SPS Commerce Inc (SPSC) Q1 2026 Earnings Call Highlights: Strong Revenue Growth Amidst Amazon ...

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Revenue: $192.1 million, a 6% increase over Q1 of last year. Recurring Revenue: Grew 7% year-over-year. Adjusted EBITDA: Increased to $57.9 million. Cash and Cash Equivalents: $154 million at the end of the quarter. Free Cash Flow Deployment: $47.1 million used to repurchase SPS shares. Q2 2026 Revenue Guidance: Expected to be in the range of $194.5 million to $196.5 million. Q2 2026 Adjusted EBITDA Guidance: Expected to be in the range of $60.9 million to $62.4 million. Q2 2026 EPS Guidance: Fully diluted earnings per share expected to be in the range of $0.53 to $0.56. Full Year 2026 Revenue Guidance: Expected to be in the range of $796.0 million to $802.0 million. Full Year 2026 Adjusted EBITDA Guidance: Expected to be in the range of $262.8 million to $267.3 million. Full Year 2026 EPS Guidance: Fully diluted earnings per share expected to be in the range of $2.66 to $2.69.

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Release Date: April 30, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

SPS Commerce Inc (NASDAQ:SPSC) reported a solid first quarter with a 6% increase in revenue to $192.1 million. Recurring revenue grew by 7%, driven by an 8% growth in fulfillment. The company is leveraging AI to improve operational efficiency, with early applications driving measurable gains in customer treatment strategies. SPS Commerce Inc (NASDAQ:SPSC) is experiencing strong cross-selling momentum, particularly among 1P customers. The MAX AI agent is helping customers like Siete Foods protect up to 8% of revenue that would otherwise be lost to stockouts.

Negative Points

SPS Commerce Inc (NASDAQ:SPSC) continues to face headwinds in the Amazon portion of its revenue recovery business. The company expects a projected decline of up to 4,000 3P suppliers in 2026 due to the introduction of a subscription platform fee. The Amazon revenue recovery business is on a negative trajectory and is expected to trough towards the end of 2026. There are ongoing challenges with delayed enablement campaigns, which are expected to be more impactful in the second half of the year. The company reported that the number of 3P customers declined by 400 in the first quarter.

Q & A Highlights

Q: When should we expect to see the 3P revenue recovery business start to trough? A: Joseph Del Preto, CFO, explained that the Amazon revenue recovery side of the business is currently on a negative trajectory and is expected to trough somewhere in the middle to the end of 2026. Momentum is anticipated to pick up in 2027, but headwinds are expected to persist throughout 2026.

Story Continues

Q: What is the progress of the delayed enablement campaigns exiting 2025? A: Joseph Del Preto, CFO, stated that the pipeline and activity on retail relationship management campaigns are strong. Some campaigns cited in Q4 2025 have either closed or are near closure, with expected impact on customer count more significant in the second half of 2026.

Q: How are customers implementing the MAX program, and what is the opportunity for custom-built versus pre-built deployment? A: Joseph Del Preto, CFO, noted that feedback from the 400 customers in the MAX Beta has been strong. Customers find value in combining their data with SPS's proprietary databases. The MAX Connect product allows for agent-to-agent interaction, providing flexibility for custom-built solutions.

Q: What are the dynamics affecting the medium-term growth targets, and how should we think about the path to high single-digit growth rates? A: The company believes high single-digit growth is appropriate over the mid to long term. The headwind is primarily from the Amazon revenue recovery segment. Excluding this, the rest of the business is growing in line with expectations, indicating a return to high single-digit growth.

Q: How is the commercial team streamlining cross-selling efforts with the expanded product portfolio? A: Chadwick Collins, CEO, explained that the focus has shifted from acquiring new customers to expanding ARPU with existing ones. The commercial team, led by the new Chief Commercial Officer, is enhancing customer engagement and treatment strategies to drive cross-selling and expand product usage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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