Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 09, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SPSC | ||
Entity Registrant Name | SPS COMMERCE INC | ||
Entity Central Index Key | 1,092,699 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 17,250,664 | ||
Entity Public Float | $ 1.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 123,127 | $ 115,877 |
Short-term investments | 40,192 | 23,076 |
Accounts receivable, net | 24,897 | 20,746 |
Deferred costs | 25,091 | 19,224 |
Other current assets | 6,149 | 7,010 |
Total current assets | 219,456 | 185,933 |
PROPERTY AND EQUIPMENT, net | 16,856 | 15,314 |
GOODWILL | 51,613 | 49,777 |
INTANGIBLE ASSETS, net | 16,529 | 19,788 |
INVESTMENTS | 5,206 | 7,494 |
OTHER ASSETS | ||
Deferred costs | 6,770 | 6,086 |
Deferred income tax asset | 17,551 | 12,446 |
Other assets | 1,539 | 1,527 |
Total assets | 335,520 | 298,365 |
CURRENT LIABILITIES | ||
Accounts payable | 4,463 | 2,302 |
Accrued compensation | 15,886 | 13,740 |
Accrued expenses | 4,712 | 3,508 |
Deferred revenue | 16,407 | 11,055 |
Deferred rent | 1,679 | 1,556 |
Total current liabilities | 43,147 | 32,161 |
OTHER LIABILITIES | ||
Deferred revenue | 10,602 | 10,847 |
Deferred rent | 3,064 | 4,179 |
Deferred income tax liability | 1,887 | 1,911 |
Total liabilities | 58,700 | 49,098 |
COMMITMENTS and CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.001 par value; 55,000,000 shares authorized; 17,249,153 and 17,081,145 shares issued; and 17,127,006 and 17,081,145 outstanding, respectively | 17 | 17 |
Treasury stock, at cost; 122,147 and 0 shares, respectively | (5,815) | |
Additional paid-in capital | 301,863 | 286,315 |
Accumulated deficit | (19,902) | (33,739) |
Accumulated other comprehensive income (loss) | 657 | (3,326) |
Total stockholders’ equity | 276,820 | 249,267 |
Total liabilities and stockholders’ equity | $ 335,520 | $ 298,365 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 55,000,000 | 55,000,000 |
Common stock, shares issued | 17,249,153 | 17,081,145 |
Common stock, shares outstanding | 17,127,006 | 17,081,145 |
Treasury stock, shares | 122,147 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenues | $ 220,566 | $ 193,295 | $ 158,518 |
Cost of revenues | 73,625 | 64,346 | 50,043 |
Gross profit | 146,941 | 128,949 | 108,475 |
Operating expenses | |||
Sales and marketing | 73,295 | 65,886 | 55,374 |
Research and development | 23,183 | 21,981 | 17,954 |
General and administrative | 37,461 | 28,827 | 24,817 |
Amortization of intangible assets | 4,574 | 4,738 | 3,307 |
Total operating expenses | 138,513 | 121,432 | 101,452 |
Income from operations | 8,428 | 7,517 | 7,023 |
Other income (expense) | |||
Interest income, net | 1,032 | 601 | 197 |
Other income (expense), net | (320) | 732 | (145) |
Total other income, net | 712 | 1,333 | 52 |
Income before income taxes | 9,140 | 8,850 | 7,075 |
Income tax expense | 11,580 | 3,140 | 2,436 |
Net (loss) income | $ (2,440) | $ 5,710 | $ 4,639 |
Net (loss) income per share | |||
Basic | $ (0.14) | $ 0.34 | $ 0.28 |
Diluted | $ (0.14) | $ 0.33 | $ 0.27 |
Weighted average common shares used to compute net (loss) income per share | |||
Basic | 17,183 | 16,947 | 16,565 |
Diluted | 17,183 | 17,241 | 17,032 |
Other comprehensive income | |||
Foreign currency translation adjustments | $ 3,944 | $ 336 | $ (2,119) |
Unrealized loss on investments, net of tax of $0, $5 and $31 | (9) | (59) | |
Reclassification of unrealized loss on investments into earnings, net of tax of $24, $0 and $0 | 39 | ||
Comprehensive income | $ 1,543 | $ 6,037 | $ 2,461 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Unrealized loss on investments, tax | $ 0 | $ 5 | $ 31 |
Reclassification of unrealized loss on investments into earnings, tax | $ 24 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Dec. 31, 2014 | $ 205,091 | $ 16 | $ 250,633 | $ (44,088) | $ (1,470) | |
Beginning balance, shares at Dec. 31, 2014 | 16,348,747 | |||||
Stock-based compensation | 6,379 | 6,379 | ||||
Exercise of stock options and issuance of restricted stock | 4,440 | $ 1 | 4,439 | |||
Exercise of stock options and issuance of restricted stock, shares | 346,885 | |||||
Excess tax benefit of stock options exercised | 2,336 | 2,336 | ||||
Employee stock purchase plan | 1,478 | 1,478 | ||||
Employee stock purchase plan, shares | 28,362 | |||||
Net income (loss) | 4,639 | 4,639 | ||||
Foreign currency translation adjustments | (2,119) | (2,119) | ||||
Unrealized loss on investments | (59) | (59) | ||||
Ending balance at Dec. 31, 2015 | 222,185 | $ 17 | 265,265 | (39,449) | (3,648) | |
Ending balance, shares at Dec. 31, 2015 | 16,723,994 | |||||
Stock-based compensation | 8,023 | 8,023 | ||||
Exercise of stock options and issuance of restricted stock | 4,303 | 4,303 | ||||
Exercise of stock options and issuance of restricted stock, shares | 279,841 | |||||
Excess tax benefit of stock options exercised | 4,070 | 4,070 | ||||
Employee stock purchase plan | 1,732 | 1,732 | ||||
Employee stock purchase plan, shares | 33,357 | |||||
Stock issued for acquisition | 2,922 | 2,922 | ||||
Stock issued for acquisition, Shares | 43,953 | |||||
Net income (loss) | 5,710 | 5,710 | ||||
Foreign currency translation adjustments | 336 | 336 | ||||
Reclassification of losses on investments into earnings | 18 | 18 | ||||
Unrealized loss on investments | (32) | (32) | ||||
Ending balance at Dec. 31, 2016 | 249,267 | $ 17 | 286,315 | (33,739) | (3,326) | |
Ending balance, shares at Dec. 31, 2016 | 17,081,145 | |||||
Stock-based compensation | 12,728 | 12,728 | ||||
Exercise of stock options and issuance of restricted stock | 1,410 | 1,410 | ||||
Exercise of stock options and issuance of restricted stock, shares | 135,906 | |||||
Cumulative-effect adjustment for previously unrecognized excess tax benefits | 16,277 | 16,277 | ||||
Employee stock purchase plan | 1,933 | 1,933 | ||||
Employee stock purchase plan, shares | 40,968 | |||||
Retirement of escrow shares | (523) | (523) | ||||
Retirement of escrow shares, shares | (8,866) | |||||
Repurchases of common stock | (5,815) | $ (5,815) | ||||
Repurchases of common stock, shares | (122,147) | 122,147 | ||||
Net income (loss) | (2,440) | (2,440) | ||||
Foreign currency translation adjustments | 3,944 | 3,944 | ||||
Reclassification of losses on investments into earnings | 39 | 39 | ||||
Ending balance at Dec. 31, 2017 | $ 276,820 | $ 17 | $ (5,815) | $ 301,863 | $ (19,902) | $ 657 |
Ending balance, shares at Dec. 31, 2017 | 17,127,006 | 122,147 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net (loss) income | $ (2,440) | $ 5,710 | $ 4,639 |
Reconciliation of net (loss) income to net cash provided by operating activities | |||
Deferred income taxes | 10,854 | (1,698) | (38) |
Share-based earn-out liability | (1,103) | ||
Depreciation and amortization of property and equipment | 7,208 | 6,598 | 6,265 |
Amortization of intangible assets | 4,574 | 4,738 | 3,307 |
Provision for doubtful accounts | 1,705 | 1,375 | 1,271 |
Stock-based compensation | 12,728 | 8,023 | 6,379 |
Other, net | (15) | ||
Changes in assets and liabilities, net of effects of acquisition | |||
Accounts receivable | (5,586) | (3,735) | (3,517) |
Deferred costs | (6,548) | (4,964) | (3,023) |
Other current and non-current assets | 393 | (1,911) | (2,037) |
Accounts payable | 832 | (382) | (1,569) |
Accrued compensation | 2,073 | 2,180 | 1,295 |
Accrued expenses | 1,192 | 990 | (461) |
Deferred revenue | 5,107 | 2,710 | 587 |
Deferred rent | (1,027) | 234 | 1,331 |
Net cash provided by operating activities | 31,050 | 18,765 | 14,429 |
Cash flows from investing activities | |||
Purchases of property and equipment | (7,271) | (8,008) | (8,757) |
Purchases of investments | (47,878) | (23,135) | (22,527) |
Maturities of investments | 33,029 | 15,018 | |
Acquisition of business and intangible assets, net of cash acquired | (500) | (18,032) | |
Net cash used in investing activities | (22,620) | (34,157) | (31,284) |
Cash flows from financing activities | |||
Repurchases of common stock | (5,815) | ||
Net proceeds from exercise of options to purchase common stock | 1,410 | 4,303 | 4,440 |
Excess tax benefit from exercise of options to purchase common stock | 4,070 | 2,336 | |
Net proceeds from employee stock purchase plan | 1,933 | 1,732 | 1,478 |
Net cash (used in) provided by financing activities | (2,472) | 10,105 | 8,254 |
Effect of foreign currency exchange rate changes | 1,292 | (374) | (656) |
Net increase (decrease) in cash and cash equivalents | 7,250 | (5,661) | (9,257) |
Cash and cash equivalents at beginning of year | 115,877 | 121,538 | 130,795 |
Cash and cash equivalents at end of year | 123,127 | 115,877 | 121,538 |
Supplemental disclosure of cash flow information | |||
Cash paid for income taxes, net | 1,068 | 722 | $ 114 |
Non-cash financing activities: | |||
Net purchases of property and equipment on account | $ 1,335 | ||
Common stock issued for business acquisitions | $ 2,922 |
General
General | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | NOTE A – General Business Description We are a leading provider of cloud-based supply chain management solutions, providing network-proven fulfillment, sourcing and item assortment management solutions, along with comprehensive retail performance analytics to thousands of customers worldwide. We provide our solutions through the SPS Commerce Platform, a cloud-based product suite that improves the way retailers, suppliers, distributors and logistics firms orchestrate the sourcing, set up of new vendors and items, and fulfillment of the products that consumers buy. We derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income (loss). Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Business Combinations We recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of determining the value and useful lives of purchased intangible assets and the purchase price allocation process. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed . Any such adjustments would be recorded Segment Information We operate in and report on one segment, which is supply chain management solutions . Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand solutions. Our management believes alternate sources are available; however, disruption or termination of these relationships could adversely affect our operating results in the near term. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of temporary cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Temporary cash investments are held with financial institutions that we believe are subject to minimal risk. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. Investments Management determines the appropriate classification of certificates of deposit and marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note C. Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write-off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop internal-use software that are incurred during the development stage. The assets and related accumulated depreciation and amortization are adjusted for asset retirements and disposals with the resulting gain or loss included in our consolidated statements of comprehensive income. Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition agreements. We recognize separately from goodwill the fair value of the identifiable intangible assets acquired. We have determined the fair value and useful lives of our purchased intangible assets using certain estimates and assumptions that we believe are reasonable. The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to nine years for subscriber relationships, two to five years for non-competition agreements and one to four years for technology and other. Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Revenue Recognition We generate revenues by providing three types of solutions to our customers; fulfillment, enablement and analytics. Our cloud-based solutions allow our customers to meet their supply chain management requirements. Revenues are recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable, and (4) collectability is probable. If collection is not considered probable, revenues are recognized when the fees are collected. Fees related to our fulfillment and analytics solutions consist of two revenue sources: set-up fees and recurring monthly fees. Set-up fees are specific for each connection a customer has with a trading partner and most of our customers have connections with numerous trading partners. Set-up fees are nonrefundable upfront fees that do not have standalone value to our customer and are not separable from the recurring monthly fees. All set-up fees and related costs are deferred and recognized ratably over the average life of the connection between the customer and the trading partner, which is approximately two years. We begin recognizing set-up fee revenue once the connection is established. Set-up fees for which connections have not yet been established are classified as long-term. We continue to evaluate the length of the amortization period as more experience is gained with cancellations and technology changes requested by our customers. It is possible that, in the future, the period over which such subscription set-up fees and costs are amortized may be adjusted. Any change in our estimate of the average connection life will affect our future results of operations. The recurring monthly fees are comprised of both fixed and transaction-based fees that are recognized as earned. Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. We estimate the fair value of options granted using the Black-Scholes option pricing model. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. Income Taxes We account for income taxes using the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in our judgement, there is a less than a 50% likelihood that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires significant estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Net Income (Loss) Per Share Basic net income (loss) per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income (loss) per share also includes the impact of our outstanding potential common shares, including options, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income (loss) per share. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting We adopted ASU 2016-09 during the year ended December 31, 2017. The impact to our consolidated balance sheet as of January 1, 2017 was a $16.3 million increase in deferred income tax assets and a corresponding $16.3 million decrease in accumulated deficit. This impact results from the cumulative-effect adjustment for previously unrecognized excess tax benefits using the modified retrospective method required by the new standard. We elected to adopt the changes in cash flow statement presentation prospectively to be consistent with the prospective transition for the treatment of excess tax benefits in the income statement. Accordingly, we no longer classify excess tax benefits as a financing activity subsequent to January 1, 2017. On December 22, 2017, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP related to the enactment of the comprehensive tax legislation, commonly referred to as the Tax Cut and Jobs Act (“Tax Act”). This guidance was adopted in the fourth quarter of 2017. Additional information regarding our adoption of this guidance is contained in Note J. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases, In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Acquisitions | NOTE B – Business Acquisitions Toolbox Solutions, Inc. On January 5, 2016, we completed our acquisition of all of the outstanding common shares of Toolbox Solutions, Inc. (“Toolbox Solutions”), a privately held company providing point-of-sale analytics and category management services to retailers and consumer packaged goods suppliers in North America. This acquisition expanded our retail network and strengthened our analytics offerings. Pursuant to the share purchase agreement, we paid $18.0 million in cash and issued $2.9 million in stock, or 43,953 shares of common stock, to the shareholders of Toolbox Solutions. The purchase agreement also allowed the sellers to receive up to 16,222 additional shares of common stock, which would have become payable contingent upon the completion of certain revenue milestones, none of which were met, and therefore, no additional shares were issued. During the year ended December 31, 2016, we recognized other income of $1.1 million in our consolidated statements of comprehensive income due to the remeasurement of this contingent liability. Purchase Price Allocation We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets. The purchase price consisted of the following (in thousands): Cash $ 18,032 SPS Commerce, Inc. common stock 2,922 Fair value of share-based earn-out liability 1,043 $ 21,997 The final purchase price was subject to a net working capital adjustment to be determined by the sellers and us, pursuant to the terms of the purchase agreement. The number of shares of our common stock issued for the acquisition was a net of 43,953 shares, which consisted of 48,668 shares issued at closing, as calculated according to the terms of the purchase agreement, less 4,715 shares that were returned to us from escrow in the fourth quarter of 2016. The following table summarizes the estimated fair values of the assets acquired, net of cash acquired of $0.4 million, and liabilities assumed at the acquisition date (in thousands): Current assets $ 1,253 Property and equipment 56 Goodwill 15,389 Intangible assets 9,070 Current liabilities (1,249 ) Deferred revenue (301 ) Deferred income tax liability (2,221 ) $ 21,997 Purchased Intangible Assets The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 7,400 8 Developed technology 1,200 4 Trade names 70 1 Non-competition agreements 400 5 Total $ 9,070 The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from January 5, 2016 through December 31, 2016 was $1.4 million. Acquisition-Related Costs and Post-Acquisition Operating Results Acquisition-related costs were $0.1 million and are included in our consolidated statement of comprehensive income for the year ended December 31, 2016. The operating results of Toolbox Solutions have been included in our consolidated financial statements since January 5, 2016, the closing date of the acquisition. For the period from January 5, 2016 through December 31, 2016, approximately $7.9 million of our revenues were derived from Toolbox Solutions’ products and services. The amount of operating income or loss from Toolbox Solutions was not separately identifiable due to our integration. Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below presents the combined operating results of SPS Commerce and Toolbox Solutions as if the acquisition had occurred on January 1, 2015. The unaudited pro forma information includes the historical operating results of each company and pro forma adjustments for the approximately $1.4 million of annual amortization expense related to purchased intangible assets and the additional impact on the provision or benefit for income taxes, resulting from the combined income and intangible amortization expense, using our statutory blended income tax rate of 26.5%. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on January 1, 2015, nor is it necessarily indicative of our results of operations for any future periods. Year Ended December 31, (in thousands, except per share data) 2016 2015 Pro forma total revenue $ 193,525 $ 166,873 Pro forma net income 5,976 2,400 Pro forma net income per share Basic 0.35 0.14 Diluted 0.35 0.14 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments Owned At Fair Value [Abstract] | |
Financial Instruments | NOTE C – Financial Instruments We invest primarily in money market funds, certificates of deposit, highly liquid debt instruments of the U.S. government and U.S. corporate debt securities. All highly liquid investments with original maturities of 90 days or less are classified as cash equivalents. All investments with original maturities greater than 90 days and remaining maturities less than one year from the balance sheet date are classified as short-term investments. Investments with remaining maturities of more than one year from the balance sheet date are classified as long-term investments. Our short- and long-term marketable securities are classified as available-for-sale. We intend to hold marketable securities until maturity; however, we may sell these securities at any time for use in current operations or for other purposes. Consequently, we may or may not keep securities with stated holding periods to maturity. Our marketable securities are carried at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss in the consolidated balance sheets. Realized gains or losses are included in other income (expense), net in the consolidated statements of comprehensive income. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. Cash equivalents and short- and long-term investments consisted of the following (in thousands): December 31, 2017 2016 Amortized Unrealized Fair Amortized Unrealized Fair Cost Gains (Losses) Value Cost Gains (Losses) Value Cash equivalents: Money market funds $ 104,544 $ — $ 104,544 $ 75,375 $ — $ 75,375 Certificate of deposit 7,814 — 7,814 — — — Marketable securities: Corporate bonds 17,758 (57 ) 17,701 15,681 (96 ) 15,585 Commercial paper 7,456 20 7,476 4,977 10 4,987 U.S. treasury securities 12,381 26 12,407 7,489 10 7,499 U.S. agency obligations — — — 2,497 3 2,500 $ 149,953 $ (11 ) $ 149,942 $ 106,019 $ (73 ) $ 105,946 Due within one year $ 144,736 $ 98,452 Due within two years 5,206 7,494 Total $ 149,942 $ 105,946 We do not believe any of the unrealized losses represent an other-than-temporary impairment based on our assessment of available evidence as of December 31, 2017. We expect to receive the full principal and interest on all of these cash equivalents and short- and long-term investments. Fair Value Measurements We measure certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are: • Level 1 – quoted prices in active markets for identical assets or liabilities. • Level 2 – observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. We obtain the fair values of our level 2 available-for-sale securities from a professional pricing service. • Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at December 31, 2017: Cash equivalents: Money market funds $ 104,544 $ — $ — $ 104,544 Certificate of deposit 7,814 — — 7,814 Marketable securities: Corporate bonds — 17,700 — 17,700 Commerical paper — 7,477 — 7,477 U.S. treasury securities — 12,407 — 12,407 $ 112,358 $ 37,584 $ — $ 149,942 Assets at December 31, 2016: Cash equivalents: Money market funds $ 75,375 $ — $ — $ 75,375 Marketable securities: Corporate bonds — 15,585 — 15,585 Commerical paper — 4,987 — 4,987 U.S. treasury securities — 7,499 — 7,499 U.S. agency obligations — 2,500 — 2,500 $ 75,375 $ 30,571 $ — $ 105,946 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts | NOTE D – Allowance for Doubtful Accounts The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2017 2016 2015 Balances, January 1 $ 515 $ 446 $ 279 Provision for doubtful accounts 1,705 1,375 1,271 Write-offs, net of recoveries (1,457 ) (1,306 ) (1,104 ) Balances, December 31 $ 763 $ 515 $ 446 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | NOTE E – Property and Equipment, net Property and equipment, net included the following (in thousands): December 31, 2017 2016 Computer equipment and software $ 35,326 $ 29,270 Office equipment and furniture 7,439 7,087 Leasehold improvements 8,042 7,844 50,807 44,201 Less: accumulated depreciation and amortization (33,951 ) (28,887 ) $ 16,856 $ 15,314 At December 31, 2017 and 2016, property and equipment, net included approximately $2.2 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | NOTE F – Goodwill and Intangible Assets, net The changes in the net carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Balances, January 1 $ 49,777 $ 33,848 Additions from business acquisitions — 15,389 Foreign currency translation 1,836 540 Balances, December 31 $ 51,613 $ 49,777 Intangible assets, net included the following (in thousands): December 31, 2017 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 34,350 $ (19,592 ) $ 614 $ 15,372 Non-competition agreements 2,499 (2,058 ) 45 486 Technology and other 2,130 (1,518 ) 59 671 $ 38,979 $ (23,168 ) $ 718 $ 16,529 December 31, 2016 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 33,736 $ (15,708 ) $ 295 $ 18,323 Non-competition agreements 2,234 (1,818 ) 17 433 Technology and other 2,089 (1,120 ) 63 1,032 $ 38,059 $ (18,646 ) $ 375 $ 19,788 Amortization expense was $4.6 2018 $ 4,022 2019 3,730 2020 3,365 2021 2,520 2022 1,449 Thereafter 1,443 $ 16,529 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE G – Commitments and Contingencies Operating Leases We are obligated under non-cancellable operating leases primarily for office space. Rent expense for all operating leases, which includes minimum lease payments and other charges such as common area maintenance fees, charged to operations was $4.9 On December 20, 2017, we executed the fourth amendment to our lease agreement for our current headquarters located in Minneapolis, Minnesota where we lease approximately 166,000 square feet under an agreement that expires on April 30, 2025. We have agreed to expand our headquarters premises by approximately 48,000 square feet during 2018 and 2020. Our lease agreement also includes a further expansion right and a right of first offer to lease certain additional space and two options to extend the term of the lease for five years at a market rate determined in accordance with the lease. We received $3.2 million in incentives upon execution of the amendment which have been incorporated into our deferred rent calculation. At December 31, 2017, our future minimum payments under operating leases were as follows (in thousands): 2018 $ 3,833 2019 3,847 2020 3,122 2021 3,624 2022 3,270 Thereafter 6,796 $ 24,492 Other Contingencies We may be involved in various claims and legal actions in the normal course of business. Our management believes that the outcome of any such claims and legal actions will not have a material effect on our financial position, results of operations or cash flows. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders’ Equity | NOTE H – Stockholders’ Equity Common Stock Issued In connection with the acquisition of Toolbox Solutions (see Note B), we issued a net of 43,953 shares which consisted of 48,668 shares issued at closing, as calculated according to the terms of the purchase agreement, less 4,715 shares that were returned to us from escrow in the fourth quarter of 2016. The fair value of the shares we issued, approximately $2.9 million, was determined using the closing price of our common stock on January 5, 2016. During the second quarter of 2017, 8,866 shares were returned from escrow pursuant to the agreement with Toolbox Solutions. Stock Repurchase Program On November 2, 2017, our board of directors authorized a program to repurchase up to $50.0 million of common stock. Under the program, purchases may be made from time to time in the open market over the next two years. The number of shares to be purchased and the timing of purchases will be based on the price of our common stock, general business and market conditions and other investment considerations and factors. The program does not obligate us to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. We intend to finance the share repurchase program with cash on hand. During the fourth quarter of 2017, we repurchased 122,147 shares at a cost of $5.8 million. As of December 31, 2017, $44.2 million of the $50.0 million share repurchases authorized was available for future share repurchases. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE I – Stock-Based Compensation Our equity compensation plans provide for the grant of incentive and nonqualified stock options, as well as other stock-based awards including restricted stock and restricted stock units, to employees, non-employee directors and other consultants who provide services to us. Restricted stock awards result in the issuance of new shares when granted. For other stock-based awards, new shares are issued when the award is exercised, vested or released according to the terms of the agreement. In February 2017 and February 2016, 1,024,868 and 1,003,439 additional shares, respectively, were reserved for future issuance under our 2010 Equity Incentive Plan. At December 31, 2017, there were approximately 4.6 million shares available for grant under approved equity compensation plans. We recorded stock-based compensation expense of $12.7 Year Ended December 31, 2017 2016 2015 Cost of revenues $ 1,887 $ 1,309 $ 989 Operating expenses Sales and marketing 2,197 2,412 1,978 Research and development 949 618 640 General and administrative 7,694 3,684 2,772 Total stock-based compensation expense $ 12,727 $ 8,023 $ 6,379 As of December 31, 2017, there was approximately $11.6 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.5 years. Stock Options Stock options generally vest over four years and have a contractual term of seven to ten years from the date of grant. Our stock option activity was as follows: Weighted Average Options Exercise Price (#) ($/share) Outstanding at January 1, 2015 1,085,463 $ 26.53 Granted 181,487 67.50 Exercised (305,106 ) 14.55 Forfeited (18,741 ) 45.82 Outstanding at December 31, 2015 943,103 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 Granted 172,697 55.87 Exercised (65,502 ) 21.53 Forfeited (25,876 ) 55.93 Outstanding at December 31, 2017 1,097,331 47.60 Of the total outstanding options at December 31, 2017, 743,471 The fair value of options that vested during the years ended December 31, 2017, 2016 and 2015 was $4.2 The intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $2.8 The weighted-average fair values per share of options granted during the years ended December 31, 2017, 2016 and 2015 were $18.85, $16.13 and $23.09, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Volatility 38 % 38 % 39 % Dividend yield — — — Life (in years) 4.51 4.54 4.52 Risk-free interest rate 1.85 % 1.19 % 1.36 % The expected volatility of the options is based on the historical volatility of our common stock. We have not issued dividends on our common stock and do not expect to do so in the foreseeable future. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Performance Share Units and Restricted Stock Units and Awards In February 2017, our executive officers were granted performance share unit (“PSU”) awards with vesting contingent on successful attainment of predetermined revenue targets over the course of a three-year performance period. No expense for PSU awards was recognized during the year ended December 31, 2017 as the probability of attainment of the revenue target decreased. Restricted stock units (“RSU”) vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock. With restricted stock awards (“RSA”), shares of our common stock are issued when the award is granted and the restrictions lapse over one year. Our PSU and RSU activity was as follows: Weighted Average PSUs and RSUs Grant Date Fair (#) Value ($/share) Outstanding at January 1, 2015 115,133 $ 45.25 Granted 68,159 67.50 Vested and common stock issued (37,669 ) 40.91 Forfeited (5,058 ) 54.28 Outstanding at December 31, 2015 140,565 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 Granted 211,168 55.62 Vested and common stock issued (64,950 ) 53.64 Forfeited (13,348 ) 55.39 Outstanding at December 31, 2017 321,912 55.16 The number of PSUs and RSUs outstanding at December 31, 2017 included 44,177 Our RSA activity was as follows: Weighted Average RSAs Grant Date Fair (#) Value ($/share) Outstanding at January 1, 2015 1,338 $ 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (4,416 ) 62.63 Outstanding at December 31, 2015 1,032 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Outstanding at December 31, 2016 1,524 52.28 Restricted common stock issued 5,454 58.29 Restrictions lapsed (5,610 ) 56.65 Outstanding at December 31, 2017 1,368 58.29 Employee Stock Purchase Plan Effective July 1, 2012, we adopted an employee stock purchase plan which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all employees subject to certain eligibility requirements. Participating employees may purchase common stock, on a voluntary after tax basis, at a price that is the lower of 85% of the fair market value of one share of common stock at the beginning or end of each stock purchase period. The plan consists of two six-month offering periods, beginning on January 1 and July 1 of each calendar year. A total of 1.0 shares of common stock are remaining for issuance under the plan. For the offering periods in 2017, 2016 and 2015, we withheld approximately $1.9 million, $1.7 million and $1.5 million, respectively, from employees participating in the plan and purchased 40,968 shares, 33,357 shares and 28,362 shares, respectively, on their behalf. For the years ended December 31, 2017, 2016 and 2015, we recorded approximately $0.7 The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Volatility 32 % 37 % 30 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 0.90 % 0.42 % 0.12 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE J – Income Taxes Our provisions for income taxes included current federal, foreign and state income tax expense, as well as deferred tax expense as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Federal $ (184 ) $ 3,684 $ 2,066 State 258 555 289 Foreign 652 599 119 Deferred Federal 11,551 (988 ) 103 State (342 ) (133 ) (141 ) Foreign (355 ) (577 ) — $ 11,580 $ 3,140 $ 2,436 The current federal provision in the table above includes a $0.4 million reclass of alternative minimum tax (“AMT”) credit carryforwards from the deferred federal provision. These unutilized AMT credit carryforwards become partially refundable in 2019, 2020 and 2021 and fully refundable in 2022. A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Expected federal income tax at statutory rate $ 3,107 $ 3,011 $ 2,404 State income taxes, net of federal tax effect 366 320 246 Tax impact of foreign activity (105 ) (115 ) 39 Permanent book/tax differences 460 372 67 Change in valuation allowance 16 (35 ) (27 ) Change in state deferred rate (134 ) (67 ) (118 ) Research and development credit (227 ) (261 ) (200 ) Tax impact of Tax Cuts and Jobs Act 8,613 — — Tax impact of stock activity (925 ) — — Other 409 (85 ) 25 Total provision for income taxes $ 11,580 $ 3,140 $ 2,436 The tax provision for the year ended December 31, 2017 includes tax benefits of $0.9 million for the excess tax deduction from stock activity. It also includes tax expense of $8.6 million related to The Job Cuts and Tax Act (“Tax Act”), primarily due to the reduction in corporate tax rate to 21.0% resulting in a decrease in our U.S. net deferred tax assets. Differences between our effective tax rate and statutory tax rates are primarily due to the impact of the Tax Act, as well as permanently non-deductible expenses partially offset by the federal research and development credit. Additionally, under ASU 2016-09, excess tax benefits generated upon settlement or exercise of stock awards are now recognized as a reduction to income tax expense as a discrete tax item in the period that the event occurs creating potentially significant fluctuation in tax expense by year. The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2017 2016 Deferred tax assets Net operating loss and credit carryforwards $ 11,067 $ 4,614 Deferred operations — 799 Stock-based compensation expense 4,273 4,085 Accounts receivable allowances 307 363 Accrued expenses 2,293 2,704 Other 182 297 Gross deferred tax asset 18,122 12,862 Less: valuation allowance (602 ) (649 ) Total net deferred tax asset 17,520 12,213 Deferred tax liability Deferred operations (163 ) — Foreign operations (133 ) (350 ) Depreciation and amortization (1,536 ) (1,328 ) Other (24 ) — Total deferred tax liability (1,856 ) (1,678 ) Net deferred tax assets $ 15,664 $ 10,535 As of December 31, 2017, we had net operating loss carryforwards of $58.5 Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. We have performed a Section 382 analysis for the time period from our inception through December 8, 2010. During this time period it was determined that we had six separate ownership changes under Section 382. We have not updated the Section 382 analysis subsequent to December 8, 2010, however, we believe there have not been any events subsequent to that date that would materially impact the analysis. We believe that approximately $17.6 million of federal losses will expire unused due to Section 382 limitations. The maximum annual limitation of federal net operating losses under Section 382 is approximately $1.0 million. This limitation could be further restricted if any ownership changes occur in future years. Accordingly, our deferred tax assets are reported net of the excess tax deductions for stock compensation and Section 382 limitations. As of December 31, 2017 we had federal research and development credit carryforwards, net of Section 383 limitations, of $1.2 million, which, if not utilized, will begin to expire in 2030. We had state research and development credit carryforwards of $0.6 million which, if not utilized, will begin to expire in 2025. As of December 31, 2017, we had a valuation allowance against our deferred tax assets of $0.6 million. The valuation allowance is established for state net operating loss and credit carryforwards that we do not expect to utilize based on our current expectations of future state taxable income. We are subject to income taxes in the U.S. federal, various state and international jurisdictions. We are generally subject to U.S. federal and state tax examinations for all prior tax years due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute. As of December 31, 2017, we do not have any unrecognized tax benefits. It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not expect any material changes in our unrecognized tax positions over the next 12 months. Tax Act The Tax Act, which was enacted on December 22, 2017, includes broad and complex changes to the U.S tax code. The Tax Act reduces the corporate federal income tax rate to 21.0% effective January 1, 2018 and establishes a mandatory tax on previously untaxed foreign earnings and profits (“E&P”). The Tax Act expands the limitations for executive compensation under Section 162(m) and includes transition rules for previously awarded compensation. Accounting Standard Codification 740 requires a company to record the effects of a tax law change in the period of enactment, however, the SEC staff issued SAB 118, which allows a company to record a provisional amount when it does not have the necessary information available, prepared or analyzed in reasonable detail to complete its accounting for the change in the tax law. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. We have finalized our accounting for the corporate rate reduction and have recorded a decrease to our net deferred tax assets of $8.6 million with a corresponding adjustment to deferred tax expense for the year ended December 31, 2017. We have estimated that there is no tax on mandatory deemed repatriation due to a net foreign E&P deficit. We are continuing to evaluate the impact of the Tax Act on the taxation of previously untaxed foreign E&P and the deferred tax liability for withholding taxes on dividends. We are also continuing to evaluate the impact the expanded Section 162(m) limitations and related transition rules have on our deferred tax assets related to stock compensation. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NOTE K – Net Income (Loss) Per Share The following table presents the components of the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator Net (loss) income $ (2,440 ) $ 5,710 $ 4,639 Denominator Weighted average common shares outstanding, basic 17,183 16,947 16,565 Options to purchase common stock — 267 437 Restricted stock units — 27 27 Employee stock purchase plan — — 3 Weighted average common shares outstanding, diluted 17,183 17,241 17,032 Net (loss) income per share Basic $ (0.14 ) $ 0.34 $ 0.28 Diluted $ (0.14 ) $ 0.33 $ 0.27 For the years ended December 31, 2017, 2016 and 2015, the effect of approximately 283,000, 5,000 and 4,000 outstanding potential common shares, respectively, were excluded from the calculation of diluted net income (loss) per share as they were anti-dilutive. |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Savings Plan | NOTE L – Retirement Savings Plan We sponsor a 401(k) retirement savings plan for our U.S. employees. Employees can contribute up to 100% of their compensation, subject to the limits established by law. We match 25% of the employee’s contribution up to the first 6% of pre-tax annual compensation. Additionally, we make statutory contributions to retirement plans as required by local foreign government regulations. Our contributions to the plans, which vest immediately, were $1.6 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE M – Related Party Transactions SPS Commerce Foundation (the “Foundation”) is a Minnesota non-profit organization exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code. The Foundation was formed in 2015 to engage in, advance, support, promote and administer charitable activities. The directors of the Foundation are also our officers. These officers receive no compensation from the Foundation for the management services performed for the Foundation. The Foundation is not a subsidiary of ours and the financial results of the Foundation are not consolidated with our financial statements. We made contributions of $0.2 million and $0.3 million to the Foundation for the years ended December 31, 2017 and 2016, respectively. We have no current legal obligations for future commitments to the Foundation. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | NOTE N – Selected Quarterly Financial Data (Unaudited) The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2017 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 51,932 $ 54,284 $ 56,150 $ 58,200 Gross profit 34,602 36,093 37,505 38,741 Income (loss) from operations 3,376 2,727 2,846 (521 ) Net income (loss) 2,971 1,825 1,865 (9,101 ) Diluted earnings (loss) per share $ 0.17 $ 0.11 $ 0.11 $ (0.53 ) For the Three Months Ended 2016 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 45,599 $ 47,351 $ 49,284 $ 51,061 Gross profit 30,718 31,379 33,113 33,739 Income from operations 1,314 880 2,670 2,653 Net income 1,044 352 2,509 1,805 Diluted earnings per share $ 0.06 $ 0.02 $ 0.14 $ 0.10 |
General (Policies)
General (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income (loss). |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Business Combinations | Business Combinations We recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of determining the value and useful lives of purchased intangible assets and the purchase price allocation process. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed . Any such adjustments would be recorded |
Segment Information | Segment Information We operate in and report on one segment, which is supply chain management solutions . |
Risk and Uncertainties | Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand solutions. Our management believes alternate sources are available; however, disruption or termination of these relationships could adversely affect our operating results in the near term. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of temporary cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Temporary cash investments are held with financial institutions that we believe are subject to minimal risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. |
Investments | Investments Management determines the appropriate classification of certificates of deposit and marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note C. |
Accounts Receivable | Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write-off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. |
Property and Equipment | Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop internal-use software that are incurred during the development stage. The assets and related accumulated depreciation and amortization are adjusted for asset retirements and disposals with the resulting gain or loss included in our consolidated statements of comprehensive income. |
Research and Development | Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. |
Intangible Assets | Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition agreements. We recognize separately from goodwill the fair value of the identifiable intangible assets acquired. We have determined the fair value and useful lives of our purchased intangible assets using certain estimates and assumptions that we believe are reasonable. The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to nine years for subscriber relationships, two to five years for non-competition agreements and one to four years for technology and other. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Revenue Recognition | Revenue Recognition We generate revenues by providing three types of solutions to our customers; fulfillment, enablement and analytics. Our cloud-based solutions allow our customers to meet their supply chain management requirements. Revenues are recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable, and (4) collectability is probable. If collection is not considered probable, revenues are recognized when the fees are collected. Fees related to our fulfillment and analytics solutions consist of two revenue sources: set-up fees and recurring monthly fees. Set-up fees are specific for each connection a customer has with a trading partner and most of our customers have connections with numerous trading partners. Set-up fees are nonrefundable upfront fees that do not have standalone value to our customer and are not separable from the recurring monthly fees. All set-up fees and related costs are deferred and recognized ratably over the average life of the connection between the customer and the trading partner, which is approximately two years. We begin recognizing set-up fee revenue once the connection is established. Set-up fees for which connections have not yet been established are classified as long-term. We continue to evaluate the length of the amortization period as more experience is gained with cancellations and technology changes requested by our customers. It is possible that, in the future, the period over which such subscription set-up fees and costs are amortized may be adjusted. Any change in our estimate of the average connection life will affect our future results of operations. The recurring monthly fees are comprised of both fixed and transaction-based fees that are recognized as earned. |
Stock-Based Compensation | Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. We estimate the fair value of options granted using the Black-Scholes option pricing model. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. |
Income Taxes | Income Taxes We account for income taxes using the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in our judgement, there is a less than a 50% likelihood that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires significant estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income (loss) per share also includes the impact of our outstanding potential common shares, including options, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income (loss) per share. |
Recently Adopted/Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting We adopted ASU 2016-09 during the year ended December 31, 2017. The impact to our consolidated balance sheet as of January 1, 2017 was a $16.3 million increase in deferred income tax assets and a corresponding $16.3 million decrease in accumulated deficit. This impact results from the cumulative-effect adjustment for previously unrecognized excess tax benefits using the modified retrospective method required by the new standard. We elected to adopt the changes in cash flow statement presentation prospectively to be consistent with the prospective transition for the treatment of excess tax benefits in the income statement. Accordingly, we no longer classify excess tax benefits as a financing activity subsequent to January 1, 2017. On December 22, 2017, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP related to the enactment of the comprehensive tax legislation, commonly referred to as the Tax Cut and Jobs Act (“Tax Act”). This guidance was adopted in the fourth quarter of 2017. Additional information regarding our adoption of this guidance is contained in Note J. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases, In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Purchase Price | The purchase price consisted of the following (in thousands): Cash $ 18,032 SPS Commerce, Inc. common stock 2,922 Fair value of share-based earn-out liability 1,043 $ 21,997 |
Estimated Fair Values of Assets Acquired, Net of Cash Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the estimated fair values of the assets acquired, net of cash acquired of $0.4 million, and liabilities assumed at the acquisition date (in thousands): Current assets $ 1,253 Property and equipment 56 Goodwill 15,389 Intangible assets 9,070 Current liabilities (1,249 ) Deferred revenue (301 ) Deferred income tax liability (2,221 ) $ 21,997 |
Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives | The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Estimated Estimated Fair Value Life Purchased Intangible Assets (in thousands) (in years) Subscriber relationships $ 7,400 8 Developed technology 1,200 4 Trade names 70 1 Non-competition agreements 400 5 Total $ 9,070 |
Pro Forma Financial Information | Year Ended December 31, (in thousands, except per share data) 2016 2015 Pro forma total revenue $ 193,525 $ 166,873 Pro forma net income 5,976 2,400 Pro forma net income per share Basic 0.35 0.14 Diluted 0.35 0.14 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments Owned At Fair Value [Abstract] | |
Summary of Cash Equivalents and Short and Long-term Investments | Cash equivalents and short- and long-term investments consisted of the following (in thousands): December 31, 2017 2016 Amortized Unrealized Fair Amortized Unrealized Fair Cost Gains (Losses) Value Cost Gains (Losses) Value Cash equivalents: Money market funds $ 104,544 $ — $ 104,544 $ 75,375 $ — $ 75,375 Certificate of deposit 7,814 — 7,814 — — — Marketable securities: Corporate bonds 17,758 (57 ) 17,701 15,681 (96 ) 15,585 Commercial paper 7,456 20 7,476 4,977 10 4,987 U.S. treasury securities 12,381 26 12,407 7,489 10 7,499 U.S. agency obligations — — — 2,497 3 2,500 $ 149,953 $ (11 ) $ 149,942 $ 106,019 $ (73 ) $ 105,946 Due within one year $ 144,736 $ 98,452 Due within two years 5,206 7,494 Total $ 149,942 $ 105,946 |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at December 31, 2017: Cash equivalents: Money market funds $ 104,544 $ — $ — $ 104,544 Certificate of deposit 7,814 — — 7,814 Marketable securities: Corporate bonds — 17,700 — 17,700 Commerical paper — 7,477 — 7,477 U.S. treasury securities — 12,407 — 12,407 $ 112,358 $ 37,584 $ — $ 149,942 Assets at December 31, 2016: Cash equivalents: Money market funds $ 75,375 $ — $ — $ 75,375 Marketable securities: Corporate bonds — 15,585 — 15,585 Commerical paper — 4,987 — 4,987 U.S. treasury securities — 7,499 — 7,499 U.S. agency obligations — 2,500 — 2,500 $ 75,375 $ 30,571 $ — $ 105,946 |
Allowance for Doubtful Accoun25
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net | The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2017 2016 2015 Balances, January 1 $ 515 $ 446 $ 279 Provision for doubtful accounts 1,705 1,375 1,271 Write-offs, net of recoveries (1,457 ) (1,306 ) (1,104 ) Balances, December 31 $ 763 $ 515 $ 446 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net included the following (in thousands): December 31, 2017 2016 Computer equipment and software $ 35,326 $ 29,270 Office equipment and furniture 7,439 7,087 Leasehold improvements 8,042 7,844 50,807 44,201 Less: accumulated depreciation and amortization (33,951 ) (28,887 ) $ 16,856 $ 15,314 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Amount of Goodwill | The changes in the net carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Balances, January 1 $ 49,777 $ 33,848 Additions from business acquisitions — 15,389 Foreign currency translation 1,836 540 Balances, December 31 $ 51,613 $ 49,777 |
Intangible Assets | Intangible assets, net included the following (in thousands): December 31, 2017 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 34,350 $ (19,592 ) $ 614 $ 15,372 Non-competition agreements 2,499 (2,058 ) 45 486 Technology and other 2,130 (1,518 ) 59 671 $ 38,979 $ (23,168 ) $ 718 $ 16,529 December 31, 2016 Carrying Amount Accumulated Amortization Foreign Currency Translation Net Subscriber relationships $ 33,736 $ (15,708 ) $ 295 $ 18,323 Non-competition agreements 2,234 (1,818 ) 17 433 Technology and other 2,089 (1,120 ) 63 1,032 $ 38,059 $ (18,646 ) $ 375 $ 19,788 |
Future Amortization Expense for Intangible Assets | At December 31, 2017, future amortization expense for intangible assets was as follows (in thousands): 2018 $ 4,022 2019 3,730 2020 3,365 2021 2,520 2022 1,449 Thereafter 1,443 $ 16,529 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Payments Under Operating Leases | At December 31, 2017, our future minimum payments under operating leases were as follows (in thousands): 2018 $ 3,833 2019 3,847 2020 3,122 2021 3,624 2022 3,270 Thereafter 6,796 $ 24,492 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation Expense | Stock-based compensation expense was allocated as follows (in thousands): Year Ended December 31, 2017 2016 2015 Cost of revenues $ 1,887 $ 1,309 $ 989 Operating expenses Sales and marketing 2,197 2,412 1,978 Research and development 949 618 640 General and administrative 7,694 3,684 2,772 Total stock-based compensation expense $ 12,727 $ 8,023 $ 6,379 |
Stock Option Activity | Our stock option activity was as follows: Weighted Average Options Exercise Price (#) ($/share) Outstanding at January 1, 2015 1,085,463 $ 26.53 Granted 181,487 67.50 Exercised (305,106 ) 14.55 Forfeited (18,741 ) 45.82 Outstanding at December 31, 2015 943,103 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 Granted 172,697 55.87 Exercised (65,502 ) 21.53 Forfeited (25,876 ) 55.93 Outstanding at December 31, 2017 1,097,331 47.60 |
Weighted Average Fair Value Per Share of Options Granted, Assumptions | The weighted-average fair values per share of options granted during the years ended December 31, 2017, 2016 and 2015 were $18.85, $16.13 and $23.09, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Volatility 38 % 38 % 39 % Dividend yield — — — Life (in years) 4.51 4.54 4.52 Risk-free interest rate 1.85 % 1.19 % 1.36 % |
Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions | The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Volatility 32 % 37 % 30 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 0.90 % 0.42 % 0.12 % |
Performance Share Units and Restricted Stock Units [Member] | |
Performance Share Units and Restricted Stock Units and Restricted Stock Awards | Our PSU and RSU activity was as follows: Weighted Average PSUs and RSUs Grant Date Fair (#) Value ($/share) Outstanding at January 1, 2015 115,133 $ 45.25 Granted 68,159 67.50 Vested and common stock issued (37,669 ) 40.91 Forfeited (5,058 ) 54.28 Outstanding at December 31, 2015 140,565 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 Granted 211,168 55.62 Vested and common stock issued (64,950 ) 53.64 Forfeited (13,348 ) 55.39 Outstanding at December 31, 2017 321,912 55.16 |
Restricted Stock Award [Member] | |
Performance Share Units and Restricted Stock Units and Restricted Stock Awards | Our RSA activity was as follows: Weighted Average RSAs Grant Date Fair (#) Value ($/share) Outstanding at January 1, 2015 1,338 $ 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (4,416 ) 62.63 Outstanding at December 31, 2015 1,032 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Outstanding at December 31, 2016 1,524 52.28 Restricted common stock issued 5,454 58.29 Restrictions lapsed (5,610 ) 56.65 Outstanding at December 31, 2017 1,368 58.29 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | Our provisions for income taxes included current federal, foreign and state income tax expense, as well as deferred tax expense as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Federal $ (184 ) $ 3,684 $ 2,066 State 258 555 289 Foreign 652 599 119 Deferred Federal 11,551 (988 ) 103 State (342 ) (133 ) (141 ) Foreign (355 ) (577 ) — $ 11,580 $ 3,140 $ 2,436 |
Reconciliation of the Provision for Income Taxes to the Statutory Federal Rate | A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Expected federal income tax at statutory rate $ 3,107 $ 3,011 $ 2,404 State income taxes, net of federal tax effect 366 320 246 Tax impact of foreign activity (105 ) (115 ) 39 Permanent book/tax differences 460 372 67 Change in valuation allowance 16 (35 ) (27 ) Change in state deferred rate (134 ) (67 ) (118 ) Research and development credit (227 ) (261 ) (200 ) Tax impact of Tax Cuts and Jobs Act 8,613 — — Tax impact of stock activity (925 ) — — Other 409 (85 ) 25 Total provision for income taxes $ 11,580 $ 3,140 $ 2,436 |
Significant Components of Deferred Tax Assets (Liabilities) | The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2017 2016 Deferred tax assets Net operating loss and credit carryforwards $ 11,067 $ 4,614 Deferred operations — 799 Stock-based compensation expense 4,273 4,085 Accounts receivable allowances 307 363 Accrued expenses 2,293 2,704 Other 182 297 Gross deferred tax asset 18,122 12,862 Less: valuation allowance (602 ) (649 ) Total net deferred tax asset 17,520 12,213 Deferred tax liability Deferred operations (163 ) — Foreign operations (133 ) (350 ) Depreciation and amortization (1,536 ) (1,328 ) Other (24 ) — Total deferred tax liability (1,856 ) (1,678 ) Net deferred tax assets $ 15,664 $ 10,535 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Components of Computation of Basic and Diluted Net Income (Loss) Per Share | The following table presents the components of the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator Net (loss) income $ (2,440 ) $ 5,710 $ 4,639 Denominator Weighted average common shares outstanding, basic 17,183 16,947 16,565 Options to purchase common stock — 267 437 Restricted stock units — 27 27 Employee stock purchase plan — — 3 Weighted average common shares outstanding, diluted 17,183 17,241 17,032 Net (loss) income per share Basic $ (0.14 ) $ 0.34 $ 0.28 Diluted $ (0.14 ) $ 0.33 $ 0.27 |
Selected Quarterly Financial 32
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Statements of Comprehensive Income Data | The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2017 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 51,932 $ 54,284 $ 56,150 $ 58,200 Gross profit 34,602 36,093 37,505 38,741 Income (loss) from operations 3,376 2,727 2,846 (521 ) Net income (loss) 2,971 1,825 1,865 (9,101 ) Diluted earnings (loss) per share $ 0.17 $ 0.11 $ 0.11 $ (0.53 ) For the Three Months Ended 2016 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 45,599 $ 47,351 $ 49,284 $ 51,061 Gross profit 30,718 31,379 33,113 33,739 Income from operations 1,314 880 2,670 2,653 Net income 1,044 352 2,509 1,805 Diluted earnings per share $ 0.06 $ 0.02 $ 0.14 $ 0.10 |
General - Additional Informatio
General - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Jan. 01, 2017USD ($) | |
Schedule Of Accounting Policies [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Average life of connection between customer and trading partner | 2 years | ||
ASU 2016-09 [Member] | Deferred Income Tax Assets, Non-Current [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Cumulative effect of change due to new accounting pronouncement | $ (16.3) | ||
ASU 2016-09 [Member] | Accumulated Deficit [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Cumulative effect of change due to new accounting pronouncement | $ 16.3 | ||
ASU 2014-09 [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Decrease in revenue | $ 0.5 | $ 0.1 | |
ASU 2014-09 [Member] | Sales and Marketing Expense [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Increase (decrease) in commission expense | $ (2) | $ 1 | |
Minimum [Member] | Subscriber Relationships [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 3 years | ||
Minimum [Member] | Non-competition Agreements [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 2 years | ||
Minimum [Member] | Technology and Other [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 1 year | ||
Maximum [Member] | Subscriber Relationships [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 9 years | ||
Maximum [Member] | Non-competition Agreements [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 5 years | ||
Maximum [Member] | Technology and Other [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 4 years | ||
Computer Equipment and Software [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 2 years | ||
Computer Equipment and Software [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 3 years | ||
Office Equipment and Furniture [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 5 years | ||
Office Equipment and Furniture [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 7 years |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 05, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||||
Stock issued for acquisition | $ 2,922 | ||||||
Amortization expense for purchased intangible assets | $ 4,574 | 4,738 | $ 3,307 | ||||
Toolbox Solutions, Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business | $ 18,032 | ||||||
Stock issued for acquisition | $ 2,922 | ||||||
Stock issued for acquisition, shares | 43,953 | 43,953 | |||||
Number of shares of common stock issuable | 16,222 | ||||||
Number of gross shares issued | 48,668 | ||||||
Number of shares returned from escrow | 8,866 | 4,715 | |||||
Cash acquired from acquisition | $ 400 | ||||||
Amortization expense for purchased intangible assets | $ 1,400 | ||||||
Acquisition-related costs | 100 | ||||||
Revenues from acquisition | $ 7,900 | ||||||
Proforma adjustments in amortization | $ 1,400 | ||||||
Statutory blended income tax rate | 26.50% | ||||||
Toolbox Solutions, Inc. [Member] | Contingent Consideration Liability [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Other income | $ 1,100 |
Business Acquisitions - Busines
Business Acquisitions - Business Purchase Price (Detail) - USD ($) $ in Thousands | Jan. 05, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
SPS Commerce, Inc. common stock | $ 2,922 | |
Toolbox Solutions, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 18,032 | |
SPS Commerce, Inc. common stock | 2,922 | |
Fair value of share-based earn-out liability | 1,043 | |
Total purchase price | $ 21,997 |
Business Acquisitions - Estimat
Business Acquisitions - Estimated Fair Values of the Assets Acquired, Net of Cash acquired and Liabilities Assumed at the Acquisition Date (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||
Goodwill | $ 51,613 | $ 49,777 | $ 33,848 |
Toolbox Solutions, Inc. [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||
Current assets | 1,253 | ||
Property and equipment | 56 | ||
Goodwill | 15,389 | ||
Intangible assets | 9,070 | ||
Current liabilities | (1,249) | ||
Deferred revenue | (301) | ||
Deferred income tax liability | (2,221) | ||
Total purchase price | $ 21,997 |
Business Acquisitions - Estim37
Business Acquisitions - Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives (Detail) - Toolbox Solutions, Inc. [Member] $ in Thousands | Jan. 05, 2016USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 9,070 |
Subscriber Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 7,400 |
Estimated Life (in years) | 8 years |
Developed Technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 1,200 |
Estimated Life (in years) | 4 years |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 70 |
Estimated Life (in years) | 1 year |
Non-competition Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 400 |
Estimated Life (in years) | 5 years |
Business Acquisitions - Pro For
Business Acquisitions - Pro Forma Financial Information (Detail) - Toolbox Solutions, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Pro forma total revenue | $ 193,525 | $ 166,873 |
Pro forma net income | $ 5,976 | $ 2,400 |
Pro forma net income per share, Basic | $ 0.35 | $ 0.14 |
Pro forma net income per share, Diluted | $ 0.35 | $ 0.14 |
Financial Instruments - Summary
Financial Instruments - Summary of Cash Equivalents and Short and Long-term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Instruments [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Due within one year | $ 144,736 | $ 98,452 |
Amortized Cost | 149,953 | 106,019 |
Due within two years | 5,206 | 7,494 |
Unrealized Gains (Losses) | (11) | (73) |
Fair Value | 149,942 | 105,946 |
Money Market Funds [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 104,544 | 75,375 |
Fair Value | 104,544 | 75,375 |
Certificate of Deposit [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 7,814 | |
Fair Value | 7,814 | |
Corporate Bonds [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 17,758 | 15,681 |
Unrealized Gains (Losses) | (57) | (96) |
Fair Value | 17,701 | 15,585 |
Commercial Paper [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 7,456 | 4,977 |
Unrealized Gains (Losses) | 20 | 10 |
Fair Value | 7,476 | 4,987 |
U.S. Treasury Securities [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 12,381 | 7,489 |
Unrealized Gains (Losses) | 26 | 10 |
Fair Value | $ 12,407 | 7,499 |
U.S. Agency Obligations [Member] | ||
Schedule of Financial Instruments [Line Items] | ||
Amortized Cost | 2,497 | |
Unrealized Gains (Losses) | 3 | |
Fair Value | $ 2,500 |
Financial Instruments - Summa40
Financial Instruments - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 149,942 | $ 105,946 |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 104,544 | 75,375 |
Certificate of Deposit [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,814 | |
Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 17,700 | 15,585 |
Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,477 | 4,987 |
U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 12,407 | 7,499 |
U.S. Agency Obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 2,500 | |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 112,358 | 75,375 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 104,544 | 75,375 |
Level 1 [Member] | Certificate of Deposit [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,814 | |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 37,584 | 30,571 |
Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 17,700 | 15,585 |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,477 | 4,987 |
Level 2 [Member] | U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 12,407 | 7,499 |
Level 2 [Member] | U.S. Agency Obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 2,500 |
Allowance for Doubtful Accoun41
Allowance for Doubtful Accounts - Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net (Detail) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balances, January 1 | $ 515 | $ 446 | $ 279 |
Provision for doubtful accounts | 1,705 | 1,375 | 1,271 |
Write-offs, net of recoveries | (1,457) | (1,306) | (1,104) |
Balances, December 31 | $ 763 | $ 515 | $ 446 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 50,807 | $ 44,201 |
Less: accumulated depreciation and amortization | (33,951) | (28,887) |
Net, Total | 16,856 | 15,314 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 35,326 | 29,270 |
Office Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 7,439 | 7,087 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 8,042 | $ 7,844 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Outside of U.S [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Property and equipment, net held at subsidiary and office locations outside of the U.S. | $ 2.2 | $ 2.1 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets, net - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Balances, January 1 | $ 49,777 | $ 33,848 |
Additions from business acquisitions | 15,389 | |
Foreign currency translation | 1,836 | 540 |
Balances, December 31 | $ 51,613 | $ 49,777 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets, net - Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | $ 38,979 | $ 38,059 |
Accumulated Amortization | (23,168) | (18,646) |
Foreign Currency Translation | 718 | 375 |
Net | 16,529 | 19,788 |
Subscriber Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 34,350 | 33,736 |
Accumulated Amortization | (19,592) | (15,708) |
Foreign Currency Translation | 614 | 295 |
Net | 15,372 | 18,323 |
Non-competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 2,499 | 2,234 |
Accumulated Amortization | (2,058) | (1,818) |
Foreign Currency Translation | 45 | 17 |
Net | 486 | 433 |
Technology and Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 2,130 | 2,089 |
Accumulated Amortization | (1,518) | (1,120) |
Foreign Currency Translation | 59 | 63 |
Net | $ 671 | $ 1,032 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 4,574 | $ 4,738 | $ 3,307 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets, net - Future Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 4,022 | |
2,019 | 3,730 | |
2,020 | 3,365 | |
2,021 | 2,520 | |
2,022 | 1,449 | |
Thereafter | 1,443 | |
Net | $ 16,529 | $ 19,788 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Dec. 20, 2017USD ($)ft²Option | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2020ft² | Dec. 31, 2018ft² |
Commitments And Contingencies [Line Items] | ||||||
Rent expense charged to operations | $ | $ 4.9 | $ 5 | $ 4.6 | |||
Current Headquarters [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Lease agreement expires, date | Apr. 30, 2025 | |||||
Number of options to extend term of the lease | Option | 2 | |||||
Lease extension period, number of years | 5 years | |||||
Incentives received upon execution of amendment | $ | $ 3.2 | |||||
Current Headquarters [Member] | Minneapolis, Minnesota [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Current leased space for headquarters | ft² | 166,000 | |||||
Current Headquarters [Member] | Scenario, Forecast [Member] | Minneapolis, Minnesota [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Future expansion of headquarters premises | ft² | 48,000 | 48,000 |
Commitments and Contingencies49
Commitments and Contingencies - Future Minimum Payments Under Operating Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 3,833 |
2,019 | 3,847 |
2,020 | 3,122 |
2,021 | 3,624 |
2,022 | 3,270 |
Thereafter | 6,796 |
Operating leases, total | $ 24,492 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | Nov. 02, 2017 | Jan. 05, 2016 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Stockholders Equity [Line Items] | |||||||
Treasury stock at cost | $ 5,815 | ||||||
Common Stock [Member] | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Stock issued for acquisition, Shares | 43,953 | ||||||
Stock repurchase program, authorized amount | $ 50,000 | ||||||
Stock repurchase program, period | 2 years | ||||||
Repurchase of treasury shares | 122,147 | (122,147) | |||||
Treasury stock at cost | $ 5,800 | ||||||
Stock repurchase program, available for future repurchases | $ 44,200 | $ 44,200 | |||||
Toolbox Solutions, Inc. [Member] | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Stock issued for acquisition, Shares | 43,953 | 43,953 | |||||
Number of gross shares issued | 48,668 | ||||||
Number of shares returned from escrow | 8,866 | 4,715 | |||||
Fair value of the shares issued | $ 2,900 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2017shares | Dec. 31, 2017USD ($)Offering$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Feb. 29, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant | shares | 4,600,000 | ||||
Stock-based compensation expense | $ 12,727,000 | $ 8,023,000 | $ 6,379,000 | ||
Unrecognized stock-based compensation expense | $ 11,600,000 | ||||
Unrecognized stock-based compensation, expected to be recognized, weighted average period | 2 years 6 months | ||||
Stock options exercisable | shares | 743,471 | ||||
Weighted average exercise price | $ / shares | $ 44.58 | ||||
Weighted average remaining contractual life | 4 years | ||||
Fair value of options vested | $ 4,200,000 | 3,400,000 | 3,100,000 | ||
Intrinsic value of options exercised | 2,800,000 | 8,600,000 | 16,800,000 | ||
Intrinsic value of options outstanding | $ 7,300,000 | $ 25,600,000 | $ 30,500,000 | ||
Weighted average fair value per share of options granted | $ / shares | $ 18.85 | $ 16.13 | $ 23.09 | ||
Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Additional shares reserved for issuance under the plan | shares | 1,000,000 | ||||
Stock-based compensation expense | $ 700,000 | $ 600,000 | $ 400,000 | ||
Purchase price as a percentage of fair market value | 85.00% | ||||
Number of offerings per year | Offering | 2 | ||||
Amount withheld from employees | $ 1,900,000 | $ 1,700,000 | $ 1,500,000 | ||
Shares purchased | shares | 40,968 | 33,357 | 28,362 | ||
Chief Executive Officers [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 3,600,000 | ||||
Equity Incentive Plan [Member] | 2010 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Additional shares reserved for issuance under the plan | shares | 1,024,868 | 1,003,439 | |||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Stock Options [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options contractual term range | 7 years | ||||
Stock Options [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options contractual term range | 10 years | ||||
Performance Share Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 0 | ||||
Vesting period | 3 years | ||||
Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Restricted Stock Award [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock awards units vest over, period | 1 year | ||||
Performance Share Units and Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSU's vested and not issued during the period | shares | 44,177 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 12,727 | $ 8,023 | $ 6,379 |
Cost of Revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,887 | 1,309 | 989 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,197 | 2,412 | 1,978 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 949 | 618 | 640 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 7,694 | $ 3,684 | $ 2,772 |
Stock-Based Compensation - St53
Stock-Based Compensation - Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Options Outstanding, Beginning balance | 1,016,012 | 943,103 | 1,085,463 |
Options, Granted | 172,697 | 340,609 | 181,487 |
Options, Exercised | (65,502) | (221,630) | (305,106) |
Options, Forfeited | (25,876) | (46,070) | (18,741) |
Options Outstanding, Ending balance | 1,097,331 | 1,016,012 | 943,103 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 44.72 | $ 37.91 | $ 26.53 |
Weighted Average Exercise Price, Granted | 55.87 | 48.58 | 67.50 |
Weighted Average Exercise Price, Exercised | 21.53 | 19.42 | 14.55 |
Weighted Average Exercise Price, Forfeited | 55.93 | 55.58 | 45.82 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 47.60 | $ 44.72 | $ 37.91 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Fair Value Per Share of Options Granted, Assumptions (Detail) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 38.00% | 38.00% | 39.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 4 years 6 months 3 days | 4 years 6 months 15 days | 4 years 6 months 7 days |
Risk-free interest rate | 1.85% | 1.19% | 1.36% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Units and Restricted Stock Units (Detail) - Performance Share Units and Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 189,042 | 140,565 | 115,133 |
Granted, stock units | 211,168 | 115,896 | 68,159 |
Vested and common stock issued, stock units | (64,950) | (52,133) | (37,669) |
Forfeited, stock units | (13,348) | (15,286) | (5,058) |
Stock awards, Outstanding, Ending Balance | 321,912 | 189,042 | 140,565 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 54.14 | $ 56.88 | $ 45.25 |
Granted, Weighted Average Grant Date Fair Value | 55.62 | 48.32 | 67.50 |
Vested and common stock issued, Weighted Average Grant Date Fair Value | 53.64 | 48.19 | 40.91 |
Forfeited, Weighted Average Grant Date Fair Value | 55.39 | 55.48 | 54.28 |
Weighted average grant date fair value, Outstanding, Ending Balance | $ 55.16 | $ 54.14 | $ 56.88 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Detail) - Restricted Stock Award [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 1,524 | 1,032 | 1,338 |
Restricted common stock issued, stock awards | 5,454 | 6,078 | 4,110 |
Restrictions lapsed, stock awards | (5,610) | (5,586) | (4,416) |
Stock awards, Outstanding, Ending Balance | 1,368 | 1,524 | 1,032 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 52.28 | $ 67.39 | $ 51.74 |
Restricted common stock issued, Weighted Average Grant Date Fair Value | 58.29 | 52.27 | 67.37 |
Restrictions lapsed, Weighted Average Grant Date Fair Value | 56.65 | 55.06 | 62.63 |
Weighted average grant date fair value, Outstanding, Ending Balance | $ 58.29 | $ 52.28 | $ 67.39 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions (Detail) - Employee Stock Purchase Plan [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 32.00% | 37.00% | 30.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.90% | 0.42% | 0.12% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
Federal | $ (184) | $ 3,684 | $ 2,066 |
State | 258 | 555 | 289 |
Foreign | 652 | 599 | 119 |
Deferred | |||
Federal | 11,551 | (988) | 103 |
State | (342) | (133) | (141) |
Foreign | (355) | (577) | |
Total provision for income taxes | $ 11,580 | $ 3,140 | $ 2,436 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Expense Benefit [Line Items] | |||
Reclass of AMT credit carryforward to current federal expense | $ 400,000 | ||
Unutilized alternative minimum tax credit carryforwards partially refundable year one | 2,019 | ||
Unutilized alternative minimum tax credit carryforwards partially refundable year two | 2,020 | ||
Unutilized alternative minimum tax credit carryforwards partially refundable year three | 2,021 | ||
Unutilized alternative minimum tax credit carryforwards fully refundable year | 2,022 | ||
Tax benefits for excess tax deduction from stock activity | $ 925,000 | ||
Tax expense related to The Job Cuts and Tax Act (“Tax Act”), primarily due to reduction in corporate tax rate | 8,613,000 | ||
Valuation allowance against our deferred tax assets | 602,000 | $ 649,000 | |
Decrease to net deferred tax assets | 8,600,000 | ||
Estimated tax on mandatory deemed repatriation due to net foreign E&P deficit | 0 | ||
Domestic Tax Authority [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Net operating loss carryforward | $ 58,500,000 | ||
Expiration of net operating loss carryforwards | Loss carryforwards for federal tax purposes will expire between 2020 and 2036 if not utilized | ||
Losses expected to expire unused | $ 17,600,000 | ||
Maximum annual limitation of federal net operating losses | 1,000,000 | ||
Domestic Tax Authority [Member] | Research and Development [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Research and development credit carryforwards | $ 1,200,000 | ||
Year in which credit carryforward begins to expire | 2,030 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Net operating loss carryforward | $ 10,600,000 | ||
Expiration of net operating loss carryforwards | Loss carryforwards for state tax purposes will expire between 2018 and 2036 if not utilized | ||
State and Local Jurisdiction [Member] | Net Operating Loss and Credit Carryforwards [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Valuation allowance against our deferred tax assets | $ 600,000 | ||
State and Local Jurisdiction [Member] | Research and Development [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Research and development credit carryforwards | $ 600,000 | ||
Year in which credit carryforward begins to expire | 2,025 | ||
Scenario, Forecast [Member] | |||
Income Tax Expense Benefit [Line Items] | |||
Corporate federal income tax rate | 21.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes to Statutory Federal Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Expected federal income tax at statutory rate | $ 3,107 | $ 3,011 | $ 2,404 |
State income taxes, net of federal tax effect | 366 | 320 | 246 |
Tax impact of foreign activity | (105) | (115) | 39 |
Permanent book/tax differences | 460 | 372 | 67 |
Change in valuation allowance | 16 | (35) | (27) |
Change in state deferred rate | (134) | (67) | (118) |
Research and development credit | (227) | (261) | (200) |
Tax impact of Tax Cuts and Jobs Act | 8,613 | ||
Tax impact of stock activity | (925) | ||
Other | 409 | (85) | 25 |
Total provision for income taxes | $ 11,580 | $ 3,140 | $ 2,436 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Liabilities) (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
Net operating loss and credit carryforwards | $ 11,067 | $ 4,614 |
Deferred operations | 799 | |
Stock-based compensation expense | 4,273 | 4,085 |
Accounts receivable allowances | 307 | 363 |
Accrued expenses | 2,293 | 2,704 |
Other | 182 | 297 |
Gross deferred tax asset | 18,122 | 12,862 |
Less: valuation allowance | (602) | (649) |
Total net deferred tax asset | 17,520 | 12,213 |
Deferred tax liability | ||
Deferred operations | (163) | |
Foreign operations | (133) | (350) |
Depreciation and amortization | (1,536) | (1,328) |
Other | (24) | |
Total deferred tax liability | (1,856) | (1,678) |
Net deferred tax assets | $ 15,664 | $ 10,535 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Components of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator | |||||||||||
Net income (loss) | $ (9,101) | $ 1,865 | $ 1,825 | $ 2,971 | $ 1,805 | $ 2,509 | $ 352 | $ 1,044 | $ (2,440) | $ 5,710 | $ 4,639 |
Denominator | |||||||||||
Weighted average common shares outstanding, basic | 17,183 | 16,947 | 16,565 | ||||||||
Options to purchase common stock | 267 | 437 | |||||||||
Restricted stock units | 27 | 27 | |||||||||
Employee stock purchase plan | 3 | ||||||||||
Weighted average common shares outstanding, diluted | 17,183 | 17,241 | 17,032 | ||||||||
Net (loss) income per share | |||||||||||
Basic | $ (0.14) | $ 0.34 | $ 0.28 | ||||||||
Diluted | $ (0.53) | $ 0.11 | $ 0.11 | $ 0.17 | $ 0.10 | $ 0.14 | $ 0.02 | $ 0.06 | $ (0.14) | $ 0.33 | $ 0.27 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net (loss) income per share | |||
Outstanding potential common shares excluded from calculation of diluted net income (loss) per share | 283 | 5 | 4 |
Retirement Savings Plan - Addit
Retirement Savings Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Pension And Other Postretirement Plans Disclosure [Abstract] | |||
Maximum allowable contribution by employee percentage | 100.00% | ||
Defined benefit plan employer matching contribution percent | 25.00% | ||
Maximum annual contribution per employee, percent | 6.00% | ||
Employer matching contribution amount | $ 1.6 | $ 1.4 | $ 1.1 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - SPS Commerce Foundation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Contributions to Foundation | $ 200,000 | $ 300,000 |
Legal obligations for future commitments to Foundation | 0 | |
Directors of Foundation [Member] | ||
Related Party Transaction [Line Items] | ||
Officers' compensation from Foundation | $ 0 |
Selected Quarterly Financial 66
Selected Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Statements of Comprehensive Income Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 58,200 | $ 56,150 | $ 54,284 | $ 51,932 | $ 51,061 | $ 49,284 | $ 47,351 | $ 45,599 | $ 220,566 | $ 193,295 | $ 158,518 |
Gross profit | 38,741 | 37,505 | 36,093 | 34,602 | 33,739 | 33,113 | 31,379 | 30,718 | 146,941 | 128,949 | 108,475 |
Income (loss) from operations | (521) | 2,846 | 2,727 | 3,376 | 2,653 | 2,670 | 880 | 1,314 | 8,428 | 7,517 | 7,023 |
Net income (loss) | $ (9,101) | $ 1,865 | $ 1,825 | $ 2,971 | $ 1,805 | $ 2,509 | $ 352 | $ 1,044 | $ (2,440) | $ 5,710 | $ 4,639 |
Diluted earnings (loss) per share | $ (0.53) | $ 0.11 | $ 0.11 | $ 0.17 | $ 0.10 | $ 0.14 | $ 0.02 | $ 0.06 | $ (0.14) | $ 0.33 | $ 0.27 |