SPSC - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the SPS Commerce Q1 2020 Earnings Call. At this time, all participant lines are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to hand the conference over to your speaker today, Irmina Blaszczyk.

begin. may You

Irmina Blaszczyk

[ph]. joining Blue Conference everyone thank and Thank on Good SPS for us XXXX Commerce you you, afternoon First Call. Quarter

with other financial involve make projections our could efforts forward-looking uncertainty traction will cause statements know and number the actual with projections. to respect statements increase materially including to uncertainties retailers and penetration of and are a We pandemic We that designed to risks from differ our could These results COVID-XX in go-to-market results, of that certain expected and strategy particular customers. performance and today, and cause regarding and impact materially. our our to results on actual projections differ

opinions as this our a publicly whether more Please refer X-K results. date otherwise. only as may for our that SEC information, note today forward-looking to revise of of Please of XX-K, furnished earlier we press to new call, obligation our our events to we specifically, future our affect of undertake update the Form detailed SEC no Form or a result statements any results release financial or these risk well forward-looking as reflect and the that factors the filings, description as statements

on These at the spscommerce.com available website documents SEC's are and our website SEC.GOV.

our In addition, we section Relations Investor on our for a of spscommerce.com. historical reference are providing easy website, datasheet

will and reconciliations regarding measures EBITDA posted adjusted release measures is SEC, including comparable adjusted of During website, of and the discuss disclosures with these EBITDA non-GAAP GAAP per with our our filings each share. on additional and call we today, measures. these our measures, we our financial earnings non-GAAP In press will find which

turn will Archie. call I that, to with over And the

Archie Black

Irmina, welcome Thanks, and everyone.

health and fully these we a and serve and support with challenging times. thoughts committed our safety the are affected suppliers we priority coronavirus you're communities well that and and our and remain hope top customers in partners all everyone foremost, is by pandemic. and retailers safe the of The staying First employees, to our

to they to need. day ensure SPS Services able essentials are deliver absolutely critical day Commerce to our to we all the customers are

We tools are and enable processes anywhere years, and to deliver investments the than made world browser. we have more the over secure our systems cloud-native often and company service the us a with nothing in web and uninterrupted

customers of the are nature the needed. suppliers able a business providing as new onboarding to we remotely Due existing to model, and SaaS full-service experience operate promptly to

revenue grew grew For first million. XX% EBITDA the quarter, XX% revenue grew to to XX% $XX.X and adjusted million. Recurring $XX.X

mission-critical business. e-commerce service supply foodservice distributor Commerce recently retailers chain. at SPS central provides a about a and to We to a become automating their Foods, US a when with suppliers EDI engaged and their leading leveraging has time

realized in operations their electronic identified as critical to disrupt component processes industry, of US As to a all COVID-XX order fulfillment. Foods operations. They maintain to are to started that in EDI food electronic process move the requiring this effective suppliers crucial business

center Foods, US four enabling with to more years. own to it deliver XX directly the they on over retailers' Commerce have than last matter on Foods a signed product formed transact SPS weeks, our has suppliers In partnerships, sector stores. also have to grocery EDI their distribution US or

ensure to approximately orders fill up network hours. Costco's XXX been new their using same-day Many has work to Costco, we meet vendor inventory to and example, they help consumer need across demand. retailers of These to retailers the with and new are on expanding demand. on multi-channel relied has sourcing supply efficiencies setup, regularly past SPS increasing few weeks for and us and the within the United increasing partnerships further meet emphasize chain strategy vendors maintain the are for their over running for to add States

in We caused have operational from directives a online sales such sometimes new and mortar was an to same new at now working also E-commerce products onboarding home and government an masks. stay suppliers. quickly face our Stay with increase brick retailers have abrupt sale retail and adapt variety full-service, to able of of capabilities, products prompting integral also our relevant. decline of day shopping. onboarding to evaluate critical -- and suppliers part for necessary as to is been shift With SPS their speed essential Walgreens, critical lives, market efficiencies a to

of reduce like launched fulfillment, functionality them service we with part save carriers Canada. processing drop-ship manage shopping Commerce for helping all time SPS and rate in As major and costs batch suppliers with the orders, carrier to capability help US

March service, which fill Costco, was Beyond customers used fulfill Amazon, orders being Bed launched Bath is Depot, -- in to & Target. Home our just by Carrier and for

as with support pleased challenging are product's community We our this to strive we the environment. to acceptance date in trading

will SPS support for to And the in continue automation. We relationships need we has way improve impacting partner expect suppliers an can. committed Commerce dynamics amplify process trading current every the to and retailers

diverse economic implications experienced landscape. also demand. Commerce seeing has volume approximately a end half have SPS with a retailers transaction mindful evolving to capabilities the and our the the some our large consumer very across volume, we and industries we of network a see steady increased serve of and partners the suppliers markets, COVID-XX of decline. March, various since uncertainty have while retail seen e-commerce implementing impacts pandemic We and across of network of are adapting around and Across rapidly trading its network

seeing and increased automation drop-ship time, The dynamics for capabilities. implementing embracing of the evolve. this e-commerce situation continue demand retailers from are to At we

new has increase grocery retailers and in to suppliers for as exposure well resulted foodservice an chain as in supply grocery onboarding distributors. the Our of

and long-term are opportunities over These SPS trading to are XX,XXX partners. growing for our as the support network the demand that dynamics drive Commerce Solutions, we about optimistic continue we of

in the continued pressure pandemic the and enterprise its solutions the of and analytics of factoring ERP As the magnitude implementations. a the rest decline economy, we the of in duration retailers, on our for look at this growing possibility around a uncertainty in as on push-out demand impact we are such XXXX, and

negatively would of and All with are community. partners are we or model These control, protect cannot dynamics we well-positioned operational to -- predict provide to our our impact business. customers, cloud-native but our which support our

In summary, a continues to SPS be mission-critical the of chain. aspect supply global

to retail network is Our the vision be world's being realized.

for vital trading customers supporting disruption. and to supply retail for keeping would and solutions employees Our thank I ensuring do are of like all continuity communities. and business and chain crisis of during this work now our commitment connected, time partners is to The we our ongoing the our especially supply

our from in on and and April, our our on a crisis history than ever. company SPS as we of consistent We public needs, based Commerce XXth execution stronger emerge this customers' year believe will achieved ongoing focus

I'll over it that, to With Kim, discuss to our turn results. financial

Kim Nelson

was XX% Thanks, this XXth XXXX. represented increase recurring last of customers over million, Recurring total number quarter Archie revenue quarter year-over-year. we to consecutive our a XX,XXX. The year-over-year grew increased quarter delivered QX year of a Revenue $XX.X of revenue XX% of solid first and approximately growth. revenue X%

QX, share X,XXX. at approximately For X% year-over-year was wallet up

adjusted and $XXX compared We ended total in $XX.X quarter, year. of marketable EBITDA quarter cash million million million. the the with to last $XX.X of For was securities QX approximately

the shares of million $XX quarter. in SPS repurchased also We

to guidance. turning Now

$XX.X quarter $XX.X of expect the million million. to we be range revenue For second of XXXX, the to in

range million. to $XX We of million to EBITDA be the $XX expect in adjusted

be share to of diluted $XX.X earnings shares. diluted We per expect $X.XX fully average weighted $X.XX to approximately shares fully million approximately with outstanding

million. million, expense expect compensation We approximately to depreciation expense $X.XX approximately expense of per $X.X share with of a non-GAAP $X.X million diluted amortization $X.X stock-based earnings be and to approximately $X.XX of approximately

result the government-mandated accordingly, reduced a uncertainties and we recognizing to we'll are from ongoing the resulting travel, discretionary spending continue closures of As savings and office pandemic. manage given

to a experience. to product invest and deliver best advance we presence, market expand to in our our technology in we're and will the unique customer continue position innovation leadership to However, continue

uncertainty the the are retail XXXX of the magnitude macroeconomic annual related of to We guidance on the impact the impact visibility network. our lack of to due and into pandemic withdrawing

bankruptcies, may in Dynamics trends ERP our positively by our store for analytics increased push business may prolonged our migration. product negatively potential that out drop-ship including business demand Dynamics demand driven impact activity campaign for that current our and include product. enablement closures, include reduced impact e-commerce

macroeconomic will dynamics the impact visibility the the on of full end second monitor the retail for and year quarter. continue reassess our at to We

SaaS However, and XXXX margin given of model, our we to history our confident of long-term business in remain expand in adjusted of resilience target our ability strong operating XX%. and leverage margin the EBITDA achieve adjusted EBITDA our

for we year, providing withdrawing are information following purpose. the are guidance modeling for we Although the

XX% effective on We pre-tax compensation expense and million. of expect rate the expense $X.X net on depreciation approximately Investors calculated of a expense approximately approximately $XX.X basis, million, year of Also, remainder year the a million for earnings. $XX.X model quarterly should for the amortization of GAAP tax stock-based

supply for in current the summary, is on dynamics In e-commerce the we And uniquely SPS believe the long-term. chain Commerce we that will that capitalize amplify positioned and to opportunity. solutions expect EDI need

to pleased and ability these SPS effort to We the and their dedication in with times. are continue for challenging and to like support to our thank all solutions we'd retailers provide our suppliers Commerce unyielding mission-critical employees to network

open to the questions. to With I'd that, call like

Operator

comes question Your from Blair. the Instructions] William Matt [Operator from of line first Pfau

Matt Pfau

model about Maybe for thanks tell Wanted for works that new doing how an you introduced on and retailers? questions, the there all ask the you're and my product you -- taking the expand just guys, opportunity more monetization service. Hey to carrier that to us on hope well. is the to can

Archie Black

things: add-on process the your monthly whole fee two and does also shopping. product so rate simplifies documents for one, a tying and your it's product And it greatly ASN it is to modest the Yes, shipping of an fulfillment.

simplifies great amount that value. of decreases manual of is effort just it So and which process

yes, network new out it building somewhere it: more the the the solution are there's a that, solution. we we to us value very for need to it one, to obviously, -- retention basically we more have the for and to they build we expect can as our tool as can stay generate the fast we're retail but a and suppliers, And parts it's network and fact think have to our so money, them add-on in network. So two I people continue customers of more difficult get go entire the a potential Again, likely our big it's with makes for else. in it's out also

Matt Pfau

there lot out guess a coming to pandemic. just supply I be generally, then, of And of changes the is chain Right. related going

for terms creating products additional how that created you to be more opportunities do about for So of think your portfolio? in

Archie Black

drop-ship as Well, I lot usage, we Obviously, extremely of I up with you well of product. overall. think kind more opportunities, seeing we're the you see but more double, it activities think a set are triple

retailers XXX%, retailers X,XXX%. some some up are for are for up Now

for We're us seeing shipping of environment the drop-shipping, seeing happened very our increased dynamics drop use significantly us had a XXXX retail So the or we're more XXXX seeing use there. more product suppliers retailers opportunities public drop-ship we're community -- so -- in our for and obviously one so XXXX more -- or the actually that off and opportunity of sales XXX that that went numbers. we remember was challenging

whole we're efficient chain an So, for -- chain. supply an the seeing that supply need electronic

a office to that get going things touch Simple into mail don't box want center comes to the slip packing the because not somebody like you or have the distribution in wanting on it. to

-- And on continue we're evolve I and I So efficiencies, the think very now. well-positioned we're very think right to front. that optimistic we'll but

Matt Pfau

taking questions, for guys. my Thanks Great.

Operator

from comes question the Berg next Needham. of Your Scott from line

Scott Berg

thanks Congrats Kim. I and Archie. and my for Hi, on a a here, guess taking good quarter, couple Archie questions.

on much fulfillment the certainly in as years kind puts different more and last What in a than Obviously, we're Today, else the, pulls Yes, looking is ecosystem. more the a a at great question today? maybe, that or very today? started recession you different have what between the business kind mode of are little of bit, you're different you are of hyper-growth cloud in XX You the other some a early it for differences stage. environment current positives are that mature, the in. the position in later, touching and still the that

Archie Black

completely a globe. in didn't there's time, wasn't know. and emotional V, then think are and going play some don't -- going like so wasn't no X,XXX and different. people didn't with the so this much this to of it had a And Is couple that, -- positives know I negatives we across know some Is -- the the I remotely is working things: we didn't for are it empathy, take? is long again XXXX-XXXX W? out an crisis, either. health time of those how to the we there we there for -- don't it a long one have XXXX, that's economics Well, was everybody does And it office so as we XXXX, last, how time know how in it how were a

Our a on have have, us only pretty business small community to ERP analytics we suppliers saw was we didn't drastically. had revenue. need In point bankruptcies and the -- we that system. enterprise or a have And two very costs accelerating we only point and two, tick actually community. flat-footed What had different. year that of And didn't a - is up very increase also accounts we XXXX, were saw But saw we a - there we and any growth. XXXX tied or didn't dynamic we little we was

us. didn't exist business that So just for

of Pipelines going I know to knowing reasonable, how going behave. look to they So record we what's look good, a really but track there. they're don't happen have don't

pipelines come are when or going a as That's biggest get the deal a stores to obviously, going behave unknown are open, then when quarter-end, big going the pushed? to and to us to for Are well. way normal in bankruptcies and is for things us, we

Scott Berg

may I campaigns kind Got a of touch how to seasonally important the if comment? obviously, and in half. the you're And there enablement commenting pipelines specifically retailers terms additions, behave. on now and in is anything quarter holiday that's customer I right on campaigns different enablement of season you it, to second suppliers very and assume as just be ramp very is the quarter on try in they what helpful. not, know, for second

Archie Black

day and more one know strong the decelerate. Costco, business I our enterprise systems community, for of and news the it's the day could programs, analytics I on entire the Loblaw Remember are sectors. good Grainger sales and -- ERP are retail don't and a about The deals of around supplier deals. could around campaigns meaningful just more it of that to enablement the think part is is pipeline accelerate, is our people community and with model and ads that around tied parts channel different

probably certain how around analytics, this, store enterprise So with just that's don't know through and going it's -- especially I'm closings. the less behave to

Scott Berg

Great. again. I'll That's in Congrats jump the all I have. queue.

Archie Black

Thanks.

Operator

Stifel. Your next comes question Roderick from Tom the of from line

Tom Roderick

been in saying public a XXst the Hi, I full reasonably I'll of guess staying ride under sane. a doing and years a and coming the I'm congratulations XX wild pretty glad you're Kim. by XXXX and hopefully recession out Archie. on safe call, quarter Hey, and now circumstances as start so company. It's we're your our XXst healthy

look chat love as just about how I'd at state and they're a your weathering of to storm. the some little bit you the customers

always a of and quite kind been As of of of lot per we has suppliers, average revenue, yet nature look and our at rate your $X,XXX customer at between that small $XXXX, $X,XXX year, sort recurring churn hence per mid-sized the -- low.

about saw and the an you with reflect by or where in suppliers of of they're the thoughts today about the of for servicing rate think having the churn how be context chain to kind challenges. off guess you stress might the it's about you XXXX how Take challenges now? and some on So it base churn think what of happen perhaps getting those how stores supply you're in installed I us you testing health are opportunity through of choked some the right

Kim Nelson

Sure.

the joint significant retail and sort to portion broad customer of mind around in network, of in virtually that's areas So one penetration all with being throughout revenue breadth that so in so revenue, no have of of keep a thing we a a have the recurring customers, that's lot depth we XX,XXX -- our positive.

we The say thing if suppliers about what other are is is that our think our mission-critical. doing I you would fulfillment for product,

mortar, can sure to and but means they a bricks that online. them. products So sales to and need had going more gone Well, there services and support our the we of help and you're are let's if still make what that the we're is, pandemic, supplier light and sales say in more of

So it obvious, may case, meaning that be because critical fulfillment where skewed they're product. closed as more -- in utilizing are product, business utilizing of stores, to -- in time this online the still it's that we just are more state different, slightly mission the there They than stores, to know, the temporarily. we many certainly

have. that is product keep really that for It's impacts are we again, long that they're one I So, in us unknowns that to associated using very to think very, And another from mission-critical, unknown closed. that are is how just changing. stores and perspective. thing it us that's going sticky that it's The with product be how a mind bankruptcy as

far did in Archie In So seen annualized at QX, XXXX-XXXX, mentioned increase an in XX% bankruptcies see sort we bankruptcies. churn. not uptick as customer we churn. that in of have Thus an we're still or

how that have but not know partially driven to that, what don't we that's be going that that's going -- think -- that's like seen I again, we And that fulfillment about look provide, going But -- to by forward. what yet dependent that So importance on to that and of that customers. stores delivering when are product think offering still long product helps and sort hopefully, is our that of the end stickiness closed. we

Tom Roderick

to home tried and way Is a channel on Is have to low side embracing is moderating very always channel of sort getting great. is -- a guys nature with and that that's market have company ways that or web. Yes, employees that raise everyone the you're go a sell that light sales is the more customers one really and you done question guys the the model the from That quickly. job channel Archie, go breakthrough? a just that have over some the And, the chasing and for for to after tougher has given sales the of market, that how now nice Any is inside over to you to in more you really now years? perfected touch managing converting of crowded? fact -- sell model, every

Archie Black

of doing about about rep is to merchandising supplier with a they threatening on one a when to perhaps have calling big think our hat supplier if calls. with try to I are thing our them sell them product. difference I business -- sales retailer our behind stop our drastic don't need Well, they return the scenes telling them return to And a our calls. model

that always field Not XX% Again, revenue. Most be an rate. looking So very those our X% crowded. isn't anywhere and or recurring either are would rates a team on close between get home from revenue but are X% run. companies inside sales to a contract deals. testing to community a That recurring XX% close

the mean, I no. calling. fact and is truly salespeople our salespeople, yes So they're cold not are

ago on-board not minutes them. have to great some home been when we're done industry job hats stayed suppliers, like within onboarding from because looking than are a them if and our these really team, of incredibly the have they hours, working -- sales onboarding sometimes weeks seven an focused is has remember, Costco So, off -- hour, literally and They months. norm to suppliers less

Tom Roderick

all. Yes, and to got I'll Take look jump but again, queue, in it. you Fantastic. forward nice the back care. job

Operator

Baird. of from the Joe Vruwink line next comes from question Your

Joe Vruwink

everyone. Great. Hello,

where could kind projects. been maybe I characterize is in IT the was on broader if EDI retail falling of this, you You've touching wondering pecking order of but

for low You provide, lot it's know, why think a fairly price I you point. of of a value when

curious So have might the of I'd type environment, for thing type interest imagine in this but of your would thoughts. that's that actually be I more

Archie Black

you. thank Yes,

I been are we're in fairly new we off, really right? world, -- fairly the six First about mean, pandemic weeks. it's new

new So of cycles. as to we relate is six trying that sales in systems. centers. are distribution see happened They and are weeks to capital They going data your back doing XXXX, as one weren't guess we're massive signs again, is have projects. But the what in mine whether similar good positive didn't it we longer building have found, typically retailers ERP things Early weren't a and new XXXX what to spend pattern. of

to a retailer, but sale not need product Our from retailer, the dollars. we commitment

a for very the up and foundational see that's rank here. moved is it we we're priority a nature. retailer, to So a -- found And hoping it's what

their sudden Frankly, everything pain a manual centers the really, home, really you processes spacing, and home effort and stay of for distribution office, back felt. there. being all The and of more at at to for the efficient is time automated need more and needing be retailers else,

that's have. So we'll that is strategy competitors, I'm at the part frankly, look on. rest the of if our of that, the you into and business think a of lean the optimistic business, part and extremely rely go-to-market they I And don't that

market set a been successful from standpoint, don't extremely So year years or well next go-to-market have. we the have think decade -- that's a over up that share competitors extremely to we're our strategy frankly,

Joe Vruwink

or how might benefits? just the that cautious to environment. One, But what of a the be a And say and let's product, to that and That's the when point and great, begs a of think there something anecdotes customers demand. suppliers conditions like how your you lot is see a more make and some on in points, return be just the in analytics getting happening category of a sell-through understand the speaking listening bit again? makes on about, that question supplier to for, then. they right at is so of visibility I specifically And now of maybe pitch are normal pain the why on as could analytics final little US shot, that sense that inventory be endpoint get seems pay you it tight asking again, to given the actually now more

Archie Black

to moving a are to sales because at store yes. think that's closed with closed. I concerned not getting closings Right that real know now, back "normal," is Yes, then of point call store get once what's we're if by and stores interesting you're data we store

on pressure puts it. that So

to to just put little fulfillment. a the retailers that purchase is their that other tremendous. on from going not -- with -- a Service They're Fulfillment to as is our our service and wants getting have to that cancel thing Costco more it opposed they stop spend hire it somebody can means "discretionary" our If the The spend. pressure to discretionary is the without so somebody go it's or value But orders else. suppliers Costco,

we are So and become will a It's in in of the spend think cautious a and closed I now stores just future a is people are the and -- more and sell. $X short-term, it just tremendous. understanding matter being looking tougher save savings to to for dollar right cost

Joe Vruwink

very you thank Great, much.

Operator

Your next question from JMP. of the comes line Walravens from Patrick

Patrick Walravens

company Great, Incredibly also public you your want go to on to guys thank congratulate back model actually to XX-year seems I you. my XXXX. And anniversary.

-- right. know So I scary I know

tell what grew quarters. like, Kim, hopefully then if it QX X it's 'XX it for in looks me, but decelerated of here's you XX% So and so wrong, recurring revenue and

were to XX%, XX%, an 'XX XX%, 'XX, then in went it races. was was up to everyone, and perspective reminder from as And off XX%, a economic growth of QX for down the about when X%. you point low popped XX%, it the and XX% XX%, So QX of just

of question us but tough reasonable five that deceleration, to know, is use? a I assumption quarters So for

Kim Nelson

view in an QX. the relates lapping, to have provided as we as and QX there So may but it in there our answer question, your to it been we acquisition broader fact, XXXX visibility to have relates into

really did relative potential it there guidance As enterprise year, we a of of lot we'll a to is positive it what a closures, provide because uncertainty at fact quarter, to view store our remainder to of also of just is be dynamics more some in about. the a that provide be is we able relates of on put pressure be analytics, so annual relates point, to position we've to lot of may That Right, withdraw would the because of and our it pulled bankruptcies, the and of uncertainty so timing relates as that ERP. this a visibility. There as talked it the there community, hopefully, there view that the to some look things like. that difficult lot to next of

in do the -- what a have that think somewhat below be from I data you again, for stores long perspective closed. that actually it relating not point rate -- guidance to but growth looks correlated to and is will answer So really QX to difficult would QX, QX. how that revenue how our be like. are long

Patrick Walravens

Okay, thank you.

Operator

next question Jason from line Markets. Capital of Your comes from the KeyBanc Celino

Jason Celino

Archie, my one, housekeeping for taking question. just Kim, thanks kind type of question. Really

You've kind help can to segment that business businesses it? of or tied grocery to the about and store suppliers given quantify of how the But is examples the that you segment. much us how of your think

Archie Black

North off best America in mortar a whole. general segment think from I is retail brick think way far we're to and about in grocery, it the as that e-commerce, and industrial distribution, we're the not probably

just be a but Costco, is segments across a we're mean at I overall meaningful would, business, smaller business have when and retail the We grocery has supplies, I lines look to segments from -- fairly anywhere would smaller. Grocery grocery part all we meaningful own our part e-commerce to one can pretty pet of dynamics. market we would some got distributed right? has of grocery with being its obviously and think it's So a fairly the equally each and it'd along be Costco so it,

Jason Celino

great. Thank you. Okay,

Operator

from Your Northland next of Tyler line the Wood Securities. comes from question

Tyler Wood

taking question. thanks Hey, for our

for one just me. Just,

share in that then of are you of ensuring preparing and of, network to that those comes one to of for you give On a sort suppliers occur? kind to could if could kind how on when suppliers bankruptcy are the retailer were that Thanks. it sense the scenario? the us just tied that And the retail don't of possibility churn network, potentially leave

Archie Black

Yes.

I'll here's So the it. talk way about

we're but really we a is and there not, customers. -- of don't is meaningful around but that three give meaningful average meaningful We have a $XXXX have $XXXX bell -- we number then the of percentage, exact customers. there's three curve types Obviously

if standpoint XX,XXX an The dollar and number the thousands. we important equal -- that passed retailers is one we retailer. and to that weighting it's or customers customers one from doing of a us have who our count, a that away customer highest far multiple customers us XXXX hundreds meaningful stopped then most use they one where is, for two weighting they them, For to or an once only or number, business with use lose XXXX the thing of one for connection, but

to using we but have see use extent than And allow SPS attempt perhaps tend more it's been, customers. retailer do them But them our to be the that the they pushing us they in another our smallest EDI and and the case, is that's, always value try will that they to get the one. and strategy same as for that's product to always the them, to

Tyler Wood

Thank helpful. you. It's

Operator

from Your next the from line question Schappel of comes Mark Benchmark.

Unidentified Analyst

taking respect many the for $XX them them thanks Mark. for range, on of With today. It's in Hey, or million Many to are M&A, are marketplace to million and my $X marginally either question. EDI vendors there several breakeven [ph] private Chad in the of profitable. are

looking retail recent strategy more for you an of M&A. exit Given disruptions, see do the these through vendors

Archie Black

we're again because pure weeks X is This into this. only speculation,

for what might work is they to handle same -- is the it loads I think think look Do a the guess weather category. always that's that this through the not many can there's time want they you're that that to the like? And process these can they many answer competitors is going value so have the think true come they -- If a technology going are we our does immediate can they cloud-based set and question M&A and is way the of every suppliers -- think can tough I and So do that up are I smaller storm economically? fight Commerce an be in back, the and that could But EDI have they of So reaction. would their survive infrastructure SPS sales yes. the and EDI to both not reliable to the is going financially. from answer

more and exposure us we that because fashion, that if and hopefully you're It the M&A industries discussion. good we're yes, right we're a buy trying they're pretty today. to high, can Obviously relationships now. at that them. building of little about be So your challenging and sure we're we an challenging there it's now, right can aware important very to would right pretty you're all grocery, least if in be high-priced feel different And now make it,

layer So forward could of deal. there. going diligence in due opportunity M&A a But I be extra there there's little think an probably an

Unidentified Analyst

I all Okay, great. That's got.

Operator

[Operator next Instructions] from line from the Capital Jeff Craig-Hallum Group. Van comes of Your question Rhee

Unidentified Analyst

on for [ph] guys, is Hey Jeff. Rudy this

quarter? June what you first surely the of seeing I With and see haircut guide, rest Which the then on think on areas we're what do based it. mean, took the you a you caution you guys some the throughout you're of sort little will

Kim Nelson

So, the relates guidance the as that that as revenue well pipeline. in far as what it to on QX thus we was quarter we're based gave seeing the

and at a upsell and comes existing look opportunities -- So enablement activity new quarter. we'll in as community the look customers customers the new our lot of sort well that as we as at of

we what into the and well with we our then guidance see take appropriate of is believe customers. all we on based we existing provide as in So, as account what pipeline that

Unidentified Analyst

you if to it. to And customer know about back just the I churns Got currently could XXXX-XXXX, think XX%. XX%

details back or of -- percentage customers to? your look have on the what what maybe do increased what guys you went churn any If customer XXXX-XXXX, bankrupt you

Kim Nelson

back on it Yes, higher the then. a X% churn on was about percent the couple at -- customer dollar of

Unidentified Analyst

helpful. it. Got very Great,

Okay, you. great. Thank

Operator

questions further at participating conference concludes this for a today's This have Thank day. no showing wonderful call. and I'm time. you

disconnect. You all may

SPS Commerce (SPSC) 3 May 202020 Q1 Earnings call transcript