Summary
SPS Commerce reported second quarter 2026 revenue of $197.8 million, up 5.6% from the prior-year quarter. For the first six months of 2026, revenue was $389.9 million, up 5.7%. Gross profit rose 8.8% to $138.8 million, and gross margin expanded to 70.2%, up 2.1 percentage points. For the six months, gross margin was 69.7%, up 1.3 percentage points. GAAP operating income fell 68.2% to $8.4 million, and operating margin dropped to 4.3%, down 9.9 percentage points. Year-to-date operating income was $33.0 million, down 37.1%, and year-to-date net income was $26.6 million, down 36.6%. Net income for the quarter declined 65.2% to $6.9 million, and diluted EPS was $0.19, down from the prior-year quarter. Diluted EPS for the six months was $0.72, down from the prior-year period. The profit drop stems largely from a loss on the sale of the 3P Revenue Recovery business, which closed on June 30, 2026.
The divestiture reshaped the customer base. Recurring revenue increased 6% to $190.4 million and made up 96% of total revenue. ARPU rose 14% to approximately $15,100 for the quarter. The number of recurring revenue customers fell 14% to roughly 46,650 at June 30, 2026, because the 3P divestiture removed about 8,200 customers. All remaining recurring revenue customers are now 1P. For the six months ended June 30, 2026, recurring revenue grew 7% to $374.9 million, and ARPU increased 5% to approximately $14,800. Recurring revenue was 96% of total revenue for the six months, compared with 95% in the prior-year period.
Cash generation was a bright spot. Operating cash flow for the second quarter was $66.0 million, up 104.3% from the prior-year quarter. Year-to-date operating cash flow reached $121.7 million, up 68.3%. Capital expenditures were $8.6 million in the quarter, up 29.0%, and $15.7 million for the six months, up 22.8%. Current deferred revenue was $80.9 million, up 2.1% from the prior-year quarter. Non-GAAP Adjusted EBITDA increased 19% to $66.6 million, and Adjusted EBITDA margin was 34%, up from 30%. Non-GAAP income was $46.4 million, or $1.27 per diluted share, compared with $38.0 million, or $1.00 per diluted share, in the prior-year quarter.
Guidance now reflects the divestiture. For the third quarter of 2026, SPS Commerce expects revenue of $196.3 million to $198.3 million, net income per diluted share of $0.72 to $0.76, non-GAAP income per diluted share of $1.20 to $1.23, and Adjusted EBITDA of $67.4 million to $69.4 million. For the full year 2026, revenue guidance is $788.4 million to $793.4 million, representing 5% to 6% growth over 2025. Full-year net income per diluted share is expected to be $2.24 to $2.33, and non-GAAP income per diluted share is expected to be $4.84 to $4.93. Adjusted EBITDA guidance is $264.6 million to $269.1 million, with an Adjusted EBITDA margin of 34% at the midpoint, up approximately 300 basis points compared with full year 2025. The divestiture is expected to reduce second-half 2026 revenue by approximately $10.5 million but be neutral to Adjusted EBITDA in that period. Third-quarter guidance includes $16.4 million of share-based compensation, $5.4 million of depreciation, and $8.5 million of amortization. Full-year guidance assumes $69.8 million of share-based compensation, $23.4 million of depreciation, and $35.6 million of amortization.
Operationally, SPS Commerce is pushing its MAX agentic capabilities. The company said MAX delivered hundreds of thousands of dollars in savings to individual beta customers in just three months, and it plans to launch MAX to all SPS Fulfillment customers later this summer. Management points to a combination of AI, 25 years of proprietary data, domain expertise, and network access as differentiators. Risks remain. The customer count is down sharply because of the divestiture. The 10-Q cites competition, foreign currency exchange, inflation, and other risk factors that could cause actual results to differ materially. The company believes its cash, cash equivalents, and operating cash flows will meet working capital and capital expenditure needs for at least the next twelve months. It also notes that future capital requirements may vary depending on costs to develop new products, sales and marketing resources, international expansion, competitor responses, and acquisitions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $197.8M | $192.1M | +3.0% | $187.4M | +5.6% |
| Gross profit | $138.8M | $132.9M | +4.4% | $127.6M | +8.8% |
| Gross margin | 70.2% | 69.2% | +1.0 pp | 68.1% | +2.1 pp |
| Research & development | $17.0M | $17.9M | -5.4% | $17.3M | -1.8% |
| Sales & marketing | $43.9M | $44.7M | -1.8% | $43.4M | +1.2% |
| General & administrative | $36.6M | $36.4M | +0.7% | $30.9M | +18.6% |
| Total operating expenses | $130.4M | $108.3M | +20.3% | $101.1M | +29.0% |
| Operating income (loss) | $8.4M | $24.6M | -65.7% | $26.5M | -68.2% |
| Operating margin | 4.3% | 12.8% | -8.5 pp | 14.1% | -9.9 pp |
| Net income (loss) | $6.9M | $19.7M | -65.2% | $19.7M | -65.2% |
| Net margin | 3.5% | 10.3% | -6.8 pp | 10.5% | -7.1 pp |
| Diluted EPS | $0.19 | $0.53 | -$0.34 | $0.52 | -$0.33 |
Risks
On June 30, 2026 the company divested the 3P portion of its revenue recovery business, recording a loss on sale of business of $23.5 million in the quarter. The charge was the main driver of operating income falling 68.2% to $8.41 million and net income falling 65.2% to $6.86 million versus the prior-year quarter.
GAAP operating margin fell 9.9 percentage points to 4.3% in the quarter and 5.8 percentage points to 8.5% year to date, with operating income down 37.1% year to date to $32.97 million. Management attributes much of the pressure to higher stock-based compensation and personnel costs rather than to revenue, which rose 5.6% in the quarter.
General and administrative expense rose 19% in the quarter to $36.65 million, including a $2.8 million increase in stock-based compensation partly from contractual acceleration of equity awards upon executive retirement; year to date the increase was $4.9 million. This indicates elevated dependence on equity-based retention of senior leadership.
Recurring revenue customers decreased 14% to approximately 46,650 at June 30, 2026, driven by the divestiture of the 3P revenue recovery business which removed roughly 8,200 customers. ARPU rose 14% to about $15,100 for the quarter, so revenue growth now relies on higher spend per remaining 1P customer and on acquisitions.
Revenue growth for the quarter and year to date was attributed primarily to business acquisitions and continued growth in core markets, following the Carbon6 acquisition in February 2025. Continued dependence on acquisitions to add 1P recurring revenue customers raises integration and purchase accounting risk, as reflected in the Carbon6-related amortization and earn-out remeasurement described in MD&A.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Recurring Revenue
Summary, forecast, risks and KPIs are extracted from SPS COMMERCE INC's SEC filings for Q2 FY2026 (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.