SPS Commerce, Inc. (NASDAQ:SPSC) Q1 2020 Earnings Conference Call - Final Transcript

Apr 30, 2020 • 04:30 pm ET

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SPS Commerce, Inc. (NASDAQ:SPSC) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Archie Black

half of our networks seeing increased volume while some have experienced a decline.

The dynamics of the situation continue to evolve. At this time, we are seeing increased demand for automation from retailers embracing e-commerce and implementing drop ship capabilities. Our exposure to the grocery supply chain has resulted in an increase in onboarding of new suppliers for retailers as well as foodservice and grocery distributors. These are the dynamics that drive demand for SPS Commerce solutions, and we are optimistic about the long-term opportunities as we continue to support our growing network of over 31,000 trading partners.

As we look at the rest of 2020, this uncertainty around the duration and the magnitude of the pandemic and its growing impact on economy, we are factoring in the possibility of continued pressure on retailers, a decline in demand for our solutions such as analytics and a push out in enterprise ERP implementations, all of which would negatively impact our business. These are dynamics we cannot predict or control. But with our cloud-native operational model, we are well positioned to provide support to our customers, partners and our community.

In summary, SPS continues to be a mission-critical aspect of the global supply chain. Our vision to be the world's retail network is being realized. Our retail supply chain solutions are keeping trading partners connected, especially now during this time of crisis and disruption. The work we do is vital, and I would like to thank all of our employees for their ongoing commitment to supporting our customers and ensuring business and supply continuity for our communities. We achieved our 10th year as a public company in April. And based on our history of consistent execution and ongoing focus on our customers' needs, we believe SPS Commerce will emerge from this crisis stronger than ever.

With that, I'll turn it over to Kim to discuss our financial results.

Executive
Kim Nelson

Thanks, Archie.

We delivered a solid first quarter of 2020. Revenue was $74.2 million, an 11% increase over Q1 of last year and represented our 77th consecutive quarter of revenue growth. Recurring revenue this quarter grew 12% year-over-year. The total number of recurring revenue customers increased 5% year-over-year to approximately 31,000.

For Q1, wallet share was up 6% year-over-year at approximately 9,100. For the quarter, adjusted EBITDA was $20.4 million compared to $16.5 million in Q1 of last year. We ended the quarter with total cash and marketable securities of approximately $215 million. We also repurchased $12 million of SPS shares in the quarter.

Now turning to guidance. For the second quarter of 2020, we expect revenue to be in the range of $73.8 million to $74.8 million. We expect adjusted EBITDA to be in the range of $19 million to $20 million. We expect fully diluted earnings per share to be approximately $0.17 to $0.19 with fully diluted weighted average shares outstanding of approximately 36.2 million shares. We expect non-GAAP diluted earnings per share to be approximately $0.29 to $0.31, with stock-based compensation