0001092699-24-000012 | 10-K | XBRL Viewer

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Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)	12.7
Unrecognized stock-based compensation expense	$ 52.0
Unrecognized stock-based compensation, expected to be recognized, weighted average period	2 years 4 months 24 days
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)	1.7
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Stock options contractual term range	7 years
Outstanding and exercisable options (in shares)	0.3
Weighted average exercise price (in dollars per share)	$ 67.07
Weighted average remaining contractual life	3 years 1 month 6 days
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years	3 years	3 years
Shares issued (in shares) (less than)	0.2
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
DSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Award receipt delay	10 years
PSUs, RSUs, RSAs and DSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested at period end (in shares)	0.1

Revenue - Summary of Revenues by Revenue Stream (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenue Recognition [Line Items]
Revenues	$ 536,910	$ 450,875	$ 385,276
Recurring Revenues
Revenue Recognition [Line Items]
Revenues	502,013	419,047	355,006
One-time revenues
Revenue Recognition [Line Items]
Revenues	34,897	31,828	30,270
Fulfillment \| Recurring Revenues
Revenue Recognition [Line Items]
Revenues	436,702	364,148	306,851
Analytics \| Recurring Revenues
Revenue Recognition [Line Items]
Revenues	51,703	46,894	42,674
Other \| Recurring Revenues
Revenue Recognition [Line Items]
Revenues	$ 13,608	$ 8,005	$ 5,481

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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-Name Accounting Standards Codification
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+ Details

Revenue

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

We derive our revenues from the following revenue streams:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Recurring revenues:
Fulfillment	$	436,702	$	364,148	$	306,851
Analytics	51,703		46,894		42,674
Other	13,608		8,005		5,481
Recurring Revenues	502,013		419,047		355,006
One-time revenues	34,897		31,828		30,270
Total revenue	$	536,910	$	450,875	$	385,276

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 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, generally 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:


	Year Ended December 31,
(in thousands)	2023		2022
Balance, beginning of year	$	14,999	$	14,459
Invoiced set-up fees	19,146		15,457
Recognized set-up fees	(16,542)		(14,917)
Balance, end of year	$	17,603	$	14,999

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 fees

Miscellaneous fees primarily 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.

Deferred Revenue

In the year ended December 31, 2023, we recognized revenue of $57.4 million from amounts included in deferred revenue at December 31, 2022.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

General - Summary of Estimated Useful Lives of Intangible Assets (Details)	Dec. 31, 2023
Subscriber relationships \| Minimum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of intangible assets	7 years
Subscriber relationships \| Maximum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of intangible assets	10 years
Developed technology \| Minimum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of intangible assets	5 years
Developed technology \| Maximum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of intangible assets	10 years

Retirement Contributions - Schedule of Total Contribution to the Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Retirement Benefits [Abstract]
Retirement contributions	$ 6,627	$ 5,386	$ 4,790

Business Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date (Details) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Estimated fair value of assets and liabilities acquired:
Goodwill	$ 249,176		$ 249,176	$ 249,176	$ 197,284
Adjustments, goodwill				4,171
TIE Kinetix Holding B.V.
Business Acquisition [Line Items]
Cash paid	73,558	$ 73,558
Estimated fair value of assets and liabilities acquired:
Cash	4,859	4,859	4,859	4,859
Accounts receivable	1,267	1,347	1,267	1,267
Adjustment, accounts receivable			(80)
Other assets	3,640	2,981	3,640	3,640
Adjustment, other assets			659
Current liabilities	(3,838)	(3,606)	(3,838)	(3,838)
Adjustment, current liabilities			(232)
Deferred revenue	(6,421)	(6,421)	(6,421)	(6,421)
Deferred income tax liabilities, net	(7,869)	(6,112)	(7,869)	(7,869)
Adjustment, deferred income tax liabilities, net			(1,757)
Total fair value of assets and liabilities acquired	28,801	23,353	28,801	28,801
Adjustment, total fair value of assets and liabilities acquired			5,448
Goodwill	44,757	50,205	44,757	44,757
Adjustments, goodwill			(5,448)
TIE Kinetix Holding B.V. \| Subscriber relationships
Estimated fair value of assets and liabilities acquired:
Intangible assets	29,320	18,183	29,320	29,320
Adjustment, intangible assets			11,137
TIE Kinetix Holding B.V. \| Developed technology
Estimated fair value of assets and liabilities acquired:
Intangible assets	$ 7,843	$ 12,122	7,843	$ 7,843
Adjustment, intangible assets			$ (4,279)

Income Taxes - Narrative (Details) $ in Millions	Dec. 31, 2023 USD ($)
Domestic Tax Authority
Income Tax Expense Benefit [Line Items]
Net operating loss carryforward	$ 28.9
Losses expected to expire unused	6.5
Domestic Tax Authority \| U.S. Internal Revenue Code
Income Tax Expense Benefit [Line Items]
Net operating loss carryforward	28.9
State and Local Jurisdiction
Income Tax Expense Benefit [Line Items]
Net operating loss carryforward	5.6
Foreign Tax Authority
Income Tax Expense Benefit [Line Items]
Net operating loss carryforward	$ 9.8

Commitments and Contingencies - Summary of Remaining Purchase Commitments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 14,536
2025	14,186
2026	6,342
Total remaining purchase commitments	$ 35,064

Geographic Information

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Geographic Information

Statements of Comprehensive Income

The percentage of domestic revenue, which we define as consolidated revenue that was attributable to customers based within the U.S., and domestic income before income taxes, which we define as the percentage of consolidated income before income taxes that was attributable to our subsidiaries based in the U.S., were as follows:


	Year Ended December 31,
	2023		2022		2021
Domestic revenue	84	%	84	%	84	%
Domestic income before income taxes	94	%	91	%	89	%

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:


	December 31,
	2023		2022
International property and equipment	15	%	13	%

Goodwill and Intangible Assets, Net - Schedule of Activity in Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill [Roll Forward]
Balance, beginning of year	$ 197,284
Additions from business acquisitions	45,393
Foreign currency translation	2,328
Remeasurement from provisional purchase accounting amount	4,171
Balance, end of year	$ 249,176

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Commitments and Contingencies - Schedule of Future Minimum Payments Under Operating Leases (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 4,910
2025	4,694
2026	3,947
2027	1,299
2028	25
Thereafter	76
Total future gross payments	14,951
Less: imputed interest	(922)
Total operating lease liabilities	$ 14,029

Related Party Transactions - Summary of Contributions to Foundation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Contributions to Foundation
Related Party Transaction [Line Items]
Foundation contributions	$ 2,300	$ 2,750	$ 2,400

Revenue - Summary of Deferred Revenue Liability Relating to Set-Up Fees (Details) - Set-Up Fees - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Deferred Revenue Arrangement [Roll Forward]
Balance, beginning of year	$ 14,999	$ 14,459
Invoiced set-up fees	19,146	15,457
Recognized set-up fees	(16,542)	(14,917)
Balance, end of year	$ 17,603	$ 14,999

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Firm ID	185
Auditor Name	KPMG, LLP
Auditor Location	Minneapolis, MN

Goodwill and Intangible Assets, Net - Schedule of Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 16,116	$ 11,768	$ 10,126

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

Our provision for income taxes was comprised of the following components:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Current
Federal	$	20,168	$	13,881	$	1,559
State	4,221		4,149		1,890
Foreign	2,103		1,990		1,610
Deferred
Federal	(5,425)		(2,530)		4,294
State	(390)		(751)		(88)
Foreign	(938)		(549)		(321)
	$	19,739	$	16,190	$	8,944

Schedule of Income Tax Expense Differed from Amounts Computed by applying U.S. Federal Income Tax Rate to Pretax Income

Our income tax expense differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:


	Year Ended December 31,
	2023		2022		2021
U.S. statutory federal income tax rate	21.0	%	21.0	%	21.0	%
Increase (decrease) resulting from:
U.S. state income taxes, net of federal tax effect	5.1		4.6		4.5
Tax impact of stock activity	(5.6)		(4.7)		(12.8)
Nondeductible compensation	4.7		3.5		5.0
Research and development credit	(1.5)		(1.5)		(1.1)
Foreign derived intangible income	(1.3)		(1.4)		(1.3)
Other	0.7		1.2		1.4
Effective tax rate	23.1	%	22.7	%	16.7	%

Significant Components of Deferred Tax Assets (Liabilities)

The significant components of our deferred income tax assets and liabilities were as follows:


	December 31,
(in thousands)	2023		2022
Deferred income tax assets
Net operating loss and credit carryforwards	$	10,212	$	9,970
Stock-based compensation expense	6,304		5,084
Accrued expenses	6,067		4,469
Operating lease liabilities	3,470		4,384
Research and development capitalized	17,007		9,591
Other deferred income tax assets	2,705		2,408
Gross deferred income tax assets	45,765		35,906
Less: valuation allowance	(2,545)		(1,873)
Total net deferred income tax assets	$	43,220	$	34,033

Deferred income tax liabilities
Deferred costs	$	(20,672)	$	(17,696)
Right-of-use assets	(1,884)		(2,338)
Depreciation and amortization	(28,066)		(20,282)
Other deferred income tax liabilities	(1,065)		(909)
Total deferred income tax liabilities	(51,687)		(41,225)
Net deferred income tax liabilities	$	(8,467)	$	(7,192)

Income Taxes - Schedule of Income Tax Expense Differed from Amounts Computed by applying U.S. Federal Income Tax Rate to Pretax Income (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
U.S. statutory federal income tax rate	21.00%	21.00%	21.00%
Increase (decrease) resulting from:
U.S. state income taxes, net of federal tax effect	5.10%	4.60%	4.50%
Tax impact of stock activity	(5.60%)	(4.70%)	(12.80%)
Nondeductible compensation	4.70%	3.50%	5.00%
Research and development credit	(1.50%)	(1.50%)	(1.10%)
Foreign derived intangible income	(1.30%)	(1.40%)	(1.30%)
Other	0.70%	1.20%	1.40%
Effective tax rate	23.10%	22.70%	16.70%

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Schedule of Financial Instruments [Line Items]
Amortized Cost	$ 216,898	$ 124,405
Unrealized Gains (Losses), net	694	375
Fair Value	217,592	124,780
Certificates of deposit
Schedule of Financial Instruments [Line Items]
Amortized Cost	6,805	6,813
Unrealized Gains (Losses), net	0	0
Fair Value	6,805	6,813
Cash equivalents: \| Money market funds
Schedule of Financial Instruments [Line Items]
Amortized Cost	161,233	73,368
Unrealized Gains (Losses), net	0	0
Fair Value	161,233	73,368
Marketable securities: \| Commercial paper
Schedule of Financial Instruments [Line Items]
Amortized Cost	48,860	44,224
Unrealized Gains (Losses), net	694	375
Fair Value	$ 49,554	$ 44,599

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

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+ Details

Goodwill and Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Activity in Goodwill

The activity in goodwill was as follows:


	Year Ended December 31,
(in thousands)	2023
Balance, beginning of year	$	197,284
Additions from business acquisitions	45,393
Foreign currency translation	2,328
Remeasurement from provisional purchase accounting amount	4,171
Balance, end of year	$	249,176

Intangible Assets

Intangible assets, net consisted of the following:


	December 31, 2023
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	105,228	$	(32,097)	$	724	$	73,855	6.6 years
Developed technology	48,843		(15,669)		315		33,489		5.0 years
	$	154,071	$	(47,766)	$	1,039	$	107,344	6.1 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
Developed technology	40,610		(9,934)		1		30,677		5.4 years
	$	120,711	$	(32,189)	$	(170)	$	88,352	6.4 years

Schedule of Amortization Expense of Intangible Assets

Amortization expense of intangible assets was as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Amortization expense	$	16,116	$	11,768	$	10,126

Estimated Annual Amortization Expense Related to Intangible Assets

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


(in thousands)
2024	$	18,842
2025	18,704
2026	17,700
2027	17,226
2028	15,959
Thereafter	18,913
Total future amortization	$	107,344

- Definition

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

+ References

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+ Details

Business Acquisitions - Narrative (Details) $ in Thousands, € in Millions							12 Months Ended
	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 13, 2023 USD ($)	Sep. 13, 2023 EUR (€)	Oct. 04, 2022 USD ($)	Jul. 19, 2022 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Goodwill	$ 249,176						$ 249,176	$ 197,284
TIE Kinetix Holding B.V.
Business Acquisition [Line Items]
Total consideration			$ 68,700	€ 63.9
Cash paid	73,558	$ 73,558
Goodwill	44,757	$ 50,205					44,757
Other Acquisition
Business Acquisition [Line Items]
Cash paid							1,500
Assets acquired	900						900
Goodwill	$ 600						600
InterTrade Systems Inc.
Business Acquisition [Line Items]
Total consideration					$ 49,100
Decrease in provisional amounts for consideration transferred							3,100
Decrease in estimated value of deferred income tax assets							3,900
Increase (decrease) in estimated value of deferred income tax assets							1,000
GCommerce Inc
Business Acquisition [Line Items]
Total consideration						$ 45,100
Decrease in provisional amounts for consideration transferred							1,600
Increase (decrease) in estimated value of deferred income tax assets							$ (1,500)

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Gain (Loss)
Beginning balance (in shares) at Dec. 31, 2020		35,487,217
Beginning balance at Dec. 31, 2020	$ 420,721	$ 37	$ (65,247)	$ 393,462	$ 93,490	$ (1,021)
Beginning balance (in shares) at Dec. 31, 2020			1,613,250
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	25,686			25,686
Shares issued pursuant to stock awards (in shares)		642,417
Shares issued pursuant to stock awards	9,374	$ 1		9,373
Employee stock purchase plan (in shares)		55,726
Employee stock purchase plan activity	$ 4,737			4,737
Repurchases of common stock (in shares)	(176,103)	(176,103)	(176,103)
Repurchases of common stock	$ (20,430)		$ (20,430)
Net income	44,597				44,597
Foreign currency translation adjustments	(514)					(514)
Unrealized gain (loss) on investments, net of tax	(102)					(102)
Reclassification of gain (loss) on investments into earnings, net of tax	190					190
Ending balance (in shares) at Dec. 31, 2021		36,009,257
Ending balance at Dec. 31, 2021	484,259	$ 38	$ (85,677)	433,258	138,087	(1,447)
Ending balance (in shares) at Dec. 31, 2021			1,789,353
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	31,275			31,275
Shares issued pursuant to stock awards (in shares)		440,427
Shares issued pursuant to stock awards	4,908			4,908
Employee stock purchase plan (in shares)		70,107
Employee stock purchase plan activity	$ 6,676			6,676
Repurchases of common stock (in shares)	(361,745)	(361,745)	(361,745)
Repurchases of common stock	$ (43,215)		$ (43,215)
Net income	55,134				55,134
Foreign currency translation adjustments	(2,240)					(2,240)
Unrealized gain (loss) on investments, net of tax	441					441
Reclassification of gain (loss) on investments into earnings, net of tax	$ (165)					(165)
Ending balance (in shares) at Dec. 31, 2022	36,158,046	36,158,046
Ending balance at Dec. 31, 2022	$ 537,073	$ 38	$ (128,892)	476,117	193,221	(3,411)
Ending balance (in shares) at Dec. 31, 2022	2,151,098		2,151,098
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	$ 42,975			42,975
Shares issued pursuant to stock awards (in shares)		598,361
Shares issued pursuant to stock awards	9,856	$ 1		9,855
Employee stock purchase plan (in shares)		63,641
Employee stock purchase plan activity	$ 8,114			8,114
Repurchases of common stock (in shares)	0
Repurchases of common stock	$ 0
Net income	65,824				65,824
Foreign currency translation adjustments	3,393					3,393
Unrealized gain (loss) on investments, net of tax	1,932					1,932
Reclassification of gain (loss) on investments into earnings, net of tax	$ (1,692)
Ending balance (in shares) at Dec. 31, 2023	36,820,048	36,820,048
Ending balance at Dec. 31, 2023	$ 667,475	$ 39	$ (128,892)	$ 537,061	$ 259,045	$ 222
Ending balance (in shares) at Dec. 31, 2023	2,151,098		2,151,098

General - Narrative (Details)	12 Months Ended
General - Narrative (Details)	Dec. 31, 2023 segment period
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segment	1
Number of operating segment	1
Deferred commission expected amortization period	2 years
Purchase price as a percentage of fair market value	85.00%
Number of offering periods \| period	2
Stock plan offering period	6 months

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net income	$ 65,824	$ 55,134	$ 44,597

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net income	$ 65,824	$ 55,134	$ 44,597
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes	(10,079)	(3,732)	3,881
Depreciation and amortization of property and equipment	18,631	16,421	14,788
Amortization of intangible assets	16,116	11,768	10,126
Provision for credit losses	5,707	3,359	4,717
Stock-based compensation	45,508	33,399	27,574
Other, net	2,415	220	323
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable	(11,949)	(6,435)	(4,959)
Deferred costs	(10,724)	(10,646)	(9,299)
Other assets and liabilities	1,834	2,632	(6,181)
Accounts payable	(3,947)	144	2,259
Accrued compensation	7,143	(3,786)	6,775
Accrued expenses	1,302	(2,829)	1,017
Deferred revenue	6,464	5,965	14,483
Operating leases	(1,947)	(1,562)	2,792
Net cash provided by operating activities	132,298	100,052	112,893
Cash flows from investing activities
Purchases of property and equipment	(19,761)	(19,880)	(19,588)
Purchases of investments	(133,994)	(160,427)	(121,242)
Maturities of investments	131,331	158,937	111,193
Acquisition of business, net	(70,218)	(91,420)	(17,066)
Net cash used in investing activities	(92,642)	(112,790)	(46,703)
Cash flows from financing activities
Repurchases of common stock	0	(43,215)	(20,430)
Net proceeds from exercise of options to purchase common stock	9,856	4,908	9,374
Net proceeds from employee stock purchase plan activity	8,114	6,676	4,737
Payments for contingent consideration	(2,000)	0	(2,042)
Net cash provided by (used in) financing activities	15,970	(31,631)	(8,361)
Effect of foreign currency exchange rate changes	562	(290)	31
Net increase (decrease) in cash and cash equivalents	56,188	(44,659)	57,860
Cash and cash equivalents at beginning of period	162,893	207,552	149,692
Cash and cash equivalents at end of period	219,081	162,893	207,552
Supplemental Cash Flow Information [Abstract]
Cash paid for income taxes	29,207	16,076	9,979
Non-cash financing activity:
Contingent consideration related to acquisition	$ 0	$ 2,000	$ 0

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	110,000,000	110,000,000
Common stock, shares issued (in shares)	38,971,146	38,309,144
Common stock, shares outstanding (in shares)	36,820,048	36,158,046
Treasury stock, shares (in shares)	2,151,098	2,151,098

Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current
Federal	$ 20,168	$ 13,881	$ 1,559
State	4,221	4,149	1,890
Foreign	2,103	1,990	1,610
Deferred
Federal	(5,425)	(2,530)	4,294
State	(390)	(751)	(88)
Foreign	(938)	(549)	(321)
Total provision for income taxes	$ 19,739	$ 16,190	$ 8,944

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

General (Policies)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

The accompanying 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 consolidated financial statements.

Foreign Currency Translation

The functional currency of our foreign operations is generally the applicable local currency. The functional currency is translated into U.S. dollars for balance sheet accounts using current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using an average exchange rate during the year. The translation adjustments are deferred as a component of other comprehensive income within the consolidated statements of comprehensive income and the consolidated statements of stockholders' equity. Gains or losses resulting from transactions denominated in foreign currencies are included in other income (expense), net in our consolidated statements of comprehensive income.

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.

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of the purchase price allocation, which includes the process to determine the value and useful lives of purchased intangible assets and the process to determine the value of any contingent consideration liabilities. We record the acquisition-date fair value of any contingent liabilities, such as earn-out provisions, as part of the consideration transferred, if present. The unsettled earn-out liability, if any, is subsequently remeasured at each reporting date at fair value through earnings.

While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed. Any such adjustments would be recorded as an offset to goodwill or a working capital purchase price adjustment as applicable. Upon the conclusion of the measurement period or final determination of the fair values, whichever comes first, any subsequent adjustments would be recorded in our consolidated statements of comprehensive income.

Segment Information

Our Chief Executive Officer acts as the Company’s chief operating decision maker and reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable by the chief operating decision maker, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, we determined we have one operating and reportable segment, which is supply chain management products.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents in financial institutions in excess of federally insured limits, accounts receivable, and investments. Cash and cash equivalents are held with financial institutions that we believe are subject to minimal risk. Concentrations of credit risk with respect to accounts receivable are subject to the financial condition of our customers, which are routinely assessed for potential credit losses. We believe that the receivable credit risk exposure is limited. Our investment policy limits the amount of credit exposure with any one financial institution or commercial issuer and sets requirements regarding credit rating and investment maturities to safeguard liquidity and minimize risk.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days.

Investments

We invest in money market funds, certificates of deposit, and/or marketable securities such as commercial paper, highly liquid debt instruments of the U.S. government, and U.S. corporate debt securities. Investments with remaining maturities of less than one year from the balance sheet date are classified as short-term investments whereas those with remaining maturities of more than one year from the balance sheet date are classified as investments, non-current.

Securities classified as available for sale are carried at fair value and the unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive gain (loss) in the consolidated balance sheets. Realized gains or losses are included in other income (expense), net in the consolidated statements of comprehensive income. Certain securities accrue interest that is included in other income (expense), net. If a determination has been made that the fair value of a marketable security is below its amortized cost basis, the portion of the unrealized loss that corresponds to a credit-related factor is realized through a credit allowance on the marketable security and the equivalent expense is realized in other income (expense), net in the consolidated statements of comprehensive income.

Fair Value Measurements

The carrying amounts of our short-term financial instruments, which include cash, cash equivalents, accounts receivable, and accounts payable, approximates fair value due to their short-term nature.

Recurring Fair Value Measurements

We measure certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that are used to measure fair value are:

•Level 1 – quoted prices in active markets for identical assets or liabilities.

•Level 2 – observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

Nonrecurring Fair Value Measurements

We measure certain assets and liabilities at fair value on a nonrecurring basis, including long-lived assets, goodwill, and indefinite-lived intangible assets.

Accounts Receivable

Accounts receivable are initially recorded upon the sale and invoicing of products to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for credit losses, which represent estimated losses resulting from customers not making required payments on accounts receivables. When determining the allowance, we pool our outstanding accounts receivable invoices based on the contractual due date of payment. We take several factors into consideration for estimated credit losses by pool, primarily our historical credit losses, with additional adjustments made for current and future macro-economic conditions and retail bankruptcy trends. We write-off accounts receivable when they are determined to be uncollectible. Changes in the allowance are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income.

Property and Equipment

Property and equipment, including assets acquired under lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization expense is calculated using the straight-line method over the estimated useful lives, commencing on the earlier date in which the asset is placed in service or ready for its intended use.

The estimated useful lives of property and equipment were as follows:


			Estimated Useful Life
Internally developed software			3 years
Computer equipment			3 years
Office equipment and furniture			5-7 years
Leasehold improvements			Shorter of the useful life of the asset or the remaining term of the lease

Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. The assets and related accumulated depreciation and amortization are adjusted for asset retirements and disposals with the resulting gain or loss included in our consolidated statements of comprehensive income.

We capitalize and amortize eligible costs to acquire or generate internally developed software that are incurred during the application development stage. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Additionally, maintenance of internally developed software are expensed as incurred. The assets and related accumulated amortization are adjusted for abandoned internally developed software with the resulting loss included in our consolidated statements of comprehensive income.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and non-current operating lease liabilities in our consolidated balance sheets.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use the implicit interest rate when readily determinable. We estimate the discount rate for a similar collateralized asset by estimating costs of borrowing. The operating lease ROU asset also includes any lease payments made and lease incentives that have been incurred. The options to extend our leases are not recognized as part of our ROU assets and lease liabilities unless it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For all leases, we combine non-lease components with the related lease components and account for it as a single lease component. The ROU assets are subject to the same impairment process as our long-lived assets. Additionally, we review our lease liabilities for remeasurement whenever there is a triggering event or when relevant facts and circumstances change.

Research and Development

Research and development costs primarily include development, maintenance, and data conversion activities related to our cloud-based supply chain management products and are expensed as incurred. Research and development costs are net of amounts capitalized as developed software.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. 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.

We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying amount of the reporting unit. We determine the fair value of the reporting unit based on our market capitalization at the testing date. If the carrying amount exceeds the fair value of the reporting unit, we would recognize an impairment loss in the consolidated statements of comprehensive income, to the extent that the carrying amount exceeds fair value.

Intangible Assets

Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and developed technology. We recognize the fair value of the identifiable intangible assets acquired separately from goodwill. We have determined the fair value and useful lives of our purchased intangible assets using certain estimates and assumptions that we believe are reasonable.

The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives.

The estimated useful lives for intangible were as follows:


			Estimated Useful Life
Subscriber relationships			7-10 years
Developed technology			5-10 years

Impairment of Long-Lived Assets

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured and recorded as an expense in the consolidated statements of comprehensive income as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

Revenue Recognition

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.

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations in the contract

•Recognition of revenue when, or as, we satisfy a performance obligation

See Note C for further descriptions of our revenue recognition policy.

Deferred Costs

Deferred costs are those that are incurred to fulfill or obtain customer contracts and that are considered incremental and recoverable costs. These consist primarily of customer implementation costs and certain commissions paid to sales personnel and referral partners, respectively. These costs are deferred and amortized over the expected period of benefit which we have determined primarily to be two years.

Customer implementation costs are based on actual costs incurred. Related amortization expense is included in cost of revenues in the consolidated statements of comprehensive income.

Sales commissions are calculated based on estimated annual recurring revenue to be generated over the customer’s initial contract period. Related amortization expense is included in sales and marketing expenses in the consolidated statements of comprehensive income.

Stock-Based Compensation

Stock-based compensation includes grants of incentive and nonqualified stock options, performance share units (“PSUs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), deferred stock units (“DSUs”), employee stock purchase plan (“ESPP”) activity, and 401(k) stock match and is used to compensate employees, executive officers, and non-employee directors.

We recognize the cost of all stock-based payments based on the grant date fair value of those awards. This cost is recognized over the period for which an 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. For all awards, we recognize forfeitures as they occur.

RSAs result in the issuance of new shares when granted. For other stock-based awards, new shares are issued when the award is exercised, vested, or released according to the terms of the agreement.

Our ESPP allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all employees subject to certain eligibility requirements. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price that is the lower of 85% of the fair market value of our common stock at the beginning or end of each stock purchase period. The plan is a Type B plan, so the number of shares a participants can acquire is variable. Participants purchase more shares as the stock price decreases, up to the total amount originally elected to withhold at the beginning of the offering period. The plan consists of two six-month offering periods, beginning on January 1 and July 1 of each calendar year.

The fair value of stock options and ESPP activity is estimated using the Black-Scholes option valuation model. The fair value for RSAs, RSUs, and DSUs is the closing market value of the underlying stock on the date of grant less the purchase price (if any). The fair value of PSUs is estimated using a Monte Carlo simulation.

Judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is derived from historical data on option holder exercises and post-vesting employment termination behavior.

Additional valuation inputs include our expected non-issuance of future common stock dividends and the risk-free interest rate that is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equaling the expected life at the grant date. For PSUs, the Monte Carlo simulation utilizes multiple input variables that determine the probability of satisfying the performance conditions stipulated in the award.

Income Taxes

We account for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in our judgment, it is more likely than not that some or all of the deferred tax asset will not be realized. Deferred tax positions are net by jurisdiction on the consolidated balance sheet.

We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Net Income Per Share

Basic net income per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share also includes the impact of our outstanding potential common shares. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share.

Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not 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

This 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 2023

The adoption of this standard has not had a material impact on the purchase accounting for business combinations.

Accounting Pronouncements Not Yet Adopted

Standard

Date of Issuance

Description

Date of Required Adoption

Effect on the Financial Statements

ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures

December 2023

This amendment requires that an entity disclose specific categories in the effective tax rate reconciliation table as well as provide disclosure of disaggregated information related to income tax expense, income before income taxes, and income taxes paid.

January 2024

We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures

November 2023

This amendment requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker.

January 2024

We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

General

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

Business Description

Basis of Presentation

Foreign Currency Translation

Use of Estimates

Business Combinations

Segment Information

Concentration of Credit Risk

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days.

Investments

Fair Value Measurements

The carrying amounts of our short-term financial instruments, which include cash, cash equivalents, accounts receivable, and accounts payable, approximates fair value due to their short-term nature.

Recurring Fair Value Measurements

•Level 1 – quoted prices in active markets for identical assets or liabilities.

•Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

Nonrecurring Fair Value Measurements

We measure certain assets and liabilities at fair value on a nonrecurring basis, including long-lived assets, goodwill, and indefinite-lived intangible assets.

Accounts Receivable

Property and Equipment

The estimated useful lives of property and equipment were as follows:


			Estimated Useful Life
Internally developed software			3 years
Computer equipment			3 years
Office equipment and furniture			5-7 years
Leasehold improvements			Shorter of the useful life of the asset or the remaining term of the lease

Leases

Research and Development

Goodwill

Intangible Assets

The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives.

The estimated useful lives for intangible were as follows:


			Estimated Useful Life
Subscriber relationships			7-10 years
Developed technology			5-10 years

Impairment of Long-Lived Assets

Revenue Recognition

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.

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations in the contract

•Recognition of revenue when, or as, we satisfy a performance obligation

See Note C for further descriptions of our revenue recognition policy.

Deferred Costs

Customer implementation costs are based on actual costs incurred. Related amortization expense is included in cost of revenues in the consolidated statements of comprehensive income.

Stock-Based Compensation

RSAs result in the issuance of new shares when granted. For other stock-based awards, new shares are issued when the award is exercised, vested, or released according to the terms of the agreement.

Income Taxes

It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Net Income Per Share

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

The adoption of this standard has not had a material impact on the purchase accounting for business combinations.

Accounting Pronouncements Not Yet Adopted

Standard

Date of Issuance

Description

Date of Required Adoption

Effect on the Financial Statements

ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures

December 2023

January 2024

We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures

November 2023

This amendment requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker.

January 2024

We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

Goodwill and Intangible Assets, Net - Estimated Future Annual Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 18,842
2025	18,704
2026	17,700
2027	17,226
2028	15,959
Thereafter	18,913
Total future amortization	$ 107,344	$ 88,352

Property and Equipment, Net

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,
(in thousands)	2023		2022
Internally developed software	$	60,396	$	49,994
Computer equipment	34,402		30,310
Leasehold improvements	15,387		16,531
Office equipment and furniture	10,966		10,981
Property and equipment, cost	121,151		107,816
Less: accumulated depreciation and amortization	(85,108)		(72,358)
Total property and equipment, net	$	36,043	$	35,458

Depreciation and amortization expense of property and equipment was as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Depreciation and amortization expense	$	18,631	$	16,421	$	14,788

General (Tables)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Estimated Useful Lives of Property and Equipment

The estimated useful lives of property and equipment were as follows:


			Estimated Useful Life
Internally developed software			3 years
Computer equipment			3 years
Office equipment and furniture			5-7 years
Leasehold improvements			Shorter of the useful life of the asset or the remaining term of the lease

Property and equipment, net consisted of the following:


	December 31,
(in thousands)	2023		2022
Internally developed software	$	60,396	$	49,994
Computer equipment	34,402		30,310
Leasehold improvements	15,387		16,531
Office equipment and furniture	10,966		10,981
Property and equipment, cost	121,151		107,816
Less: accumulated depreciation and amortization	(85,108)		(72,358)
Total property and equipment, net	$	36,043	$	35,458

Summary of Estimated Useful Lives of Intangible Assets

The estimated useful lives for intangible were as follows:


			Estimated Useful Life
Subscriber relationships			7-10 years
Developed technology			5-10 years

Stock-Based Compensation - Summary of Additional Information Related to Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-Based Payment Arrangement [Abstract]
Fair value of options vested	$ 1,966	$ 1,996	$ 2,509
Intrinsic value of options exercised	31,227	16,705	27,713
Intrinsic value of options outstanding	$ 39,474	$ 40,692	$ 66,235
Weighted-average fair value per share of options granted (in dollars per share)	$ 56.47	$ 41.34	$ 31.31

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

The estimated useful lives of property and equipment were as follows:


			Estimated Useful Life
Internally developed software			3 years
Computer equipment			3 years
Office equipment and furniture			5-7 years
Leasehold improvements			Shorter of the useful life of the asset or the remaining term of the lease

Property and equipment, net consisted of the following:


	December 31,
(in thousands)	2023		2022
Internally developed software	$	60,396	$	49,994
Computer equipment	34,402		30,310
Leasehold improvements	15,387		16,531
Office equipment and furniture	10,966		10,981
Property and equipment, cost	121,151		107,816
Less: accumulated depreciation and amortization	(85,108)		(72,358)
Total property and equipment, net	$	36,043	$	35,458

Schedule of Depreciation and Amortization Expense of Property and Equipment

Depreciation and amortization expense of property and equipment was as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Depreciation and amortization expense	$	18,631	$	16,421	$	14,788

Stock-Based Compensation - Summary of ESPP Activity (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts for shares purchased	$ 8,114	$ 6,676	$ 4,737
Shares purchased (in shares)	63,641	70,107	55,726

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
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+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Share Repurchase Program

Our board of directors has authorized multiple non-concurrent programs to repurchase our common stock. Details of the programs and activity thereunder through December 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
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		2,992		N/A		$	47,008

The share repurchase activity by period was as follows:


	Year Ended December 31,
(in thousands, except shares and per share amounts)	2023		2022		2021
Number of shares repurchased	—		361,745		176,103
Shares repurchased cost	$	—	$	43,215	$	20,430
Average price per repurchased share	$	—	$	119.46	$	116.01

- Definition

The entire disclosure for equity.

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+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Other Income and Expense - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Other Income and Expenses [Abstract]
Investment income	$ 7,660	$ 1,670	$ 278
Realized gain (loss) from foreign currency on cash and investments held	1,726	(1,026)	(1,456)
Other expense, net	(1,071)	(502)	(366)
Total other income (expense), net	$ 8,315	$ 142	$ (1,544)

Commitments and Contingencies - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 5,022	$ 4,639
Right-of-use assets obtained in exchange for operating lease liabilities	$ 1,147	$ 934

Retirement Savings Plan

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Retirement Contributions

We sponsor a 401(k) retirement savings plan for our U.S. employees. Eligible employees can contribute up to 80% of their compensation, subject to the limits established by law, and we match 50% of the employee’s contribution up to the first 6% of pre-tax annual compensation. A portion of our match is in Company stock, which is purchased from the open market by our plan provider and immediately deposited into the employee’s 401(k) account. Additionally, we make statutory contributions to retirement plans as required by local foreign government regulations.

Our total contributions were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Retirement contributions	$	6,627	$	5,386	$	4,790

- Definition

The entire disclosure for retirement benefits.

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+ Details

Stock-Based Compensation - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Options (#)
Beginning balance (in shares)	562,697	678,650	944,886
Granted (in shares)	42,215	56,430	53,223
Exercised (in shares)	(254,353)	(164,393)	(311,378)
Forfeited (in shares)	(3,737)	(7,990)	(8,081)
Ending balance (in shares)	346,822	562,697	678,650
Weighted Average Exercise Price ($/share)
Beginning Balance (in dollars per share)	$ 56.24	$ 44.76	$ 36.71
Granted (in dollars per share)	152.68	122.59	105.53
Exercised (in dollars per share)	38.75	29.86	30.10
Forfeited (in dollars per share)	129.43	92.48	68.62
Ending Balance (in dollars per share)	$ 80.02	$ 56.24	$ 44.76

Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

The activity in goodwill was as follows:


	Year Ended December 31,
(in thousands)	2023
Balance, beginning of year	$	197,284
Additions from business acquisitions	45,393
Foreign currency translation	2,328
Remeasurement from provisional purchase accounting amount	4,171
Balance, end of year	$	249,176

Intangible Assets

Intangible assets, net consisted of the following:


	December 31, 2023
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Subscriber relationships	$	105,228	$	(32,097)	$	724	$	73,855	6.6 years
Developed technology	48,843		(15,669)		315		33,489		5.0 years
	$	154,071	$	(47,766)	$	1,039	$	107,344	6.1 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
Developed technology	40,610		(9,934)		1		30,677		5.4 years
	$	120,711	$	(32,189)	$	(170)	$	88,352	6.4 years

Amortization expense of intangible assets was as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Amortization expense	$	16,116	$	11,768	$	10,126

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


(in thousands)
2024	$	18,842
2025	18,704
2026	17,700
2027	17,226
2028	15,959
Thereafter	18,913
Total future amortization	$	107,344

Schedule of Percentage of Domestic Revenue and Domestic Income Before Income Taxes (Details) - Geographic Concentration Risk - Domestic revenue	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenue Benchmark
Property, Plant and Equipment [Line Items]
Concentration risk, percentage	84.00%	84.00%	84.00%
Income Before Income Tax
Property, Plant and Equipment [Line Items]
Concentration risk, percentage	94.00%	91.00%	89.00%

Other Income and Expense (Tables)

12 Months Ended

Dec. 31, 2023

Other Income and Expenses [Abstract]

Summary of Other Income (Expense), Net

Other income (expense), net included the following:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Investment income	$	7,660	$	1,670	$	278
Realized gain (loss) from foreign currency on cash and investments held	1,726		(1,026)		(1,456)
Other expense, net	(1,071)		(502)		(366)
Total other income (expense), net	$	8,315	$	142	$	(1,544)

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Unrealized gain (loss) on investments, tax	$ 644	$ 147	$ (34)
Reclassification of unrealized (gain) loss on investments into earnings, tax	$ (564)	$ (55)	$ 63

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Revenues	$ 536,910	$ 450,875	$ 385,276
Cost of revenues	182,069	153,065	131,678
Gross profit	354,841	297,810	253,598
Operating expenses
Sales and marketing	122,936	101,772	88,044
Research and development	53,654	45,748	39,038
General and administrative	84,887	67,340	61,305
Amortization of intangible assets	16,116	11,768	10,126
Total operating expenses	277,593	226,628	198,513
Income from operations	77,248	71,182	55,085
Other income (expense), net	8,315	142	(1,544)
Income before income taxes	85,563	71,324	53,541
Income tax expense	19,739	16,190	8,944
Net income	65,824	55,134	44,597
Other comprehensive income (expense)
Foreign currency translation adjustments	3,393	(2,240)	(514)
Unrealized gain (loss) on investments, net of tax of $644, $147, and $(34), respectively	1,932	441	(102)
Reclassification of (gain) loss on investments into earnings, net of tax of $(564), $(55), and $63, respectively	(1,692)	(165)	190
Total other comprehensive income (expense)	3,633	(1,964)	(426)
Comprehensive income	$ 69,457	$ 53,170	$ 44,171
Net income per share
Basic (in dollars per share)	$ 1.80	$ 1.53	$ 1.24
Diluted (in dollars per share)	$ 1.76	$ 1.49	$ 1.21
Weighted average common shares used to compute net income per share
Basic (in shares)	36,646	36,117	35,928
Diluted (in shares)	37,475	36,953	36,962

Revenue - Narrative (Details) $ in Millions	12 Months Ended
Revenue - Narrative (Details) $ in Millions	Dec. 31, 2023 USD ($)
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
Deferred revenue	$ 57.4
Minimum
Disaggregation Of Revenue [Line Items]
Customer contract cancellation period	30 days
Maximum
Disaggregation Of Revenue [Line Items]
Customer contract cancellation period	90 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 219,081	$ 162,893
Short-term investments	56,359	51,412
Accounts receivable	50,160	42,501
Allowance for credit losses	(3,320)	(3,066)
Accounts receivable, net	46,840	39,435
Deferred costs	62,403	52,755
Other assets	16,758	16,319
Total current assets	401,441	322,814
Property and equipment, net	36,043	35,458
Operating lease right-of-use assets	7,862	9,170
Goodwill	249,176	197,284
Intangible assets, net	107,344	88,352
Other assets
Deferred costs, non-current	20,347	17,424
Deferred income tax assets	505	227
Other assets, non-current	1,126	2,185
Total assets	823,844	672,914
Current liabilities
Accounts payable	7,420	11,256
Accrued compensation	41,588	30,235
Accrued expenses	8,014	7,451
Deferred revenue	69,187	57,423
Operating lease liabilities	4,460	4,277
Total current liabilities	130,669	110,642
Other liabilities
Deferred revenue, non-current	6,930	4,771
Operating lease liabilities, non-current	9,569	13,009
Deferred income tax liabilities	8,972	7,419
Other liabilities, non-current	229	0
Total liabilities	156,369	135,841
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding	0	0
Common stock, $0.001 par value; 110,000,000 shares authorized; 38,971,146 and 38,309,144 shares issued; and 36,820,048 and 36,158,046 shares outstanding, respectively	39	38
Treasury Stock, at cost; 2,151,098 shares	(128,892)	(128,892)
Additional paid-in capital	537,061	476,117
Retained earnings	259,045	193,221
Accumulated other comprehensive gain (loss)	222	(3,411)
Total stockholders’ equity	667,475	537,073
Total liabilities and stockholders’ equity	$ 823,844	$ 672,914

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

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


		December 31,
		2023						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	$	161,233	$	—	$	161,233	$	73,368	$	—	$	73,368
Investments:
Certificates of deposit	Level 1	6,805		—		6,805		6,813		—		6,813
Marketable securities:
Commercial paper	Level 2	48,860		694		49,554		44,224		375		44,599

		$	216,898	$	694	$	217,592	$	124,405	$	375	$	124,780

Other Income and Expense

12 Months Ended

Dec. 31, 2023

Other Income and Expenses [Abstract]

Other Income and Expense

Other income (expense), net included the following:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Investment income	$	7,660	$	1,670	$	278
Realized gain (loss) from foreign currency on cash and investments held	1,726		(1,026)		(1,456)
Other expense, net	(1,071)		(502)		(366)
Total other income (expense), net	$	8,315	$	142	$	(1,544)

Commitments and Contingencies - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 3,123	$ 3,087	$ 3,089
Variable lease cost	3,771	3,576	3,660
Total Lease expense	$ 6,894	$ 6,663	$ 6,749

Cover - USD ($) $ in Billions	12 Months Ended
Cover - USD ($) $ in Billions	Dec. 31, 2023	Feb. 13, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-34702
Entity Registrant Name	SPS COMMERCE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-2015127
Entity Address, Address Line One	333 South Seventh Street
Entity Address, Address Line Two	Suite 1000
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55402
City Area Code	612
Local Phone Number	435-9400
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	SPSC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Document Financial Statement Error Correction	false
Entity Public Float			$ 7.0
Entity Common Stock, Shares Outstanding		36,973,665
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on May 16, 2024 (the “2024 Proxy Statement”), which is expected to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference in Part III of this Annual Report on Form 10-K.
Entity Central Index Key	0001092699
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

Goodwill and Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 154,071	$ 120,711
Accumulated Amortization	(47,766)	(32,189)
Foreign Currency Translation	1,039	(170)
Total future amortization	$ 107,344	$ 88,352
Weighted Average Remaining Amortization Period	6 years 1 month 6 days	6 years 4 months 24 days
Subscriber relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 105,228	$ 80,101
Accumulated Amortization	(32,097)	(22,255)
Foreign Currency Translation	724	(171)
Total future amortization	$ 73,855	$ 57,675
Weighted Average Remaining Amortization Period	6 years 7 months 6 days	6 years 9 months 18 days
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 48,843	$ 40,610
Accumulated Amortization	(15,669)	(9,934)
Foreign Currency Translation	315	1
Total future amortization	$ 33,489	$ 30,677
Weighted Average Remaining Amortization Period	5 years	5 years 4 months 24 days

Commitments and Contingencies - Schedule of Supplemental Balance Sheet Information Related to Leases (Details)	Dec. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Weighted-average remaining lease term	3 years 1 month 6 days	3 years 10 months 24 days
Weighted-average discount rate	4.00%	4.00%

Retirement Contributions (Tables)

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Schedule of Total Contribution to the Plan

Our total contributions were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Retirement contributions	$	6,627	$	5,386	$	4,790

Stock-Based Compensation - PSU, RSU, RSA, and DSU (Details) - PSUs, RSUs, RSAs and DSUs - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of Shares
Beginning balance (in shares)	712,158	702,160	738,422
Granted (in shares)	416,377	312,880	314,290
Vested and common stock issued (in shares)	(344,087)	(276,872)	(331,669)
Forfeited (in shares)	(11,034)	(26,010)	(18,883)
Ending balance (in shares)	773,414	712,158	702,160
Weighted Average Grant Date Fair Value ($/share)
Beginning balance (in dollars per share)	$ 103.93	$ 78.03	$ 52.37
Granted (in dollars per share)	163.55	126.44	101.85
Vested and common stock issued (in dollars per share)	77.52	64.12	44.14
Forfeited (in dollars per share)	122.97	99.37	66.35
Ending balance (in dollars per share)	$ 147.50	$ 103.93	$ 78.03

Net Income Per Share - Schedule of Anti-dilutive Common Shares Excluded from Calculation of Diluted Net Income Per Share (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Anti-dilutive shares (in shares)	36	75	31

Business Acquisitions (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:




(in thousands)	Acquisition Date Estimated Fair Value as of September 30, 2023		Adjustment		Acquisition Date Estimated Fair Value as of December 31, 2023
Cash paid	$	73,558	$	—	$	73,558




Estimated fair value of assets and liabilities acquired:
Cash	$	4,859	$	—	$	4,859
Accounts receivable	1,347		(80)		1,267
Other assets	2,981		659		3,640
Intangible assets
Subscriber relationships	18,183		11,137		29,320
Developed technology	12,122		(4,279)		7,843

Current liabilities	(3,606)		(232)		(3,838)
Deferred revenue	(6,421)		—		(6,421)
Deferred income tax liabilities, net	(6,112)		(1,757)		(7,869)
Total fair value of assets and liabilities acquired	$	23,353	$	5,448	$	28,801

Goodwill	$	50,205	$	(5,448)	$	44,757

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

The following table summarizes the estimated useful lives for each acquired intangible asset, each of which are subject to finalization:


			Estimated Useful Life

Subscriber relationships			8.0 years
Developed technology			6.0 years

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

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


	Year Ended December 31,
(in thousands)	2023		2022		2021
Cost of revenues	$	10,169	$	8,684	$	6,760
Operating expenses
Sales and marketing	9,774		7,590		6,248
Research and development	7,200		5,634		4,384
General and administrative	18,365		11,491		10,182
	$	45,508	$	33,399	$	27,574

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


	Year Ended December 31,
(in thousands)	2023		2022		2021
Stock options	$	1,947	$	1,903	$	2,057
PSUs	11,886		7,509		6,417
RSUs & DSUs	26,185		19,282		15,388
RSAs	472		437		434
ESPP	2,488		2,144		1,391
401(k) stock match	2,530		2,124		1,887
	$	45,508	$	33,399	$	27,574

Stock Option Activity

Our stock option activity was as follows:


	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding at December 31, 2020	944,886	36.71
Granted	53,223	105.53
Exercised	(311,378)	30.10
Forfeited	(8,081)	68.62
Outstanding at December 31, 2021	678,650	44.76
Granted	56,430	122.59
Exercised	(164,393)	29.86
Forfeited	(7,990)	92.48
Outstanding at December 31, 2022	562,697	56.24
Granted	42,215	152.68
Exercised	(254,353)	38.75
Forfeited	(3,737)	129.43
Outstanding at December 31, 2023	346,822	80.02

Summary of Additional Information Related to Stock Options

The table below presents additional information related to our stock options:


	Year Ended December 31,
(in thousands, except per share data)	2023		2022		2021
Fair value of options vested	$	1,966	$	1,996	$	2,509
Intrinsic value of options exercised	31,227		16,705		27,713
Intrinsic value of options outstanding	39,474		40,692		66,235
Weighted-average fair value per share of options granted	56.47		41.34		31.31

Weighted Average Fair Value Per Share of Options Granted, Assumptions

The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Year Ended December 31,
	2023		2022		2021
Life (in years)	4.2		4.3		4.4
Volatility	39	%	38	%	35	%
Dividend yield	—		—		—
Risk-free interest rate	4.00	%	2.50	%	0.59	%

PSU, RSU, RSA, and DSU

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


	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding at December 31, 2020	738,422	52.37
Granted	314,290	101.85
Vested and common stock issued	(331,669)	44.14
Forfeited	(18,883)	66.35
Outstanding at December 31, 2021	702,160	78.03
Granted	312,880	126.44
Vested and common stock issued	(276,872)	64.12
Forfeited	(26,010)	99.37
Outstanding at December 31, 2022	712,158	103.93
Granted	416,377	163.55
Vested and common stock issued	(344,087)	77.52
Forfeited	(11,034)	122.97
Outstanding at December 31, 2023	773,414	147.50

Summary of ESPP Activity

Our ESPP activity was as follows:


	Year Ended December 31,
(in thousands, except share data)	2023		2022		2021
Amounts for shares purchased	$	8,114	$	6,676	$	4,737
Shares purchased	63,641		70,107		55,726

Fair Value Estimation of Common Stock, 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:


	Year Ended December 31,
	2023		2022		2021
Life (in years)	0.5		0.5		0.5
Volatility	36	%	42	%	32	%
Dividend yield	—		—		—
Risk-free interest rate	4.92	%	1.27	%	0.07	%

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Contributions to Foundation

Our contributions to the Foundation were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Foundation contributions	$	2,300	$	2,750	$	2,400

Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [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:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Balance, beginning of year	$	3,066	$	4,249	$	4,233
Provision for credit losses	5,707		3,359		4,717
Write-offs, net of recoveries	(5,453)		(4,542)		(4,790)
Initial allowance for business combination acquired receivables	—		—		89
Balance, end of year	$	3,320	$	3,066	$	4,249

General - Summary of Estimated Useful Lives of Property and Equipment (Details)	Dec. 31, 2023
Internally developed software
Schedule of Accounting Policies [Line Items]
Estimated useful lives of property and equipment	3 years
Computer equipment
Schedule of Accounting Policies [Line Items]
Estimated useful lives of property and equipment	3 years
Office equipment and furniture \| Minimum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of property and equipment	5 years
Office equipment and furniture \| Maximum
Schedule of Accounting Policies [Line Items]
Estimated useful lives of property and equipment	7 years

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 121,151	$ 107,816
Less: accumulated depreciation and amortization	(85,108)	(72,358)
Total property and equipment, net	36,043	35,458
Internally developed software
Property, Plant and Equipment [Line Items]
Property and equipment, cost	60,396	49,994
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, cost	34,402	30,310
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, cost	15,387	16,531
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, cost	$ 10,966	$ 10,981

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Leases

We are engaged in a lease agreement for our current headquarters located in Minneapolis, Minnesota where we lease approximately 198,000 square feet under an agreement that expires in 2027. The lease also has two options to extend the term for five years each at a market rate determined in accordance with the lease. We lease other smaller facilities across the U.S. and international locations.

The components of lease expense were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Operating lease cost	$	3,123	$	3,087	$	3,089
Variable lease cost	3,771		3,576		3,660
	$	6,894	$	6,663	$	6,749

Supplemental cash flow information related to leases was as follows:


	December 31,
(in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,022	$	4,639
Right-of-use assets obtained in exchange for operating lease liabilities	1,147		934

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


	December 31, 2023		December 31, 2022
Weighted-average remaining lease term	3.1 years		3.9 years
Weighted-average discount rate	4.0	%	4.0	%

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


(in thousands)
2024	$	4,910
2025	4,694
2026	3,947
2027	1,299
2028	25
Thereafter	76
Total future gross payments	14,951
Less: imputed interest	(922)
Total operating lease liabilities	$	14,029

Purchase Commitments

We have entered into separate noncancelable agreements with computing infrastructure, productivity software, customer relationship management, and performance and security data analytics vendors for services through 2026. At December 31, 2023, our remaining purchase commitments and estimated purchase timing were as follows:


(in thousands)
2024	$	14,536
2025	14,186
2026	6,342
Total remaining purchase commitments	$	35,064

Contingencies

We may be involved in various claims and legal actions in the normal course of business. We believe that the outcome of any such claim or legal action is not expected to have a material adverse effect on our financial position or results of operations.

Revenue (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Summary of Revenues by Revenue Stream

We derive our revenues from the following revenue streams:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Recurring revenues:
Fulfillment	$	436,702	$	364,148	$	306,851
Analytics	51,703		46,894		42,674
Other	13,608		8,005		5,481
Recurring Revenues	502,013		419,047		355,006
One-time revenues	34,897		31,828		30,270
Total revenue	$	536,910	$	450,875	$	385,276

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:


	Year Ended December 31,
(in thousands)	2023		2022
Balance, beginning of year	$	14,999	$	14,459
Invoiced set-up fees	19,146		15,457
Recognized set-up fees	(16,542)		(14,917)
Balance, end of year	$	17,603	$	14,999

Deferred Costs - Summary of Deferred Costs Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Deferred Costs [Roll Forward]
Balance, beginning of year	$ 70,179	$ 59,720
Incurred deferred costs	89,012	72,509
Amortized deferred costs	(76,441)	(62,050)
Balance, end of year	$ 82,750	$ 70,179

Stock-Based Compensation - Fair Value Estimation of Common Stock, Assumptions (Details) - Employee Stock Purchase Plan	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Life (in years)	6 months	6 months	6 months
Volatility	36.00%	42.00%	32.00%
Dividend yield	0.00%	0.00%	0.00%
Risk-free interest rate	4.92%	1.27%	0.07%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Allowance for Credit Losses

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


	Year Ended December 31,
(in thousands)	2023		2022		2021
Balance, beginning of year	$	3,066	$	4,249	$	4,233
Provision for credit losses	5,707		3,359		4,717
Write-offs, net of recoveries	(5,453)		(4,542)		(4,790)
Initial allowance for business combination acquired receivables	—		—		89
Balance, end of year	$	3,320	$	3,066	$	4,249

Stockholders' Equity - Summary of Stock Repurchase Activity by Year (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Equity [Abstract]
Number of shares repurchased (in shares)	0	361,745	176,103
Shares repurchased cost	$ 0	$ 43,215	$ 20,430
Average price per repurchased share (in dollars per share)	$ 0	$ 119.46	$ 116.01

Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions

The SPS Commerce Foundation (the “Foundation”) is a Minnesota non-profit organization exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code. The Foundation was formed in 2015 to engage in, advance, support, promote and administer charitable activities. The directors of the Foundation are also our executive officers. These directors receive no compensation from the Foundation or us for the management services performed for the Foundation. The Foundation is not a subsidiary of ours and the financial results of the Foundation are not consolidated with our financial statements. We have no current legal obligations for future commitments to the Foundation. Our contributions to the Foundation were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Foundation contributions	$	2,300	$	2,750	$	2,400

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Allowance for Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of year	$ 3,066	$ 4,249	$ 4,233
Provision for credit losses	5,707	3,359	4,717
Write-offs, net of recoveries	(5,453)	(4,542)	(4,790)
Initial allowance for business combination acquired receivables	0	0	89
Balance, end of year	$ 3,320	$ 3,066	$ 4,249

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Components of Lease Expense

The components of lease expense were as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Operating lease cost	$	3,123	$	3,087	$	3,089
Variable lease cost	3,771		3,576		3,660
	$	6,894	$	6,663	$	6,749

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:


	December 31,
(in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,022	$	4,639
Right-of-use assets obtained in exchange for operating lease liabilities	1,147		934

Schedule of Supplemental Balance Sheet Information Related to Leases

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


	December 31, 2023		December 31, 2022
Weighted-average remaining lease term	3.1 years		3.9 years
Weighted-average discount rate	4.0	%	4.0	%

Schedule of Future Minimum Payments Under Operating Leases

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


(in thousands)
2024	$	4,910
2025	4,694
2026	3,947
2027	1,299
2028	25
Thereafter	76
Total future gross payments	14,951
Less: imputed interest	(922)
Total operating lease liabilities	$	14,029

Summary of Remaining Purchase Commitments and Estimated Purchase Timing

At December 31, 2023, our remaining purchase commitments and estimated purchase timing were as follows:


(in thousands)
2024	$	14,536
2025	14,186
2026	6,342
Total remaining purchase commitments	$	35,064

Geographic Information (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Percentage of Domestic Revenue and Domestic Income Before Income Taxes


	Year Ended December 31,
	2023		2022		2021
Domestic revenue	84	%	84	%	84	%
Domestic income before income taxes	94	%	91	%	89	%

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

Summary of Percentage of Property and Equipment Net Located at Subsidiary and Office Locations Outside of Unites States

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


	December 31,
	2023		2022
International property and equipment	15	%	13	%

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Class of Treasury Stock

Our board of directors has authorized multiple non-concurrent programs to repurchase our common stock. Details of the programs and activity thereunder through December 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
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		2,992		N/A		$	47,008

The share repurchase activity by period was as follows:


	Year Ended December 31,
(in thousands, except shares and per share amounts)	2023		2022		2021
Number of shares repurchased	—		361,745		176,103
Shares repurchased cost	$	—	$	43,215	$	20,430
Average price per repurchased share	$	—	$	119.46	$	116.01

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 45,508	$ 33,399	$ 27,574
Stock options
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,947	1,903	2,057
PSUs
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	11,886	7,509	6,417
RSUs & DSUs
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	26,185	19,282	15,388
RSAs
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	472	437	434
ESPP
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	2,488	2,144	1,391
401(k) stock match
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	2,530	2,124	1,887
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	10,169	8,684	6,760
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	9,774	7,590	6,248
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	7,200	5,634	4,384
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 18,365	$ 11,491	$ 10,182

Income Taxes - Significant Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred income tax assets
Net operating loss and credit carryforwards	$ 10,212	$ 9,970
Stock-based compensation expense	6,304	5,084
Accrued expenses	6,067	4,469
Operating lease liabilities	3,470	4,384
Research and development capitalized	17,007	9,591
Other deferred income tax assets	2,705	2,408
Gross deferred income tax assets	45,765	35,906
Less: valuation allowance	(2,545)	(1,873)
Total net deferred income tax assets	43,220	34,033
Deferred income tax liabilities
Deferred costs	(20,672)	(17,696)
Right-of-use assets	(1,884)	(2,338)
Depreciation and amortization	(28,066)	(20,282)
Other deferred income tax liabilities	(1,065)	(909)
Total deferred income tax liabilities	(51,687)	(41,225)
Net deferred income tax liabilities	$ (8,467)	$ (7,192)

Commitments and Contingencies - Narrative (Details) ft² in Thousands	Dec. 31, 2023 ft² option
Commitments and Contingencies Disclosure [Abstract]
Current leased space \| ft²	198
Number of extension options \| option	2
Lease extension period	5 years

Deferred Costs

12 Months Ended

Dec. 31, 2023

Deferred Costs [Abstract]

Deferred Costs

The deferred costs activity was as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Balance, beginning of year	$	70,179	$	59,720
Incurred deferred costs	89,012		72,509
Amortized deferred costs	(76,441)		(62,050)
Balance, end of year	$	82,750	$	70,179

Retirement Contributions - Narrative (Details)	12 Months Ended
Retirement Contributions - Narrative (Details)	Dec. 31, 2023
Retirement Benefits [Abstract]
Maximum allowable contribution by employee percentage	80.00%
Defined benefit plan employer matching contribution percent	50.00%
Maximum annual contribution per employee, percent	6.00%

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Our provision for income taxes was comprised of the following components:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Current
Federal	$	20,168	$	13,881	$	1,559
State	4,221		4,149		1,890
Foreign	2,103		1,990		1,610
Deferred
Federal	(5,425)		(2,530)		4,294
State	(390)		(751)		(88)
Foreign	(938)		(549)		(321)
	$	19,739	$	16,190	$	8,944

Our income tax expense differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:


	Year Ended December 31,
	2023		2022		2021
U.S. statutory federal income tax rate	21.0	%	21.0	%	21.0	%
Increase (decrease) resulting from:
U.S. state income taxes, net of federal tax effect	5.1		4.6		4.5
Tax impact of stock activity	(5.6)		(4.7)		(12.8)
Nondeductible compensation	4.7		3.5		5.0
Research and development credit	(1.5)		(1.5)		(1.1)
Foreign derived intangible income	(1.3)		(1.4)		(1.3)
Other	0.7		1.2		1.4
Effective tax rate	23.1	%	22.7	%	16.7	%

The significant components of our deferred income tax assets and liabilities were as follows:


	December 31,
(in thousands)	2023		2022
Deferred income tax assets
Net operating loss and credit carryforwards	$	10,212	$	9,970
Stock-based compensation expense	6,304		5,084
Accrued expenses	6,067		4,469
Operating lease liabilities	3,470		4,384
Research and development capitalized	17,007		9,591
Other deferred income tax assets	2,705		2,408
Gross deferred income tax assets	45,765		35,906
Less: valuation allowance	(2,545)		(1,873)
Total net deferred income tax assets	$	43,220	$	34,033

Deferred income tax liabilities
Deferred costs	$	(20,672)	$	(17,696)
Right-of-use assets	(1,884)		(2,338)
Depreciation and amortization	(28,066)		(20,282)
Other deferred income tax liabilities	(1,065)		(909)
Total deferred income tax liabilities	(51,687)		(41,225)
Net deferred income tax liabilities	$	(8,467)	$	(7,192)

As of December 31, 2023, we had net operating loss carryforwards of $28.9 million for U.S. federal tax purposes, $5.6 million for state tax purposes, and $9.8 million for foreign tax purposes. If not utilized, the loss carryforwards will expire between 2024 and 2036 for federal tax purposes, between 2024 and 2043 for state tax purposes, and will not expire for foreign tax purposes. Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. As of December 31, 2023, all $28.9 million of our federal net operating loss carryforwards are subject to Section 382 limitations, of which we believe $6.5 million will expire unused due to Section 382 limitations. Accordingly, our deferred income tax assets are reported net of the Section 382 limitations.

We are subject to income taxes for U.S. federal and various state and international jurisdictions. We are generally subject to U.S. federal and state tax examinations for most prior tax years due to our net operating loss and R&D credit carryforwards and the utilization of the carryforwards in years still open under statute.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Net Income Per Share

12 Months Ended

Dec. 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:


	Year Ended December 31,
(in thousands, except per share amounts)	2023		2022		2021
Numerator
Net income	$	65,824	$	55,134	$	44,597
Denominator
Weighted average common shares outstanding, basic	36,646		36,117		35,928
Options to purchase common stock and ESPP	265		382		529
PSUs, RSUs, RSAs, and DSUs	564		454		505
Weighted average common shares outstanding, diluted	37,475		36,953		36,962
Net income per share
Basic	$	1.80	$	1.53	$	1.24
Diluted	$	1.76	$	1.49	$	1.21

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:


	Year Ended December 31,
(in thousands)	2023	2022	2021
Anti-dilutive shares	36	75	31

Summary of Percentage of Property and Equipment Net Located at Subsidiary and Office Locations Outside of Unites States (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property and Equipment \| Geographic Concentration Risk \| Foreign
Property, Plant and Equipment [Line Items]
Concentration risk, percentage	15.00%	13.00%

Stockholders' Equity - Share Repurchase Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Stockholders Equity [Line Items]
Share Value Repurchased	$ 128,892	$ 128,892
Common Stock \| 2019 Program
Schedule Of Stockholders Equity [Line Items]
Share Value Authorized for Repurchase	50,000
Share Value Repurchased	29,611
Unused & Expired Share Repurchase Value	20,389
Common Stock \| 2021 Program
Schedule Of Stockholders Equity [Line Items]
Share Value Authorized for Repurchase	50,000
Share Value Repurchased	49,992
Unused & Expired Share Repurchase Value	8
Common Stock \| 2022 Program
Schedule Of Stockholders Equity [Line Items]
Share Value Authorized for Repurchase	50,000
Share Value Repurchased	2,992
Share Value Available for Future Repurchase	$ 47,008

Stock-Based Compensation - Weighted Average Fair Value Per Share of Options Granted, Assumptions (Details) - Stock options	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Life (in years)	4 years 2 months 12 days	4 years 3 months 18 days	4 years 4 months 24 days
Volatility	39.00%	38.00%	35.00%
Dividend yield	0.00%	0.00%	0.00%
Risk-free interest rate	4.00%	2.50%	0.59%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Components of Computation of Basic and Diluted Net Income Per Share

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


	Year Ended December 31,
(in thousands, except per share amounts)	2023		2022		2021
Numerator
Net income	$	65,824	$	55,134	$	44,597
Denominator
Weighted average common shares outstanding, basic	36,646		36,117		35,928
Options to purchase common stock and ESPP	265		382		529
PSUs, RSUs, RSAs, and DSUs	564		454		505
Weighted average common shares outstanding, diluted	37,475		36,953		36,962
Net income per share
Basic	$	1.80	$	1.53	$	1.24
Diluted	$	1.76	$	1.49	$	1.21

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:


	Year Ended December 31,
(in thousands)	2023	2022	2021
Anti-dilutive shares	36	75	31

Business Acquisitions

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions

TIE Kinetix

Effective September 13, 2023, we acquired all of the outstanding equity ownership interests of TIE Kinetix Holding B.V. ("TIE Kinetix"), a leading provider of supply chain digitalization including EDI and e-invoicing in Europe and the United States. Pursuant to the definitive agreement, the purchase price was €63.9 million ($68.7 million at the September 13, 2023 exchange rate), net of cash acquired. The purchase accounting for the acquisition has not been finalized as of December 31, 2023; provisional amounts are primarily related to intangible assets and tax components. We expect to finalize the allocation of the purchase price within the one-year measurement period following the acquisition. The goodwill associated with the acquisition is not deductible for income tax purposes.

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 following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:




(in thousands)	Acquisition Date Estimated Fair Value as of September 30, 2023		Adjustment		Acquisition Date Estimated Fair Value as of December 31, 2023
Cash paid	$	73,558	$	—	$	73,558




Estimated fair value of assets and liabilities acquired:
Cash	$	4,859	$	—	$	4,859
Accounts receivable	1,347		(80)		1,267
Other assets	2,981		659		3,640
Intangible assets
Subscriber relationships	18,183		11,137		29,320
Developed technology	12,122		(4,279)		7,843

Current liabilities	(3,606)		(232)		(3,838)
Deferred revenue	(6,421)		—		(6,421)
Deferred income tax liabilities, net	(6,112)		(1,757)		(7,869)
Total fair value of assets and liabilities acquired	$	23,353	$	5,448	$	28,801

Goodwill	$	50,205	$	(5,448)	$	44,757

The following table summarizes the estimated useful lives for each acquired intangible asset, each of which are subject to finalization:


			Estimated Useful Life

Subscriber relationships			8.0 years
Developed technology			6.0 years

Other Acquisition Activity

In the year ended December 31, 2023, we had other acquisition activity resulting in a total purchase price of $1.5 million, paid in cash. Assets acquired were primarily comprised of developed technology and customer relationships, totaling $0.9 million of estimated fair value. The remainder of the consideration transferred, $0.6 million, was allocated to goodwill.

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 was $49.1 million, including estimated post-closing adjustments. In the year ended December 31, 2023, provisional amounts were adjusted by $3.1 million, primarily relating to a $3.9 million decrease in estimated value of intangible assets and the corresponding $1.0 million change to the deferred tax position, with the offsets to goodwill. The purchase accounting was finalized in the year ended December 31, 2023.

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 was $45.1 million, including post-closing adjustments. In the year ended December 31, 2023, provisional amounts were adjusted by $1.6 million, primarily relating to a $1.5 million decrease in the estimated value of deferred income tax assets, with the corresponding offset to goodwill. The purchase accounting was finalized in the year ended December 31, 2023.

Business Acquisitions - Schedule of Estimated Fair Value of Purchased Intangible Assets and their Estimated Useful Lives (Details) - TIE Kinetix Holding B.V.	Dec. 31, 2023
Subscriber relationships
Business Acquisition [Line Items]
Estimated useful lives of intangible assets	8 years
Developed technology
Business Acquisition [Line Items]
Estimated useful lives of intangible assets	6 years

Fair Value Measurements (Tables)

12 Months Ended

Dec. 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:


		December 31,
		2023						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	$	161,233	$	—	$	161,233	$	73,368	$	—	$	73,368
Investments:
Certificates of deposit	Level 1	6,805		—		6,805		6,813		—		6,813
Marketable securities:
Commercial paper	Level 2	48,860		694		49,554		44,224		375		44,599

		$	216,898	$	694	$	217,592	$	124,405	$	375	$	124,780

Property and Equipment, Net - Schedule of Depreciation and Amortization Expense of Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 18,631	$ 16,421	$ 14,788

Net Income Per Share - Components and Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Numerator
Net income	$ 65,824	$ 55,134	$ 44,597
Weighted average common shares used to compute net income per share
Weighted average common shares outstanding, basic (in shares)	36,646	36,117	35,928
Options to purchase common stock and ESPP (in shares)	265	382	529
PSUs, RSUs, RSAs, and DSUs (n shares)	564	454	505
Weighted average common shares outstanding, diluted (in shares)	37,475	36,953	36,962
Net income per share
Basic (in dollars per share)	$ 1.80	$ 1.53	$ 1.24
Diluted (in dollars per share)	$ 1.76	$ 1.49	$ 1.21

Stock-Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

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 PSUs, RSAs, RSUs, and DSUs, to employees, non-employee directors and other consultants who provide services to us. We also provide an ESPP and 401(k) stock 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 December 31, 2023 there were 12.7 million shares available for grant under approved equity compensation plans.

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


	Year Ended December 31,
(in thousands)	2023		2022		2021
Cost of revenues	$	10,169	$	8,684	$	6,760
Operating expenses
Sales and marketing	9,774		7,590		6,248
Research and development	7,200		5,634		4,384
General and administrative	18,365		11,491		10,182
	$	45,508	$	33,399	$	27,574

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


	Year Ended December 31,
(in thousands)	2023		2022		2021
Stock options	$	1,947	$	1,903	$	2,057
PSUs	11,886		7,509		6,417
RSUs & DSUs	26,185		19,282		15,388
RSAs	472		437		434
ESPP	2,488		2,144		1,391
401(k) stock match	2,530		2,124		1,887
	$	45,508	$	33,399	$	27,574

As of December 31, 2023, there was $52.0 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 2.4 years.

Stock Options

Options generally vest over four years and, upon vesting, the holder is given the option to purchase shares of common stock at a specific strike price until expiration, which is generally seven years from the grant date.

Our stock option activity was as follows:


	Options (#)	Weighted Average Exercise Price ($/share)
Outstanding at December 31, 2020	944,886	36.71
Granted	53,223	105.53
Exercised	(311,378)	30.10
Forfeited	(8,081)	68.62
Outstanding at December 31, 2021	678,650	44.76
Granted	56,430	122.59
Exercised	(164,393)	29.86
Forfeited	(7,990)	92.48
Outstanding at December 31, 2022	562,697	56.24
Granted	42,215	152.68
Exercised	(254,353)	38.75
Forfeited	(3,737)	129.43
Outstanding at December 31, 2023	346,822	80.02

Of the total outstanding options at December 31, 2023, 0.3 million were exercisable. The outstanding and exercisable options had a weighted average exercise price of $67.07 per share and a weighted average remaining contractual life of 3.1 years.

The table below presents additional information related to our stock options:


	Year Ended December 31,
(in thousands, except per share data)	2023		2022		2021
Fair value of options vested	$	1,966	$	1,996	$	2,509
Intrinsic value of options exercised	31,227		16,705		27,713
Intrinsic value of options outstanding	39,474		40,692		66,235
Weighted-average fair value per share of options granted	56.47		41.34		31.31

The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Year Ended December 31,
	2023		2022		2021
Life (in years)	4.2		4.3		4.4
Volatility	39	%	38	%	35	%
Dividend yield	—		—		—
Risk-free interest rate	4.00	%	2.50	%	0.59	%

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

In 2023, 2022, and 2021 we granted PSU awards with certain target performance levels. 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. Expense is recognized on a straight-line basis over the performance period, regardless of whether the market condition is satisfied as the likelihood of the market condition being met is included in the fair-value measurement of the award. In 2023, PSU awards granted in 2020 were earned and vested at the maximum performance level and less than 0.2 million shares of common stock were issued.

RSUs generally vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock.

RSAs vest over one year and, upon vesting, the holder is entitled to receive shares of our common stock. In lieu of RSAs, a participant may elect to receive DSUs with one year vesting, but the participant directs delayed receipt of common shares of up to ten years after the end of service to us.

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


	#	Weighted Average Grant Date Fair Value ($/share)
Outstanding at December 31, 2020	738,422	52.37
Granted	314,290	101.85
Vested and common stock issued	(331,669)	44.14
Forfeited	(18,883)	66.35
Outstanding at December 31, 2021	702,160	78.03
Granted	312,880	126.44
Vested and common stock issued	(276,872)	64.12
Forfeited	(26,010)	99.37
Outstanding at December 31, 2022	712,158	103.93
Granted	416,377	163.55
Vested and common stock issued	(344,087)	77.52
Forfeited	(11,034)	122.97
Outstanding at December 31, 2023	773,414	147.50

The number of PSUs, RSUs, RSAs, and DSUs outstanding at December 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 agreements.

Employee Stock Purchase Plan

Our ESPP activity was as follows:


	Year Ended December 31,
(in thousands, except share data)	2023		2022		2021
Amounts for shares purchased	$	8,114	$	6,676	$	4,737
Shares purchased	63,641		70,107		55,726

A total of 1.7 million shares of common stock are remaining for issuance under the plan at December 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:


	Year Ended December 31,
	2023		2022		2021
Life (in years)	0.5		0.5		0.5
Volatility	36	%	42	%	32	%
Dividend yield	—		—		—
Risk-free interest rate	4.92	%	1.27	%	0.07	%

Deferred Costs (Tables)

12 Months Ended

Dec. 31, 2023

Deferred Costs [Abstract]

Summary of Deferred Costs Activity

The deferred costs activity was as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Balance, beginning of year	$	70,179	$	59,720
Incurred deferred costs	89,012		72,509
Amortized deferred costs	(76,441)		(62,050)
Balance, end of year	$	82,750	$	70,179