10-Q 1 spsc-20220630.htm 10-Q spsc-20220630
000109269912-312022Q2false00010926992022-01-012022-06-3000010926992022-07-20xbrli:shares00010926992022-06-30iso4217:USD00010926992021-12-31iso4217:USDxbrli:shares00010926992022-04-012022-06-3000010926992021-04-012021-06-3000010926992021-01-012021-06-300001092699us-gaap:CommonStockMember2021-03-310001092699us-gaap:TreasuryStockMember2021-03-310001092699us-gaap:AdditionalPaidInCapitalMember2021-03-310001092699us-gaap:RetainedEarningsMember2021-03-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100010926992021-03-310001092699us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001092699us-gaap:CommonStockMember2021-04-012021-06-300001092699us-gaap:TreasuryStockMember2021-04-012021-06-300001092699us-gaap:RetainedEarningsMember2021-04-012021-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001092699us-gaap:CommonStockMember2021-06-300001092699us-gaap:TreasuryStockMember2021-06-300001092699us-gaap:AdditionalPaidInCapitalMember2021-06-300001092699us-gaap:RetainedEarningsMember2021-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000010926992021-06-300001092699us-gaap:CommonStockMember2022-03-310001092699us-gaap:TreasuryStockMember2022-03-310001092699us-gaap:AdditionalPaidInCapitalMember2022-03-310001092699us-gaap:RetainedEarningsMember2022-03-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100010926992022-03-310001092699us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001092699us-gaap:CommonStockMember2022-04-012022-06-300001092699us-gaap:TreasuryStockMember2022-04-012022-06-300001092699us-gaap:RetainedEarningsMember2022-04-012022-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001092699us-gaap:CommonStockMember2022-06-300001092699us-gaap:TreasuryStockMember2022-06-300001092699us-gaap:AdditionalPaidInCapitalMember2022-06-300001092699us-gaap:RetainedEarningsMember2022-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001092699us-gaap:CommonStockMember2020-12-310001092699us-gaap:TreasuryStockMember2020-12-310001092699us-gaap:AdditionalPaidInCapitalMember2020-12-310001092699us-gaap:RetainedEarningsMember2020-12-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100010926992020-12-310001092699us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001092699us-gaap:CommonStockMember2021-01-012021-06-300001092699us-gaap:TreasuryStockMember2021-01-012021-06-300001092699us-gaap:RetainedEarningsMember2021-01-012021-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001092699us-gaap:CommonStockMember2021-12-310001092699us-gaap:TreasuryStockMember2021-12-310001092699us-gaap:AdditionalPaidInCapitalMember2021-12-310001092699us-gaap:RetainedEarningsMember2021-12-310001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001092699us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001092699us-gaap:CommonStockMember2022-01-012022-06-300001092699us-gaap:TreasuryStockMember2022-01-012022-06-300001092699us-gaap:RetainedEarningsMember2022-01-012022-06-300001092699us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001092699spsc:FulfillmentMemberspsc:RecurringRevenuesMember2022-04-012022-06-300001092699spsc:FulfillmentMemberspsc:RecurringRevenuesMember2021-04-012021-06-300001092699spsc:FulfillmentMemberspsc:RecurringRevenuesMember2022-01-012022-06-300001092699spsc:FulfillmentMemberspsc:RecurringRevenuesMember2021-01-012021-06-300001092699spsc:RecurringRevenuesMemberspsc:AnalyticsMember2022-04-012022-06-300001092699spsc:RecurringRevenuesMemberspsc:AnalyticsMember2021-04-012021-06-300001092699spsc:RecurringRevenuesMemberspsc:AnalyticsMember2022-01-012022-06-300001092699spsc:RecurringRevenuesMemberspsc:AnalyticsMember2021-01-012021-06-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2022-04-012022-06-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2021-04-012021-06-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2022-01-012022-06-300001092699spsc:RecurringRevenuesMemberspsc:OtherMember2021-01-012021-06-300001092699spsc:RecurringRevenuesMember2022-04-012022-06-300001092699spsc:RecurringRevenuesMember2021-04-012021-06-300001092699spsc:RecurringRevenuesMember2022-01-012022-06-300001092699spsc:RecurringRevenuesMember2021-01-012021-06-300001092699spsc:OneTimeRevenuesMember2022-04-012022-06-300001092699spsc:OneTimeRevenuesMember2021-04-012021-06-300001092699spsc:OneTimeRevenuesMember2022-01-012022-06-300001092699spsc:OneTimeRevenuesMember2021-01-012021-06-300001092699srt:MinimumMember2022-01-012022-06-300001092699srt:MaximumMember2022-01-012022-06-300001092699spsc:SetUpFeesMember2022-03-310001092699spsc:SetUpFeesMember2021-03-310001092699spsc:SetUpFeesMember2021-12-310001092699spsc:SetUpFeesMember2020-12-310001092699spsc:SetUpFeesMember2022-04-012022-06-300001092699spsc:SetUpFeesMember2021-04-012021-06-300001092699spsc:SetUpFeesMember2022-01-012022-06-300001092699spsc:SetUpFeesMember2021-01-012021-06-300001092699spsc:SetUpFeesMember2022-06-300001092699spsc:SetUpFeesMember2021-06-300001092699us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2022-06-300001092699us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:CertificatesOfDepositMember2022-06-300001092699us-gaap:CertificatesOfDepositMember2021-12-310001092699spsc:MarketableSecuritiesMemberus-gaap:CommercialPaperMember2022-06-300001092699spsc:MarketableSecuritiesMemberus-gaap:CommercialPaperMember2021-12-310001092699spsc:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2022-06-300001092699spsc:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel3Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMember2022-06-300001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001092699us-gaap:FairValueMeasurementsRecurringMember2021-12-310001092699spsc:InternallyDevelopedSoftwareMember2022-06-300001092699spsc:InternallyDevelopedSoftwareMember2021-12-310001092699us-gaap:ComputerEquipmentMember2022-06-300001092699us-gaap:ComputerEquipmentMember2021-12-310001092699us-gaap:LeaseholdImprovementsMember2022-06-300001092699us-gaap:LeaseholdImprovementsMember2021-12-310001092699spsc:OfficeEquipmentAndFurnitureMember2022-06-300001092699spsc:OfficeEquipmentAndFurnitureMember2021-12-310001092699us-gaap:CustomerRelationshipsMember2022-06-300001092699us-gaap:CustomerRelationshipsMember2021-01-012021-06-300001092699us-gaap:TechnologyBasedIntangibleAssetsMember2022-06-300001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-06-300001092699us-gaap:CustomerRelationshipsMember2021-12-310001092699us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-12-310001092699us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-12-3100010926992021-01-012021-12-31xbrli:pure0001092699us-gaap:CommonStockMemberspsc:A2019StockRepurchaseProgramMember2022-06-300001092699us-gaap:CommonStockMemberspsc:A2019StockRepurchaseProgramMember2022-01-012022-06-300001092699us-gaap:CommonStockMemberspsc:A2021StockRepurchaseProgramMember2022-06-300001092699spsc:A2022StockRepurchaseProgramMemberus-gaap:SubsequentEventMemberus-gaap:CommonStockMember2022-07-260001092699us-gaap:CostOfSalesMember2022-04-012022-06-300001092699us-gaap:CostOfSalesMember2021-04-012021-06-300001092699us-gaap:CostOfSalesMember2022-01-012022-06-300001092699us-gaap:CostOfSalesMember2021-01-012021-06-300001092699us-gaap:SellingAndMarketingExpenseMember2022-04-012022-06-300001092699us-gaap:SellingAndMarketingExpenseMember2021-04-012021-06-300001092699us-gaap:SellingAndMarketingExpenseMember2022-01-012022-06-300001092699us-gaap:SellingAndMarketingExpenseMember2021-01-012021-06-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001092699us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001092699us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-300001092699us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001092699us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001092699us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001092699us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001092699us-gaap:PerformanceSharesMember2022-04-012022-06-300001092699us-gaap:PerformanceSharesMember2021-04-012021-06-300001092699us-gaap:PerformanceSharesMember2022-01-012022-06-300001092699us-gaap:PerformanceSharesMember2021-01-012021-06-300001092699us-gaap:RestrictedStockUnitsRSUMember2022-04-012022-06-300001092699us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001092699us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001092699us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2022-04-012022-06-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2021-04-012021-06-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2022-01-012022-06-300001092699spsc:RestrictedStockUnitsAndDeferredStockUnitsMember2021-01-012021-06-300001092699spsc:EmployeeStockPurchasePlanMember2022-04-012022-06-300001092699spsc:EmployeeStockPurchasePlanMember2021-04-012021-06-300001092699spsc:EmployeeStockPurchasePlanMember2022-01-012022-06-300001092699spsc:EmployeeStockPurchasePlanMember2021-01-012021-06-300001092699spsc:FourZeroOneKStockMatchMember2022-04-012022-06-300001092699spsc:FourZeroOneKStockMatchMember2021-04-012021-06-300001092699spsc:FourZeroOneKStockMatchMember2022-01-012022-06-300001092699spsc:FourZeroOneKStockMatchMember2021-01-012021-06-300001092699us-gaap:EmployeeStockOptionMember2022-06-300001092699us-gaap:PerformanceSharesMember2020-01-012020-03-310001092699us-gaap:PerformanceSharesMember2019-01-012019-03-310001092699us-gaap:PerformanceSharesMember2021-01-012021-03-310001092699us-gaap:PerformanceSharesMember2022-01-012022-03-310001092699srt:MaximumMemberus-gaap:PerformanceSharesMember2022-01-012022-03-310001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2021-12-310001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2022-01-012022-06-300001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMember2022-06-300001092699spsc:PerformanceShareUnitsRestrictedStockUnitsRestrictedStockAwardsAndDeferredStockUnitsMembersrt:MaximumMember2022-06-300001092699us-gaap:EmployeeStockMember2022-04-012022-06-300001092699us-gaap:EmployeeStockMember2021-04-012021-06-300001092699us-gaap:EmployeeStockMember2022-01-012022-06-300001092699us-gaap:EmployeeStockMember2021-01-012021-06-300001092699us-gaap:EmployeeStockMember2022-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMemberus-gaap:SalesRevenueNetMember2022-04-012022-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMemberus-gaap:SalesRevenueNetMember2021-04-012021-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMemberus-gaap:SalesRevenueNetMember2022-01-012022-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:GeographicDistributionDomesticMemberus-gaap:SalesRevenueNetMember2021-01-012021-06-30spsc:jurisdiction0001092699us-gaap:GeographicConcentrationRiskMembersrt:MaximumMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicDistributionForeignMember2022-01-012022-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicDistributionForeignMember2022-01-012022-06-300001092699us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicDistributionForeignMember2021-01-012021-12-310001092699us-gaap:SubsequentEventMemberspsc:GCommerceIncMember2022-07-192022-07-19
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: June 30, 2022
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ________ to ________
Commission file number 001-34702
SPS COMMERCE, INC.
spsc-20220630_g1.jpg
(Exact Name of Registrant as Specified in its Charter)
Delaware41-2015127
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
333 South Seventh Street, Suite 1000, Minneapolis, MN 55402
(Address of principal executive offices, including Zip Code)
(612) 435-9400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.001 per shareSPSC
The Nasdaq Stock Market LLC (Nasdaq Global Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding at July 20, 2022 was 36,015,159 shares.


SPS COMMERCE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Unless the context otherwise requires, for purposes of the Quarterly Report on Form 10-Q, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
2
Form 10-Q for the Quarterly Period ended June 30, 2022

PART I. – FINANCIAL INFORMATION
Item 1. Financial Statements
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares)June 30,
2022
December 31,
2021
ASSETS(unaudited)
Current assets
Cash and cash equivalents$212,725 $207,552 
Short-term investments46,513 49,758 
Accounts receivable44,559 38,811 
Allowance for credit losses(4,454)(4,249)
Accounts receivable, net40,105 34,562 
Deferred costs48,294 44,529 
Other assets17,912 16,042 
Total current assets365,549 352,443 
Property and equipment, net32,000 31,901 
Operating lease right-of-use assets9,578 10,851 
Goodwill142,960 143,663 
Intangible assets, net53,597 58,587 
Other assets 
Deferred costs, non-current16,371 15,191 
Deferred income tax assets191 182 
Other assets, non-current2,530 3,028 
Total assets$622,776 $615,846 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current liabilities  
Accounts payable$4,442 $8,330 
Accrued compensation25,855 31,661 
Accrued expenses7,508 8,345 
Deferred revenue59,093 50,428 
Operating lease liabilities4,341 4,108 
Total current liabilities101,239 102,872 
Other liabilities  
Deferred revenue, non-current5,281 5,144 
Operating lease liabilities, non-current14,239 16,426 
Deferred income tax liabilities4,997 7,145 
Total liabilities125,756 131,587 
Commitments and contingencies
Stockholders' equity  
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
  
Common stock, $0.001 par value; 110,000,000 shares authorized; 38,074,026 and 37,798,610 shares issued; and 36,029,477 and 36,009,257 shares outstanding, respectively
38 38 
Treasury Stock, at cost; 2,044,549 and 1,789,353 shares, respectively
(115,900)(85,677)
Additional paid-in capital453,922 433,258 
Retained earnings161,443 138,087 
Accumulated other comprehensive loss(2,483)(1,447)
Total stockholders’ equity497,020 484,259 
Total liabilities and stockholders’ equity$622,776 $615,846 
See accompanying notes to these condensed consolidated financial statements.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
3
Form 10-Q for the Quarterly Period ended June 30, 2022

SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except per share amounts) (unaudited)2022202120222021
Revenues$109,178 $94,539 $214,371 $184,633 
Cost of revenues37,530 31,730 72,919 61,700 
Gross profit71,648 62,809 141,452 122,933 
Operating expenses
Sales and marketing24,582 21,952 49,237 43,307 
Research and development11,432 8,899 22,133 17,605 
General and administrative17,198 15,758 32,666 30,495 
Amortization of intangible assets2,468 2,671 4,938 5,335 
Total operating expenses55,680 49,280 108,974 96,742 
Income from operations15,968 13,529 32,478 26,191 
Other expense, net(1,338)(383)(915)(708)
Income before income taxes14,630 13,146 31,563 25,483 
Income tax expense3,877 2,963 8,207 5,100 
Net income$10,753 $10,183 $23,356 $20,383 
Other comprehensive income (expense)
Foreign currency translation adjustments(1,743)172 (1,013)364 
Unrealized loss on investments, net of tax of ($3), ($12), ($4) and $(27), respectively
(8)(35)(11)(80)
Reclassification of (gain) loss on investments into earnings, net of tax of $(8), $11, $(4) and $30, respectively
(23)33 (12)90 
Total other comprehensive income (expense)(1,774)170 (1,036)374 
Comprehensive income$8,979 $10,353 $22,320 $20,757 
Net income per share
Basic$0.30 $0.28 $0.65 $0.57 
Diluted$0.29 $0.28 $0.63 $0.55 
Weighted average common shares used to compute net income per share
Basic36,085 35,903 36,110 35,828 
Diluted36,862 36,753 36,897 36,741 
See accompanying notes to these condensed consolidated financial statements.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
4
Form 10-Q for the Quarterly Period ended June 30, 2022

SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Common StockTreasury Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTotal
Stockholders'
Equity
(in thousands, except shares) (unaudited)Shares AmountSharesAmount
Balances, March 31, 202135,861,584 $37 1,613,250 $(65,247)$402,860 $103,690 $(817)$440,523 
Stock-based compensation— — — — 7,014 — — 7,014 
Shares issued pursuant to stock awards36,756 1 — — 1,227 — — 1,228 
Employee stock purchase plan activity24,528 — — — 2,081 — — 2,081 
Repurchases of common stock(63,515)— 63,515 (6,450)— — — (6,450)
Net income— — — — — 10,183 — 10,183 
Foreign currency translation adjustments— — — — — — 172 172 
Unrealized loss on investments, net of tax— — — — — — (35)(35)
Reclassification of loss on investments into earnings, net of tax— — — — — — 33 33 
Balances, June 30, 202135,859,353 $38 1,676,765 $(71,697)$413,182 $113,873 $(647)$454,749 
Balances, March 31, 202236,120,518 $38 1,910,897 $(100,903)$442,405 $150,690 $(709)$491,521 
Stock-based compensation— — — — 8,128 — — 8,128 
Shares issued pursuant to stock awards9,274 — — — 186 — — 186 
Employee stock purchase plan activity33,337 — — — 3,203 — — 3,203 
Repurchases of common stock(133,652)— 133,652 (14,997)— — — (14,997)
Net income— — — — — 10,753 — 10,753 
Foreign currency translation adjustments— — — — — — (1,743)(1,743)
Unrealized loss on investments, net of tax— — — — — — (8)(8)
Reclassification of gain on investments into earnings, net of tax— — — — — — (23)(23)
Balances, June 30, 202236,029,477 $38 2,044,549 $(115,900)$453,922 $161,443 $(2,483)$497,020 
Common StockTreasury Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTotal
Stockholders'
Equity
Shares AmountSharesAmount
Balances, December 31, 202035,487,217 $37 1,613,250 $(65,247)$393,462 $93,490 $(1,021)$420,721 
Stock-based compensation— — — — 13,505 — — 13,505 
Shares issued pursuant to stock awards409,502 1 — — 4,029 — — 4,030 
Employee stock purchase plan activity26,149 — — — 2,186 — — 2,186 
Repurchases of common stock(63,515)— 63,515 (6,450)— — — (6,450)
Net income— — — — — 20,383 — 20,383 
Foreign currency translation adjustments— — — — — — 364 364 
Unrealized loss on investments, net of tax— — — — — — (80)(80)
Reclassification of loss on investments into earnings, net of tax— — — — — — 90 90 
Balances, June 30, 202135,859,353 $38 1,676,765 $(71,697)$413,182 $113,873 $(647)$454,749 
        
Balances, December 31, 202136,009,257 $38 1,789,353 $(85,677)$433,258 $138,087 $(1,447)$484,259 
Stock-based compensation— — — — 16,624 — — 16,624 
Shares issued pursuant to stock awards240,381  — — 690 — — 690 
Employee stock purchase plan activity35,035 — — — 3,350 — — 3,350 
Repurchases of common stock(255,196)— 255,196 (30,223)— — — (30,223)
Net income— — — — — 23,356 — 23,356 
Foreign currency translation adjustments— — — — — — (1,013)(1,013)
Unrealized loss on investments, net of tax— — — — — — (11)(11)
Reclassification of gain on investments into earnings, net of tax— — — — — — (12)(12)
Balances, June 30, 202236,029,477 $38 2,044,549 $(115,900)$453,922 $161,443 $(2,483)$497,020 
See accompanying notes to these condensed consolidated financial statements.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
5
Form 10-Q for the Quarterly Period ended June 30, 2022

SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
(in thousands) (unaudited)20222021
Cash flows from operating activities
Net income$23,356 $20,383 
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes(2,160)351 
Depreciation and amortization of property and equipment7,814 7,294 
Amortization of intangible assets4,938 5,335 
Provision for credit losses2,634 2,831 
Stock-based compensation17,676 14,424 
Other, net8 170 
Changes in assets and liabilities
Accounts receivable(7,862)(6,945)
Deferred costs(5,095)(3,338)
Other current and non-current assets(1,423)(1,201)
Accounts payable(3,234)(147)
Accrued compensation(7,186)3,246 
Accrued expenses(805)(2,087)
Deferred revenue8,802 12,893 
Operating leases(678)1,449 
Net cash provided by operating activities36,785 54,658 
Cash flows from investing activities
Purchases of property and equipment(8,191)(8,738)
Purchases of investments(114,603)(44,034)
Maturities of investments117,500 35,000 
Net cash used in investing activities(5,294)(17,772)
Cash flows from financing activities
Repurchases of common stock(30,223)(6,450)
Net proceeds from exercise of options to purchase common stock690 4,030 
Net proceeds from employee stock purchase plan3,350 2,186 
Payments for contingent consideration (2,042)
Net cash used in financing activities(26,183)(2,276)
Effect of foreign currency exchange rate changes(135)65 
Net increase in cash and cash equivalents5,173 34,675 
Cash and cash equivalents at beginning of period207,552 149,692 
Cash and cash equivalents at end of period$212,725 $184,367 
See accompanying notes to these condensed consolidated financial statements.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
6
Form 10-Q for the Quarterly Period ended June 30, 2022

SPS COMMERCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A – General
Business Description

SPS Commerce is a leading provider of cloud-based supply chain management services across our global retail network. Our products make it easier for retailers, suppliers, grocers, distributors, and logistics firms to orchestrate the management of item data, order fulfillment, inventory control, and sales analytics across omnichannel retail channels. SPS Commerce delivers our products using a full-service model whereby our internal experts monitor, update, and boost network performance on our customers’ behalf.
The services offered by SPS Commerce eliminate the need for on-premise software and support staff by taking on that capability on the customer’s behalf. The services we provide enable our customers to increase their supply cycle agility, optimize their inventory levels and sell-through, reduce operational costs and gain increased visibility into customer orders, to help ensure that suppliers, grocers, distributors, and logistics firms can satisfy exacting retailer requirements.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
This interim financial information has been prepared under the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”). We have included all normal recurring adjustments considered necessary to provide a fair presentation of our financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Significant Accounting Policies
There were no material changes in our significant accounting policies during the six months ended June 30, 2022. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding our significant accounting policies.
Accounting Pronouncements Not Yet Adopted
StandardDate of IssuanceDescriptionDate of Required AdoptionEffect on the Financial Statements
ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
October 2021This amendment requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, effective for all business combinations in the year of adoption and thereafter.
January 2023The adoption of this standard may have a material impact on the purchase accounting for business combinations depending on the specific amount of contract assets and liabilities being acquired.
spsc-20220630_g2.jpgSPS COMMERCE, INC.
7
Form 10-Q for the Quarterly Period ended June 30, 2022

NOTE B – Revenue
We derive our revenues from the following revenue streams:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2022202120222021
Recurring revenues:
Fulfillment$87,887 $75,228 $172,618 $146,632 
Analytics11,648 10,381 22,944 20,525 
Other1,628 1,331 3,168 2,584 
Recurring revenues101,163 86,940 198,730 169,741 
One-time revenues8,015 7,599 15,641 14,892 
Total revenue$109,178 $94,539 $214,371 $184,633 
Revenues are the amount that reflects the consideration we are contractually and legally entitled to, as well as expect to collect, in exchange for those services.
Recurring Revenues
Recurring revenues consist of recurring subscriptions from customers that utilize our Fulfillment, Analytics, and Other supply chain management products. Revenue for these products is generally recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our contracts with our recurring revenue customers are recurring in nature, generally ranging from monthly to annual, and generally allow the customer to cancel the contract for any reason with 30 to 90 days’ notice. Timing of billings varies by customer and by contract type and generally are either in advance or within 30 days of the service being performed.
Given that the recurring revenue contracts are for one year or less, we have applied the optional exemption to not disclose information about the remaining performance obligations for recurring revenue contracts.
One-time Revenues
One-time revenues consist of set-up fees and miscellaneous fees from customers.
Set-up revenues
Set-up fees are specific for each connection a customer has with a trading partner. These nonrefundable fees are necessary for our customers to utilize our services and do not provide any standalone value. Many of our customers have connections with numerous trading partners.
Set-up fees constitute a material renewal option right that provide customers a significant future incentive that would not be otherwise available to that customer unless they entered into the contract, as the set-up fees will not be incurred again upon contract renewal. As such, set-up fees and related costs are deferred and recognized ratably over two years, which is the estimated period for which a material right is present for our customers.
The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2022202120222021
Balance, beginning of period$14,938 $12,102 $14,459 $11,118 
Invoiced set-up fees4,058 4,343 8,061 8,210 
Recognized set-up fees(3,687)(3,101)(7,211)(5,984)
Balance, end of period$15,309 $13,344 $15,309 $13,344 
spsc-20220630_g2.jpgSPS COMMERCE, INC.
8
Form 10-Q for the Quarterly Period ended June 30, 2022

The entire balance of deferred set-up fees will be recognized within two years. Those that will be recognized within the next year are classified as current, whereas the remainder are classified as non-current.
Miscellaneous one-time revenues
Miscellaneous one-time fees consist of professional services and testing and certification.
The contract period for these one-time fees is for one year or less and recognized at the time service is provided. We have applied the optional exemption to not disclose information about the remaining performance obligations for miscellaneous one-time fee contracts since they have original durations of one year or less.
NOTE C – Deferred Costs
The deferred costs activity was as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2022202120222021
Balance, beginning of period$62,610 $51,540 $59,720 $50,595 
Incurred deferred costs17,637 16,036 35,418 29,463 
Amortized deferred costs(15,582)(13,735)(30,473)(26,217)
Balance, end of period$64,665 $53,841 $64,665 $53,841 
NOTE D – Financial Instruments
Cash Equivalents and Investments
Cash equivalents and investments consisted of the following:
June 30, 2022December 31, 2021
(in thousands)Amortized CostUnrealized Losses, netFair ValueAmortized CostUnrealized Gains (Losses), netFair Value
Cash equivalents:
Money market funds$138,729 $ $138,729 $138,205 $ $138,205 
Certificates of deposit6,904  6,904 7,268  7,268 
Marketable securities:
Commercial paper39,634 (25)39,609 34,984 7 34,991 
U.S. treasury securities   7,500 (1)7,499 
$185,267 $(25)$185,242 $187,957 $6 $187,963 
spsc-20220630_g2.jpgSPS COMMERCE, INC.
9
Form 10-Q for the Quarterly Period ended June 30, 2022

Recurring Fair Value Measurements
The following table details the fair value hierarchy of our assets and liabilities measured at a fair value on a recurring basis:
June 30, 2022December 31, 2021
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds$138,729 $ $ $138,729 $138,205 $ $ $138,205 
Certificates of deposit6,904   6,904 7,268   7,268 
Marketable securities:
Commercial paper 39,609  39,609  34,991  34,991 
U.S. treasury securities     7,499  7,499 
$145,633 $39,609 $ $185,242 $145,473 $42,490 $ $187,963 
See Note E to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding the three levels of inputs that may be used to measure fair value.
NOTE E – Allowance for Credit Losses
The allowance for credit losses activity, included in accounts receivable, net, was as follows:
Six Months Ended
June 30,
(in thousands)20222021
Balance, beginning of period$4,249 $4,233 
Provision for credit losses2,634 2,831 
Write-offs, net of recoveries(2,429)(2,809)
Balance, end of period$4,454 $4,255 
NOTE F – Property and Equipment, Net
Property and equipment, net consisted of the following:
(in thousands)June 30,
2022
December 31, 2021
Internally developed software$47,230 $44,981 
Computer equipment31,305 29,329 
Leasehold improvements16,650 16,685 
Office equipment and furniture10,929 10,972 
Property and equipment, cost106,114 101,967 
Less: accumulated depreciation and amortization(74,114)(70,066)
Total property and equipment, net$32,000 $31,901 
spsc-20220630_g2.jpgSPS COMMERCE, INC.
10
Form 10-Q for the Quarterly Period ended June 30, 2022

NOTE G – Goodwill and Intangible Assets, Net
Goodwill
The activity in goodwill was as follows:
Six Months Ended
June 30,
(in thousands)20222021
Balance, beginning of period$143,663 $134,853 
Foreign currency translation(703)233 
Remeasurement from provisional purchase accounting amount 268 
Balance, end of period$142,960 $135,354 
Intangible Assets
Intangible assets, net consisted of the following:
June 30, 2022
($ in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Foreign
Currency
Translation
NetWeighted Average Remaining Amortization Period
Subscriber relationships$61,142 $(33,964)$(51)$27,127 6.0 years
Acquired technology35,327 (8,857) 26,470 6.3 years
$96,469 $(42,821)$(51)$53,597 6.2 years
December 31, 2021
($ in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Foreign
Currency
Translation
NetWeighted Average Remaining Amortization Period
Subscriber relationships$61,270 $(29,866)$(1,395)$30,009 6.4 years
Acquired technology35,316 (6,738) 28,578 6.8 years
$96,586 $(36,604)$(1,395)$58,587 6.6 years
The estimated future annual amortization expense related to intangible assets is as follows:
(in thousands) 
Remainder of 2022$4,924 
20239,777 
20248,534 
20258,396 
20267,392 
Thereafter14,573 
Total future amortization$53,597 
spsc-20220630_g2.jpgSPS COMMERCE, INC.
11
Form 10-Q for the Quarterly Period ended June 30, 2022

NOTE H – Commitments and Contingencies
Leases
The components of lease expense were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2022202120222021
Operating lease cost$740