NASDAQ: SPSC

Global commerce is constantly evolving, and consumer expectations continue to rise, accelerating the need for automated, coordinated supply chain operations. To navigate disruptions and meet growing demands, companies across the commerce ecosystem must orchestrate operations across wholesale, eCommerce, marketplace, and direct-to-consumer channels simultaneously. These channels no longer operate independently, and consumers expect a seamless experience regardless of how or where they shop. Managing this complexity across multiple trading partners, fulfillment models, and compliance requirements creates operational burden that most companies cannot efficiently handle on their own.

Our Products

SPS Commerce operates a global supply chain network where companies connect once and can immediately transact with thousands of trading partners across any channel. We maintain the compliance rules, connection protocols, and data standards while our teams handle onboarding, monitor transactions, resolve exceptions, and optimize operations continuously.

Our products include:

•Fulfillment - Our Fulfillment product offers a comprehensive solution designed to streamline supply chain operations. Our connections empower retailers, brands, distributors, manufacturers, and logistics providers to efficiently send and receive order data, ensuring accurate execution of required processes from order to invoicing and revenue recovery through fully automated operations. By integrating seamlessly with existing systems, Fulfillment enhances day-to-day efficiency, reduces errors, and provides real-time visibility across all of our customers' order channels.

•Analytics - Our Analytics product simplifies managing sell-through data from our customers’ business partners. We handle data acquisition, cleansing, normalization, and delivery. Our pre-built dashboards create custom reports, or integrate data with existing tools, to gain insights to enhance product performance, forecasting, pricing, and inventory management.

•Other Products - We also have other complementary products, including:

◦Assortment - Our Assortment product simplifies the communication of robust, accurate item data by automatically translating item attributes and hierarchies through a single connection across all sales channels.

◦Relationship Management - Our Relationship Management product (formerly known as Community) allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through proven change management, onboarding programs, and supplier score carding.

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By embedding expertise, proven processes, and compliance logic into the network itself, we enable companies to participate in modern omnichannel commerce without building or managing the infrastructure themselves. Our recurring revenue customers use the network to expand and optimize their trading relationships while we handle the operational complexity.

In addition to these offerings, we also provide one-time services such as professional services as well as testing and certification.

Growing Our Network

As one of the largest providers of cloud-based services for supply chain management, SPS Commerce enables trading partner relationships among retailers, grocers, distributors, suppliers, manufacturers, and logistics firms that naturally lead to new customer acquisition opportunities.

“Network Effect”

The value of our network increases exponentially with scale. After joining, customers typically discover that many of their existing or prospective trading partners are already connected, enabling immediate transaction capability. Each new participant can instantly communicate with our existing network of global connections, and existing participants gain access to transact with each new addition.

This network effect creates significant opportunity for participants to realize incremental business. Suppliers can more easily onboard new retail customers. Retailers can more quickly activate new suppliers. Logistics providers can seamlessly integrate with new fulfillment relationships. As transaction volume grows among network participants through these expanded relationships, we earn additional revenue from increased activity across the network. Our customers grow their business relationships more efficiently, and we grow alongside them.

Customer Acquisition Sources

Relationship Management - As retailers and suppliers reshape how they do business in an omnichannel landscape, they need to bring new capabilities and services to their trading partner networks. Our Relationship Management product is designed to manage this process and bring suppliers into compliance with new requirements. For instance, a supplier may wish to collaborate with their retailers around point-of-sale analytics data, or a retailer may decide to change the workflow or protocol by which it interacts with its suppliers. In each case, the supplier and retailer may engage us to work with their trading partner base to enable the new capability. Performing these programs on behalf of retailers and suppliers generates supplier sales leads for us.

Referrals from Our Customers - We also receive sales leads from our customers seeking to communicate electronically with their trading partners. For example, a supplier may refer a third-party logistics provider or manufacturer, which is not in our network, to us.

Direct Marketing - We employ various marketing strategies. Our marketing programs include a variety of lead generating activities including digital marketing, account-based marketing, conferences and trade shows, sponsored events, and public relations activities targeted at key decision makers within our prospective customers.

Channel Partners - In addition to the customer acquisition sources identified above, we market and sell our products through a variety of channel partners, including software providers, resellers, system integrators, and logistics partners. For example, software partners such as Microsoft, NetSuite, Oracle, SAP, Sage, and their business partner communities generate sales for us as part of broader enterprise resource planning, warehouse management system and/or transportation management system sales efforts. Our logistics partners also drive new sales both by providing leads and by embedding our products as part of their service offerings.

Our Growth Strategy

Our objective is to be the leading global supply chain network and provider of supply chain management products. Key elements of our strategy include:

•Further Penetrate Our Current Market - We believe the global supply chain management market is underpenetrated. As the retail industry continues to respond to the changing requirements of the omnichannel marketplace, and as the supply chain ecosystem becomes more complex and geographically dispersed, we

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believe the demand for supply chain management solutions will increase. We intend to continue leveraging our relationships with customers and their trading partners to obtain new sales leads.

•Increase Revenues from Our Customer Base - We believe our overall customer satisfaction is strong and will lead our customers to further expand their use of our products they have purchased, as well as purchase additional products to continue improving the performance of their trading partner relationships, generating additional revenues for us. We also expect to introduce new products to sell to our customers. We believe our position as the incumbent supply chain management solution provider to our customers, our integration into our recurring revenue customers’ business systems, and the modular nature of our cloud-based products are conducive to deploying additional products with customers.

•Expand Our Distribution Channels - We intend to grow our business by expanding our sales capacity to gain new customers. We also believe there are valuable opportunities to promote and sell our products through collaboration with other providers.

•Expand Our International Presence - We believe our presence in Asia Pacific and Europe has created a foundation to expand our global presence. We plan to increase our global sales efforts to obtain new customers around the world. We intend to leverage our current global presence to increase the number of integrations we have with retailers in foreign markets to make our products more valuable to their trading partners based overseas.

•Enhance and Expand Our Services - We intend to further improve and develop the functionality and features of our cloud-based products, including, from time to time, developing new offerings and applications.

•Selectively Pursue Strategic Acquisitions - The nature of our market provides an opportunity for selective acquisitions. We plan to continue to evaluate potential acquisitions based on the number of new customers, revenue, functionality, or geographic reach the acquisition would provide relative to the purchase price, and our ability to integrate and operate the acquired business. In 2025, we acquired Carbon6 Technologies Inc. ("Carbon6"), a provider of software tools to Amazon.com, Inc. sellers, including specialized offerings for revenue recovery for both first-party ("1P") and third-party ("3P") suppliers. This acquisition further extends the capabilities of our network and added new customers and technology.

Our Market Opportunity

We believe we have a significant market opportunity to help organizations accelerate their omnichannel retail strategies with our supply chain network and supply chain products.

•Omnichannel retail requires new connections/transactions - Each sales channel (wholesale, eCommerce, and marketplaces) brings new trading partners to the supply chain process. As customers expand their business, the SPS Commerce supply chain network is a core part of their omnichannel strategy. Each additional channel brings more reliance and volume to the network and increases customer revenue.

•Retail needs automation - With increased retail store openings and closings, labor shortages, supply chain disruptions, and new buying patterns, retailers are demanding more from their trading partners as they need to be agile and transition their businesses as markets change. Businesses using SPS Commerce products to automate supply chain functions with their trading partners can pivot quickly to new delivery models and capture market share. The visibility into orders, shipments, and inventory gained by automating trading relationships on the SPS Commerce supply chain network is critical to their success and offers a competitive advantage.

•Consumers want new products - Retail assortments are ever-changing with seasonality shifts and new product introductions from companies of all sizes. Consumers want the latest products and retailers are continually chasing trends, offering differentiated items, and introducing new products and suppliers to their supply chains. As retailers evolve, their trading partner relationships must support any new product introductions or new suppliers to achieve their merchandising goals. The SPS Commerce supply chain network automates these relationships to quickly secure product details, initiate orders, and track performance to help keep operations running smoothly.

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Technology, Development and Operations

Technology

SPS Commerce was an early provider of cloud-services to the supply chain management industry, launching the first version of what would become our current services in 1997. We use commercially available hardware and cloud-services with a combination of proprietary and commercially available software.

Our cloud-service model treats all customers as logically separate tenants within a shared virtual infrastructure. As a result, we spread the cost of delivering our products across our customer base. Because we do not manage thousands of distinct applications with their own business logic and database schemas, we can scale our business faster than traditional software vendors, even those that modified their products to be accessible over the internet.

Development

Our research and development efforts focus on maintaining, improving, and enhancing our existing products, as well as developing new products and applications. Our multi-tenant products serve all of our customers, which allows us to maintain relatively low research and development expenses and release software updates more frequently compared to traditional on-premise licensed software products that support multiple versions. Our development efforts take place at our United States ("U.S.") locations in Minnesota, Arkansas, and New Jersey, as well as in Melbourne, Australia; Toronto, Canada; Breukelen, Netherlands; Warsaw, Poland; and Kyiv, Ukraine.

Operations

We operate our infrastructure in third-party data centers located throughout North America, Europe, and Australia, as well as provisioned services with cloud providers. In most cases, infrastructure and services are managed by us.

We have internal and third-party monitoring software that continually checks the status of services and underlying infrastructure for availability and performance, helping ensure that the network is always available and providing desired service levels. We have a technology team that includes system provisioning, management, maintenance, monitoring, and back-up.

We operate a service architecture using industry best practices to ensure multiple points of redundancy, high availability, and scale as needed. Our databases are replicated between locations with a defined recovery point objective.

Sales & Marketing

We sell our products through an employed global sales force that focuses on retailers, grocers, distributors, suppliers, and logistics firms.

Our marketing teams focus on driving awareness and demand for our products through the following activities:

•Demand Generation - Engages with target audiences using the latest digital marketing strategies to bring opportunities to our sales teams.

•Communications - Manages our brand and public relations, as well as provides go-to-market support.

•Product Marketing - Equips our sales teams, performs market studies, and promotes the unique capabilities of each of our products using our go-to-market strategies.

•Events - Highlights our presence at industry trade shows and orchestrates virtual and in-person events.

Customer Success

The Customer Success team includes retail and technology experts who implement our products on our customers' behalf, provide ongoing support, and collaborate with accounts to identify opportunities for added value from their existing products. This team focuses on delivering services that build customer satisfaction and result in high customer retention rates.

Competition

Vendors in the supply chain management industry offer products through three delivery methods: traditional on-premise software, managed services, and cloud-based full-service products.

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The market for cloud-based supply chain management products is fragmented and rapidly evolving. Cloud-service vendors compete directly with each other based mainly on the following:

•the breadth of pre-built network connections to retailers, third-party logistics providers, and other trading partners;

•a history of establishing and maintaining reliable connections with trading partners;

•the reputation of the cloud-service vendor in the supply chain management industry;

•price;

•specialization in a customer market segment;

•speed and quality with which the cloud-service vendor can integrate its customers to their trading partners;

•functionality of the cloud-service product, such as the ability to integrate the product with a customer’s business systems;

•breadth of complementary supply chain management products the cloud-service vendor offers; and

•training and customer support services provided during and after a customer’s initial integration.

Cloud-service vendors also compete with traditional on-premise software companies. Traditional on-premise software uses a single-tenant approach in which information maps to retailers are built for and used by one supplier, as compared to cloud-service products that allow multiple customers to share information maps with a retailer. Traditional on-premise requires customers to purchase, install, and manage specialized software, hardware, and value-added networks for their supply chain integration needs. Additionally, customers are required to make significant upfront and ongoing investments to purchase, operate, and maintain the software. As such, a customer may be less willing to abandon their traditional on-premise product in favor of a cloud-service product.

Managed service providers focused on the supply chain management market offer a cloud-based product in which they develop and maintain the core technology, while the customer’s internal staff is responsible for the day-to-day customization, optimization, and operations of the technology.

In contrast, full-service providers, including SPS Commerce, offer cloud-based products and expert resources that customize, optimize, and operate the technology. This approach offloads the time-intensive process of managing these products, which is not a core competency for most businesses. Full-service cloud-based vendors compete with both managed service providers and traditional on-premise software products based on the total cost of ownership and flexibility.

Intellectual Property and Proprietary Content

SPS Commerce relies on a combination of copyright, trademark, patent and trade secret laws as well as confidentiality procedures and contractual provisions to protect our proprietary technology and our brand. We enter into confidentiality and proprietary rights agreements with our employees, consultants and other third parties, and control access to software, documentation, and other proprietary information. We have registered trademarks and pending trademark applications in the U.S. and certain foreign countries.

Depending on the jurisdiction, trademarks are generally valid as long as they are in use or their registrations are properly maintained, and they have not been found to have become generic. Registrations of trademarks can also generally be renewed indefinitely as long as the trademarks are in use. We have a number of patents acquired through acquisitions. Our trade secrets consist primarily of the software we have developed for our SPS Commerce cloud-based products and network. Our software is also protected under copyright law, but we do not have any registered copyrights.

Human Capital

HR Strategy

At SPS, our ability to execute our mission - to power the connections that move the world of commerce forward - is fundamentally dependent on the quality, expertise, and velocity of our human capital. Our strategy is built on the principle that to sustain and grow the world’s largest supply chain network, we must invest in our people who possess the specific competencies required to maintain the reliability and scale of our cloud-based platform, accelerate our customers' adoption of omnichannel commerce, and navigate the increasingly complex global supply chain compliance requirements.

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This focus positions our human capital as a long-term competitive asset, directly enabling customer success and driving profitable growth.

Our People

As of December 31, 2025, our total workforce has increased to 2,948 worldwide. 39% of our global workforce identifies as female and 2% did not specify their gender. Within the U.S. 13% of our employees self-identified as members of an underrepresented group. Our executive team is comprised of 7 individuals, of which 43% are women.

While 78% of our workforce is based in North America, we continue to build critical skills and capabilities in Europe and Asia Pacific. In addition to having statutory obligations for employee representation in certain countries, we are keenly focused on our delivered employee experience.

Talent Acquisition, Learning and Development, Belonging, Engagement & Retention

In 2025, we implemented a more formalized strategic workforce planning methodology building plans across the enterprise to recruit, develop and deploy the talent needed to build the solutions and services that will power SPS’s future growth.

SPS strengthened its global talent pipeline in 2025, attracting and retaining critical skills aligned to our strategic capabilities - including technology, customer success, and go-to-market execution. 90% of hires supported these priority areas. We invested in employer branding, global recruiting infrastructure, and early-career programs to expand reach and help SPS continue to attract top talent to drive business growth.

In 2025, as part of a multi-year learning culture transformation, we introduced a new Learning and Development strategy, one that builds a learning culture, delivers learning experiences in the flow of work and empowers employees to take ownership of their professional and career growth. In furtherance of that strategy, we deployed an artificial intelligence ("AI")-enabled learning platform that provides our employees with visibility to in-demand skills and offers personalized learning content supporting their professional development and helping SPS develop the skills and capabilities key to driving our business strategy.

At SPS we maintain a strong commitment to Belonging, helping everyone feel accepted, valued, and empowered to make a meaningful impact. Our company’s core value of “Employees First” clearly states our commitment and we are measuring employee perceptions related to Belonging through our employee listening program. That commitment is evident in our workforce, recruiting efforts and our community engagement. SPS has actively engaged Employee Resources Groups, each sponsored by a business executive and open to all employees, providing employees a forum to share their ideas to continually improve the employee experience and build community bridges. We have relationships with the Wallin Education Partners and a Diverse Scholar Program that supports diverse college students pursuing careers in technology. In addition to receiving funding for their education, participants are offered internships, have access to mentorship and are connected to business professionals across our organization. In 2025, we strengthened our community engagement by launching Commerce with Purpose, an inclusive sourcing and community impact initiative focused on building partnerships with diverse vendors operating in the communities where we live and work. We also launched Let’s Chat SPS in 2025, a global employee connection program to foster meaningful relationships across Team SPS. These actions continue to build on our Belonging@SPS program and strengthen our foundation for sustainable growth.

To retain the talent we work hard to attract, we regularly survey our employees. The insights we gain deepen our understanding of their perspectives and our opportunities to improve their experience. In 2025, we conducted an Organizational Health and Culture survey focused on both the employee experience and organization culture. We see both as critical enablers of our business strategy, our ability to meet the needs of our customers, and our ability to attract and retain the necessary talent.

As a result of our strong company culture and focus on providing meaningful work, professional development, flexible work options, competitive pay and benefits, as well as our commitment to belonging, our 2025 employee retention rate was 88%.

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Total Rewards, Governance & Oversight and Well-Being

Well-Being

At SPS, we believe that a sense of well-being is the result of our employees feeling balanced, resilient and energized resulting in high performance and critical talent retention. We understand that work is only one part of life, so we offer benefit plans, programs and culture that supports and enables the full spectrum of employees’ career, financial, mental, physical and social needs of our global workforce.

We are committed to equitable pay practices, ensuring employees are compensated fairly regardless of gender, race, or ethnicity. To uphold this commitment, we regularly review pay data for fairness and equity.

Succession and Governance

Annually, our Chief Human Resources Officer works with our Board of Directors to review SPS’s critical leadership roles and maintain a robust plan for ready-now successors. Those plans are the culmination of a rigorous talent review process executed company-wide based on the SPS Leadership Model that lays out clear expectations of both performance and behaviors distinguishing our high potential leadership talent.

Social Responsibility and Sustainability

At SPS Commerce, our commitment to positive change extends well beyond advancing commerce. A key pillar of our Environmental, Social, and Governance ("ESG") strategy is fostering a culture of giving, where employees are empowered to make meaning contributions to their communities. One of our core values, “Give Back,” reflects our belief that generosity and compassion can create lasting impact. This is demonstrated through the work of the SPS Foundation, our corporate donations and sponsorships, and the numerous volunteer initiatives we support, which plays a crucial role in shaping the future of our communities. Together, these efforts exemplify our dedication to making a difference in the communities where we live and work.

Available Information

We provide free access to various reports that we file with or furnish to the SEC through our website at www.spscommerce.com, as soon as reasonably practicable after they have been filed or furnished. These reports include, but are not limited to, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports. Our SEC reports can be accessed through the investor relations section of our website or through the SEC’s website at www.sec.gov. Stockholders may also request copies of these documents by writing to us at the address above, with attention to "Investor Relations".