The trend of retailers and their suppliers to engage more in ecommerce has been good for SPS Commerce Inc., a provider of internet-based supply chain technology, CEO Archie Black said yesterday.

Archie Black, CEO,
SPS Commerce Inc.

“As retailers and suppliers continue on their journey to embrace ecommerce, SPS Commerce plays an integral role in providing cloud-based supply chain management solutions,” Black said on a conference call with stock analysts regarding the company’s financial performance for the fourth quarter and year ended Dec. 31., according to a transcript from Seeking Alpha.

The company’s 2018 revenue increased 12.8% year over year to $248.24, as net income surged to $23.87 million from less than $1 million.

Expanding with Costco and Walgreens

Black said SPS expanded contracts last year with Costco Wholesale Corp. and Walgreens Boots Alliance Inc. to onboard more suppliers to each of those retailer’s cloud-based supply chain platforms. He said SPS also carried out trading partner connections for Shamrock Foods Co., a manufacturer and distributor of foods and related products; Circle Media, an electronics supplier; and Sprouts Farmers Market, which operates 300 grocery stores in 19 states.

Black cited Circle Media as an example of a customer that uses multiple SPS services, including help in selling through EDI to Walmart Inc., connecting with other trading partners through the Shopify ecommerce platform and fulfilling orders through SPS’s NetSuite fulfillment system. Oracle NetSuite is a unit of Oracle Corp. that provides enterprise resource planning and ecommerce software.

Black added that SPS recently integrated its supply chain management technology with ShipStation, a web-based shipping application.

80,000 customers

SPS finished 2018 with more than 80,000 customers, including more than 29,000 that provide recurring revenue, Black said. He added that SPS has more than 2,400 customers that each pay more than $20,000 in annual fees.

For the fourth quarter ended Dec. 31, SPS reported:

• Revenue increased 12.3% to $65.19 million from $58.06 million in 2017.
• Gross profit increased 14.02% to $44.01 million from $38.60 million, as gross profit margin increased to 67.5% from 66.5%;
• Net income surged to $7.14 million from a year-earlier loss of $6.78 million.

For the full year ended Dec. 31, SPS reported:

• Revenue increased 12.8% to $248.24 million from $220.09 in 2017;
• Gross profit increased 13.7% to $166.49 million from $146.46 million, as gross profit margin increased to 67.1% from 66.5%;
• Net income increased to $23.87 million from $351,000.

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