Summary
SPS Commerce closed fiscal 2024 with fourth-quarter revenue of $170.9 million, up 17.9% from the prior-year quarter, marking the company's 96th consecutive quarter of topline growth. Recurring revenue grew 19% in the quarter. Gross profit was $115.3 million, up 20.2%, and gross margin reached 67.5%, up 1.3 percentage points. Operating income was $24.7 million, up 8.1%, but operating margin slipped to 14.5%, down 1.3 percentage points. Net income was $17.6 million, down 7.6% from the prior-year quarter.
Fiscal year revenue was $637.8 million, up 18.8%, and fiscal year net income was $77.1 million, up 17.1%. Diluted EPS for the fiscal year was $2.04, up 15.9%. Non-GAAP results were stronger. Adjusted EBITDA for the quarter increased 18% to $49.6 million, and full-year Adjusted EBITDA increased 18% to $186.6 million. Non-GAAP income per diluted share was $0.89 for the quarter and $3.48 for the year.
Cash generation remained solid. Operating cash flow was $40.6 million in the quarter, up 23.7%, and $157.4 million for the fiscal year, up 19.0%. Capital expenditures were $6.2 million in the quarter, up 44.7%, and $20.0 million for the fiscal year, up 1.4%. Deferred revenue, current portion, was $74.3 million, up 7.3% from the prior-year quarter.
Operational metrics show a network still expanding through wallet share rather than customer count alone. Wallet share increased 15% to approximately $13,300 for the year ended December 31, 2024 from approximately $11,550 for the year ended December 31, 2023. Recurring revenue customers increased 1% to approximately 45,350 at December 31, 2024 from approximately 44,800 at December 31, 2023. Acquisitions added existing customer bases, including approximately 1,000 recurring revenue customers from TIE Kinetix in September 2023, approximately 50 from Traverse Systems in May 2024, and approximately 200 from SupplyPike in July 2024. Recurring revenues increased 20% to $600,089 for fiscal 2024 and accounted for 94% of total revenues.
Management's guidance points to continued growth. For the first quarter of 2025, Adjusted EBITDA is expected to be $49.5 million to $50.5 million, and non-GAAP income per diluted share is expected to be $0.82 to $0.84. For the full fiscal year 2025, Adjusted EBITDA is expected to be $227.5 million to $231.0 million, representing 22% to 24% growth over 2024, and non-GAAP income per diluted share is expected to be $3.78 to $3.84. Revenue growth is guided to 19% to 20% for both the first quarter and the full year. The guidance is inclusive of the expected results of the Carbon6 acquisition.
The quarter brought lower net income and a lower operating margin even as revenue and gross profit rose. Sales and marketing, research and development, general and administrative, and amortization expenses all increased, with amortization rising because of recent acquisitions. The company also flagged that future capital requirements may vary significantly and depend on factors such as product development costs, sales and marketing resources, international expansion, competitor responses, and acquisition spending. Forward-looking statements carry known and unknown risks, and actual results may differ materially. The Carbon6 acquisition adds integration and valuation uncertainty, since business combination accounting relies on significant estimates and assumptions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $170.9M | $163.7M | +4.4% | $145.0M | +17.9% |
| Gross profit | $115.3M | $112.1M | +2.9% | $95.9M | +20.2% |
| Gross margin | 67.5% | 68.5% | -1.0 pp | 66.2% | +1.3 pp |
| Research & development | $17.1M | $15.3M | +12.1% | $14.2M | +20.6% |
| Sales & marketing | $39.2M | $37.6M | +4.4% | $33.2M | +18.1% |
| General & administrative | $26.4M | $27.2M | -2.9% | $20.6M | +27.9% |
| Total operating expenses | $90.6M | $86.5M | +4.7% | $73.0M | +24.0% |
| Operating income (loss) | $24.7M | $25.6M | -3.2% | $22.9M | +8.1% |
| Operating margin | 14.5% | 15.6% | -1.1 pp | 15.8% | -1.3 pp |
| Net income (loss) | $17.6M | $23.5M | -25.2% | $19.0M | -7.6% |
| Net margin | 10.3% | 14.3% | -4.1 pp | 13.1% | -2.8 pp |
| Diluted EPS | $0.46 | $0.62 | -$0.16 | $0.51 | -$0.05 |
| Customers | 45,350 | — | — | 44,800 | +1.2% |
Risks
Most recurring revenue contracts can be cancelled with 30 to 90 days' notice, and recurring revenue was 94% of total revenues in 2024. A decline in renewal rates or significant customer terminations could reduce revenue quickly and impair the growth that drove FY2024 revenue up 18.8% year over year.
A significant international workforce in Ukraine and the Philippines exposes operations to political and civil unrest, including Russian interference in Ukraine. Disruption could delay programming deliverables or force more expensive alternative workforce locations.
The company states it has significant retail supply chain presence and past cyber events affecting its systems, making it a target for malware, ransomware, and other attacks. A breach or service disruption could harm reputation, cause customer loss, and raise compliance and insurance costs.
Economic weakness and constrained retail spending may cause customers to delay technology purchases and lengthen sales cycles. The retailer-dependent revenue base makes forecasting difficult even as FY2024 revenue rose 18.8% year over year.
Recent acquisitions including TIE Kinetix, Traverse Systems, and SupplyPike added customers and intangible assets, but integration and retention risks could disrupt operations. Acquired goodwill or intangibles could also lead to future impairment charges.
The company depends on attracting, retaining, and training key executive, technology, and sales personnel. The announced retirement of President and Chief Operating Officer James Frome effective December 31, 2024 adds leadership transition risk.
Rapid technological change, including advancements in artificial intelligence, could make existing products obsolete if the company cannot anticipate customer needs and release enhancements. Competitors with new technologies or lower prices could pressure revenue and operating margins.
Rapid headcount and operations growth, plus acquisitions, strain management, personnel, and infrastructure. FY2024 operating margin was 13.9%, down 0.5 percentage points from the prior year, so failure to improve controls and reporting systems could impair execution.
Increasing privacy and data protection regulation, including the GDPR and e-Privacy Directive, and evolving industry-specific cloud rules could limit adoption and raise compliance costs. The cloud model depends on collecting and processing customer and trading partner data.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Summary, forecast, risks and KPIs are extracted from SPS COMMERCE INC's SEC filings for Q4 FY2024 (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.