SPS Commerce, Inc.

Good afternoon and welcome to the SPS Commerce Q4 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please press star zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star one. To remove your question, star two. Please note this event is being recorded. I would now like to turn the conference call over to Armina Blaswick. Please go ahead.

Thank you, Nahumi. Good afternoon, everyone, and thank you for joining us on SPS Commerce fourth quarter 2023 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 attraction 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 that 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 or 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 income 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 Chad.

Thanks, Armina, and good afternoon, everyone. Thank you for joining us today. I'd like to start my prepared remarks by expressing gratitude to the SPS team for enabling a smooth leadership transition during my first full quarter as CEO. Having spent the last four months meeting SPS employees, I have come to appreciate their inherent retail expertise, their drive to deliver the best customer experience, and their commitment to consistent execution. Having completed a review of our product roadmap, I can say with conviction that the network SPS has built over the years uniquely positions the company to optimize our customer supply chain operations. By simplifying the exchange of supply chain data, SPS has become the world's retail network. By harnessing that data, we can help our customers make their trading partner relationships more collaborative and profitable. As we explore new use cases and adjacencies to leverage the data, we are creating a strong, defensible, competitive position and an undeniable value proposition for trading partners everywhere. Looking back to 2023, the company's strong performance underscores our ability to execute as macro and retail dynamics continue to evolve. Q4 was the 92nd consecutive quarter of revenue growth and a strong finish to an exciting year. For the full year 2023, revenue grew 19% to $536.9 million. Recurring revenue grew 20%, led by fulfillment growth of 20% and analytics, which grew 10%. In 2023, the number of recurring revenue customers reached approximately 44,800. Throughout the year, we demonstrated ongoing success in expanding our network as we continue to play a key role in retailers and suppliers' transformation to omnichannel retail, improving supply chain efficiencies, and enabling international expansion. The True Value Company, a wholesaler with over 4,500 independent retail locations worldwide and one of the largest distributors in the U.S., partnered with SPS to standardize their electronic order fulfillment with over 1,000 vendors. Moose Toys, a large toy manufacturer in Australia and an SPS fulfillment customer since 2016, chose SPS's analytics solution to effectively manage the vast amount of data feeds from their many trading partners as they grew across Asia Pacific, North America, and Europe. Deckers, a footwear designer and distributor, which includes the UGG, Teva, and Hoka brands, has been a longtime SPS analytics customer in North America. As they expanded their vendor network to Europe, Deckers chose SPS's fulfillment solution to ensure they can service a growing number of retailers across both regions. Starboard Cruise Services, a division of LVMH, is known as the preferred partner for luxury retail at sea. With over 700 stores on over 100 ships across 15 cruise lines, Starboard understood the need for efficiency across their supply chain and chose to work with SPS to standardize and automate their electronic order fulfillment. To underscore the importance of this initiative, Starboard chose to share sales data using SPS Commerce Analytics, which incentivized a higher-than-expected adoption of SPS's fulfillment solution by Starboard's vendor network. Our continued focus on the channel and the strategic partnerships we established over the years play a key role in the expansion of our network. As trading partners strive for automation, ERP integration is another key component to solving supply chain challenges. For example, our team's expertise in the Microsoft space earned us a spot as the featured app on the main App Store's page. SPS's Commerce's deep integration technology, multi-tenant cloud-based retail network, and full-service model is allowing Microsoft and their value-added resellers to leverage best-in-class technologies when trying to migrate customers and win new business. By partnering with ERP providers, we engage with suppliers like Orveon, who are focused on long-term omnichannel success. Automating connections with their trading partners was a priority for Orbeon, who became a fulfillment customer. Shortly after, they subscribed to analytics for visibility into inventory levels and sell-through across their various sales channels and trading partners that include Bloomingdale's, Macy's, and Nordstrom. SPS's ability to deliver world-class solutions includes targeted acquisitions that integrate best-in-class technology with the SPS platform. In 2023, we continued to expand our portfolio with the acquisition of Tye Kinetics to strengthen our e-invoicing capability and extend our European presence. We also acquired the Order Exchange, one of our technology partners in Australia, who enabled suppliers to link their line of business applications through SPS's network, unlocking connections to trading partners around the world. SPS plays a pivotal role in supporting retailers and suppliers to on their omnichannel journey. Our technology roadmap includes initiatives to further simplify access to the network and continued build-out of trading partner connections, creating long-term growth opportunities as we continue to execute our strategy to be the world's retail network. And with that, I'll turn it over to Kim to discuss our financial results.