What changed in this filing

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Item 1. Financial Statements

2024-04-25 compared with 2023-10-26 · 106 added, 181 removed, 405 unchanged (41% of the section changed)

1 unchanged sentence

SPS COMMERCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares) September 30,

(in thousands, except shares) March 31,

2024 December 31,

29 unchanged sentences

Deferred income tax liabilities 7,536 8,972

Other liabilities, non-current 232 229

Total liabilities 156,882 156,369

9 unchanged sentences

Treasury stock, at cost;

2,151,098 shares

2,260,578 and 2,151,098 shares, respectively

( 148,892 ) ( 128,892 )

1 unchanged sentence

Retained earnings 277,048 259,045

Accumulated other comprehensive loss ( 4,650 ) ( 3,411 )

Accumulated other comprehensive gain (loss) ( 3,228 ) 222

Total stockholders’ equity 682,965 667,475

2 unchanged sentences

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

SPS COMMERCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) (unaudited) 2024 2023

9 unchanged sentences

Income from operations 15,403 16,730

Other income (expense), net 1,702 ( 695 ) 4,859 ( 1,610 )

Other income, net 3,132 1,276

Income before income taxes 18,535 18,006

4 unchanged sentences

Unrealized gain on investments, net of tax of $ 171 and $ 133 , respectively

570 158 1,376 147

Reclassification of gain on investments into earnings, net of tax of $( 215 ) and $( 125 ), respectively

( 646 ) ( 376 )

Total other comprehensive expense ( 2,808 ) ( 2,177 ) ( 1,239 ) ( 3,213 )

Total other comprehensive income (expense) ( 3,450 ) ( 72 )

Comprehensive income $ 14,553 $ 15,217

7 unchanged sentences

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

SPS COMMERCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

1 unchanged sentence

Capital Retained

Earnings Accumulated Other Comprehensive Loss Total

Earnings Accumulated Other Comprehensive Gain (Loss) Total

Stockholders'

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

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

Stock-based compensation — — — — 7,429 — — 7,429

Shares issued pursuant to stock awards 108,240 — — — 1,767 — — 1,767

Employee stock purchase plan activity 2,481 — — — 238 — — 238

Repurchases of common stock ( 102,234 ) — 102,234 ( 12,477 ) — — — ( 12,477 )

Net income — — — — — 15,863 — 15,863

Foreign currency translation adjustments — — — — — — ( 2,296 ) ( 2,296 )

Unrealized gain on investments, net of tax — — — — — — 158 158

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 39 ) ( 39 )

Balances, September 30, 2022 36,037,964 $ 38 2,146,783 $ ( 128,377 ) $ 463,356 $ 177,306 $ ( 4,660 ) $ 507,663

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

Stock-based compensation — — — — 10,780 — — 10,780

Shares issued pursuant to stock awards 45,952 — — — 705 — — 705

Employee stock purchase plan activity 3,159 — — — 344 — — 344

Net income — — — — — 16,842 — 16,842

Foreign currency translation adjustments — — — — — — ( 2,966 ) ( 2,966 )

Unrealized gain on investments, net of tax — — — — — — 570 570

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 412 ) ( 412 )

Balances, September 30, 2023 36,695,930 $ 39 2,151,098 $ ( 128,892 ) $ 520,313 $ 240,034 $ ( 4,650 ) $ 626,844

Common Stock Treasury Stock Additional

Capital Retained

Earnings Accumulated Other Comprehensive Loss Total

Stockholders'

Shares Amount Shares Amount

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

2 unchanged sentences

Employee stock purchase plan activity 2,549 — — — 241 — — 241

Repurchases of common stock ( 357,430 ) — 357,430 ( 42,700 ) — — — ( 42,700 )

Net income — — — — — 15,289 — 15,289

2 unchanged sentences

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 376 ) ( 376 )

Balances, September 30, 2022 36,037,964 $ 38 2,146,783 $ ( 128,377 ) $ 463,356 $ 177,306 $ ( 4,660 ) $ 507,663

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

Balances, December 31, 2023 36,820,048 $ 39 2,151,098 $ ( 128,892 ) $ 537,061 $ 259,045 $ 222 $ 667,475

2 unchanged sentences

Employee stock purchase plan activity 2,398 — — — 391 — — 391

Repurchases of common stock, net of costs ( 109,480 ) — 109,480 ( 20,000 ) — — — ( 20,000 )

Net income — — — — — 18,003 — 18,003

2 unchanged sentences

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 646 ) ( 646 )

Balances, September 30, 2023 36,695,930 $ 39 2,151,098 $ ( 128,892 ) $ 520,313 $ 240,034 $ ( 4,650 ) $ 626,844

Balances, March 31, 2024 37,049,001 $ 39 2,260,578 $ ( 148,892 ) $ 557,998 $ 277,048 $ ( 3,228 ) $ 682,965

See accompanying notes to these condensed consolidated financial statements.

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

SPS COMMERCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in thousands) (unaudited) 2024 2023

11 unchanged sentences

Deferred costs ( 1,651 ) ( 1,679 )

Other current and non-current assets 2,814 2,202

Other assets and liabilities 3,030 602

Accounts payable 5,098 ( 4,849 )

8 unchanged sentences

Maturities of investments 45,000 35,000

Acquisition of business, net ( 70,218 ) ( 44,923 )

Net cash used in investing activities ( 2,945 ) ( 4,590 )

5 unchanged sentences

Effect of foreign currency exchange rate changes ( 674 ) ( 55 )

Net increase (decrease) in cash and cash equivalents 15,809 ( 21,322 )

Net increase in cash and cash equivalents 15,556 19,411

Cash and cash equivalents at beginning of period 219,081 162,893

2 unchanged sentences

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

SPS COMMERCE, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

18 unchanged sentences

Significant Accounting Policies

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

There were no material changes in our significant accounting policies during the three months ended March 31, 2024 .

See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 , as filed with the SEC, for additional information regarding our significant accounting policies.

Accounting Pronouncements Recently Adopted

Accounting Pronouncements Recently Issued and Adopted

Standard Date of Issuance Description Date of Adoption Effect on the Financial Statements

ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

October 2021 This amendment requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, effective for all business combinations in the year of adoption and thereafter.

January 2023 The adoption of this standard has not had a material impact on the purchase accounting for business combinations.

ASU 2023-07 , Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures

November 2023 This amendment requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker.

2024 The adoption will result in additional disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024.

ASU 2023-09 , Income Taxes (Topic 740) - Improvements to Income Tax Disclosures

December 2023 This amendment requires that an entity disclose specific categories in the effective tax rate reconciliation table as well as provide disclosure of disaggregated information related to income tax expense, income before income taxes, and income taxes paid.

2025 We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE B – Business Acquisitions

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

("InterTrade"), a leading EDI provider within the apparel and general merchandising markets.

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

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.

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

The purchase accounting has been finalized as of September 30, 2023.

Effective September 13, 2023, we acquired all of the outstanding equity ownership interests of TIE Kinetix Holding B.V.

("TIE Kinetix"), a leading provider of supply chain digitalization including EDI and e-invoicing in Europe.

("TIE Kinetix"), a leading provider of supply chain digitalization including EDI and e-invoicing in Europe and the United States ("U.S.").

Pursuant to the definitive agreement, the purchase price was € 63.9 million ($ 68.7 million at the September 13, 2023 exchange rate), net of cash acquired.

The purchase accounting for the acquisition has not been finalized as of September 30, 2023;

provisional amounts are primarily related to intangible assets and tax components.

The purchase accounting for the acquisition has not been finalized as of March 31, 2024;

provisional amounts are primarily related to tax components.

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

Purchase Price Allocations

We accounted for the acquisitions as business combinations.

Purchase Price Allocation

We accounted for the acquisition as a business combination.

We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition dates:

InterTrade TIE Kinetix

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

(in thousands) Acquisition Date Estimated Fair Value as of

December 31, 2022 Adjustment Acquisition Date Estimated Fair Value as of

September 30, 2023 Acquisition Date Estimated Fair Value as of

September 30, 2023

Cash paid at transaction date $ 47,165 $ — $ 47,165 $ 73,558

Contingent consideration 2,000 — 2,000

Post-closing adjustments ( 93 ) 116 23

Total consideration $ 49,072 $ 116 $ 49,188 $ 73,558

September 30, 2023 Adjustment Acquisition Date Estimated Fair Value as of

March 31, 2024

Cash paid $ 73,558 $ — $ 73,558

Estimated fair value of assets and liabilities acquired:

10 unchanged sentences

Goodwill $ 50,205 $ ( 3,760 ) $ 46,445

SPS COMMERCE, INC.

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

The following table summarizes the estimated useful lives for each acquired intangible asset:

Estimated Useful Life

InterTrade TIE Kinetix

Subscriber relationships 8.0 years 8.0 years

Developed technology 6.0 years 6.0 years

Subscriber relationships 8.0 years

Developed technology 7.0 years

Other Acquisition Activity

During the third quarter of 2023, the Company had other acquisition activity resulting in a total purchase price of $ 1.5 million, paid in cash.

Assets acquired were primarily comprised of developed technology and customer relationships, totaling $ 0.9 million of estimated fair value.

The remainder of the consideration transferred, $ 0.6 million, was allocated to goodwill.

On April 10, 2024, the Company entered into an Asset Purchase Agreement (the "Agreement") to acquire Vision33's SAP Business One SPS Integration Technology.

Pursuant to the Agreement, the purchase price, denominated in Canadian dollars ("CAD"), was $ 5.8 million CAD ($ 4.3 million U.S.

dollars ["USD"] at the Agreement date exchange rate), of which $ 4.5 million CAD ($ 3.3 million USD) was paid in cash at close, with the remainder payable in cash within two years , subject to certain closing conditions.

Given the timing of the acquisition, the Company is currently in the process of determining the impact on its financial statements.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE C – Revenue

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

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.

Revenue by Geographic Area

Domestic revenue, which we define as revenue that was attributable to customers based within the U.S., was as follows:

Three Months Ended

Domestic revenue 83 % 84 %

No single jurisdiction outside of the U.S.

had revenues in excess of 10%.

Recurring Revenues

11 unchanged sentences

Set-up fees constitute a material renewal option right that provide customers a significant future incentive that would not be otherwise available to that customer unless they entered into the contract, as the set-up fees will not be incurred again upon contract renewal.

As such, set-up fees and related costs are deferred and recognized ratably over two years which is the estimated period for which a material right is present for our customers.

SPS COMMERCE, INC.

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

As such, set-up fees and related costs are deferred and recognized ratably generally over two years which is the estimated period for which a material right is present for our customers.

The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees:

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

3 unchanged sentences

Balance, end of period $ 17,418 $ 15,287

The entire balance of deferred set-up fees will be recognized within two years .

Those that will be recognized within the next year are classified as current, whereas the remainder are classified as non-current.

Miscellaneous one-time revenues

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

4 unchanged sentences

NOTE E – Fair Value Measurements

Cash Equivalents and Investments

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

7 unchanged sentences

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE F – Allowance for Credit Losses

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

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2024 2023

5 unchanged sentences

Property and equipment, net consisted of the following:

(in thousands) September 30,

(in thousands) March 31,

2024 December 31, 2023

6 unchanged sentences

Total property and equipment, net $ 34,971 $ 36,043

Property and equipment, net located at subsidiary and office locations outside of the U.S.

was as follows:

2024 December 31, 2023

International property and equipment 16 % 15 %

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE H – Goodwill and Intangible Assets, Net

The activity in goodwill was as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2024

1 unchanged sentence

Foreign currency translation ( 2,062 )

Addition from business acquisition(s) 50,842

Remeasurement from provisional purchase accounting amount 1,699

2 unchanged sentences

Intangible assets, net consisted of the following:

September 30, 2023

March 31, 2024

($ in thousands) Gross

3 unchanged sentences

Subscriber relationships $ 102,042 $ ( 35,000 ) $ ( 585 ) $ 66,457 6.3 years

Acquired technology 53,505 ( 13,995 ) ( 703 ) 38,807 5.3 years

Developed technology 50,439 ( 17,360 ) ( 247 ) 32,832 5.1 years

$ 152,481 $ ( 52,360 ) $ ( 832 ) $ 99,289 5.9 years

SPS COMMERCE, INC.

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

December 31, 2023

4 unchanged sentences

Subscriber relationships $ 105,228 $ ( 32,097 ) $ 724 $ 73,855 6.6 years

Acquired technology 40,610 ( 9,934 ) 1 30,677 5.7 years

Developed technology 48,843 ( 15,669 ) 315 33,489 5.0 years

$ 154,071 $ ( 47,766 ) $ 1,039 $ 107,344 6.1 years

4 unchanged sentences

Total future amortization $ 99,289

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE I – Commitments and Contingencies

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

3 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2024 2023

1 unchanged sentence

Operating cash flows from operating leases $ 1,203 $ 1,247

Right-of-use assets obtained in exchange for operating lease liabilities 1,072 934

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

September 30,

2024 December 31, 2023

1 unchanged sentence

Weighted-average discount rate 4.0 % 4.0 %

SPS COMMERCE, INC.

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

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

At March 31, 2024, our future minimum payments under operating leases were as follows:

(in thousands)

6 unchanged sentences

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

At March 31, 2024, our remaining purchase commitments and estimated purchase timing were as follows:

(in thousands)

1 unchanged sentence

Total estimated future purchases $ 31,745

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE J – Stockholders’ Equity

Share Repurchase Programs

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

Details of the programs and activity thereunder through September 30, 2023 were as follows:

Share Repurchase Program

Our board of directors has authorized a program to repurchase our common stock.

Details of the program and activity thereunder through March 31, 2024 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

2021 Program November 2021 August 2022 $ 50,000 $ 49,992 $ 8 N/A

2022 Program August 2022 July 2024 $ 50,000 $ 22,990 N/A $ 27,010

Share repurchases are accounted for as the trade date occurs and are reflected in the condensed consolidated financial statements net of the costs incurred to acquire the shares.

Share repurchases that have not yet settled in cash are included in accrued expenses in the condensed consolidated balance sheet.

The share repurchase activity by period was as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except shares and per share amounts) 2024 2023

Number of shares repurchased 109,480 —

Shares repurchased cost $ — $ 12,477 $ — $ 42,700

Average price per repurchased share $ — $ 122.04 $ — $ 119.46

SPS COMMERCE, INC.

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

Total share repurchased cost $ 20,000 $ —

Average total cost per repurchased share $ 182.68 $ —

NOTE K – Stock-Based Compensation

2 unchanged sentences

We recognize stock-based compensation expense based on grant date award fair value.

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

If retirement-eligible employees have not given their required notice, expense is recognized on a pro-rata basis over the notice period prior to retirement;

if they have given their notice, expense is recognized over the notice period;

if they have given their notice and completed the notice period, expense is recognized upon grant.

At March 31, 2024, there were 12.3 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

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

5 unchanged sentences

$ 20,018 $ 11,780

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

2 unchanged sentences

RSUs & DSUs 15,491 6,062

RSAs 122 110 345 328

ESPP 637 577 1,974 1,609

401(k) stock match 738 605

$ 20,018 $ 11,780

As of September 30, 2023, there was $ 50.3 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 2.4 years.

SPS COMMERCE, INC.

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

As of March 31, 2024, there was $ 83.7 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 2.8 years.

Stock Options

Our stock option activity was as follows:

Nine Months Ended

September 30, 2023

Three Months Ended

March 31, 2024

Options (#) Weighted Average

5 unchanged sentences

Outstanding, end of period 347,461 $ 91.34

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

Of the total outstanding options at March 31, 2024, 0.3 million were exercisable.

The outstanding and exercisable options had a weighted average exercise price of $ 72.75 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 nine months ended September 30, 2023 was $ 56.29 per share.

The weighted average grant date fair value of options granted during the three months ended March 31, 2024 was $ 67.30 per share.

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

8 unchanged sentences

In the three months ended March 31, 2024, PSU awards granted in 2021 vested at the maximum performance level and 0.1 million shares of common stock were issued.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

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

Nine Months Ended

September 30, 2023

Three Months Ended

March 31, 2024

# Weighted Average Grant

5 unchanged sentences

Outstanding, end of period 781,890 $ 172.37

The number of PSUs, RSUs, RSAs, and DSUs outstanding at September 30, 2023 included 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.

SPS COMMERCE, INC.

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

The number of PSUs, RSUs, RSAs, and DSUs outstanding at March 31, 2024 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

September 30, Nine Months Ended

September 30,

(in thousands, except shares) 2024 2023

1 unchanged sentence

Shares purchased 2,398 2,549

A total of 1.7 million shares of common stock are reserved for issuance under the ESPP as of September 30, 2023.

A total of 1.7 million shares of common stock are reserved for issuance under the plan at March 31, 2024.

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:

8 unchanged sentences

Additionally, excess tax benefits generated upon settlement or exercise of stock awards are recognized as a reduction to income tax expense as a discrete tax item in the quarter that the event occurs, creating potentially significant fluctuation in tax expense by quarter and by year.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2024

NOTE M – Other Income and Expense

Other income (expense), net included the following:

Other income, net included the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

Investment income $ 2,879 $ 1,127

Realized gain (loss) from foreign currency on cash and investments held 98 ( 1,151 ) 525 ( 2,010 )

Other expense, net ( 1,031 ) ( 130 ) ( 1,038 ) ( 406 )

Total other income (expense), net $ 1,702 $ ( 695 ) $ 4,859 $ ( 1,610 )

SPS COMMERCE, INC.

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

Realized gain from foreign currency on cash and investments held 304 137

Other income (expense), net ( 51 ) 12

Total other income, net $ 3,132 $ 1,276

NOTE N – Net Income Per Share

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023

1 unchanged sentence

Weighted average common shares outstanding, basic 37,049 36,427

Options to purchase common stock 256 379 279 396

Options to purchase common stock and ESPP 177 307

PSUs, RSUs, RSAs, and DSUs 460 421

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

Anti-dilutive shares 145 108

NOTE O – Geographic Information

Domestic revenue, which we define as revenue that was attributable to customers based within the U.S., was as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Domestic revenue 84 % 85 % 84 % 84 %

No single jurisdiction outside of the U.S.

had revenues in excess of 10%.

Property and Equipment

Property and equipment, net located at subsidiary and office locations outside of the U.S.

was as follows:

September 30,

2023 December 31, 2022

International property and equipment 14 % 13 %

SPS COMMERCE, INC.

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

Form 10-Q for the Quarterly Period ended March 31, 2024

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