Summary
SPS Commerce reported third-quarter fiscal 2021 revenue of $97.9 million, up 23.0% from the prior-year quarter. The company said this was its 83rd consecutive quarter of revenue growth. Recurring revenue grew 20% from the third quarter of 2020. Recurring revenue customers increased 10% to 35,400, and wallet share increased 10% to $10,350. Recurring revenue was 92% of total revenue in the quarter. Deferred revenue, current portion, was $49.2 million, up 38.2% from the prior-year quarter. Gross margin slipped to 64.9%, down 3.6 percentage points. Operating margin fell to 13.8%, down 3.7 percentage points. Year-to-date revenue through September 30, 2021 was $282.5 million, up 23.2%.
Gross profit was $63.5 million, up 16.6% from the prior-year quarter. Operating income was $13.5 million, down 3.1%. Net income was $11.4 million, flat with the prior-year quarter. Diluted earnings per share was $0.31, also flat. The MD&A attributed the cost pressure to higher headcount, stock-based compensation, and depreciation in cost of revenues. Adjusted EBITDA rose 14% to $26.5 million. Non-GAAP net income per diluted share was $0.47, compared with $0.39 in the prior-year quarter. For the first nine months, net income was $31.8 million, down 0.9%, and diluted earnings per share was $0.86, down 3.4%.
Cash flow from operations was $26.9 million in the quarter, down 6.3% from the prior-year quarter. For the first nine months of fiscal 2021, operating cash flow was $81.6 million, up 24.5%. Capital expenditures were $6.8 million in the quarter, up 110.6%, and $15.6 million for the first nine months, up 33.7%. The company announced a new stock repurchase program of up to $50.0 million, effective November 28, 2021, and expiring November 28, 2023. The current plan expires November 2, 2021. SPS Commerce intends to fund repurchases with cash on hand.
Guidance for the fourth quarter of 2021 calls for non-GAAP net income per diluted share of $0.41 to $0.42 and Adjusted EBITDA of $26.3 million to $26.8 million. For the full year 2021, non-GAAP income per diluted share is expected to be $1.76 to $1.77, and Adjusted EBITDA is expected to be $105.6 million to $106.1 million. Management expects full-year 2021 revenue growth of 22% to 23% over 2020. The fourth-quarter outlook also assumes non-cash share-based compensation expense of approximately $6.5 million, depreciation expense of approximately $4.1 million, and amortization expense of approximately $2.5 million.
Management flagged several risks. The 10-Q cites ongoing risks from the COVID-19 pandemic and directs readers to the risk factors in the 2020 annual report. Other income and expense swung to a net expense from other income a year earlier, mostly because of unfavorable foreign currency exchange rate changes. The company also faces execution risk as it expands internationally and selectively pursues acquisitions. Inflation did not have a material effect on the business during the first nine months of 2021, and the company does not expect it to be material in the foreseeable future. SPS Commerce believes its cash, cash equivalents, investments and operating cash flows will be enough to meet working capital and capital expenditure needs for at least the next twelve months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $97.9M | $94.5M | +3.5% | $79.6M | +23.0% |
| Gross profit | $63.5M | $62.8M | +1.2% | $54.5M | +16.6% |
| Gross margin | 64.9% | 66.4% | -1.5 pp | 68.5% | -3.6 pp |
| Research & development | $10.9M | $8.9M | +22.0% | $8.1M | +34.8% |
| Sales & marketing | $22.1M | $22.0M | +0.6% | $19.2M | +14.8% |
| General & administrative | $14.7M | $15.8M | -6.8% | $11.9M | +23.1% |
| Total operating expenses | $50.0M | $49.3M | +1.5% | $40.6M | +23.3% |
| Operating income (loss) | $13.5M | $13.5M | -0.1% | $14.0M | -3.1% |
| Operating margin | 13.8% | 14.3% | -0.5 pp | 17.5% | -3.7 pp |
| Net income (loss) | $11.4M | $10.2M | +12.4% | $11.4M | +0.4% |
| Net margin | 11.7% | 10.8% | +0.9 pp | 14.3% | -2.6 pp |
| Diluted EPS | $0.31 | $0.28 | +$0.03 | $0.31 | ±$0.00 |
Risks
Cost of revenues increased 37.1% and total operating expenses increased 23.3% in FY2021 Q3 versus the prior-year quarter, outpacing revenue growth of 23.0%. This drove gross margin down 3.6 pp to 64.9% from 68.5% and operating margin down 3.7 pp to 13.8% from 17.5%, with operating income down 3.1%.
Other income (expense), net changed to $0.7 million expense in FY2021 Q3 from $0.4 million income in the prior-year quarter, and to $1.4 million expense for FY2021 year to date from $1.2 million income in the prior-year period. The company attributed the change primarily to unfavorable foreign currency exchange rate changes and decreased investment income.
FY2021 year-to-date income tax expense increased 13.2% to $6.5 million, though FY2021 Q3 income tax expense decreased 54.3%. The company expects its annual effective income tax rate to fluctuate due to excess tax benefits from stock activity and nondeductible executive compensation.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Recurring Revenue Customers
Wallet Share
Recurring Revenue % of Total Revenue
Summary, forecast, risks and KPIs are extracted from SPS COMMERCE INC's SEC filings for Q3 FY2021 (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.