SPS Commerce (NASDAQ: SPSC) reported Q2 EPS of $0.37, $0.06 better than the analyst estimate of $0.31. Revenue for the quarter came in at $75.6 million versus the consensus estimate of $74.35 million.

“The dynamics impacting the retail industry continued into the second quarter with both retailers and suppliers seeing the need for increased efficiency and automation across the supply chain, underscoring the critical nature of the service we provide,” said Archie Black, President and CEO of SPS Commerce. “The challenges we have endured this year have impacted our communities, our businesses and our lives. We would like to thank SPS Commerce employees for their ongoing dedication to our customers and our communities. We remain committed to take action and make progress in the years ahead.”

“We cannot predict the duration and magnitude of the pandemic and its growing impact on the economy, but the challenges the retail industry faces underscore the need for EDI and supply chain automation. With our cloud-native operational model, SPS Commerce is well positioned to continue to provide mission critical solutions and support our customers, partners and our community,” said Kim Nelson, CFO of SPS Commerce.

GUIDANCE:

SPS Commerce sees Q3 2020 EPS of $0.32-$0.33, versus the consensus of $0.33. SPS Commerce sees Q3 2020 revenue of $76.6-77.1 million, versus the consensus of $75.68 million.

SPS Commerce sees FY2020 EPS of $1.41-$1.42, versus the consensus of $1.35. SPS Commerce sees FY2020 revenue of $304.1-305.3 million, versus the consensus of $301.9 million.

For the third quarter of 2020, revenue is expected to be in the range of $76.6 million to $77.1 million. Third quarter net income per diluted share is expected to be in the range of $0.19 to $0.20 with fully diluted weighted average shares outstanding of approximately 36.3 million shares. Non-GAAP income per diluted share is expected to be in the range of $0.32 to $0.33. Adjusted EBITDA is expected to be in the range of $20.5 million to $21.0 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.

The dynamics of the current situation continue to impact our business and we continue to monitor the uncertainty around the duration and magnitude of the pandemic, and the impact that a second wave of infections may have on economic activity. We are also taking into account the possibility of continued pressure on retailers, prolonged store closures and potential bankruptcies, all of which would negatively impact our business. However, with two quarters left in the year, and the ongoing need for automation across our network which continues to drive momentum for our Fulfillment product, we are reinstating 2020 annual guidance.

For the full year of 2020, revenue is expected to be in the range of $304.1 million to $305.3 million, representing approximately 9% growth over 2019. Full year net income per diluted share is expected to be in the range of $0.99 to $1.00 with fully diluted weighted average shares outstanding of approximately 36.1 million shares. Non-GAAP income per diluted share is expected to be in the range of $1.41 to $1.42. Adjusted EBITDA is expected to be in the range of $82.4 to $83.5 million, representing approximately 18% to 20% growth over 2019. Non-cash, share-based compensation expense is expected to be approximately $19.6 million, depreciation expense is expected to be approximately $13.4 million and amortization expense is expected to be approximately $5.5 million.

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