SPS Commerce, Inc. Q3 FY2025 earnings call

• Chad Collins noted solid Q3 results despite macroeconomic uncertainty, with revenue growth and fulfillment business strength. Highlighted revenue recovery challenges due to seasonality and Amazon policy, and completed combined go-to-market strategy ahead of schedule. Mentioned partnerships like Cyber Power Systems and Petco. - Leadership update: Dan Juckniess retiring, Eduardo Rosini joining as Chief Commercial Officer. - Kimberly Nelson discussed financial results: revenue $189.9M, adjusted EBITDA up 25% to $60.5M, cash and investments $134M, and share repurchase program details.

Third quarter revenue grew 16% to $189.9 million, with recurring revenue growing 18%. The fulfillment business grew 20% year-over-year, adding 450 net new customers. The revenue recovery business was approximately $3 million below expectations in Q3 due to seasonality and Amazon policy changes. Revenue recovery represents a $750 million addressable market. Recurring revenue customers in Q3 were approximately 54,950, with ARPU at ~$13,300.

For Q4 2025, revenue expected $192.7M - $194.7M (13-14% YOY growth), adjusted EBITDA $58.8M - $60.8M. Full-year 2025 revenue $751.6M - $753.6M (18% growth), adjusted EBITDA $229.7M - $231.7M (23-24% growth). 2026 revenue growth ~7-8%, adjusted EBITDA margin expansion 2 points. Longer term, high single-digit revenue growth and 2 points EBITDA margin expansion without acquisitions.

• Macro economic uncertainty and spend scrutiny. - Seasonality impact on revenue recovery business. - Invoice scrutiny and delayed purchases affecting fulfillment customers. - Retailer enablement campaigns pushed from Q4 to first half of 2026 impacting onetime revenue.

Q: Scott Berg asked about revenue recovery seasonality and impact on Q4 guidance.

A: Chad Collins said seasonality became apparent late in Q3, and Kimberly Nelson noted revenue recovery impact similar to Q3 in Q4.

Q: Christopher Quintero inquired about retail go-to-market programs and network-led growth.

A: Kimberly Nelson discussed program timing changes, and Chad Collins highlighted network-led growth examples like revenue recovery triggering.

Q: Matthew VanVliet asked about AI impact and M&A.

A: Chad Collins said AI not a disruption, and M&A focus on EDI consolidation, solution expansion, and geographic expansion.

Q: George Kurosawa asked about spend scrutiny and revenue recovery assets.

A: Chad Collins discussed spend scrutiny not exclusive to tariffs and revenue recovery asset performance.

Q: J. Lane asked about 2026 guidance and go-to-market team benefits.

A: Kimberly Nelson discussed 2026 assumptions, and Chad Collins noted early success but Q4 impact limited.

Q: Tim Greaves asked about ERP and WMS replacements.

A: Chad Collins noted softness in mid-market ERP change events.

Q: Jackson Bogli asked about new logo momentum and AI leverage.

A: Kimberly Nelson discussed new logo momentum and Chad Collins talked about AI-driven efficiency.

Q: Joseph Vruwink asked about revenue recovery and customer count.

A: Kimberly Nelson discussed revenue recovery business expectations and customer count trends.