Summary
SPS Commerce opened fiscal 2025 with another quarter of double-digit growth. Revenue was $181.5 million, up 21.4% from the prior-year quarter, marking the 97th consecutive quarter of topline growth. Recurring revenue climbed 23% to $172.3 million and accounted for 95% of total revenue. Gross profit was $124.6 million, up 27.1%, and gross margin expanded to 68.7%, up 3.1 percentage points. Operating income rose 68.5% to $25.96 million, lifting operating margin to 14.3%, up 4.0 percentage points. Net income was $22.20 million, up 23.3%, and diluted EPS was $0.58, up 20.8%. On a non-GAAP basis, income per diluted share was $1.00, and Adjusted EBITDA rose 22% to $54.4 million.
Customer metrics moved higher. ARPU increased 11% to approximately $13,850. The number of recurring revenue customers rose 21% to roughly 54,150 at March 31, 2025. Of that total, about 45,950 were 1P customers and the rest were 3P. Acquisitions added to the base: Carbon6 brought in roughly 8,500 recurring revenue customers in February 2025, including about 300 1P customers; SupplyPike added about 200 customers in July 2024; and Traverse Systems added about 50 customers in May 2024. SPS Commerce says new customers do not contribute meaningfully to revenue at the start of their tenure, so most of the revenue increase came from existing customers. The company operates a network of over 50,000 suppliers, logistics companies, and buying organizations, and management pegs the total addressable market at $11 billion.
Cash generation remained solid. Operating cash flow was $39.98 million, up 17.4% from the prior-year quarter. Capital expenditures were $6.15 million, up 74.1%. Deferred revenue, current portion, stood at $78.62 million, up 6.7%. Management expects cash generated by operations to fund working capital and capital expenditure requirements for at least the next twelve months. The quarter also included costs tied to a business acquisition, which management said was the main driver of higher cash used in investing activities. Financing activities included share repurchases, which management said were higher year over year to deliver shareholder value. The increase in operating cash flow was driven by continued growth in revenue, partially offset by cash paid for expenses to operate the growing business.
Guidance points to continued growth. For the second quarter of 2025, management expects non-GAAP income per diluted share of $0.87 to $0.90 and Adjusted EBITDA of $53.0 million to $54.5 million. The second-quarter revenue outlook implies 20% to 21% year-over-year growth. For the full fiscal year 2025, the company guided non-GAAP income per diluted share to $3.86 to $3.93 and Adjusted EBITDA to $229.4 million to $232.9 million. The full-year revenue outlook implies 19% to 20% growth over 2024, and the full-year Adjusted EBITDA outlook represents 23% to 25% growth over 2024. Management flagged ongoing uncertainty in the macro environment but expressed confidence in the full-year growth outlook and margin expansion profile. Risks include the integration of recent acquisitions, foreign currency exchange and inflation rate changes, and the known and unknown risks described in the company's SEC filings. The company points to risk factors in its Annual Report on Form 10-K for the year ended December 31, 2024, as well as subsequent reports filed with the SEC. The company does not provide a reconciliation of forward-looking non-GAAP measures to the most directly comparable GAAP measures because it cannot forecast certain items without unreasonable effort.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $181.5M | $170.9M | +6.2% | $149.6M | +21.4% |
| Gross profit | $124.6M | $115.3M | +8.1% | $98.1M | +27.1% |
| Gross margin | 68.7% | 67.5% | +1.2 pp | 65.6% | +3.1 pp |
| Research & development | $17.4M | $17.1M | +1.7% | $16.0M | +8.9% |
| Sales & marketing | $41.6M | $39.2M | +6.2% | $36.4M | +14.3% |
| General & administrative | $31.0M | $26.4M | +17.7% | $25.9M | +19.7% |
| Total operating expenses | $98.7M | $90.6M | +8.9% | $82.7M | +19.3% |
| Operating income (loss) | $26.0M | $24.7M | +4.9% | $15.4M | +68.5% |
| Operating margin | 14.3% | 14.5% | -0.2 pp | 10.3% | +4.0 pp |
| Net income (loss) | $22.2M | $17.6M | +26.4% | $18.0M | +23.3% |
| Net margin | 12.2% | 10.3% | +2.0 pp | 12.0% | +0.2 pp |
| Diluted EPS | $0.58 | $0.46 | +$0.12 | $0.48 | +$0.10 |
Risks
The February 2025 Carbon6 acquisition added approximately 8,500 recurring revenue customers, mostly 3P, with an inconsequential impact on recurring revenue and a partial offset to ARPU growth. Integrating multiple recent acquisitions, including Traverse Systems and SupplyPike, may strain resources and complicate retention of acquired customers.
Recurring revenue customers increased 21% to approximately 54,150 at March 31, 2025, largely from acquisitions of 3P customers that have inconsequential recurring revenue. This mix shift partially offset ARPU growth of 11% to approximately $13,850 for the three months ended March 31, 2025.
Income tax expense increased in the three months ended March 31, 2025 compared to the prior-year period, driven by higher pre-tax income, a decrease in excess tax benefits from equity award settlements, and a change in non-deductible compensation. Management expects the annual effective income tax rate to fluctuate.
Capital expenditures increased 74.1% for the quarter ended March 31, 2025 versus the prior-year quarter, and cash used in financing activities increased primarily due to higher share repurchases year-over-year. These outflows could reduce liquidity if operating cash flow growth does not keep pace.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Recurring Revenue Customers
Recurring Revenue
Non-GAAP Income Per Diluted Share
Recurring Revenue % of Total Revenue
1P Recurring Revenue Customers
Non-GAAP Income
Summary, forecast, risks and KPIs are extracted from SPS COMMERCE INC's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.