SPS Commerce, Inc.

Hello, thank you for standing by and welcome to SBS Commerce first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Hermina Blaszczak. Investor Relations, SPS Commerce. Please go ahead.

Thank you, Josh. Good afternoon, everyone, and thank you for joining us on SPS Commerce first quarter 2022 conference call. We will make certain statements today, including with respect to our expected financial results, go-to-market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties, that could cause actual results to differ materially. Please note these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to our SEC filings, specifically our Form 10-K, as well as our financial results press release for a more detailed description of the risk factors that may affect our results. These documents are available at our website, spscommerce.com, and at the SEC's website, sec.gov. In addition, we are providing a historical data sheet for easy reference on our investor relations section of our website, spscommerce.com. During our call today, we will discuss adjusted EBITDA financial measures and non-GAAP earnings per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, including reconciliations of these measures with comparable GAAP measures. And with that, I will turn the call over to Archie.

Thanks, Hermina, and welcome, everyone. Before I start with our Q1 business overview, I want to recognize that our thoughts are with the people in Ukraine. As we continue to monitor the ongoing crisis, our priority is our employees and their safety. We're doing what we can to support our team in Kyiv and their families, while other SPS teams remain focused on business continuity and delivering to our customers. Turning to first quarter 2022 results, our strong performance points to an ongoing evolution in retail. Omni-channel dynamics are creating growth opportunities for suppliers, driving the need for efficiency and continuity across the supply chain. Since 2020, we observed how the pandemic impacted the retail industry and consumer shopping habits, which in turn compelled trading partners to evaluate their infrastructure and supply chain processes. These dynamics emphasize the need for automation, agility, and demand planning, all of which accelerate EDI adoption. Over the last year, we've seen a significant increase in volume of electronic purchase orders, advanced ship notices, and electronic invoices. In the first quarter of 2022, we continued to see strong momentum and fulfillment, which grew 19% year over year. Analytics had another strong quarter and grew 11%. Total revenue grew 17% to $105.2 million, and recurring revenue grew 18%. Adjusted EBITDA grew 25% to $31.8 million. Automation is essential to achieve agility and efficiency in a dynamic omnichannel environment. The capability to scale depends on a supplier's capacity to fulfill as many orders as possible without being hampered by retailers' technical requirements. Brands like Hydrate Spark partnered with SPS Commerce to automate fulfillment and expand their business across online sites, marketplaces, and retail stores. Automation provided Hydrate's sparked the agility to leverage omnichannel and grow their business nationwide. To reduce the risk of delays along the supply chain, demand planning is critical. Predicting the level of stock to satisfy customer needs at any given time results in higher sales and increased profitability. Big data analytics not only has the potential to improve the operating margins of companies by 60%, but also revolutionize all areas of retail. For example, as a result of collaboration between Pantene, the Weather Channel, and Walgreens, Pantene saw its sales increase over 10% in Walgreens stores through its data-driven hair cast project. Amazon is so successful in using big data marketing and sales tactics that 35% of its sales are generated from its customer recommendations algorithm. Walmart is developing the world's largest private cloud with algorithms built to track data on inventory, transactions, and competitor activity. This allows them to respond to market changes almost instantly. At SPS, our retail analytics software is the key in efficient demand planning and gives decision makers the overview of trends and patterns needed to make macro-scale decisions and react to micro-scale trends and unexpected challenges. So Therabody, a pioneer in the wellness technology space, has been an SPS fulfillment customer since 2019. They experienced high growth in recent years and became an analytics customer. Leveraging global point of sale data, Therabody is able to optimize inventory management to increase sales and continue to add more retailers to the network in North America, Europe, and Australia. In summary, SPS continues to be a valuable partner to retailers and suppliers, as they navigate ongoing challenges and seize opportunities to evolve their omnichannel strategies. Our comprehensive suite of solutions includes all the elements that trading partners need to communicate inventory, order, delivery, and status information. One connection to SPS Commerce provides instant access to the largest network of up-to-date mapped EDI connections and more than 105,000 players in the retail space. With that, I'll turn it over to Kim to discuss our financial results.