SPS Commerce Reports Strong Third Quarter 2026 Financial Results

SPS Commerce posts solid Q3 growth, boosts margins, and raises near-term guidance.

What the company is saying

SPS Commerce reports third quarter 2026 revenue of $197.6 million, up 4% year-over-year, despite a $10.5 million revenue reduction from the divestiture of its 3P Revenue Recovery business. The company highlights recurring revenue growth of 4% and a 17% increase in Adjusted EBITDA to $70.9 million, emphasizing strong operating leverage and margin expansion. CEO Chad Collins frames the results as evidence of successful 'agentic transformation' initiatives and positions SPS as uniquely advantaged by its AI-driven network. CFO Joe Del Preto attributes margin gains to disciplined cost management and efficiency from agentic customer onboarding. The company guides for Q4 2026 revenue of $199.3–$201.3 million and full-year 2026 revenue of $786.9–$788.9 million, with Adjusted EBITDA margin expected to rise by 330 basis points to 34%. The tone is confident, with management stressing sustainable, profitable growth and a durable competitive moat.

What the data suggests

The disclosed numbers show clear operational and financial improvement. Q3 2026 revenue rose to $197.6 million from $189.9 million in Q3 2025, and net income increased to $30.7 million ($0.85 per diluted share) from $25.6 million ($0.67 per share). Non-GAAP income climbed to $50.2 million ($1.39 per share), and Adjusted EBITDA jumped 17% to $70.9 million. Share repurchases totaled $48.8 million in the quarter. Guidance for Q4 2026 points to further growth, with revenue expected between $199.3 million and $201.3 million and Adjusted EBITDA of $72.0–$74.0 million. Fiscal 2026 guidance implies 5% revenue growth and a higher Adjusted EBITDA margin. The $10.5 million revenue hit from the divestiture is quantified, but management expects no EBITDA impact in the second half. The company provides detailed GAAP and non-GAAP figures, but does not disclose prior-year Adjusted EBITDA margin, limiting direct verification of the claimed 330 basis point margin expansion. Overall, the data supports the narrative of improving profitability and disciplined capital allocation.

Analysis

The announcement presents a balanced and factual summary of SPS Commerce's Q3 2026 financial results, with realised figures for revenue, net income, EPS, and Adjusted EBITDA, all showing clear year-over-year improvement. Forward-looking statements (guidance for Q4 and FY26) are proportionate and near-term, with no exaggerated claims or long-dated projections. The only capital outlay disclosed is share repurchases, which are not paired with speculative future benefits. The language is measured, and all key claims about realised performance are supported by disclosed numbers. There is no evidence of narrative inflation or overstatement; the tone matches the underlying results.

Risk flags

• ●The divestiture of the 3P Revenue Recovery business reduces revenue by $10.5 million in the second half of 2026, which could pressure top-line growth if not offset by other segments. The company expects this to be EBITDA-neutral, but any underperformance in remaining business lines could challenge this assumption.
• ●Guidance assumes continued margin expansion and operational efficiency from agentic transformation initiatives. If these initiatives fail to deliver as expected, profitability improvements could stall or reverse.
• ●Share repurchases totaled $48.8 million in Q3 2026, signaling confidence but also reducing cash reserves. If growth slows or unforeseen costs arise, this capital allocation could limit financial flexibility.
• ●The company provides detailed forward guidance, but actual results may vary due to known and unknown risks, including customer demand variability, competitive pressures, and execution of technology initiatives.

Bottom line

SPS Commerce delivered a strong Q3 2026, with revenue, net income, and Adjusted EBITDA all rising despite the headwind from a business divestiture. The company is executing on its agentic transformation strategy, driving margin expansion and operational leverage. Guidance for Q4 and full-year 2026 signals management's confidence in sustaining growth and profitability, though the full impact of the divestiture and ongoing efficiency initiatives will be tested in coming quarters. The $48.8 million in share repurchases reflects a shareholder-friendly approach but also commits capital that could otherwise support organic or inorganic growth. Investors should focus on whether SPS can maintain its improved margins and deliver on guidance as the competitive and macro environment evolves. The most important takeaway is that SPS is showing tangible progress on both growth and profitability, but continued execution is required to meet elevated expectations.

Announcement summary

(NASDAQ:SPSC) SPS Commerce, Inc. announced financial results for the third quarter ended September 30, 2026. Revenue for the third quarter of 2026 was $197.6 million, compared to $189.9 million in the third quarter of 2025, reflecting 4% growth, partially offset by the divestiture of the 3P Revenue Recovery business and variability in the 1P Revenue Recovery take rate model. Recurring revenue grew 4% from the third quarter of 2025. Net income for the third quarter of 2026 was $30.7 million or $0.85 per diluted share, compared to $25.6 million or $0.67 per diluted share in the third quarter of 2025. Non-GAAP income was $50.2 million or $1.39 per diluted share, compared to $43.0 million or $1.13 per diluted share in the third quarter of 2025. Adjusted EBITDA for the third quarter of 2026 increased 17% to $70.9 million compared to the third quarter of 2025. Share repurchases in the third quarter of 2026 totaled $48.8 million. The company completed the divestiture of the 3P Revenue Recovery business on June 30, 2026, resulting in a reduction of approximately $10.5 million in revenue to the second half of 2026, and the divestiture is expected to be neutral to Adjusted EBITDA in the second half of 2026. For the fourth quarter of 2026, revenue is expected to be in the range of $199.3 million to $201.3 million. Net income per diluted share for the fourth quarter is expected to be in the range of $0.74 to $0.79, with fully diluted weighted average shares outstanding of 36.0 million shares. Non-GAAP income per diluted share for the fourth quarter is expected to be in the range of $1.31 to $1.36. Adjusted EBITDA for the fourth quarter is expected to be in the range of $72.0 million to $74.0 million. Non-cash, share-based compensation expense for the fourth quarter is expected to be $17.0 million, depreciation expense $6.1 million, and amortization expense $12.3 million. For the fiscal year 2026, revenue is expected to be in the range of $786.9 million to $788.9 million, representing approximately 5% growth over 2025. Net income per diluted share for the fiscal year is expected to be in the range of $2.29 to $2.35, with fully diluted weighted average shares outstanding of 36.6 million shares. Non-GAAP income per diluted share for the fiscal year is expected to be in the range of $5.05 to $5.11. Adjusted EBITDA for the fiscal year is expected to be in the range of $267.4 million to $269.4 million, reflecting an Adjusted EBITDA margin of 34% at the midpoint, an increase of approximately 330 basis points compared to full year 2025. Non-cash, share-based compensation expense for the fiscal year is expected to be $69.5 million, depreciation expense $24.1 million, and amortization expense $40.8 million. As of September 30, 2026, cash and cash equivalents were $153,818,000 and short-term investments were $29,683,000. Accounts receivable, net, were $66,175,000. Total current assets were $347,021,000. Goodwill was $539,089,000 and intangible assets, net, were $162,545,000. Total assets were $1,132,598,000. Total current liabilities were $153,973,000 and total liabilities were $199,696,000. Total stockholders’ equity was $932,902,000. For the three months ended September 30, 2026, cost of revenues was $57,101,000, gross profit was $140,546,000, and total operating expenses were $100,617,000. Income from operations was $39,929,000, other income, net, was $1,372,000, and income before income taxes was $41,301,000. Income tax expense was $10,618,000. Weighted average common shares used to compute net income per diluted share for the quarter were 36,209,000. Total stock-based compensation expense for the quarter was $15,693,000. For the nine months ended September 30, 2026, net income was $57,276,000. The company held a quarterly conference call at 3:30 p.m. CT to discuss these results. Chad Collins is CEO of SPS Commerce. Joe Del Preto is CFO of SPS Commerce.

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