SPS Commerce — Q3 2026 Earnings Summary

Financial Performance:

• Revenue for Q3 2026 was $197.6 million, a 4% increase year-over-year from $189.9 million in Q3 2025, partially offset by the divestiture of the 3P Revenue Recovery business and variability in the 1P Revenue Recovery take rate.
• Recurring revenue grew 4% compared to Q3 2025.
• Net income was $30.7 million ($0.85 per diluted share), up from $25.6 million ($0.67 per diluted share) in Q3 2025.
• Non-GAAP income was $50.2 million ($1.39 per diluted share), compared to $43.0 million ($1.13 per diluted share) in Q3 2025.
• Adjusted EBITDA increased 17% to $70.9 million in Q3 2026 from $60.5 million in Q3 2025.
• Adjusted EBITDA margin was 36% in Q3 2026, up from 32% in Q3 2025.
• Net income per share for the nine months ended September 30, 2026, was $1.56 (basic) and $1.56 (diluted), compared to $1.78 (basic) and $1.77 (diluted) in the prior year period.
• Cash and cash equivalents were $153.8 million as of September 30, 2026, compared to $151.4 million as of December 31, 2025.
• Deferred revenue was $79.3 million (current) and $3.9 million (non-current) as of September 30, 2026.
• Share repurchases totaled $48.8 million in Q3 2026 and $147.2 million for the nine months ended September 30, 2026.

Guidance and Future Outlook:

• Q4 2026 revenue is expected to be between $199.3 million and $201.3 million.
• Q4 2026 net income per diluted share is expected to be between $0.74 and $0.79.
• Q4 2026 non-GAAP income per diluted share is expected to be between $1.31 and $1.36.
• Q4 2026 Adjusted EBITDA is expected to be between $72.0 million and $74.0 million.
• Full-year 2026 revenue is expected to be between $786.9 million and $788.9 million, representing approximately 5% growth over 2025.
• Full-year 2026 net income per diluted share is expected to be between $2.29 and $2.35.
• Full-year 2026 non-GAAP income per diluted share is expected to be between $5.05 and $5.11.
• Full-year 2026 Adjusted EBITDA is expected to be between $267.4 million and $269.4 million, with an Adjusted EBITDA margin of 34% at the midpoint, an increase of approximately 330 basis points compared to full-year 2025.
• Guidance factors in a $10.5 million revenue reduction in the second half of 2026 due to the divestiture of the 3P Revenue Recovery business, which is expected to be neutral to Adjusted EBITDA.

Business Segments and Product Lines:

• The company is advancing an "agentic strategy" across its product portfolio and internally, citing progress that has exceeded expectations.
• Agentic customer onboarding is delivering tangible efficiency gains and contributing to margin expansion.
• The 1P Revenue Recovery business is experiencing variability in its take rate model.
• The 3P Revenue Recovery business was divested on June 30, 2026.

Market and Competitive Landscape:

• SPS Commerce connects 300,000+ trading relationships worldwide, moving over 750 million transactions and over $650 billion in gross merchandise value annually.
• The company is trusted by seven of the top ten largest retailers and over two-thirds of today's fastest-growing brands.
• Management describes the combination of AI and the intelligent network as a "powerful and durable competitive moat."

Risks and Challenges:

• Forward-looking statements involve significant known and unknown risks and uncertainties, including the uncertainty and inherent difficulty of predicting the occurrence and financial impact of items excluded from non-GAAP measures.
• Actual results may vary materially from forward-looking guidance due to these risks.

Management Commentary and Tone:

• CEO Chad Collins stated that progress on agentic transformation initiatives has exceeded expectations and highlighted the team's "agentic-first mindset."
• CFO Joe Del Preto noted that financial results demonstrate strong operating leverage and that continued margin expansion underscores disciplined cost management and efficiency gains from agentic onboarding.
• Management expressed confidence in delivering sustainable, profitable growth backed by their AI and network strategy.

Other Key Points:

• The company completed the divestiture of the 3P Revenue Recovery business in Q2 2026.
• Non-GAAP financial measures (Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP income per share) are provided to supplement GAAP measures but are not substitutes for them.
• The company does not present a reconciliation of forward-looking non-GAAP measures to GAAP measures due to the impracticality of forecasting certain items without unreasonable effort.
• Stock-based compensation expense was $15.7 million for Q3 2026 and $52.5 million for the nine months ended September 30, 2026.
• Amortization of intangible assets was $9.8 million for Q3 2026 and $28.5 million for the nine months ended September 30, 2026.
• A loss on sale of business of $23.5 million was recorded in the nine months ended September 30, 2026, with no such loss in Q3 2026.