SPS Commerce, Inc.

Good day and welcome to the SPS Commerce Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Ormina Blaszczyk, Investor Relations for SPS Commerce. Please go ahead, ma'am.

Thank you, Chuck. Good afternoon, everyone, and thank you for joining us on the SPS Commerce second quarter 2024 conference call. We will make certain statements today, including with respect to our 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 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 for 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 the 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, Hermina, and good afternoon, everyone. Thank you for joining us today. We delivered a strong second quarter. Revenue grew 18% to $153.6 million. Recurring revenue also grew 18%. SPS delivers mission-critical leading supply chain solutions to an industry that continues to evolve, and we remain committed to helping our growing network of retailers and suppliers improve efficiencies across the retail ecosystem. In May, we completed the acquisition of Traverse Systems and expanded our product portfolio in supply chain performance and optimization. enabling retailers to effectively manage vendor performance, improve collaboration, and meet consumer demand. We're excited to welcome our new employees and customers to SPS Commerce. Today, 21% of retail sales are completed online. By 2026, it's expected that number will increase to 25%. This translates to an ongoing need for automation to execute a successful omnichannel retail strategy which aims to deliver consistent consumer experience across multiple sales channels and aligns with their purchase and delivery preferences. For some suppliers, that level of operational efficiency can only be achieved through elevated supply chain visibility. For example, Mattress Firm, the nation's largest omnichannel mattress specialty retailer, strives to provide the product their customers want on the day and time they choose using their preferred delivery method. To enhance supply chain efficiency, Mattress Firm upgraded their ERP solution and began improving their warehouse management system. With supplier collaboration playing a pivotal role in their transformation, Mattress Firm partnered with SPS, relying on the company's ERP integration expertise, supply chain best practices, and established vendor relationships for quick connections to the SPS platform. Since Mattress Firm started working with SPS, their customer satisfaction metrics have improved, leading to increased market share. Mattress Firm now operates at a level of excellence that would not be possible without the enhanced inventory and order visibility enabled by SPS Commerce. As suppliers expand their retail network, manual processes can quickly hinder growth opportunities. The Good Crisp Company in Australia leveraged SPS system automation to integrate fulfillment with an inventory management system to process orders from tens of retailers in half the time. The improvement in efficiency allowed the company to handle increasing order volumes and maintain timely delivery. Partnering with SPS equipped the Good Crisp Company to meet the demands of its expanding customer base and navigate the challenges of growing retail partnerships. Collaboration with suppliers is as critical to retailers as it is to distributors. For example, Performance Food Group is an industry leader and one of the largest food and food service distribution companies in North America and works with thousands of suppliers to serve more than 300,000 customer locations. EFG partnered with SPS Commerce to execute an enterprise-wide EDI initiative across their multiple operating segments. For large organizations, such as PFG, that operate a diversified business model across a broad geographic reach, standardized fulfillment processes are critical to ensure timely delivery of goods, fast and accurate invoicing, and visibility in the inventory movement. Standardization also enables the company to capture critical business information and allows them to quickly respond to changes to maximize long-term success and business efficiency. As the retail industry continues to evolve, SVS is uniquely positioned to help suppliers, large and small, digitize their trading partner connections to achieve efficiencies and scalability. The mission-critical nature of our solutions fuels consistent demand for our product portfolio, and we remain confident in the growth opportunity ahead of us as e-commerce and omnichannel retail continue to grow. And with that, I'll turn it over to Kim to discuss our financial results.