SPS Commerce (NASDAQ:SPSC) Issues Quarterly Earnings Results, Beats Estimates By $0.19 EPS

SPS Commerce (NASDAQ:SPSC) posted its earnings results on Thursday. The software maker reported $1.27 EPS for the quarter, topping analysts’ consensus estimates of $1.08 by $0.19, FiscalAI reports. SPS Commerce had a return on equity of 12.43% and a net margin of 11.92%.The business had revenue of $197.81 million during the quarter, compared to analyst estimates of $195.46 million. During the same quarter last year, the company earned $1.00 EPS. The company’s quarterly revenue was up 5.6% compared to the same quarter last year. SPS Commerce updated its Q3 2026 guidance to 1.200-1.230 EPS and its FY 2026 guidance to 4.840-4.930 EPS.

Here are the key takeaways from SPS Commerce’s conference call:

• Core business growth remained healthy: Q2 revenue rose 6% year over year to $197.8 million, while management said the business excluding the divested 3P Revenue Recovery unit grew at a high-single-digit rate, supported by upsell, cross-sell, and improving gross retention.
• SPS reported strong profitability and cash generation, with adjusted EBITDA of $66.6 million and trailing 12-month free cash flow of $198.7 million, up 40% year over year. The company used $51.2 million of quarterly free cash flow to repurchase shares.
• The company sold its 3P Revenue Recovery business for $9.5 million in cash and recorded a $23.5 million loss on the sale. Management said the divestiture removes a lower-overlap Amazon Marketplace business and sharpens focus on 1P suppliers, but it reduces second-half 2026 revenue by approximately $10.5 million.
• SPS is expanding its AI strategy through MAX, which is detecting supply-chain issues and delivering measurable customer savings. MAX is expected to become generally available to Fulfillment customers by the end of summer, with paid autonomous-agent bundles targeted for launch by late Q4 2026.
• Full-year 2026 guidance calls for revenue of $788.4 million to $793.4 million and adjusted EBITDA of $264.6 million to $269.1 million, implying roughly 34% adjusted EBITDA margin and about 300 basis points of margin expansion. Management expects core revenue growth in the high-single digits, although total customer counts are projected to be flat to slightly positive.

SPS Commerce Trading Up 10.2%

NASDAQ SPSC traded up $6.69 on Friday, hitting $72.52. 325,591 shares of the company traded hands, compared to its average volume of 692,203. The business’s 50 day moving average price is $58.53 and its 200-day moving average price is $62.27. The company has a market capitalization of $2.66 billion, a price-to-earnings ratio of 30.30 and a beta of 0.56. SPS Commerce has a 52-week low of $49.04 and a 52-week high of $124.08.

Analyst Ratings Changes

Several equities research analysts recently commented on the company. Zacks Research upgraded SPS Commerce from a “strong sell” rating to a “hold” rating in a report on Monday, July 20th. Morgan Stanley lowered shares of SPS Commerce from an “overweight” rating to an “underweight” rating and reduced their price target for the stock from $70.00 to $57.00 in a research note on Tuesday, July 21st. Rothschild & Co Redburn set a $60.00 price objective on shares of SPS Commerce and gave the company a “neutral” rating in a report on Thursday, April 16th. Citigroup restated a “buy” rating and set a $82.00 price objective (up from $76.00) on shares of SPS Commerce in a research report on Tuesday, July 21st. Finally, Stifel Nicolaus set a $70.00 target price on shares of SPS Commerce and gave the stock a “hold” rating in a research report on Friday. One analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Hold” and an average target price of $72.40.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in SPSC. Advisors Asset Management Inc. increased its position in SPS Commerce by 39.9% during the 1st quarter. Advisors Asset Management Inc. now owns 393 shares of the software maker’s stock valued at $52,000 after buying an additional 112 shares in the last quarter. State of Wyoming grew its stake in shares of SPS Commerce by 10.8% during the fourth quarter. State of Wyoming now owns 1,792 shares of the software maker’s stock worth $160,000 after acquiring an additional 174 shares during the last quarter. State of Tennessee Department of Treasury increased its holdings in shares of SPS Commerce by 1.0% during the fourth quarter. State of Tennessee Department of Treasury now owns 17,442 shares of the software maker’s stock valued at $1,557,000 after acquiring an additional 175 shares in the last quarter. NewEdge Advisors LLC raised its position in shares of SPS Commerce by 545.7% in the 1st quarter. NewEdge Advisors LLC now owns 226 shares of the software maker’s stock valued at $30,000 after purchasing an additional 191 shares during the last quarter. Finally, AQR Capital Management LLC raised its position in shares of SPS Commerce by 2.0% in the 1st quarter. AQR Capital Management LLC now owns 14,134 shares of the software maker’s stock valued at $1,876,000 after purchasing an additional 275 shares during the last quarter. 98.96% of the stock is currently owned by institutional investors.

Key SPS Commerce News

Here are the key news stories impacting SPS Commerce this week:

• Positive Sentiment: Q2 earnings and revenue exceeded expectations. Adjusted EPS was $1.27 versus the $1.08 consensus estimate, while revenue rose 5.6% year over year to approximately $197.8 million, ahead of the $195.5 million consensus. SPS Commerce Q2 Earnings and Revenues Beat Estimates
• Positive Sentiment: Profitability trends were strong on an adjusted basis. Adjusted EBITDA increased 19% to $66.6 million, and second-quarter revenue and adjusted EBITDA exceeded the high end of management’s guidance range. SPS Commerce Reports Strong Second Quarter 2026 Financial Results
• Positive Sentiment: Full-year EPS guidance was raised relative to consensus. SPS Commerce forecast FY 2026 adjusted EPS of $4.84–$4.93, above the $4.46 analyst estimate. The company also repurchased $51.2 million of stock during the quarter.
• Neutral Sentiment: The completed divestiture changes the growth profile. The sale of the 3P Revenue Recovery business is expected to reduce second-half 2026 revenue by about $10.5 million but remain neutral to adjusted EBITDA. Management’s full-year revenue forecast of $788.4–$793.4 million implies 5%–6% growth, but is below the $797.6 million consensus.
• Negative Sentiment: Near-term revenue guidance was cautious. Q3 revenue guidance of $196.3–$198.3 million fell short of the $202.4 million analyst estimate, despite EPS guidance of $1.20–$1.23 exceeding the $1.18 consensus.
• Negative Sentiment: GAAP net income declined. Net income fell to $6.9 million, or $0.19 per diluted share, from $19.7 million, or $0.52, a year earlier, even though adjusted EBITDA improved.

SPS Commerce Company Profile

SPS Commerce, Inc is a leading provider of cloud-based supply chain management solutions that enable seamless collaboration between retailers, suppliers and logistics providers. Through its robust network, SPS Commerce connects trading partners with electronic data interchange (EDI) capabilities, helping businesses automate order processing, inventory management and fulfillment workflows. The company’s platform ensures data accuracy, accelerates order-to-cash cycles and reduces manual intervention, supporting a wide range of industries including retail, grocery, consumer goods and automotive.

The company offers a suite of services encompassing EDI, retail-ready compliance, order management and data analytics.