The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SPS Commerce beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
SPS Commerce reported revenue of $22.5 million. The eight analysts polled by S&P Capital IQ predicted sales of $21.9 million on the same basis. GAAP reported sales were 42% higher than the prior-year quarter's $15.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.12. The eight earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. GAAP EPS of $0.02 for Q4 were 98% lower than the prior-year quarter's $1.03 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 69.7%, 370 basis points worse than the prior-year quarter. Operating margin was 1.0%, 150 basis points worse than the prior-year quarter. Net margin was 1.6%, 8,130 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $22.5 million. On the bottom line, the average EPS estimate is $0.10.
Next year's average estimate for revenue is $97.2 million. The average EPS estimate is $0.50.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SPS Commerce is buy, with an average price target of $43.14.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.