What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-24 compared with 2024-10-24 · 56 added, 159 removed, 136 unchanged (61% of the section changed)

9 unchanged sentences

Forward-looking statements may also be made from time to time in oral presentations, including telephone conferences and/or webcasts open to the public.

Shareholders, potential investors, and others are cautioned that all forward-looking statements involve risks and uncertainties that could cause results in future periods to differ materially from those anticipated by some of the statements made in this report, including the risks and uncertainties described under the heading “Risk Factors” appearing in our Annual Report on Form 10-K for the year ended December 31, 2023, as may be updated in our subsequent Quarterly Reports on Form 10-Q from time to time.

Shareholders, potential investors, and others are cautioned that all forward-looking statements involve risks and uncertainties that could cause results in future periods to differ materially from those anticipated by some of the statements made in this report, including the risks and uncertainties described under the heading “Risk Factors” appearing in our Annual Report on Form 10-K for the year ended December 31, 2024, as may be updated in our subsequent Quarterly Reports on Form 10-Q or other filings from time to time.

We expressly disclaim any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that advise interested parties of the risks and factors that may affect our business.

SPS Commerce is a leading provider of cloud-based supply chain management services across our global retail network.

Our products make it easier for retailers, grocers, distributors, suppliers, and logistics firms to communicate and collaborate by simplifying how they manage and share item, inventory, order and sales data across omnichannel retail channels.

We deliver our products using a full-service model, which includes industry-leading technology and a team of experts that optimize, update, and operate the technology on customers' behalf.

Our products enable customers to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience.

SPS Commerce is transforming how our global retail supply chain co-operates by creating a more dynamic, interconnected community where players can more freely connect, collaborate, and prosper together.

Our comprehensive suite of cloud-based products and solutions lead the industry in establishing and maintaining stronger collaboration between retailers, grocers, distributors, suppliers, manufacturers, and logistics firms around the globe.

Our products enable customers to enhance how they operate:

both within their organizations and with their trading partners, with reduced operational costs and stronger supply chain performance;

with order and supply chain visibility, sell-through data, and optimized inventory management, and;

through the limitless access to connect and grow with the world’s largest retail network of trading partners that only SPS Commerce can offer.

We plan to continue to grow our business by further penetrating the supply chain management market, increasing revenues from our customers as their businesses grow, expanding our distribution channels, expanding our international presence and, from time to time, developing new products and applications.

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We have several key financial terms, metrics, and non-GAAP measures as discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC, under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations.

To supplement our condensed consolidated financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures.

Recurring Revenue - We define recurring revenue as active contracts during the reporting period to regularly pay us fees for subscription-based and reoccurring services.

All components of the contracts that are not expected to recur (primarily set ups and professional services) are excluded from recurring revenue.

Recurring Revenue Customers - We define recurring revenue customers as customers with an active recurring revenue contract at the end of the period.

A s mall portion of our recurring revenue customers consist of separate units within a larger organization and are separately invoiced.

We treat each of these units, which may include divisions, departments, affiliates and franchises, as distinct recurring revenue customers.

We classify the majority of our recurring revenue customers as '1P', with the exception of those recurring revenue customers that only have an online marketplace or e-Commerce connection within our network (which we refer to as '3P').

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2025

Annual Revenue Per User (ARPU) - We calculate the annualized average recurring revenues per recurring revenue customer, which we refer to as “ARPU” and was previously referred to as “wallet share”, by dividing the annualized recurring revenues for the period by the average of the beginning and ending number of recurring revenue customers for the period.

Non-GAAP Financial Measures - To supplement our condensed consolidated financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures.

We believe that these non-GAAP financial measures provide useful information to our management, Board of Directors, and investors regarding certain financial and business trends relating to our financial condition and results of operations.

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Adjusted EBITDA and Adjusted EBITDA Margin are used to measure operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP.

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Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this “ Management’s Discussion and Analysis of Financial Condition and Results of Operations.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2025

Results of Operations

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

The following table presents our results of operations for the periods indicated:

Three Months Ended September 30,

Three Months Ended March 31,

2025 2024 Change

11 unchanged sentences

Income from operations 25,956 14 15,403 10 10,553 69

Other income, net 3,778 2 1,702 1 2,076 NM

Other income, net 2,207 1 3,132 2 (925) (30)

Income before income taxes 28,163 16 18,535 12 9,628 52

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(1) Amounts in column may not foot due to rounding

(2) NM = not meaningful

Revenues - Revenues increased for the 97th consecutive quarter.

The increase in revenue period-over-period resulted primarily from the increase in average recurring revenues per recurring revenue customer, which we also refer to as wallet share.

Additionally, the revenue growth was attributable to an increase in recurring revenue customers, which is driven primarily by continued business growth and by business acquisitions.

• Wallet share increased 18% to approximately $13,700 for the three months ended September 30, 2024 from approximately $11,650 for the same period in 2023.

This was primarily attributable to increased usage of our products by our recurring revenue customers.

• The number of recurring revenue customers increased 2% to approximately 45,200 at September 30, 2024 from approximately 44,500 at September 30, 2023, primarily d ue to sales and marketing efforts to acquire new customers and recent acquisitions.

The increase in revenue period-over-period resulted from an increase in average recurring revenues per recurring revenue customer, which we also refer to as “ARPU” and was previously referred to as “wallet share”, and from an increase in recurring revenue customers that was driven primarily by business acquisitions and continued business growth.

• ARPU increased 11% to approximately $13,850 for the three months ended March 31, 2025.

This was primarily attributable to increased usage of our products by our recurring revenue customers, partially offset by the addition of 3P recurring revenue customers.

• The number of recurring revenue customers increased 21% to approximately 54,150 at March 31, 2025.

Of the total recurring revenue customers, a pproximately 45,950 are 1P recurring revenue customers and the remainder are 3P recurring revenue customers.

The increase in recurring revenue customers is primarily d ue to recent acquisition s of 3P recurring revenue customers, which have an inconsequential impact on recurring revenue .

New recurring revenue customers do not have a meaningful contribution to revenue at the beginning of their tenure as our recurring revenue customer, and therefore a majority of the increased revenue was generated from existing recurring revenue customers.

• Approximately 50 recurring revenue customers were added in May 2024 due to the acquisition of the existing customer base of Traverse Systems, and approximately 200 recurring revenue customers were added in July 2024 due to the acquisition of the existing customer base of SupplyPike.

Additionally, approximately 8,500 recurring revenue customers were added in February 2025 due to the acquisition of the existing customer base of Carbon6, of which approximately 30 0 are 1P recurring revenue customers and the remainder are 3P recurring revenue customers.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

• Approximately 1,000 recurring revenue customers were added in September 2023 due to the acquisition of the existing customer base of TIE Kinetix.

Additionally, approximately 50 recurring revenue customers were added in May 2024 due to the acquisition of the existing customer base of Traverse Systems, and approximately 200 recurring revenue customers were added in July 2024 due to the acquisition of the existing customer base of SupplyPike.

Recurring revenues increased 21% to $154.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 .

Recurring revenues accounted for 94% of our total revenues for the three months ended September 30, 2024 and 2023.

We anticipate that the number of recurring revenue customers and wallet share will continue to increase as we execute our growth strategy focused on further penetration of our market.

Form 10-Q for the Quarterly Period ended March 31, 2025

Recurring revenues increased 23% to $172.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 .

Recurring revenues accounted for 95% and 93% of our total revenues for the three months ended March 31, 2025 and 2024, respectively.

We anticipate that the number of recurring revenue customers and ARPU will increase as we execute our growth strategy focused on further penetration of our market.

Cost of Revenues - The increase in cost of revenues was primarily due to increased headcount, which resulted in an increase of $5.3 million in personnel-related costs.

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General and Administrative Expenses - The increase in general and administrative expense was primarily due to increased headcount, which resulted in an increase of $2.6 million in personnel-related costs.

Additionally, there was an expense increase of $1.1 million associated with current and projected future credit losses and overall business growth.

Amortization of Intangible Assets - The increase in amortization of intangible assets was driven by acquired intangible assets related to recent business combinations.

Other Income, Net - The increase in other income, net was primarily due to realized gains from favorable foreign currency exchange rates.

Income Tax Expense - The increase in income tax expense was primarily driven by increases in pre-tax income and our US state effective rate, as partially offset by favorable return to provision adjustments made in the current period.

Other Income, Net - The decrease in other income, net was primarily due to a decrease in investment income.

Income Tax Expense - The increase in income tax expense was primarily driven by an increase in pre-tax income, a decrease in the excess tax benefits due to the current period equity award settlements and the change in non-deductible compensation.

Excess tax benefits generated upon the settlement or exercise of stock awards are recognized as a reduction to income tax expense and, as a result, we expect that our annual effective income tax rate will fluctuate.

Adjusted EBITDA - Adjusted EBITDA consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from foreign currency on cash and investments held, investment income, and other adjustments as necessary for a fair presentation.

Other adjustments for the three months ended September 30, 2024 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs.

Other adjustments for the three months ended September 30, 2023 included the expense impact from acquisition-related employee severance costs.

Other adjustments for the three months ended March 31, 2025 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs.

Net income is the comparable GAAP measure of financial performance.

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Three Months Ended

September 30,

(in thousands) 2025 2024

4 unchanged sentences

Stock-based compensation expense 13,867 20,018

Realized gain from foreign currency on cash and investments held (1,077) (98)

Realized gain from investments held and foreign currency impact on cash and investments (366) (304)

Investment income (1,849) (2,879)

1 unchanged sentence

Adjusted EBITDA $ 54,373 $ 44,402

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

Adjusted EBITDA Margin - Adjusted EBITDA Margin consists of Adjusted EBITDA divided by revenue.

Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2025

The following table provides a comparison of Margin to Adjusted EBITDA Margin:

Three Months Ended

September 30,

(in thousands, except Margin and Adjusted EBITDA Margin) 2025 2024

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Adjusted EBITDA Margin 30 % 30 %

Non-GAAP Income per Share - Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, other adjustments as necessary for a fair presentation, including for the three months ended September 30, 2024 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs and for the three months ended September 30, 2023 the expense impact from acquisition-related employee severance costs, and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period.

Non-GAAP Income per Share - Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, other adjustments as necessary for a fair presentation, including for the three months ended March 31, 2025 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs , and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period.

Net income per share, the comparable GAAP measure of financial performance, consists of net income divided by the weighted average number of shares of common and diluted stock outstanding during each period.

3 unchanged sentences

Three Months Ended

September 30,

(in thousands, except per share amounts) 2025 2024

2 unchanged sentences

Amortization of intangible assets 8,588 4,338

Realized gain from foreign currency on cash and investments held (1,077) (98)

Other 978 1,036

Income tax effects of adjustments (5,514) (4,981)

Non-GAAP income $ 35,069 $ 28,023

Shares used to compute net income and non-GAAP income per share

Basic 37,447 36,728

Diluted 37,996 37,584

Net income per share, basic $ 0.63 $ 0.46

Non-GAAP adjustments to net income per share, basic 0.31 0.30

Non-GAAP income per share, basic $ 0.94 $ 0.76

Net income per share, diluted $ 0.62 $ 0.45

Non-GAAP adjustments to net income per share, diluted 0.30 0.30

Non-GAAP income per share, diluted $ 0.92 $ 0.75

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

The following table presents our results of operations for the periods indicated:

Nine Months Ended September 30,

2024 2023 Change

($ in thousands) $ % of revenue (1)

$ % of revenue (1)

Revenues $ 466,858 100 % $ 391,945 100 % $ 74,913 19 %

Cost of revenues 155,129 33 133,029 34 22,100 17

Gross profit 311,729 67 258,916 66 52,813 20

Operating expenses

Sales and marketing 109,700 23 89,722 23 19,978 22

Research and development 45,667 10 39,438 10 6,229 16

General and administrative 76,575 16 64,275 16 12,300 19

Amortization of intangible assets 15,648 3 11,118 3 4,530 41

Total operating expenses 247,590 53 204,553 52 43,037 21

Income from operations 64,139 14 54,363 14 9,776 18

Other income, net 10,966 2 4,859 1 6,107 NM

Income before income taxes 75,105 16 59,222 15 15,883 27

Income tax expense 15,610 3 12,409 3 3,201 26

Net income $ 59,495 13 % $ 46,813 12 % $ 12,682 27 %

(1) Amounts in column may not foot due to rounding

(2) NM = "not meaningful"

Revenues - Revenues increased for the 95th consecutive quarter.

The increase in revenue period-over-period resulted primarily from the increase in average recurring revenues per recurring revenue customer, which we also refer to as wallet share.

Additionally, the revenue growth was attributable to an increase in recurring revenue customers, which is driven primarily by continued business growth and by business acquisitions.

• Wallet share increased 16% to approximately $13,000 for the nine months ended September 30, 2024 from approximately $11,250 for the same period in 2023.

This was primarily attributable to increased usage of our products by our recurring revenue customers.

• Approximately 1,000 recurring revenue customers were added in September 2023 due to the acquisition of the existing customer base of TIE Kinetix.

Recurring revenues increased 20% to $438.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 .

Recurring revenues accounted for 94% of our total revenues for the nine months ended September 30, 2024 compared to 93% for the same period in 2023.

We anticipate that the number of recurring revenue customers and wallet share will continue to increase as we execute our growth strategy focused on further penetration of our market.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

Cost of Revenues - The increase in cost of revenues was primarily due to increased headcount, which resulted in an increase of $14.1 million in personnel-related costs.

Additionally, there was an increase in our software subscriptions of $3.1 million due primarily to the general growth of our business.

Sales and Marketing Expenses - The increase in sales and marketing expense was primarily due to increased headcount, which resulted in an increase of $13.2 million in personnel-related costs, and an increase of $2.4 million in stock-based compensation.

Additionally, there was an increase of $2.2 million in product management costs.

Research and Development Expenses - The increase in research and development expense was primarily due to increased headcount, which resulted in an increase of $5.4 million in personnel-related costs.

General and Administrative Expenses - The increase in general and administrative expense was primarily due to increased headcount, which resulted in an increase of $5.2 million in personnel-related costs.

Additionally, there was an expense increase of $2.2 million associated with current and projected future credit losses and overall business growth.

Amortization of Intangible Assets - The increase in amortization of intangible assets was driven by acquired intangible assets related to recent business combinations.

Other Income, Net - The increase in other income, net was primarily due to increased investment income from favorable investment allocations and realized gains due to favorable foreign currency exchange rates.

Income Tax Expense - The increase in income tax expense was primarily driven by an increase in pre-tax income, as well as decreases in the excess tax benefits from current period equity award settlements, as partially offset by a decrease in nondeductible compensation.

Other adjustments for the nine months ended September 30, 2024 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs.

Other adjustments for the nine months ended September 30, 2023 included the expense impacts from acquisition-related employee severance costs and disposals of certain capitalized internally developed software.

Net income is the comparable GAAP measure of financial performance.

The following table provides a reconciliation of net income to Adjusted EBITDA:

Nine Months Ended

September 30,

(in thousands) 2024 2023

Net income $ 59,495 $ 46,813

Income tax expense 15,610 12,409

Depreciation and amortization of property and equipment 14,010 13,964

Amortization of intangible assets 15,648 11,118

Stock-based compensation expense 42,264 36,097

Realized gain from foreign currency on cash and investments held (2,636) (525)

Investment income (8,377) (5,372)

Other 978 1,170

Adjusted EBITDA $ 136,992 $ 115,674

Adjusted EBITDA Margin - Adjusted EBITDA Margin consists of Adjusted EBITDA divided by revenue.

Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

The following table provides a comparison of Margin to Adjusted EBITDA Margin:

Nine Months Ended

September 30,

(in thousands, except Margin and Adjusted EBITDA Margin) 2024 2023

Revenue $ 466,858 $ 391,945

Net income 59,495 46,813

Margin 13 % 12 %

Adjusted EBITDA 136,992 115,674

Adjusted EBITDA Margin 29 % 30 %

Non-GAAP Income per Share - Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, other adjustments as necessary for a fair presentation, including for the nine months ended September 30, 2024 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs and for the nine months ended September 30, 2023 the expense impacts from acquisition-related employee severance costs and disposals of certain capitalized internally developed software, and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period.

To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments.

The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.

The following table provides a reconciliation of net income per share to non-GAAP income per share:

Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023

Net income $ 59,495 $ 46,813

Stock-based compensation expense 42,264 36,097

Amortization of intangible assets 15,648 11,118

Realized gain from foreign currency on cash and investments held (2,636) (525)

Realized gain from investments held and foreign currency impact on cash and investments (366) (304)

Other 1,013 —

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SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

Form 10-Q for the Quarterly Period ended March 31, 2025

Critical Accounting Policies and Estimates

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Accordingly, we believe that our policies for revenue recognition, internally developed software, and business combinations are the most critical to fully understand and evaluate our financial condition and results of operations.

During the nine months ended September 30, 2024, there were no changes in our critical accounting policies or estimates.

During the three months ended March 31, 2025, there were no changes in our critical accounting policies or estimates.

For additional information regarding our critical accounting policies and estimates, see the discussion under "Critical Accounting Policies and Estimates" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC.

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Sources of Liquidity

As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents and short-term investments totaling $205.8 million and net accounts receivable of $55.6 million.

Our investments are selected in accordance with our investment policy, with a goal to preserve principal, provide liquidity, and maximize income consistent with minimizing risk of material loss.

Our cash equivalents and short-term investments are generally held in highly liquid money market funds, certificates of deposit, and commercial paper.

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $94.9 million and net accounts receivable of $63.4 million.

Statements of Cash Flows Summary

The summary of activity within the condensed consolidated statements of cash flows was as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2025 2024

1 unchanged sentence

Net cash used in investing activities (147,786) (2,945)

Net cash provided by (used in) financing activities (27,697) 10,005

Net cash used in financing activities (38,954) (14,889)

Operating Activities

The increase in cash provided by operating activities from the nine months ended September 30, 2023 to the nine months ended September 30, 2024 was primarily due to an increase in net income as adjusted for non-cash expenses, of $ 25.0 million, driven by continued growth in revenue, as partially offset by cash paid for expenses to operate the growing business.

Additionally, fluctuations in operating assets and liabilities resulted in a decrease of $7.7 million, driven by changes in the amount and timing of settlements and general growth of the business.

The increase in cash provided by operating activities from the three months ended March 31, 2024 to the three months ended March 31, 2025 was primarily due to an increase in net income as adjusted for non-cash expenses, of $ 6.2 million, driven by continued growth in revenue, as partially offset by cash paid for expenses to operate the growing business.

Investing Activities

The increase in cash used in investing activities from the nine months ended September 30, 2023 to the nine months ended September 30, 2024 was primarily due to an increase in cash used to acquire businesses of $ 77.2 million year-over-year to further grow our business, partially offset by an increase in cash provided by net maturities of investments of $ 58.8 million year-over-year.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

The increase in cash used in investing activities from the three months ended March 31, 2024 to the three months ended March 31, 2025 was primarily due to an increase in cash used to acquire a business of $ 141.6 million to further grow our business.

Financing Activities

The increase in cash used in financing activities from the nine months ended September 30, 2023 to the nine months ended September 30, 2024 was primarily due to an increase in cash used for share repurchases of $ 37.6 million year-over-year to continue to deliver shareholder value.

The increase in cash used in financing activities from the three months ended March 31, 2024 to the three months ended March 31, 2025 was primarily due to an increase in cash used for share repurchases of $ 23.5 million year-over-year to continue to deliver shareholder value.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended March 31, 2025

Contractual and Commercial Commitment Summary

Our contractual obligations and commercial commitments as o f September 30, 2024 are summarized below:

Our contractual obligations and commercial commitments as o f March 31, 2025 are summarized below:

Payments Due by Period

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Historically, we have experienced increases in our expenditures consistent with the growth in our operations and personnel, and we anticipate that our expenditures will continue to increase as we expand our business.

We believe our cash, cash equivalents, investments, and cash flows from our operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months.

We believe our cash, cash equivalents, and cash flows from our operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months.

Off-Balance Sheet Arrangements

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Foreign Currency Exchange and Inflation Rate Changes

For information regarding the effect of foreign currency exchange rate changes, refer to the section entitled “Foreign Currency Exchange Risk,” included in Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk” of this Quarterly Report on Form 10-Q.

Inflation and changing prices did not have a material effect on our business during the nine months ended September 30, 2024 and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.

SPS COMMERCE, INC.

Form 10-Q for the Quarterly Period ended September 30, 2024

For information regarding the effect of foreign currency exchange and inflation rate changes, refer to the section entitled “Foreign Currency Exchange Risk,” included in Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk” of this Quarterly Report on Form 10-Q.

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 2. Management’s Discussion and Analysis