More retailers are getting on board with faster and more efficient supply chains to ensure they can deliver what their customers want when they want it, SPS Commerce Inc. CEO Archie Black says. That’s a main reason why SPS, a provider of cloud-based supply chain technology, reported a 21.9% increase in revenue last year to nearly $200 million, he adds.
“For the past two years, retailers have reported a faster supply chain as a top priority, as technology has made it possible for consumers to have whatever they want delivered to their home whatever they want it with free shipping,” Black said in a conference call with stock analysts late yesterday. “This has gone beyond the largest retailers, such as Amazon or Walmart, as companies like Uber have made same-day delivery service available to almost any merchant.”
SPS provides cloud-based supply chain and order management technology that retailers can use for such tasks as finding and connecting with suppliers; managing product information; and managing customers’ orders received online, in stores or through contact centers and routing them to the most appropriate inventory location for fulfillment.
The company has more than 70,000 clients worldwide, including more than 2,000 retailers and tens of thousands of suppliers of consumer products. It notes that large retailers and suppliers are driving most of the demand for better supply chain collaboration through SPS technology. As a result, Black says the company saw an increase last year in the number of larger companies it serves. “We now have approximately 1,800 customers that pay us at least $20,000 annually,” he said on the conference call, which is recorded on the SPS Commerce web site.
“Real-time collaboration, inventory visibility and data are critical in satisfying elevated consumer demands and realizing cost efficiencies in order to address the high cost of doing business in the omnichannel world,” Black said. “These trends are fueling the adoption of our broad suite of products, including our analytic solutions.” In omnichannel operations, retailers and their suppliers can use supply chain technology to fulfill orders from the most appropriate location after receiving customer orders online, in stores or through contact centers.
SPS’s clients include such distributors and retailers as Abt Electronics Inc., W.W. Grainger Inc., Target Corp., Wal-Mart Stores Inc. and Amazon.com Inc., and such suppliers as diversified manufacturer 3M Co., pharmaceutical company Abbott Laboratories and AGCO Corp., a manufacturer and distributor of agricultural equipment.
For the fourth quarter ended Dec. 31, SPS reported:
Revenue of $51.06 million, up 20.6% from $42.35 million a year earlier;
Gross profit of $33.74 million, up 16.7% from $28.91 million;
Sales and marketing expenses of $16.79 million, up 22.3% from $13.73 million;
Net income of $1.81 million, down 15.0% from $2.13 million.
For the full year, SPS reported:
Revenue of $193.30 million, 21.9% from $158.52 million in 2015;
Gross profit of $128.95 million, up 18.9% from $108.48 million;
Sales and marketing expenses of $65.89 million, up 19.0% from $55.37 million;
Research and development expenses of $21.98 million, up 22.5% from $17.95 million;
Net income of $5.71 million, up 23.1% from $4.64 million.
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