SPS Commerce (NASDAQ:SPSC – Get Free Report) announced its quarterly earnings data on Thursday. The software maker reported $1.39 EPS for the quarter, beating analysts’ consensus estimates of $1.23 by $0.16, FiscalAI reports. The firm had revenue of $197.65 million for the quarter, compared to analyst estimates of $197.51 million. SPS Commerce had a return on equity of 13.04% and a net margin of 10.10%.
Here are the key takeaways from SPS Commerce’s conference call:
- Core business momentum exceeded expectations: Q3 revenue reached $197.6 million, while adjusted EBITDA rose 17% to $70.9 million, expanding the margin to 36%. Excluding the divested business and Amazon take-rate effects, underlying Q4 growth is expected at 8%–9%.
- SPS is accelerating its agentic AI strategy, making MAX broadly available to Fulfillment customers and developing paid MAX Agents for 2027. Management cited customer benefits including avoided chargebacks, faster invoice resolution, and potentially millions of dollars in delayed-receivables prevention.
- Operating leverage and automation are improving profitability. Gross margin increased to 73%, while agent-assisted onboarding is shortening implementation timelines and is expected to provide additional margin expansion over the next 12–18 months.
- Amazon policy changes affecting short shipments and dispute processes reduced Revenue Recovery yields and prompted the company to lower its outlook; management said most of the guidance impact came from these changes, with a smaller portion from customers shifting from take-rate to subscription contracts.
- The company continues to see strong demand from retailer enablement programs and expects growth to increasingly come from higher average revenue per customer through additional trading connections, Analytics, Revenue Recovery, and future AI offerings. SPS also repurchased $48.8 million of its shares in Q3, deploying 84% of quarterly free cash flow.
SPS Commerce Trading Up 0.2%
Shares of SPSC stock traded up $0.19 on Thursday, reaching $85.78. The company had a trading volume of 704,356 shares, compared to its average volume of 647,994. The stock has a market cap of $3.09 billion, a PE ratio of 41.44 and a beta of 0.62. The company has a 50-day moving average of $83.21 and a 200-day moving average of $68.51. SPS Commerce has a 12 month low of $49.04 and a 12 month high of $106.50.
Wall Street Analysts Forecast Growth
Several analysts have weighed in on SPSC shares. Stifel Nicolaus boosted their price objective on SPS Commerce from $70.00 to $85.00 and gave the stock a “hold” rating in a report on Wednesday, October 14th. Wall Street Zen upgraded shares of SPS Commerce from a “hold” rating to a “buy” rating in a research report on Sunday. Citigroup reissued a “buy” rating and set a $99.00 price target (up from $82.00) on shares of SPS Commerce in a research note on Tuesday, October 20th. Zacks Research upgraded shares of SPS Commerce from a “strong sell” rating to a “hold” rating in a report on Monday, July 20th. Finally, Morgan Stanley reaffirmed an “underweight” rating and issued a $74.00 price objective on shares of SPS Commerce in a research note on Monday. One research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, SPS Commerce currently has an average rating of “Hold” and a consensus target price of $81.80.
Check Out Our Latest Stock Report on SPSC
About SPS Commerce
SPS Commerce, Inc provides cloud-based supply chain management software for retailers, suppliers, distributors and logistics providers. Its platform helps businesses manage and automate transactions and workflows across complex retail and e-commerce networks.
The company’s solutions include electronic data interchange (EDI), order management, inventory visibility, fulfillment, invoice and payment processing, product information management, and supply chain analytics. These tools are designed to connect trading partners, reduce manual data entry, improve order accuracy and support more efficient movement of products from suppliers to consumers.
Founded in 2001 and headquartered in Minneapolis, Minnesota, SPS Commerce serves businesses across retail and wholesale ecosystems in North America and other international markets.
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