

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

In each of the quarters ended March 31, 2023, 2022, 2021, and 2020 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, 2023, PSU awards granted in 2019 vested at the maximum performance level and 0.1 million shares of common stock were issued.

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


	Three Months Ended March 31, 2023
	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding, beginning of period	712,158	$	103.93
Granted	304,635	163.06
Vested and common stock issued	(305,123)	74.70
Forfeited	(3,798)	112.93
Outstanding, end of period	707,872	$	141.92

The number of PSUs, RSUs, RSAs, and DSUs outstanding at March 31, 2023 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 March 31,
(in thousands, except shares)	2023		2022
Amounts for shares purchased	$	241	$	147
Shares purchased	2,549		1,698

A total of 1.7 million shares of common stock are reserved for issuance under the ESPP as of March 31, 2023.

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	46.4	%
Dividend yield	—
Risk-free interest rate	2.5	%

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
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. Our provisions for income taxes includes current federal, state, and foreign income tax expense, as well as deferred tax expense.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.

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.

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Other Income and Expenses [Abstract]

Other Income and Expense

3 Months Ended

Mar. 31, 2023

Other Income and Expense

Other income, net included the following:


	Three Months Ended March 31,
(in thousands)	2023		2022
Investment income	$	1,127	$	48
Realized gain from foreign currency on cash and investments held	137		468
Other income (expense), net	12		(93)
Total other income, net	$	1,276	$	423

Net Income Per Share

3 Months Ended

Mar. 31, 2023

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 March 31,
(in thousands, except per share amounts)	2023		2022
Numerator
Net income	$	15,289	$	12,603
Denominator
Weighted average common shares outstanding, basic	36,427		36,136
Options to purchase common stock	307		419
PSUs, RSUs, RSAs, and DSUs	421		434
Weighted average common shares outstanding, diluted	37,155		36,989
Net income per share
Basic	$	0.42	$	0.35
Diluted	$	0.41	$	0.34

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 March 31,
(in thousands)	2023	2022
Anti-dilutive shares	108	151

Geographic Information

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Geographic Information

Revenue

Domestic revenue, which we define as revenue that was attributable to customers based within the U.S., was as follows:


	Three Months Ended March 31,
	2023		2022
Domestic revenue	84	%	84	%

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

Property and Equipment

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


	March 31, 2023		December 31, 2022
International property and equipment	14	%	13	%

General (Policies)	3 Months Ended
General (Policies)	Mar. 31, 2023
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, grocers, distributors, suppliers, and logistics firms to communicate and collaborate by simplifying how they manage and share item, inventory, order and sales data across omnichannel retail channels. We deliver our products using a full-service model, which includes industry-leading technology and a team of experts that optimize, update, and operate the technology on customers' behalf. Our products enable customers to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience.
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, 2022, 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 three months ended March 31, 2023. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC, for additional information regarding our significant accounting policies.

General (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Pronouncements Note Yet Adopted

Accounting Pronouncements Recently Adopted

Standard

Date of Issuance

Description

Date of 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

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Revenues by Revenue Stream

We derive our revenues from the following revenue streams:


	Three Months Ended March 31,
(in thousands)	2023		2022
Recurring revenues:
Fulfillment	$	101,668	$	84,731
Analytics	12,370		11,296
Other	3,263		1,540
Recurring revenues	117,301		97,567
One-time revenues	8,567		7,626
Total revenue	$	125,868	$	105,193

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 March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	14,999	$	14,459
Invoiced set-up fees	4,251		4,003
Recognized set-up fees	(3,963)		(3,524)
Balance, end of period	$	15,287	$	14,938

Deferred Costs (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs [Abstract]

Summary of Deferred Costs and Amortization of Deferred Costs

The deferred costs activity was as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	70,179	$	59,720
Incurred deferred costs	18,234		17,781
Amortized deferred costs	(16,604)		(14,891)
Balance, end of period	$	71,809	$	62,610

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Cash Equivalents and Investments

Cash equivalents and investments, as measured at fair value on a recurring basis, consisted of the following:


		March 31, 2023						December 31, 2022
	Fair Value Level	Amortized Cost		Unrealized Gains (Losses), net		Fair Value		Amortized Cost		Unrealized Gains (Losses), net		Fair Value
(in thousands)
Cash equivalents:
Money market funds	Level 1	$	94,284	$	—	$	94,284	$	73,368	$	—	$	73,368
Investments:
Certificates of deposit	Level 1	6,687		—		6,687		6,813		—		6,813
Marketable securities:
Commercial paper	Level 2	34,228		353		34,581		44,224		375		44,599
U.S. treasury securities	Level 2	9,827		51		9,878		—		—		—
		$	145,026	$	404	$	145,430	$	124,405	$	375	$	124,780

Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

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:


	Three Months Ended March 31,
(in thousands)	2023		2022
Balance, beginning of period	$	3,066	$	4,249
Provision for credit losses	1,206		1,144
Write-offs, net of recoveries	(1,055)		(1,106)
Balance, end of period	$	3,217	$	4,287

Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property and equipment, net consisted of the following:


(in thousands)	March 31, 2023		December 31, 2022
Internally developed software	$	53,530	$	49,994
Computer equipment	30,601		30,310
Leasehold improvements	16,603		16,531
Office equipment and furniture	11,113		10,981
Property and equipment, cost	111,847		107,816
Less: accumulated depreciation and amortization	(76,769)		(72,358)
Total property and equipment, net	$	35,078	$	35,458

Goodwill and Intangible Assets, Net (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Net Carrying Amount of Goodwill

Goodwill

The activity in goodwill was as follows:


	Three Months Ended March 31,
(in thousands)	2023
Balance, beginning of period	$	197,284
Foreign currency translation	(71)

Remeasurement from provisional purchase accounting amount	1,788
Balance, end of period	$	199,001

Intangible Assets

Intangible assets, net consisted of the following:


	March 31, 2023
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	79,385	$	(24,205)	$	29	$	55,209	6.6 years
Acquired technology	40,612		(11,292)		7		29,327		5.5 years
	$	119,997	$	(35,497)	$	36	$	84,536	6.2 years


	December 31, 2022
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	80,101	$	(22,255)	$	(171)	$	57,675	6.8 years
Acquired technology	40,610		(9,934)		1		30,677		5.7 years
	$	120,711	$	(32,189)	$	(170)	$	88,352	6.4 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 2023	$	11,450
2024	14,102
2025	13,964
2026	12,960
2027	12,497
Thereafter	19,563
Total future amortization	$	84,536

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)

3 Months Ended

Mar. 31, 2023

Components of Lease Expense

The components of lease expense were as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Operating lease cost	$	798	$	759
Variable lease cost	928		793
	$	1,726	$	1,552

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,247	$	1,095

Schedule of Supplemental Balance Sheet Information Related to Leases

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


	March 31, 2023		December 31, 2022
Weighted-average remaining lease term	3.8 years		3.9 years
Weighted-average discount rate	4.0	%	4.0	%

Schedule of Future Minimum Payments Under Operating Leases

At March 31, 2023, our future minimum payments under operating leases were as follows:


(in thousands)
Remainder of 2023	$	3,847
2024	4,471
2025	4,081
2026	3,763
2027	1,266

Total future gross payments	$	17,428
Less: imputed interest	(1,313)
Total operating lease liabilities	$	16,115

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 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

2021 Program

November 2021

August 2022

50,000

49,992

N/A

2022 Program

August 2022

July 2024

50,000

2,992

N/A

47,008

The share repurchase activity by period was as follows:


	Three Months Ended March 31,
(in thousands, except shares and per share amounts)	2023		2022
Number of shares repurchased	—		121,544
Shares repurchased cost	$	—	$	15,226
Average price per repurchased share	$	—	$	125.27

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31,
(in thousands)	2023		2022
Cost of revenues	$	2,503	$	2,179
Operating expenses
Sales and marketing	2,423		2,032
Research and development	1,777		1,474
General and administrative	5,077		3,330
	$	11,780	$	9,015

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


	Three Months Ended March 31,
(in thousands)	2023		2022
Stock options	$	490	$	477
PSUs	3,926		2,699
RSUs	6,062		4,638
RSAs & DSUs	108		108
ESPP	589		574
401(k) stock match	605		519
	$	11,780	$	9,015

Stock Option Activity

Our stock option activity was as follows:


	Three Months Ended March 31, 2023
	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding, beginning of period	562,697	$	56.24
Granted	30,148	150.76
Exercised	(68,088)	32.06
Forfeited	(1,916)	123.49
Outstanding, end of period	522,841	$	64.60

Weighted Average Grant Date Fair Value of Options Granted, Assumptions


Life (in years)	3.9
Volatility	39.7	%
Dividend yield	—
Risk-free interest rate	4.2	%

PSU, RSU, RSA, and DSU

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


	Three Months Ended March 31, 2023
	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding, beginning of period	712,158	$	103.93
Granted	304,635	163.06
Vested and common stock issued	(305,123)	74.70
Forfeited	(3,798)	112.93
Outstanding, end of period	707,872	$	141.92

Summary of ESPP Activity

Our ESPP activity was as follows:


	Three Months Ended March 31,
(in thousands, except shares)	2023		2022
Amounts for shares purchased	$	241	$	147
Shares purchased	2,549		1,698

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	46.4	%
Dividend yield	—
Risk-free interest rate	2.5	%

Other Income and Expense (Tables)

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Summary of Other Income (Expense), Net

Other income, net included the following:


	Three Months Ended March 31,
(in thousands)	2023		2022
Investment income	$	1,127	$	48
Realized gain from foreign currency on cash and investments held	137		468
Other income (expense), net	12		(93)
Total other income, net	$	1,276	$	423

Net Income Per Share (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31,
(in thousands, except per share amounts)	2023		2022
Numerator
Net income	$	15,289	$	12,603
Denominator
Weighted average common shares outstanding, basic	36,427		36,136
Options to purchase common stock	307		419
PSUs, RSUs, RSAs, and DSUs	421		434
Weighted average common shares outstanding, diluted	37,155		36,989
Net income per share
Basic	$	0.42	$	0.35
Diluted	$	0.41	$	0.34

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 March 31,
(in thousands)	2023	2022
Anti-dilutive shares	108	151

Geographic Information (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Domestic Revenue

Domestic revenue, which we define as revenue that was attributable to customers based within the U.S., was as follows:


	Three Months Ended March 31,
	2023		2022
Domestic revenue	84	%	84	%

Schedule Of Percentage Of Property And Equipment Net

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


	March 31, 2023		December 31, 2022
International property and equipment	14	%	13	%

Business Acquisitions - Narrative (Details) - USD ($) $ in Millions			3 Months Ended
	Oct. 04, 2022	Jul. 19, 2022	Mar. 31, 2023
GCommerce Inc
Business Acquisition [Line Items]
Purchase price		$ 45.1
Measurement period		1 year
Decrease in purchase price due to measurement period adjustment			$ 1.6
Decrease in estimated value of deferred income tax assets			$ 1.5
InterTrade Systems Inc.
Business Acquisition [Line Items]
Purchase price	$ 49.1
Measurement period	1 year

Revenue - Summary of Revenues by Revenue Stream (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue Recognition [Line Items]
Revenues	$ 125,868	$ 105,193
Recurring revenues
Revenue Recognition [Line Items]
Revenues	117,301	97,567
One-time revenues
Revenue Recognition [Line Items]
Revenues	8,567	7,626
Fulfillment \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	101,668	84,731
Analytics \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	12,370	11,296
Other \| Recurring revenues
Revenue Recognition [Line Items]
Revenues	$ 3,263	$ 1,540

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)	3 Months Ended
Revenue - Narrative (Detail)	Mar. 31, 2023
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
	Mar. 31, 2023	Mar. 31, 2022
Deferred Revenue Arrangement [Roll Forward]
Balance, beginning of period	$ 14,999	$ 14,459
Invoiced set-up fees	4,251	4,003
Recognized set-up fees	(3,963)	(3,524)
Balance, end of period	$ 15,287	$ 14,938

Deferred Costs (Detail) - USD ($) $ in Thousands	3 Months Ended
Deferred Costs (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Deferred Costs [Roll Forward]
Balance, beginning of period	$ 70,179	$ 59,720
Incurred deferred costs	18,234	17,781
Amortized deferred costs	(16,604)	(14,891)
Balance, end of period	$ 71,809	$ 62,610

Fair Value Measurements - Summary of Cash Equivalents and Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Financial Instruments [Line Items]
Amortized Cost	$ 145,026	$ 124,405
Unrealized Gains (Losses), net	404	375
Fair Value	145,430	124,780
Investments:
Schedule of Financial Instruments [Line Items]
Amortized Cost	6,687	6,813
Unrealized Gains (Losses), net	0	0
Fair Value	6,687	6,813
Cash Equivalents \| Money market funds
Schedule of Financial Instruments [Line Items]
Amortized Cost	94,284	73,368
Unrealized Gains (Losses), net	0	0
Fair Value	94,284	73,368
Marketable Securities \| Commercial paper
Schedule of Financial Instruments [Line Items]
Amortized Cost	34,228	44,224
Unrealized Gains (Losses), net	353	375
Fair Value	34,581	44,599
Marketable Securities \| U.S. treasury securities
Schedule of Financial Instruments [Line Items]
Amortized Cost	9,827	0
Unrealized Gains (Losses), net	51	0
Fair Value	$ 9,878	$ 0

Allowance for Credit Losses (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 3,066	$ 4,249
Provision for credit losses	1,206	1,144
Write-offs, net of recoveries	(1,055)	(1,106)
Balance, end of period	$ 3,217	$ 4,287

Property and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 111,847	$ 107,816
Less: accumulated depreciation and amortization	(76,769)	(72,358)
Property and equipment, net	35,078	35,458
Internally developed software
Property, Plant and Equipment [Line Items]
Property and equipment, cost	53,530	49,994
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, cost	30,601	30,310
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, cost	16,603	16,531
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 11,113	$ 10,981

Goodwill and Intangible Assets, Net - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Balance, beginning of period	$ 197,284
Foreign currency translation	(71)
Remeasurement from provisional purchase accounting amount	1,788
Balance, end of period	$ 199,001