SPS Commerce, Inc. (SPSC) has reported a 15.34 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $1.80 million, or $0.10 a share in the quarter, compared with $2.13 million, or $0.12 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $5.01 million, or $0.29 a share compared with $4.56 million or $0.27 a share, a year ago.
Revenue during the quarter grew 20.57 percent to $51.06 million from $42.35 million in the previous year period. Gross margin for the quarter contracted 220 basis points over the previous year period to 66.08 percent. Total expenses were 94.80 percent of quarterly revenues, up from 93.36 percent for the same period last year. That has resulted in a contraction of 145 basis points in operating margin to 5.20 percent.
Operating income for the quarter was $2.65 million, compared with $2.81 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $7.44 million compared with $6.71 million in the prior year period. At the same time, adjusted EBITDA margin contracted 128 basis points in the quarter to 14.57 percent from 15.84 percent in the last year period.
"The expansion of our network continued to drive our successful results in 2016 as we grew our customer base and increased wallet share," said Archie Black, president and chief executive officer of SPS Commerce. "Throughout the year, we expanded the size and strength of our network and saw steady adoption of our products. We remain enthusiastic about the large market opportunity and intend to bolster our leadership position in 2017 as retailers and suppliers build their omnichannel businesses."
For fiscal year 2017, SPS Commerce, Inc. forecasts revenue to be in the range of $220 million to $222 million. The company expects diluted earnings per share to be in the range of $0.29 to $0.33 and expects diluted earnings per share to be in the range of $0.80 to $0.83 on adjusted basis.
For the first-quarter 2017, SPS Commerce, Inc. forecasts revenue to be in the range of $51.50 million to $52 million. The company expects diluted earnings per share to be in the range of $0.06 to $0.07. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.18 to $0.20.
Operating cash flow improves significantly
SPS Commerce, Inc. has generated cash of $18.76 million from operating activities during the year, up 30.05 percent or $4.34 million, when compared with the last year.
The company has spent $34.16 million cash to meet investing activities during the year as against cash outgo of $31.28 million in the last year.
Cash flow from financing activities was $10.10 million for the year, up 22.43 percent or $1.85 million, when compared with the last year.
Cash and cash equivalents stood at $115.88 million as on Dec. 31, 2016, down 4.66 percent or $5.66 million from $121.54 million on Dec. 31, 2015.
Working capital increases
SPS Commerce, Inc. has recorded an increase in the working capital over the last year. It stood at $153.77 million as at Dec. 31, 2016, up 7.87 percent or $11.22 million from $142.55 million on Dec. 31, 2015. Current ratio was at 5.78 as on Dec. 31, 2016, down from 6.88 on Dec. 31, 2015.
Days sales outstanding were almost stable at 19 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding went down to 6 days for the quarter from 7 for the same period last year.
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