Yahoo Finance SPS Commerce Inc (SPSC) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Q1 2024 Revenue: $149.6 million, up 19% year-over-year
Recurring Revenue Growth: 19% year-over-year
Adjusted EBITDA: $44.4 million, up 20% from $37 million in Q1 of last year
Total Cash and Investments: $291 million at the end of the quarter
Share Repurchase: Approximately $20 million of SPS shares
Q2 2024 Revenue Guidance: $150.9 million to $151.7 million
Q2 2024 Adjusted EBITDA Guidance: $43.4 million to $44.1 million
Full Year 2024 Revenue Guidance: $619.9 million to $621.9 million
Full Year 2024 Adjusted EBITDA Guidance: $185.1 million to $186.7 million
Full Year 2024 Non-GAAP Diluted Income Per Share: $3.28 to $3.32
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you talk about the contribution for VISION 33 in terms of your full year guidance, both in terms of the top line impact and maybe some margin impact? A: Kimberly Nelson, CFO of SPS Commerce, explained that VISION 33 was already a partner, so there would be no significant change in the financials for 2024 due to the acquisition. The purchase price was nominal, and the acquisition is not expected to impact the financials significantly.
Q: Was the large enablement campaign just about adding more connections, or was there cross-selling involved, such as your analytics platforms? A: CEO Chadwick Collins clarified that the campaign involved expanding the scope of supply chain data exchanged, which SPS could monetize. It primarily involved implementing an Advanced Shipping Notice for better visibility and distribution center efficiency, indicating no direct cross-selling of analytics platforms in this instance.
Q: How should we think about the net new customer acquisition environment? A: Chadwick Collins noted that the flat sequential growth in customer numbers was due to the focus on a large enablement program rather than a reflection of the market conditions, which remain healthy.
Q: Can you distinguish between wallet share growth from acquired businesses versus organic customers? A: CFO Kimberly Nelson indicated that recent acquisitions have not significantly impacted wallet share growth, which is primarily driven by the network effect of increasing revenue from customers over time as they connect with more retailers.
Q: With ongoing investments in supply chain management, are there potential natural product adjacencies that SPS could explore to capture a larger part of the spend? A: CEO Chadwick Collins suggested that while the current focus remains on their existing business model, future opportunities could include areas like shipping processes or other supply chain documents that complement their existing services.
Q: How does the large enablement campaign relate to future expansion opportunities with other retailers? A: Chadwick Collins described the campaign as part of their business model, emphasizing that expanding the scope of supply chain information exchanged is a growth lever for SPS, suggesting potential repeatable processes with other retailers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.