What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-19 · 184 added, 120 removed, 821 unchanged (27% of the section changed)

40 unchanged sentences

Subjective auditor judgment was required in determining the nature and extent of procedures to be performed over revenue as well as the need to involve IT professionals with specialized skills and knowledge to assist in the performance of certain procedures.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

The following are the primary procedures we performed to address this critical audit matter.

3 unchanged sentences

We performed a software-assisted data analysis to test relationships among certain revenue transactions.

For a sample of transactions, we compared the amounts recognized by the Company with underlying documentation, including contracts with customers and cash receipts.

For a sample of transactions, we compared the amounts recognized by the Company with underlying documentation, including contracts with

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

customers and cash receipts.

Additionally, for the same sample of transactions, we recalculated the amount of revenue recognized in the period based on the terms of the arrangement.

13 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 19, 2026 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired SupplyPike during 2024, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, SupplyPike’s internal control over financial reporting associated with less than 5% of consolidated assets and less than 5% of consolidated revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of SupplyPike.

The Company acquired Carbon6 Technologies, Inc.

during 2025, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, Carbon6 Technologies, Inc.’s internal control over financial reporting associated with less than 5% of consolidated assets and approximately 5% of consolidated revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Carbon6 Technologies, Inc.

Basis for Opinion

24 unchanged sentences

Cash and cash equivalents $ 151,355 $ 241,017

Short-term investments — 56,359

Accounts receivable 75,295 56,214

26 unchanged sentences

Total liabilities 195,966 176,540

Commitments and contingencies

Commitments and contingencies (Note I)

Stockholders' equity

11 unchanged sentences

Retained earnings 429,438 336,099

Accumulated other comprehensive gain (loss) ( 9,683 ) 222

Accumulated other comprehensive loss ( 373 ) ( 9,683 )

Total stockholders’ equity 973,893 854,690

49 unchanged sentences

Employee stock purchase plan activity 63,641 — — — 8,114 — — 8,114

Repurchases of common stock ( 361,745 ) — 361,745 ( 43,215 ) — — — ( 43,215 )

Net income — — — — — 65,824 — 65,824

6 unchanged sentences

Employee stock purchase plan activity 61,979 — — — 9,827 — — 9,827

Repurchases of common stock, net of costs ( 205,331 ) — 205,331 ( 37,567 ) — — — ( 37,567 )

Reissuances of treasury stock 427,461 — ( 427,461 ) 66,711 24,713 — — 91,424

Net income — — — — — 77,054 — 77,054

6 unchanged sentences

Employee stock purchase plan activity 98,594 — — — 9,584 — — 9,584

Shares withheld for net share settlement ( 10,338 ) — 10,338 ( 843 ) — — — ( 843 )

Repurchases of common stock, net of costs ( 969,965 ) — 969,965 ( 115,010 ) — — — ( 115,010 )

2 unchanged sentences

Foreign currency translation adjustments — — — — — — 9,310 9,310

Unrealized gain on investments, net of tax — — — — — — 1,089 1,089

Reclassification of gain on investments into earnings, net of tax — — — — — — ( 1,610 ) ( 1,610 )

Balances, December 31, 2025 37,517,239 $ 40 2,531,171 $ ( 177,949 ) $ 722,737 $ 429,438 $ ( 373 ) $ 973,893

29 unchanged sentences

Maturities of investments — 143,275 131,331

Acquisition of businesses, net ( 147,924 ) ( 70,218 ) ( 91,420 )

Acquisition of business, net ( 142,628 ) ( 147,924 ) ( 70,218 )

Net cash used in investing activities ( 169,152 ) ( 110,454 ) ( 92,642 )

11 unchanged sentences

Cash paid for income taxes $ 28,892 $ 27,097 $ 29,207

Non-cash financing activity:

Contingent consideration related to acquisition $ — $ — $ 2,000

See accompanying notes to these consolidated financial statements.

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Business Description

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.

SPS Commerce is a global supply chain network that connects retailers, brands, distributors, manufacturers, and logistics providers through shared infrastructure built to handle the complexity of modern commerce operations.

Our network enables companies to connect once and immediately transact with thousands of trading partners without negotiating standards, building integrations, or maintaining compliance logic.

Our network powers our portfolio of solutions that orchestrate the critical processes, protocols, and data exchanges needed to get the right product, in the right place, at the right time, every time.

We have embedded deep expertise, proven processes, and compliance logic built from over 20 years of commerce intelligence into every connection, delivering a full-service experience that empowers partners to move forward faster, together.

Basis of Presentation

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dollars for balance sheet accounts using current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using an average exchange rate during the year.

The translation adjustments are deferred as a component of other comprehensive income within the consolidated statements of comprehensive income and the consolidated statements of stockholders' equity.

Gains or losses resulting from transactions denominated in foreign currencies are included in other income (expense), net in our consolidated statements of comprehensive income.

The translation adjustments are deferred as a component of other comprehensive income (expense) within the consolidated statements of comprehensive income and the consolidated statements of stockholders' equity.

Gains or losses resulting from transactions denominated in foreign currencies are included in other income, net in our consolidated statements of comprehensive income.

Use of Estimates

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There are no segment managers who are held accountable by the CODM, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level.

Adjusted EBITDA is a non-GAAP financial measure also reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations .

Adjusted EBITDA is a non-GAAP financial measure also reported in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report on Form 10-K.

Concentration of Credit Risk

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Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days.

We invest in money market funds, certificates of deposit, and/or marketable securities such as commercial paper, highly liquid debt instruments of the U.S.

government, and U.S.

corporate debt securities.

Investments with remaining maturities of less than one year from the balance sheet date are classified as short-term investments whereas those with remaining maturities of more than one year from the balance sheet date are classified as investments, non-current.

Securities classified as available for sale are carried at fair value and the unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive gain (loss) in the consolidated balance sheets.

10 unchanged sentences

• Level 1 – quoted prices in active markets for identical assets or liabilities.

• Level 2 – observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

• Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

31 unchanged sentences

We estimate the discount rate for a similar collateralized asset by estimating costs of borrowing.

The operating lease ROU asset also includes any lease payments made and lease incentives that have been incurred.

The operating lease ROU asset also includes any lease payments made and lease incentives that have been or are deemed probable to be incurred.

The options to extend our leases are not recognized as part of our ROU assets and lease liabilities unless it is reasonably certain that we will exercise that option.

3 unchanged sentences

Additionally, we review our lease liabilities for remeasurement whenever there is a triggering event or when relevant facts and circumstances change.

Variable lease payments primarily consist of common area maintenance charges and real estate taxes, which are based on our pro rata share of actual costs incurred by the landlord.

These variable lease payments are excluded from the measurement of our operating lease right-of-use assets and lease liabilities and are recognized as lease cost in the period in which the obligation for those payments is incurred.

Research and Development

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Intangible Assets

Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and developed technology.

Assets acquired in business combinations may include identifiable intangible assets such as customer relationships and developed technology.

We recognize the fair value of the identifiable intangible assets acquired separately from goodwill.

3 unchanged sentences

Estimated Useful Life

Subscriber relationships 7 - 10 years

Customer relationships 7 - 10 years

Developed technology 5 - 10 years

3 unchanged sentences

An impairment loss is measured and recorded as an expense in the consolidated statements of comprehensive income as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

Revenue Recognition

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-K for the Annual Period ended December 31, 2025

Revenue Recognition

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.

We determine revenue recognition through the following steps:

39 unchanged sentences

Share repurchases, reflected as treasury stock on the consolidated balance sheets, are accounted for as the trade date occurs and are reflected 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 consolidated balance sheets.

Share repurchases that have not yet settled in cash are included in accounts payable in the consolidated balance sheets.

Treasury stock reissuances are accounted for using the specific identification method, with gains (or losses to the extent of previously recognized gains) recognized in additional paid-in capital and any remaining loss recorded in retained earnings in the consolidated financial statements.

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Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Accounting Pronouncements Recently Adopted

1 unchanged sentence

Effect on the Financial Statements

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 resulted in additional disclosure.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

Accounting Pronouncements Not Yet Adopted

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

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.

2025 The prospective adoption resulted in additional disclosure in our Annual Report on

Form 10-K for the year ended December 31, 2025.

See Note L, Income Taxes, for further discussion on the adoption of the ASU.

Accounting Pronouncements Not Yet Adopted

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

ASU 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)

1 unchanged sentence

2027 We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

ASU 2025-05 , Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

July 2025 This amendment allows for entities to elect a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

(optional) We are currently evaluating the election of the practical expedient, but do not expect a material impact on our financial statements and related disclosures.

ASU 2025-06 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)

September 2025 This amendment modernizes the accounting for software costs under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software by removing all references to software development project stages.

The amendment requires an entity to begin capitalizing software costs when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

2028 We are currently evaluating the adoption on our financial statements and related disclosures.

ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvement

December 2025 The amendments in this update result in a comprehensive list of interim disclosures that are required by GAAP.

The objective of the amendments is to provide clarity about the current requirements, rather than

evaluate whether to expand or reduce interim disclosure requirements.

2028 We are currently evaluating the adoption on our interim financial statements and related disclosures.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE B – Business Acquisitions

Effective July 31, 2024, we acquired SupplyPike, a revenue recovery solution, through the purchase of all of the outstanding equity ownership interests in SupplyPike.

Carbon6 Technologies, Inc.

On December 30, 2024, we entered into a definitive agreement to acquire all of the outstanding equity ownership interests of Carbon6 Technologies, Inc.

("Carbon6"), a provider of software tools to Amazon.com, Inc.

sellers, including specialized offerings for revenue recovery for both first-party ("1P") and third-party ("3P") suppliers.

The acquisition became effective on February 4, 2025 ("Close").

Pursuant to the definitive agreement, the total consideration transferred was $ 210.2 million, net of cash acquired.

The consideration was comprised of $ 142.5 million paid in cash, net of cash acquired, and 378,100 shares of SPS common stock (valued at $ 67.7 million, determined at acquisition Close based on the price of SPS common stock).

The shares were issued from SPS treasury shares.

The goodwill associated with the acquisition is not deductible for income tax purposes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of SPS and Carbon6 assuming the acquisition was completed as of the beginning of the prior fiscal year, January 1, 2024.

These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined companies would have been, nor are they indicative of future results of operations.

The pro forma results reflect certain adjustments, such as one-time acquisition-related costs, incremental impact for amortization of acquired intangibles, and the elimination of debt extinguishment and interest costs.

The adjustments do not reflect synergies or costs that would have been expected to result from the integration of the acquisition.

Pro forma consolidated revenue and net income are as follows:

Year Ended December 31,

(unaudited, in thousands)

Revenue $ 755,686 $ 680,890

Net income 92,926 72,266

Effective July 31, 2024, we acquired SupplyPike, Inc.

("SupplyPike"), an automated invoice deduction management and prevention solution, through the purchase of all of the outstanding equity ownership interests of SupplyPike.

Pursuant to the definitive agreement and plan of merger, the total consideration transferred at close was $ 205.8 million, net of cash acquired.

The consideration was comprised of $ 118.6 million paid in cash and 404,587 shares of SPS common stock (valued at $ 87.2 million, determined at acquisition close based on the price of SPS common stock).

The shares were issued from SPS treasury shares, see Note J - Stockholders' Equity for further detail on the treasury share reissuance.

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

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

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

The consideration was comprised of $ 118.6 million paid in cash, net of cash acquired, and 404,587 shares of SPS common stock (valued at $ 87.2 million, determined at acquisition close based on the price of SPS common stock).

The shares were issued from SPS treasury shares.

The goodwill associated with the acquisition is not deductible for income tax purposes.

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 presents the purchase consideration and fair values of acquired assets and liabilities recorded in the Company's consolidated balance sheet as of the acquisition date:

(in thousands)

We accounted for each of the Carbon6 and SupplyPike acquisitions 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 respective acquisition dates.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

The following table presents the purchase consideration and estimated fair values of acquired assets and liabilities recorded in the Company's consolidated balance sheet as of the acquisition dates:

(in thousands) Carbon6 (1)

SupplyPike (2)

Cash paid $ 144,855 $ 124,769

2 unchanged sentences

Estimated fair value of assets and liabilities acquired:

Other assets 3,732

Cash $ 2,306 $ 6,118

Accounts receivable

Other assets, current and non-current 8,695 1,712

Intangible assets

Subscriber relationships 71,822

Customer relationships 44,535 62,967

Developed technology 29,370 21,090

Deferred revenue ( 604 ) ( 2,462 )

Other liabilities ( 2,644 )

Other liabilities, current and non-current ( 10,162 ) ( 2,644 )

Deferred income tax liabilities, net ( 3,753 ) ( 10,705 )

1 unchanged sentence

Goodwill $ 136,272 $ 133,829

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

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

Subscriber relationships 9.0 years

Developed technology 8.0 years

SupplyPike (2)

Customer relationships 8.0 years 9.0 years

Developed technology 9.0 years 8.0 years

(1) The purchase accounting for the Carbon6 acquisition has been finalized as of December 31, 2025;

provisional adjustments were primarily related to intangible assets, tax components, and correspondingly, goodwill.

(2) The purchase accounting for the SupplyPike acquisition is finalized.

Other Acquisition Activity

Traverse Systems

1 unchanged sentence

Total consideration transferred at close was $ 29.4 million, which was comprised of $ 25.0 million paid in cash and 22,874 shares of SPS common stock (valued at $ 4.4 million, determined at acquisition close based on the price of SPS common stock).

The shares were issued from SPS treasury shares, see Note J - Stockholders' Equity for further detail on the treasury share reissuance.

The shares were issued from SPS treasury shares.

We accounted for the acquisition as a business combination.

4 unchanged sentences

The goodwill associated with the acquisition is deductible for income tax purposes.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Effective April 10, 2024, the Company entered into an asset purchase agreement to acquire Vision33's SAP Business One SPS Integration Technology.

5 unchanged sentences

The goodwill associated with the acquisition is deductible for income tax purposes.

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 and the United States.

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.

In the year ended December 31, 2024, provisional amounts were adjusted by $ 1.8 million, primarily relating to a $ 2.9 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.

The purchase accounting was finalized in the year ended December 31, 2024.

The goodwill associated with the acquisition is not deductible for income tax purposes.

Other Acquisition Activity

On December 30, 2024, we entered into a definitive agreement to acquire all of the outstanding equity ownership interests of Carbon6, a provider of software tools to Amazon sellers, including specialized offerings for revenue recovery for both first-party (1P) and third-party (3P) suppliers.

The acquisition became effective on February 4, 2025 (" Close").

Pursuant to the definitive agreement, the total consideration transferred at Close was $ 209.1 million, net of cash acquired and subject to post-close customary adjustments.

The consideration was comprised of $ 141.4 million paid in cash and 378,100 shares of SPS common stock (valued at $ 67.7 million, determined at acquisition Close based on the price of SPS common stock).

The shares were issued from SPS treasury shares.

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-K for the Annual Period ended December 31, 2024

NOTE C – Revenue

19 unchanged sentences

Recurring Revenues

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

We define recurring revenue as active contracts during the reporting period under which the customer regularly pays 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.

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Given that the recurring revenue contracts are generally for one year or less, we have applied the optional exemption to not disclose information about the remaining performance obligations for recurring revenue contracts.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

One-time Revenues

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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.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

The table below presents the activity of the portion of the deferred revenue liability relating to set-up fee s.

20 unchanged sentences

Balance, end of year $ 87,412 $ 85,914

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE E – Fair Value Measurements

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Money market funds Level 1 $ 117,685 $ — $ 117,685 Level 1 $ 178,417 $ — $ 178,417

Certificates of deposit Level 2 — — — Level 1 6,805 — 6,805

Marketable securities:

Commercial paper Level 2 — — — Level 2 48,860 694 49,554

$ 178,417 $ — $ 178,417 $ 216,898 $ 694 $ 217,592

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

NOTE F – Allowance for Credit Losses

23 unchanged sentences

International property and equipment 26 % 18 %

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE H – Goodwill and Intangible Assets, Net

5 unchanged sentences

Foreign currency translation 6,570

Remeasurement from provisional purchase accounting amount 1,817

Remeasurement from provisional purchase accounting amount and other (1)

Balance, end of year $ 541,719

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

(1) Refer to Note B – Business Acquisitions for further information.

Intangible Assets

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Translation Net Weighted Average Remaining Amortization Period

Subscriber relationships $ 178,147 $ ( 47,432 ) $ ( 1,715 ) $ 129,000 7.3 years

Customer relationships $ 214,451 $ ( 70,050 ) $ 2,019 $ 146,420 6.6 years

Developed technology 105,599 ( 37,198 ) 994 69,395 6.1 years

5 unchanged sentences

Translation Net Weighted Average Remaining Amortization Period

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

Customer relationships $ 178,147 $ ( 47,432 ) $ ( 1,715 ) $ 129,000 7.3 years

Developed technology 77,108 ( 24,111 ) ( 703 ) 52,294 5.7 years

10 unchanged sentences

Total future amortization $ 215,815

NOTE I – Commitments and Contingencies

We are engaged in a lease agreement for our current headquarters located in Minneapolis, Minnesota where we lease approximately 200,000 square feet under an agreement that expires in 2027.

The lease also has two options to extend the term for five years each at a market rate determined in accordance with the lease.

We lease other smaller facilities across the U.S.

and international locations.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE I – Commitments and Contingencies

In October 2025, we executed the sixth amendment to our lease agreement (the "Amendment") for our current headquarters located in Minneapolis, Minnesota where we lease approximately 198,000 square feet effective October 1, 2025.

The Amendment extends the lease term to end in July 2043 and provides approximately $ 33 million of lease incentives, which were included in the initial measurement of the operating lease right-of-use asset.

The Company expects to utilize approximately $ 23 million of these lease incentives during the year ending December 31, 2027, with the remaining balance to be utilized thereafter.

The components of lease expense were as follows:

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Weighted-average discount rate 6.0 % 4.3 %

Future minimum lease payments under operating leases are presented net of lease incentives deemed payable at lease commencement.

At December 31, 2025, our future minimum payments under operating leases were as follows:

(in thousands)

2027 ( 21,307 )

Thereafter 35,466

2 unchanged sentences

Total operating lease liabilities 7,192

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Purchase Commitments

2 unchanged sentences

(in thousands)

2025 $ 14,187

Total remaining purchase commitments $ 18,347

Total estimated future purchases 18,261

Contingencies

1 unchanged sentence

We believe that the outcome of any such claim or legal action is not expected to have a material adverse effect on our financial position or results of operations.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

NOTE J – Stockholders’ Equity

3 unchanged sentences

(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 40,471 9,529 N/A

2024 Program August 2024 July 2026 100,000 99,990 N/A 10

2025 Program December 2025 December 2027 100,000 15,000 N/A 85,000

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 accounts payable in the condensed consolidated balance sheet.

The share repurchase activity by period was as follows:

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Average total cost per repurchased share $ 118.57 $ 182.96 $ —

On February 10, 2026 (announced February 12, 2026), our Board of Directors approved an additional $ 200.0 million in repurchase authority under our previously announced share repurchase program ("2025 Program" within the tables above) that was approved on October 29, 2025 to repurchase up to $ 100.0 million of our common stock, excluding costs to obtain, for a total authorized repurchase amount of $ 300.0 million.

Under the program, purchases may be made from time to time in the open market or in privately negotiated purchases, or both.

The share repurchase program became effective December 1, 2025 and expires on December 1, 2027.

Treasury Stock Reissuances

In connection with the acquisitions of Traverse Systems and SupplyPike, the Company re-issued treasury shares as part of the purchase consideration (see Note B – Business Combinations for further information).

In connection with the acquisitions of Carbon6, Traverse Systems, and SupplyPike, the Company re-issued treasury shares as part of the purchase consideration (see Note B – Business Acquisitions for further information).

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE K – Stock-Based Compensation

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At December 31, 2025, there were 11.6 million shares available for grant under approved equity compensation plans.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

Stock Options

Options generally vest over four years and, upon vesting, the holder is given the option to purchase shares of common stock at a specific strike price until expiration, which is generally seven years from the grant date.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Our stock option activity was as follows:

30 unchanged sentences

Risk-free interest rate 4.2 % 4.3 % 4.0 %

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Performance Share Units, Restricted Stock Units and Awards, and Deferred Stock Units

3 unchanged sentences

Expense is recognized on a straight-line basis over the performance period, regardless of whether the market condition is satisfied as the likelihood of the market condition being met is included in the fair-value measurement of the award.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

RSUs generally vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock.

25 unchanged sentences

A total of 1.5 million shares of common stock are remaining for issuance under the plan at December 31, 2025.

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

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:

5 unchanged sentences

Risk-free interest rate 4.3 % 5.3 % 4.9 %

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

Note L – Income Taxes

Our provision for income taxes was comprised of the following components:

Our provision (benefit) for income taxes was comprised of the following components:

Year Ended December 31,

6 unchanged sentences

Foreign ( 2,472 ) ( 1,152 ) ( 938 )

$ 22,422 $ 19,739 $ 16,190

The percentage of domestic income before income taxes, which we define as the percentage of consolidated income before income taxes that was attributable to our subsidiaries based in the U.S., was as follows:

Total $ 30,496 $ 22,422 $ 19,739

We define domestic and foreign income before income taxes as the consolidated income before income taxes that was attributable to either our subsidiaries based in the U.S.

("domestic"), or attributable to our subsidiaries outside of the U.S.

The percentage of consolidated income before income taxes attributable to our domestic subsidiaries was as follows:

Year Ended December 31,

1 unchanged sentence

Domestic income before income taxes 98 % 92 % 94 %

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

The following table reconciles the U.S.

federal statutory income tax rate with our effective tax rate and includes both the reporting currency amounts and percentages for each category of the reconciliation:

Year Ended December 31,

(in thousands) Amount Percent

statutory federal income tax $ 26,005 21.0 %

Increase (decrease) resulting from:

Research and development credit ( 6,921 ) ( 5.6 )

Other ( 140 ) ( 0.1 )

Nontaxable or nondeductible items

Nondeductible compensation 3,307 2.7

Other 110 0.1

Uncertain tax positions 1,619 1.3

Effect of cross-border tax laws ( 273 ) ( 0.2 )

state and local income taxes, net of federal effect (1)

Foreign tax effects 398 0.3

Total $ 30,496 24.6 %

state and local income taxes in California, New York, Illinois, Pennsylvania, and Wisconsin make up the majority (greater than 50%) of the tax effect in this category.

The following table reconciles the U.S.

federal statutory income tax rate with our effective tax rate:

Year Ended December 31,

2024 2023 2022

statutory federal income tax rate 21.0 % 21.0 %

10 unchanged sentences

The significant components of our deferred income tax assets and liabilities were as follows:

Year Ended December 31,

(in thousands) 2025 2024

16 unchanged sentences

Net deferred income tax liabilities $ ( 32,708 ) $ ( 15,036 )

As of December 31, 2024, we had the following tax loss carryforwards:

(in millions, except expiration dates) Amount Expiration Dates

Tax loss carryforwards, net of Section 382 limitations, were as follows:

Year Ended December 31,

(in millions) 2025

Operating loss carryforwards $ 36.8

2 unchanged sentences

State operating loss carryforwards $ 40.4

Foreign loss carryforwards 10.0 N/A

Total tax loss carryforwards, net of Section 382 limitations $ 50.7

Foreign loss carryforwards 14.9

Total loss carryforwards, net of Section 382 limitations $ 86.0

As of December 31, 2025, our federal net operating loss carryforwards, if not used, will begin to expire in 2028.

Federal net operating losses generated after December 31, 2018 will carry forward indefinitely.

State operating loss carryforwards begin to expire in 2026 and all foreign loss carryforwards are indefinite in expiration.

During the year ended December 31, 2025, we recorded an uncertain tax position.

The activity for the uncertain tax position was as follows:

Year Ended December 31,

(in thousands) 2025

Balance, beginning of year $ —

Changes from uncertain tax positions taken in current period 1,619

Balance, end of year $ 1,619

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

Income taxes paid (net of refunds received), by jurisdiction, were as follows:

Year Ended December 31,

(in thousands) 2025

Federal $ 16,600

California 1,610

NOTE M – Other Income and Expense

3 unchanged sentences

Investment income $ 4,649 $ 10,582 $ 7,660

Realized gain (loss) from investments held and foreign currency impact on cash and investments 115 1,726 ( 1,026 )

Other expense, net ( 104 ) ( 1,071 ) ( 502 )

Realized gain from investments held and foreign currency impact on cash and investments 388 115 1,726

Other income (expense), net 495 ( 104 ) ( 1,071 )

Total other income, net $ 5,532 $ 10,593 $ 8,315

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2024

NOTE N – Net Income Per Share

14 unchanged sentences

Anti-dilutive shares 511 55 36

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 31, 2025

NOTE O – Retirement Contributions

20 unchanged sentences

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

SPS COMMERCE, INC.

Form 10-K for the Annual Period ended December 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-K

Item 8. Financial Statements and Supplementary Data