SPS Commerce, Inc. (Nasdaq: SPSC) (the “Company”), a leader in retail cloud services, today announced financial results for the third quarter ended September 30, 2019.
Revenue was $70.9 million in the third quarter of 2019, compared to $62.9 million in the third quarter of 2018, reflecting 13% growth in revenue from the third quarter of 2018. Recurring revenue grew 13% from the third quarter of 2018.
Net income in the third quarter of 2019 was $8.9 million or $0.25 per diluted share, compared to net income of $8.1 million or $0.23 per diluted share, in the third quarter of 2018. Non-GAAP income per diluted share was $0.33 compared to non-GAAP income per diluted share of $0.26 in the third quarter of 2018.
Adjusted EBITDA for the third quarter of 2019 increased 26% to $18.1 million compared to the third quarter of 2018.
“Retailers and suppliers continue to embrace the evolution of e-commerce and omnichannel retail,” said Archie Black, President and CEO of SPS Commerce. “SPS Commerce is well positioned to address the needs of trading partners around the globe with the world’s largest cloud-based retail network, best-in-class technology and full service experience.”
“SPS Commerce continues to execute on its targets, leveraging our growing network of strategic relationships, retailers and suppliers to address the multi-billion dollar market opportunity ahead of us,” said Kim Nelson, CFO of SPS Commerce.
Stock Repurchase Program
The Company also announced today that its Board of Directors (the “Board”) of SPS Commerce authorized an increase and extension of its previously announced stock repurchase program pursuant to which the Company may, from time to time, purchase shares of its outstanding common stock. The stock repurchase program originally authorized the Company to purchase up to $50.0 million of its outstanding common stock and that amount has been increased by the Board to $100.0 million. The Board also authorized an extension of the original expiration date of the stock repurchase program from November 2, 2019 to November 2, 2021. The number of shares to be purchased and the timing of purchases will be based on the price of the Company’s common stock, general business and market conditions and other investment considerations and factors.
The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. The company had 34.9 million shares of outstanding common stock as of September 30, 2019. The Company intends to finance the share repurchase program with cash on hand.
Guidance
For the fourth quarter of 2019, revenue is expected to be in the range of $72.2 million to $72.8 million. Fourth quarter net income per diluted share is expected to be in the range of $0.19 to $0.20 with fully diluted weighted average shares outstanding of approximately 36.2 million shares. Non-GAAP income per diluted share is expected to be in the range of $0.29 to $0.30. Adjusted EBITDA is expected to be in the range of $17.9 million to $18.4 million. Non-cash, share-based compensation expense is expected to be approximately $3.4 million, depreciation expense is expected to be approximately $3.1 million and amortization expense is expected to be approximately $1.6 million.
For the full year of 2019, revenue is expected to be in the range of $278.6 million to $279.2 million, representing approximately 12% growth over 2018. Full year net income per diluted share is expected to be in the range of $0.87 to $0.89 with fully diluted weighted average shares outstanding of approximately 36.0 million shares. Non-GAAP income per diluted share is expected to be in the range of $1.21 to $1.23. Adjusted EBITDA is expected to be in the range of $68.8 to $69.3 million, representing approximately 34% to 35% growth over 2018. Non-cash, share-based compensation expense is expected to be approximately $14.7 million, depreciation expense is expected to be approximately $11.2 million and amortization expense is expected to be approximately $5.5 million.
