SPS Commerce (SPSC) Tops Q1 EPS by 6c, Revenues Beat; Offers 2Q EPS/Revenue Guidance Below Consensus, Withdraws FY20 Views

SPS Commerce (NASDAQ: SPSC) reported Q1 EPS of $0.38, $0.06 better than the analyst estimate of $0.32. Revenue for the quarter came in at $74.2 million versus the consensus estimate of $73.79 million.

“SPS Commerce plays a mission-critical role in the global supply chain. Our solutions are keeping trading partners connected, especially now during this time of crisis and disruption,” said Archie Black, President and CEO of SPS Commerce. “We’d like to thank our employees and our partners who delivered world class service as they responded to the needs of retailers impacted by macroeconomic effects of the pandemic, executing remote retail automation better and faster than ever. We remain fully committed to provide unwavering support to the suppliers and retailers that serve our communities in these challenging times.”

“We are pleased with our first quarter results as we continued to deliver uninterrupted, full-service solutions remotely, to new and existing customers worldwide. With proven operational leverage and a strong balance sheet, we are confident that SPS Commerce is positioned to overcome near term uncertainties. We expect the current supply chain dynamics to amplify the need for e-commerce and EDI solutions in the long term, and we believe SPS Commerce is uniquely positioned to expand on its market leadership.” said Kim Nelson, CFO of SPS Commerce.

GUIDANCE:

SPS Commerce sees Q2 2020 EPS of $0.29-$0.31, versus the consensus of $0.32. SPS Commerce sees Q2 2020 revenue of $73.8-74.8 million, versus the consensus of $75 million.

For the second quarter of 2020, revenue is expected to be in the range of $73.8 million to $74.8 million. Second quarter net income per diluted share is expected to be in the range of $0.17 to $0.19 with fully diluted weighted average shares outstanding of approximately 36.2 million shares. Non-GAAP income per diluted share is expected to be in the range of $0.29 to $0.31. Adjusted EBITDA is expected to be in the range of $19.0 million to $20.0 million. Non-cash, share-based compensation expense is expected to be approximately $5.1 million, depreciation expense is expected to be approximately $3.5 million and amortization expense is expected to be approximately $1.4 million.

Due to uncertainties related to the macroeconomic impact of the COVID-19 pandemic, we are withdrawing 2020 guidance until we can ascertain the scale of the impact on retail dynamics, and our business. However, given our history of strong operating leverage and the resilience of our SaaS business model, we remain confident in our ability to expand adjusted EBITDA margin in 2020.

For modeling purposes, we expect stock based compensation expense for the year of approximately $19.7 million, depreciation expense of approximately $13.8 million, and amortization expense of approximately $5.6 million.

We will continue to monitor the macroeconomic impact on retail dynamics and reassess our visibility for the full year at the end of the second quarter.

For earnings history and earnings-related data on SPS Commerce (SPSC) click here.

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