SPS Commerce (SPSC) saw its stock decline following the company's release of a subdued outlook for fiscal year 2026, citing slower revenue growth and tighter margins. The guidance has triggered investor concerns about near-term performance in the SaaS sector.
- SPSC revised FY2026 revenue growth guidance to 4%-5%, down from 7%-8% previously
- Adjusted non-GAAP EPS forecast lowered to $2.90–$2.95, down from $3.05–$3.15
- Stock dropped approximately 9% in after-hours trading following the announcement
- Higher sales and marketing expenses cited as primary factor behind margin pressure
- Broader implications for mid-cap SaaS firms in logistics and supply chain technology space
- Upcoming earnings call set for January 28, 2026, to provide further context
SPS Commerce (SPSC) posted a notable drop in share price after releasing its updated financial outlook for fiscal year 2026, which signaled tepid growth and rising operational pressures. Management cited headwinds in client onboarding and increased competition within the supply chain software space as key factors affecting forward visibility. The company now anticipates full-year revenue to grow between 4% and 5%, significantly below prior expectations of 7% to 8%. This revision reflects a more conservative view on new customer acquisition and subscription renewal rates. The adjusted non-GAAP earnings per share guidance was narrowed to a range of $2.90 to $2.95, down from an earlier forecast of $3.05 to $3.15. These figures imply margin contraction due to higher-than-expected sales and marketing expenses related to market expansion. The guidance update came amid broader macroeconomic uncertainty, particularly in retail and logistics sectors where SPS Commerce’s core clients operate. Investors reacted swiftly, pushing SPSC shares down nearly 9% in after-hours trading. The move marks one of the steepest declines for a mid-cap software firm this quarter. Market watchers noted that the muted outlook could signal broader challenges facing enterprise SaaS companies reliant on recurring revenue models. Analysts have begun revising their forecasts downward, with several adjusting their price targets by 10% to 15%. The impact is particularly felt among institutional investors holding large positions in the software and cloud infrastructure segment. With SPS Commerce operating in a high-velocity industry, the revised outlook may influence capital allocation decisions across tech portfolios. The company plans to address the challenges during its upcoming earnings call, scheduled for January 28, 2026.