SPS Commerce, Inc.

What they do

SPS Commerce operates a network that lets companies connect once and transact with thousands of trading partners without negotiating standards, building integrations, or maintaining compliance logic. The company maintains compliance rules, connection protocols and data standards while its teams handle onboarding, monitor transactions, resolve exceptions and optimize operations. Its products include Fulfillment, Analytics, Assortment and Relationship Management, plus one-time professional services and testing and certification. Recurring revenue accounted for 96% of total revenue in 2025, and no customer represented more than 1% of total revenue.

Revenue drivers

• Fulfillment — Streamlines order-to-invoice supply chain operations; enables customers to send and receive order data with trading partners, with real-time visibility across order channels.
• Analytics — Manages sell-through data from customers' business partners through data acquisition, cleansing, normalization and delivery, with pre-built dashboards and custom reports.
• Recurring subscription revenue — Active contracts under which customers regularly pay subscription-based and recurring fees; represented 96% of total 2025 revenue of $751.5 million.
• Other products and services — Includes Assortment (item data translation), Relationship Management (supplier onboarding and score carding) and one-time professional services, testing and certification.

Recent performance

Second quarter 2026 revenue was $197.8 million, up 6% from $187.4 million in the second quarter of 2025, with recurring revenue also growing 6%. Net income was $6.9 million, or $0.19 per diluted share, versus $19.7 million, or $0.52 per diluted share, a year earlier, while non-GAAP income was $46.4 million, or $1.27 per diluted share. Adjusted EBITDA rose 19% to $66.6 million, and the company repurchased $51.2 million of shares in the quarter. The company divested its 3P Revenue Recovery business on June 30, 2026, and now classifies all recurring revenue customers as 1P.

Strategy

Management plans to grow by penetrating the supply chain management market further, increasing revenue from existing customers as their businesses grow, expanding distribution channels, and expanding international presence. The company intends to selectively pursue acquisitions that add customers, expand into new regions, or add new functionalities. It is rolling out MAX, described as agentic capabilities embedded within the SPS network, to all SPS Fulfillment customers after a beta that reportedly delivered hundreds of thousands of dollars in savings to individual customers in three months. CEO Chad Collins cited AI capabilities, 25 years of proprietary data, domain expertise and network access as differentiators.

Risks

• Customer and product growth dependence — Revenue growth depends on regularly adding new customers, selling additional products to existing customers, and customers increasing their use of subscribed products.
• Competitive environment — The company operates in a very competitive and rapidly changing environment where new risk factors emerge from time to time.
• Customer concentration — No customer represented more than 1% of total revenue in 2025, 2024 or 2023, which limits exposure to any single customer but also means growth requires broad customer additions.
• Divestiture and guidance impact — The June 30, 2026 divestiture of the 3P Revenue Recovery business reduces expected second-half 2026 revenue by approximately $10.5 million, though it is expected to be neutral to Adjusted EBITDA.

Outlook

For fiscal year 2026, management guides revenue of $788.4 million to $793.4 million, representing 5% to 6% growth over 2025, with net income per diluted share of $2.24 to $2.33 and non-GAAP income per diluted share of $4.84 to $4.93. Adjusted EBITDA is expected to be $264.6 million to $269.1 million, a 34% margin at the midpoint and an increase of approximately 300 basis points versus full year 2025. Third quarter 2026 revenue guidance is $196.3 million to $198.3 million, with Adjusted EBITDA of $67.4 million to $69.4 million. Guidance reflects an approximately $10.5 million second-half revenue reduction from the 3P Revenue Recovery divestiture.