SPS Commerce, Inc. (NASDAQ:SPSC) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 04:30 pm ET

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SPS Commerce, Inc. (NASDAQ:SPSC) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, and welcome to the SPS Commerce Q4 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

I would like to turn the conference over to your host, Ms. Irmina Blaszczyk. Ma'am, please go ahead.

Executive
Irmina Blaszczyk

Thank you, Jona. Good afternoon, everyone, and thank you for joining us on SPS Commerce Fourth Quarter and Full Year 2019 Conference Call. We will make certain statements today, including with respect to our expected financial results, go-to-market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially.

Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to our SEC filings, specifically our Form 10-K as well as our financial results press release, for a more detailed description of the risk factors that may affect our results. These documents are available at our website, spscommerce.com, and at the SEC's website, sec.gov. In addition, we are providing a historical data sheet for easy reference on our Investor Relations section of the website, spscommerce.com.

During our call today, we will discuss adjusted EBITDA financial measures and non-GAAP earnings per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP and adjusted EBITDA measures, including reconciliations of these measures with comparable GAAP measures.

And with that, I will turn the call over to Archie.

Executive
Archie Black

Thanks, Irmina and welcome, everyone. 2019 was a year of significant accomplishments for SPS Commerce. We continued to deliver on our strategic goals and financial targets as we expand our community of trading partners and leverage the unique lead generation engine fueled by the power of the SPS Commerce network. In 2019, the number of recurring revenue customers reached approximately 30,800, nearly 3 times the number of customers since we went public in 2010. We acquired MAPADOC to expand our leadership in full service EDI and successfully completed the integration of two acquisitions made in 2018, EDI Admin and CovalentWorks. We remained committed to shareholder value and repurchased 418,000 shares at an average price of $49.38 per share.

For the full year, revenue grew 12% to $279.1 million, and adjusted EBITDA grew 36% to $69.8 million. Our consistent focus on profitability resulted in an adjusted EBITDA margin of 25% in 2019, up from 21% in 2018 and 16% in 2017. Throughout the year, we have seen retail dynamics continue to stabilize. The need for optimizing fulfillment and increasing collaboration positions SPS to capitalize on ongoing growth opportunities. As the industry evolution and omnichannel retail continues