What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-04-26 · 103 added, 52 removed, 433 unchanged (26% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares) March 31,

(in thousands, except shares) June 30,

2023 December 31,

49 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

SPS COMMERCE, INC.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share amounts) (unaudited) 2023 2022 2023 2022

9 unchanged sentences

Income from operations 17,033 15,968 33,764 32,478

Other income, net 1,276 423

Other income (expense), net 1,882 ( 1,338 ) 3,157 ( 915 )

Income before income taxes 18,915 14,630 36,921 31,563

4 unchanged sentences

Unrealized gain (loss) on investments, net of tax of $ 136 , $( 3 ), $ 269 and $( 4 ), respectively

Reclassification of (gain) loss on investments into earnings, net of tax of ($ 125 ) and $ 4 , respectively

408 ( 8 ) 806 ( 11 )

Reclassification of gain on investments into earnings, net of tax of $( 127 ), $( 8 ), $( 252 ), and $( 4 ), respectively

( 381 ) ( 23 ) ( 757 ) ( 12 )

Total other comprehensive income (expense) 1,642 ( 1,774 ) 1,569 ( 1,036 )

8 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

SPS COMMERCE, INC.

6 unchanged sentences

(in thousands, except shares) (unaudited) Shares Amount Shares Amount

Balances, December 31, 2021 36,009,257 $ 38 1,789,353 $ ( 85,677 ) $ 433,258 $ 138,087 $ ( 1,447 ) $ 484,259

Balances, March 31, 2022 36,120,518 $ 38 1,910,897 $ ( 100,903 ) $ 442,405 $ 150,690 $ ( 709 ) $ 491,521

Stock-based compensation — — — — 8,128 — — 8,128

6 unchanged sentences

Reclassification of loss on investments into earnings, net of tax — — — — — — ( 23 ) ( 23 )

Balances, June 30, 2022 36,029,477 $ 38 2,044,549 $ ( 115,900 ) $ 453,922 $ 161,443 $ ( 2,483 ) $ 497,020

Balances, March 31, 2023 36,532,756 $ 39 2,151,098 $ ( 128,892 ) $ 489,716 $ 208,510 $ ( 3,484 ) $ 565,889

Stock-based compensation — — — — 12,237 — — 12,237

Shares issued pursuant to stock awards 78,387 — — — 2,636 — — 2,636

Employee stock purchase plan activity 35,676 — — — 3,895 — — 3,895

Net income — — — — — 14,682 — 14,682

Foreign currency translation adjustments — — — — — — 1,615 1,615

Unrealized gain on investments, net of tax — — — — — — 408 408

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 381 ) ( 381 )

Balances, June 30, 2023 36,646,819 $ 39 2,151,098 $ ( 128,892 ) $ 508,484 $ 223,192 $ ( 1,842 ) $ 600,981

Common Stock Treasury Stock Additional

Capital Retained

Earnings Accumulated Other Comprehensive Loss Total

Stockholders'

Shares Amount Shares Amount

Balances, December 31, 2021 36,009,257 $ 38 1,789,353 $ ( 85,677 ) $ 433,258 $ 138,087 $ ( 1,447 ) $ 484,259

2 unchanged sentences

Employee stock purchase plan activity 35,035 — — — 3,350 — — 3,350

Repurchases of common stock ( 255,196 ) — 255,196 ( 30,223 ) — — — ( 30,223 )

Net income — — — — — 23,356 — 23,356

Foreign currency translation adjustments — — — — — — ( 1,013 ) ( 1,013 )

Unrealized loss on investments, net of tax — — — — — — ( 11 ) ( 11 )

Reclassification of loss on investments into earnings, net of tax — — — — — — ( 12 ) ( 12 )

Balances, June 30, 2022 36,029,477 $ 38 2,044,549 $ ( 115,900 ) $ 453,922 $ 161,443 $ ( 2,483 ) $ 497,020

Balances, December 31, 2022 36,158,046 $ 38 2,151,098 $ ( 128,892 ) $ 476,117 $ 193,221 $ ( 3,411 ) $ 537,073

Stock-based compensation — — — — 23,412 — — 23,412

Shares issued pursuant to stock awards 450,548 1 — — 4,818 — — 4,819

Employee stock purchase plan activity 38,225 — — — 4,136 — — 4,136

Net income — — — — — 29,971 — 29,971

Foreign currency translation adjustments — — — — — — 1,520 1,520

Unrealized gain on investments, net of tax — — — — — — 806 806

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 757 ) ( 757 )

Balances, March 31, 2023 36,532,756 $ 39 2,151,098 $ ( 128,892 ) $ 489,716 $ 208,510 $ ( 3,483 ) $ 565,890

Balances, June 30, 2023 36,646,819 $ 39 2,151,098 $ ( 128,892 ) $ 508,484 $ 223,192 $ ( 1,842 ) $ 600,981

See accompanying notes to these condensed consolidated financial statements.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

SPS COMMERCE, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in thousands) (unaudited) 2023 2022

22 unchanged sentences

Maturities of investments 60,000 117,500

Net cash provided by (used in) investing activities ( 4,590 ) 5,668

Net cash used in investing activities ( 18,348 ) ( 5,294 )

Cash flows from financing activities

4 unchanged sentences

Effect of foreign currency exchange rate changes 94 ( 135 )

Net increase (decrease) in cash and cash equivalents 19,411 (4,464)

Net increase in cash and cash equivalents 46,371 5,173

Cash and cash equivalents at beginning of period 162,893 207,552

2 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

SPS COMMERCE, INC.

20 unchanged sentences

Significant Accounting Policies

There were no material changes in our significant accounting policies during the three months ended March 31, 2023.

There were no material changes in our significant accounting policies during the six months ended June 30, 2023.

See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 , as filed with the SEC, for additional information regarding our significant accounting policies.

5 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE B – Business Acquisitions

2 unchanged sentences

Pursuant to the definitive agreement, the purchase price was $ 45.1 million, including post-closing adjustments.

The purchase accounting for the acquisition has not been finalized as of March 31, 2023 due primarily to provisional tax components and corresponding impacts to other items, including intangible assets.

We expect to finalize the allocation of the purchase price within the one-year measurement period following the acquisition.

During the quarter ended March 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.

During the quarter ending June 30, 2023, there were no significant adjustments made to provisional amounts.

The purchase accounting for the acquisition has been finalized as of June 30, 2023.

Effective October 4, 2022, we acquired all of the outstanding equity ownership interests of Canadian based InterTrade Systems Inc.

1 unchanged sentence

Pursuant to the definitive agreement, the purchase price was $ 49.1 million, including estimated post-closing adjustments.

The purchase accounting for the acquisition has not been finalized as of March 31, 2023 due to various items including valuation modeling completion;

The purchase accounting for the acquisition has not been finalized as of June 30, 2023 due to various items including valuation modeling completion;

provisional amounts are primarily related to intangible assets.

We expect to finalize the allocation of the purchase price within the one-year measurement period following the acquisition.

During the quarter ended March 31, 2023, there were no material changes to the provisional amounts.

During the quarter ended June 30, 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.

On July 26, 2023, we entered into a purchase agreement with TIE Kinetix N.V.

("TIE Kinetix"), a leading provider of supply chain digitalization including EDI and e-invoicing in Europe, to acquire the business and operations of TIE Kinetix by purchasing the equity of its wholly owned operating subsidiary.

The purchase price is € 64.5 million ($ 71.4 million at the July 26, 2023 exchange rate), net of cash acquired.

The transaction is subject to customary closing conditions and is expected to close during the quarter ending September 30, 2023, upon the approval of the shareholders of TIE Kinetix.

NOTE C – Revenue

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

7 unchanged sentences

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.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended June 30, 2023

Recurring Revenues

6 unchanged sentences

One-time revenues consist of set-up fees and miscellaneous fees from customers.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Set-up revenues

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

4 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE E – Fair Value Measurements

1 unchanged sentence

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Fair Value Level Amortized Cost Unrealized Gains (Losses), net Fair Value Amortized Cost Unrealized Gains (Losses), net Fair Value

9 unchanged sentences

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

Three Months Ended

Six Months Ended

(in thousands) 2023 2022

5 unchanged sentences

Property and equipment, net consisted of the following:

(in thousands) March 31,

(in thousands) June 30,

2023 December 31, 2022

7 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE H – Goodwill and Intangible Assets, Net

The activity in goodwill was as follows:

Three Months Ended

Six Months Ended

(in thousands) 2023

5 unchanged sentences

Intangible assets, net consisted of the following:

March 31, 2023

June 30, 2023

($ in thousands) Gross

19 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE I – Commitments and Contingencies

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

3 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Six Months Ended

(in thousands) 2023 2022

1 unchanged sentence

Operating cash flows from operating leases $ 1,329 $ 2,176

Right-of-use assets obtained in exchange for operating lease liabilities 268 —

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

2 unchanged sentences

Weighted-average discount rate 4.0 % 4.0 %

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

At June 30, 2023, our future minimum payments under operating leases were as follows:

(in thousands)

4 unchanged sentences

Purchase Commitments

We have entered into separate noncancelable agreements with computing infrastructure, customer relationship management, and performance and security data analytics vendors for services through 2025.

At March 31, 2023, the total remaining purchase commitments were $ 4.3 million .

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 June 30, 2023, our remaining purchase commitments and estimated purchase timing were as follows:

(in thousands)

Remainder of 2023 $ 5,863

Total estimated future purchases $ 33,078

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE J – Stockholders’ Equity

1 unchanged sentence

Our board of directors has authorized multiple non-concurrent programs to repurchase our common stock.

Details of the programs and activity thereunder through March 31, 2023 were as follows:

Details of the programs and activity thereunder through June 30, 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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands, except shares and per share amounts) 2023 2022 2023 2022

7 unchanged sentences

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 March 31, 2023 , there were 12.8 million shares available for grant under approved equity compensation plans.

At June 30, 2023 , there were 12.8 million shares available for grant under approved equity compensation plans.

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

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

6 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

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

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

3 unchanged sentences

RSAs & DSUs 115 110 223 218

ESPP 748 458 1,337 1,032

401(k) stock match 644 532 1,249 1,051

$ 12,881 $ 8,661 $ 24,661 $ 17,676

As of March 31, 2023, there was $ 63.8 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 2.6 years.

As of June 30, 2023, there was $ 53.8 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 2.5 years.

Stock Options

Our stock option activity was as follows:

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2023

Options (#) Weighted Average

5 unchanged sentences

Outstanding, end of period 456,714 $ 71.36

Of the total outstanding options at March 31, 2023, 0.4 million were exercisable.

Of the total outstanding options at June 30, 2023, 0.4 million were exercisable.

The outstanding and exercisable options had a weighted average exercise price of $ 58.49 per share and a weighted average remaining contractual life of 3.1 years.

The weighted average grant date fair value of options granted during the three months ended March 31, 2023 was $ 54.53 per share.

The weighted average grant date fair value of options granted during the six months ended June 30, 2023 was $ 56.23 per share.

This was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

9 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

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

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2023

# Weighted Average Grant

5 unchanged sentences

Outstanding, end of period 713,180 $ 142.04

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

The number of PSUs, RSUs, RSAs, and DSUs outstanding at June 30, 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 underlying agreements.

Employee Stock Purchase Plan

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in thousands, except shares) 2023 2022 2023 2022

1 unchanged sentence

Shares purchased 35,676 33,337 38,225 35,035

A total of 1.7 million shares of common stock are reserved for issuance under the ESPP as of March 31, 2023.

A total of 1.7 million shares of common stock are reserved for issuance under the ESPP as of June 30, 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:

9 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE M – Other Income and Expense

Other income, net included the following:

Other income (expense), net included the following:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

Investment income $ 1,611 $ 172 $ 2,737 $ 220

Realized gain from foreign currency on cash and investments held 137 468

Other income (expense), net 12 ( 93 )

Total other income, net $ 1,276 $ 423

Realized gain (loss) from foreign currency on cash and investments held 290 ( 1,327 ) 427 ( 859 )

Other expense, net ( 19 ) ( 183 ) ( 7 ) ( 276 )

Total other income (expense), net $ 1,882 $ ( 1,338 ) $ 3,157 $ ( 915 )

NOTE N – Net Income Per Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share amounts) 2023 2022 2023 2022

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

Anti-dilutive shares 37 242 63 211

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended June 30, 2023

NOTE O – Geographic Information

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Domestic revenue 84 % 84 % 84 % 84 %

7 unchanged sentences

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2023

Form 10-Q for the Quarterly Period ended June 30, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements