SPS Commerce, Inc. Price & Performance (SPSC)

We will make certain statements today, including with respect to our expected financial results, go to market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward looking statements reflect our opinions only as of the date of this call and we undertake no obligation to publicly update or revise any forward looking statements whether as a result of new information future events or otherwise. Please refer to our SEC filings, specifically our Form 10 ks, as well as our financial results press release for a more detailed description of the risks factors that may affect our results. These documents are available at our website, spscommerce.com, and at the SEC's website, sec.gov. In addition, we are providing all historical data sheets for easy reference on the Relations section of our website. Fpscommerce.com. During our call today, we will discuss adjusted EBITDA financial measures and non GAAP income per share.

In our press release and our filings with the SEC, each of which is posted on our website. You will find additional disclosures regarding these non GAAP financial measures. Including reconciliations of these measures with comparable GAAP measures. And with that, I will turn the call over to Judd.

Thanks, Irina, and good afternoon, everyone. Thank you for joining us today. SPS Commerce delivered a strong first quarter and a great start to the year. First quarter revenue grew 21 percent $181,500,000 Recurring revenue grew 23%. As supply chains continue to evolve and macro dynamic impact their performance, the benefits of automation become more apparent. Our customers are telling us that their growth and profitability relies heavily on having the most efficient processes with their trading partners. SPS Commerce is committed and uniquely positioned to support and improve all trading partner relationships with a product portfolio that now includes fulfillment, analytics, e invoicing, supply chain performance suite for retailers, and revenue recovery. In February, we closed the acquisition of Carbon Six, which expanded our portfolio and established SPS as a clear leader in the emerging category of revenue recovery. Supporting supplier communities of the two largest global retailers. We're excited to welcome our new employees and customers to SPS Commerce. SPS Network participants who recognize the benefits of automation tend to implement additional efficiencies over time. It is not uncommon for SPS to run numerous enablement campaigns for one retailer over the course of several years to reach all trading partners across all divisions and brands.

We repeat this process for new compliance requirements and ongoing onboarding of new vendors. For example, Fastenal, one of the world's largest industrial distributors, has significantly diversified their product line over the years, adding thousands of suppliers to their network. They started with SPS Commerce in 02/2009 to run enablement campaigns which included advanced shipment notice onboarding, and rolling out additional requirements to improve visibility across transportation, logistics, inventory, and assortment. Barilla, a globally recognized brand, especially in high quality pasta sauces and Italian food products has operations in over 100 countries. To maintain its competitive edge, and meet growing demand, Virela had to overhaul its supply chain model and shift from direct imports via containers to local 3PL fulfillment strategy to secure local inventory. Bareela needed to integrate a new local ERP system with its customers and warehouse partners using EDI to streamline critical processes such as order handling. With the support of SPS Commerce, they successfully established a scalable system that not only improved operational efficiency, but also prepared the company for future expansion and adapting to new markets. Setting the stage for long term growth. According to a recent survey of five seventy nine supply chain professionals across industries, Gartner found that only 29% of supply chains are ready for the future, and that most top performing companies have yet to fully embrace advanced technologies.

SPS actively engages with industry groups to promote the tools available to them to advance their supply chain performance. We recently participated in the Food Industry Association Supply Chain Forum worked with key industry players to evaluate the possibility of deploying a collaborative supply chain performance scorecard, with access to data across our network SPS is uniquely positioned to help execute such a collaboration at scale, and drive measurable results for grocery retailers and suppliers. Over the years, SPS has shown the ability to seamlessly and cost effectively implement efficiencies across supply chains, improve vendor compliance. Add trading partner connections to grow sales, and advance operations in a constantly changing retail industry. With the added uncertainty of today's economic backdrop, we are closely monitoring how current trade dynamics are impacting the retail industry and we are committed to helping our partners and customers successfully navigate challenging macro environments. In summary, SPS Commerce operates a network of over 50,000 suppliers logistics companies and buying organizations across retail, distribution, grocery and manufacturing. And we are uniquely positioned to support all trading relationships. Within $11,000,000,000 total addressable market, we have a tremendous opportunity to transform how trading partners work together as they continue to advance their supply chain technologies.

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

Thanks, Chad. We had a great first quarter of twenty twenty five. Revenue was $181,500,000 a 21% increase over Q1 of last year and represented our ninety seventh consecutive quarter of revenue growth. Recurring revenue grew 23% year over year. Total number of recurring revenue customers in Q1 was up approximately 54,150 ARPU was approximately 13,850 As a reminder, in February, we closed the acquisition of CarbonSpix. Having analyzed all available information following the closing, we concluded the acquisition added approximately 8,500 customers which is higher than our preliminary estimate of 6,500. Due to the partial period in Q1, the Carbon six acquisition is expected to have a full quarter ARPU impact in Q2, resulting in an expected decrease of approximately 1,400 For the quarter, adjusted EBITDA increased 22% to $54,400,000 compared to $44,400,000 in Q1 of last year. We ended the quarter with total cash and investments of $95,000,000 and repurchased approximately $40,000,000 of SPS shares. Now turning to guidance. For the second quarter of twenty twenty five, we expect revenue to be in the range of 184,500,000.0 $186,200,000 which represents approximately 20% to 21% year over year growth. We expect adjusted EBITDA to be in the range of $53,000,000 to $54,500,000 We expect fully diluted earnings per share to be in the range of $0.41 to $0.44 with fully diluted weighted average shares outstanding of approximately 38,800,000.0 shares.

We expect non GAAP diluted income per share to be in the range of $0.87 to $0.90 with stock based compensation expense of approximately $15,500,000 depreciation expense of approximately $5,500,000 and amortization expense of approximately $9,800,000 As we look to the remainder of the year, as Chad mentioned, we are closely monitoring how trade dynamics are impacting the economy [indiscernible] the retail industry. However, we believe automation and operational efficiency across supply chains remain a priority for trading partners. Given the nominal cost of our fulfillment product relative to its value, combined with our fee structure, which is not priced on GMV, these factors have historically limited the impact on demand for SPS' mission critical services. As a result, our outlook for the full year 2025 revenue growth remains unchanged, we expect revenue to be in the range of 758,500,000.0 to $763,000,000 representing approximately 19% to 20 growth over 2024. We expect adjusted EBITDA to be in the range of 229,400,000.0 to $232,900,000 representing growth of approximately 23% to 25% over 2024. We expect fully diluted earnings per share to be in the range of $2.6 to $2.13 with fully diluted weighted average shares outstanding of approximately 38,700,000.0 shares. We expect non GAAP diluted income per share to be in the range $3.86 to $3.93 with stock based compensation [indiscernible] of approximately $61,400,000 depreciation of approximately $23,000,000 and amortization expense for the year of approximately $38,000,000 For the remainder of the year, on a quarterly basis, investors should model approximately a 30% effective tax rate calculated on GAAP pre tax net earnings.

In summary, we delivered strong first quarter performance and the ninety seventh consecutive quarter of revenue growth. Despite ongoing uncertainty in the macro environment, we remain confident in our full year 2025 growth outlook. And margin expansion profile, which underscores the resilience of our business model and the mission critical nature of our solutions designed improve collaboration across the global retail supply chain. And with that, I'd like to open the call to questions.

We will now begin the question and answer session. To ask a question, If you're using a speakerphone, please pick up your handset. Before pressing the keys. Please note, at this time, we will pause momentarily to assemble our roster. Our first question comes from Parker Lane from Stifel. Please go ahead.

Hey, team. Thanks for taking the question.

Chad, supply pipe done in August, Carbon six done earlier this year. So I understand there they're relatively new to the business. But anything you're seeing in the initial customer conversations and go to market efforts around this new part of your business that perhaps give you any more confidence or clarity on the cross sell potential that you're going to see from these solutions going forward? Yeah, absolutely. So of the things we really liked about this emerging category of revenue recovery was that the ideal customer profile for revenue recovery and the ideal customer profile for our fulfillment product really lined up very nicely. And we thought that when you do get that ideal customer profile lining up, over time, that will generate opportunities for cross selling And so here in 2025, we're still operating with two different sales teams one for fulfillment, one for revenue recovery. But we do have certain incentives and lead sharing programs in place across those two teams. And early indications are positive that our hypothesis around this alignment around the ideal customer profile will lead to cross selling, meaning that we have qualified opportunities from the fulfillment side over to the revenue recovery side and even some opportunities on revenue recovery that we think will lead to fulfillment business.

So still very early days, but enough that we have we view it as a positive validation of our hypothesis.

Appreciate the feedback. And just one follow-up on the analytics piece of the business, if I'm not mistaken, looks like it was down a touch year over year and quarter over quarter. Just wondering if there's anything you could provide around what you saw there in 1Q and how you expect potential customers to evaluate that solution in light of some the tariff concerns and macro trends we're seeing.

Sure, Parker. So, you are correct, the analytics business slightly declined year over year by approximately 2%. You may recall that is the one area of our business that does tend to be a little bit more impacted depending on what's happening in the economy and your point, there certainly is still a fair amount of uncertainty out there with tariffs, etcetera. So that you did see reflected within our Q1 results. Our current expectation for the year is we do expect analytics to be about flat on a year over year basis and it was down again about 2% in the quarter Therefore, Q2 through Q4 or the remainder of the year, we do expect some slight improvement netting us to about flat on an annual basis.

Understood. We'd like all all the product lines to have strong growth. Will remind the analytics is about 10%, little less than 10% of our total business. So on the total scale of the business, it's important, maybe not impactful to the total revenue number.

Got it. Thanks again. I'll jump back in.

Thank you. Your next question comes from Scott Berg from Needham and Co. Please go ahead.

Hi. This is Rob Morelli on for Scott. Thanks for taking the question and congrats on the quarter. It looks We'd like to just touch on the tariff side of things. Are you hearing from any suppliers at all or seeing retailers delay enablement campaigns due to all this uncertainty?

Yes. So as we engage with customers, certainly on both the retailer side and the supplier side, everything going on with the tariffs is very top of mind right now for our customers. And is leading to some uncertainty about not only how the tariffs will impact their business and how they should react, but also will that lead to other uncertainty or headwinds in the macro? Now all of that said, while it's top of mind, if we look at our information around enablement programs, the pipeline for enablement programs, and what we have in the business. We are not yet seeing any decline in the total volume of the pipeline, nor the speed at which we're able to move opportunities through that pipeline. I would say, given all this uncertainty, it's something we're monitoring very closely, so we really understand those dynamics. But as of now, not seeing a huge impact.

That's helpful. Thanks for the color. And then guys had a strong EPS outperformance in the quarter. But the full year increase was less than the 1Q outperformance. Was there a potential change in expense timing or is something else driving the additional rest of your expenses?

Sure, Rob. It's really more driven by the timing. You'll notice though, we did increase our view for the year, but it's not the complete beat in that in Q1. And that part that's not being carried over to the full year is exactly what you said. It's just due to the timing of some of our spend and investments and hiring. That we're anticipating making.

Got it. Thanks for the color and congrats on the quarter.

Thank you.

The next question comes from Lachlan Brown from Redburn Atlantic. Please go ahead.

Hi, Chad, Kim, and Mina. Congrats on the solid results. Yeah. I made a tough backdrop. On the new customer organic inorganic split for the quarter, just given eight 8,500 of the customer adds come from the Carbon six acquisition, that implies that there was 300 of them that were organic. Have I got that correct?

And if so, maybe just the the drivers of the strong delivery in the quarter.

Yeah, so yes, that math all ties together with net 300 adds without the carbon six effect included, What we saw was another quarter of strong performance from community enablement programs. As we had in 2024. The difference, I'd say, is just the mix of the opportunities for new subscribing customers within those community programs, as happened a little bit in 2024, was shifted more to existing customers. We saw more currently was more opportunities for new subscribing customers. So really just that mix within the campaigns And then that was really it, just the mix.

Interesting. That's a strong outcome. And the upcoming expiry of the de minimis exemption, are you anticipating any meaningful impact on your customer base? And how should we think about exposure to carbon sticks, just given that the tool for Amazon sellers?

Yeah, we do see a little bit of the use of de minimis shipments in the in the Amazon area. However, I would say the majority of Amazon Marketplace sellers that we are working with are bringing that product in to The U. S. In bulk and then for fulfilling it. So we don't expect a major impact that 3P side of our business, which is the Amazon sellers.

That's very clear. Thanks, Jeff. Thank you.

Your next question comes from George Kurosawa from Citi. Please go ahead.

Hi, Chad and Kim. Thanks for taking the questions here. We discussed a little bit about maybe the downside risk from tariffs already. I'd love to talk a little bit about how we should think about maybe some positive potential offsets if I think about retailers looking to reorient supply chains, maybe diversify their supplier base, maybe some reshoring activity, Are any of those things that seem to be coming up in conversations that you're hearing? And how are you guys just kind thinking about that those dynamics generally?

Yeah, so maybe just a quick reminder that the majority of trading that happens on our network is happening domestically, so the goods could kind of be coming from all over the world, but usually the brand is bringing them in domestically, and then we're picking it up on our network when they start that trading process domestically with the retailers. I would say that if the tariffs result in retailers and their suppliers dramatically shifting the sources of supply to other locations around the world and finding new suppliers. We certainly have a strong position and are well recognized in the market. As a service provider that can help them with the onboarding of all of those new vendors. So I would say that if that happens and there's a potential that we'd be one of the phone calls they'd make to help them with that process. In terms of how that would impact, I mean that potentially could be a tailwind to our community enablement activity. However, what I would say, if those vendors are all replacing other vendors some of which are already trading on our network and no longer have that agreement with the there could be a little bit of a headwind then and just that shift.

So I think there's some potential for that to be a benefit to our business. But I think we'll kind of have to wait and see how that really plays out.

Okay, okay. That's helpful color. And then I wanted to talk about I think, Kim, you referenced some timing of investments. Maybe just in general, how you guys are thinking about cadence of growth investments here? I mean, does any of this uncertainty put any of those on pause in any areas? Maybe there's some areas where you want be more aggressive. Just how are guys thinking about, you know, where you wanna put dollars to work?

Sure. When we put together our expectations for the year, we have assumptions in there as it relates to resources as an example. To meet both the needs of our existing customers as well as opportunity for future customers. In this case, some of that timing it just didn't end up happening quite as soon as expected in Q1. But we still do see the opportunity to be adding some great talent to the organization. We, of course, are going to be mindful of what's happening ex externally and make sure we don't underinvest or overinvest But with most of our business model being somewhat agnostic to what happens to the economy, although we'll be mindful to it, that isn't something that currently is impacting our view of investments that we think are appropriate for the short term, medium term and long term.

Got it. Thanks for taking the questions. Thank you. Your next question comes from Dylan Baker from William Blair. Please go ahead.

Guys.

Nice job here, I appreciate the question.

Maybe, Chad, of touched on this on one your other ones, but given the current backdrop, is that lead to any shift in resource allocation throughout your enablement [indiscernible] Effectively, are retailers digitizing more and looking to go deeper or does it give us an opportunity to your point to add different supplier touch points at the ecosystem? Maybe it's a bit of both, but how should we be thinking about that? Yeah, so what I'd say what we're seeing right now is pretty steady and consistent with our expectation pipeline of community enablement programs. We haven't seen either the tariff situation or the macro really having an impact to that positively or negatively. I think one of the great things about the way that we're set up in our go to market is that if we did see an uptick in community enablement campaigns between that retail sales force that typically follows up on that and our very large supplier sales force we do have very sufficient capacity to follow-up on new opportunities for buyers joining our network. So I do feel pretty confident that if there was that uptick one, we could handle the immediate demand. And then as we have in the past, we could scale up the sales force.

Now all that said, demand is consistent with our expectations. We're not seeing upticks in demand, feel confident in our in the ability of this business to scale as it has in the past.

Got it.

Okay. Thank you.

And then maybe for Kim too.

You touched on kind of the opportunity for automation, but as a lot of these suppliers are kind of trying to navigate and and make sense of what's going on, Even though the spend level today is a relative drop in the bucket, as I think you kind of said, How do they think about kind of efficiency and automation in helping kind of circumnavigate that? Externally? And then also how you guys are thinking about the net scale being able to utilize greater automation efforts gross margin expansion, like that as well too?

Thank you.

Sure. From an perspective and from an internal of how we run the business and the costs associated with running the business, We're always looking at ways to get more efficient. We look at that from a people, a process and a technology side. We're leveraging as you'd expect things like AI to help look at ways to be more efficient at what we're doing. We also are making sure everything we're doing to delight our customers, we're able to do that as fast and efficiently as possible. So that time to value continues to shrink and that overall customer experience tends to be very positive. You're also seeing that translate in you've you're already beginning to see that translate in our results if you look at our EBITDA margin expansion, you'll see that come through in gross margin and in our implied expectations for the year. You'd expect to see a continued improvement in EBITDA margin and particularly in that gross margin area. From a customer perspective, the way we price our core fulfillment product to think of it as there's that fixed fee per retailer. But we do we're very mindful of our overall cost of our product offering to customers.

We do make sure that we make sure that that is at an appropriate price and that that will naturally scale the more the customer buys from us, the more scaling in that cost there'll be. So we don't envision a situation where our cost a customer is you know, prohibitive to the customer. We think it's very cost effective for suppliers to gain efficiency as well as to comply with what retailers' expectations are.

Very helpful. Thank you, Thank you.

Your next question comes from Joe Ruiink from Baird. Please go ahead.

Hi, great. Thanks for taking my questions. I want to say I'm a tariff topic and what could change about the opportunity I think Dylan kind of asked a part of what I'm going to ask, but is this actually something that could lead retailers to want to digitally upscale their supply chains So as part of a fulfillment transaction, they just realized more information is very helpful in this type of environment. And that becomes more documents exchanged over the network They maybe need to run enablement campaigns, so suppliers are getting onboarded to the type of information they're now looking for. I guess all of that is kind of part of supply chain visibility, but that does seem to be really important and rising in attention at the moment. So could that ultimately be a knock on benefit you see not to say it's being seen now, but over time, could there maybe be an uplift in wallet share that comes about Yeah, I definitely could imagine that, you know, the more complexity that's out there in the global supply chain for these the more they're going to want visibility to the full scope of their supply chain, which is beneficial for us.

There is definitely that visibility piece that you mentioned, Joe. I think there is likely to be a focus too on just supply chain agility coming out of this. And certainly, ability to onboard new suppliers quickly and effectively and make sure that they're tying into all the systems and processes you have for managing your suppliers would really lead to that supply chain agility. And would be favorable to them wanting more of their suppliers to be connected to them via the SPS network.

Okay, that's helpful. [indiscernible] for a few years now, 15% plus revenue growth. M and A is a piece of that this year, just given supply spike in carbon six, M and A is a larger contributor to the growth algorithm. Than has been the case since the 15% target was established. I guess, probably the most common question we've been getting is when you get out of this year and think ahead, what's kind of the right organic growth rate to think about And then there's probably going to be a regular amount of M and A as well. Do you kind of have a rough sense of how those two average out over time? And kind of the organic contribution to the 15% ultimately should be?

Sure. So let's start with this year. We are well within those parameters of what was our stated goal. To your point, we're above that at that 19% to 20% on the top line, and we're at 23% to 25% based on our guidance for the implied EBITDA dollar growth. And the reason that number is higher on that revenue growth, you also did mention is because of some of the more recent acquisitions we've made that have been a little bit larger.

So we've reiterated our expectations for this year and we talked about the reasons why we feel confident with reiterating what that top line growth rate is for this year. Now to your point, there is a lot of uncertainty right now out in the market. And therefore, we're comfortable with our our numbers that we've established for 2025 but we're not in a position to provide maybe a little bit more granular information or a view as it relates to '26 at this point in time. We do recognize that is an area of focus for investors and some investors really would like to understand what that number is or how we're thinking about that excluding acquisitions. So that's something we're certainly mindful of We're taking that into account internally. But at this point in time, we've reiterated what our expectations is for 2025. And as it gets closer towards 'twenty six or later in this year, we will certainly relook at what information we may or may not feel would be helpful to share to investors.

Okay. Thanks, Kim. Thanks, Jeff. Thank you.

Your next question comes from Jeff Van Rhee from Craig Hallum. Please go ahead.

Yeah. Great. Thanks for taking the questions. Got a few. So if I guess Kim if we look at the enable this is for of you. On the enablement campaigns why are the more enablement campaigns last several?

Biased more to retailers that already have suppliers who are on your network as opposed to people that would be net new. I know that started to emerge as a trend last, I know, last year, a handful of quarters, several quarters ago. You're getting deeper and deeper into it. Any more clarity on why the enablement campaigns tend to be biased if it obviously wasn't intentional to retailers whose suppliers are already on the network? It really has to do with how much work we've done with the retailer in the past. So in 2024, we did some work that really extended the use of documents on the network with those retailers or went to different divisions or banners of retailers where there was more overlap in the suppliers. So in a lot of cases, we've been through that retailer's list of suppliers before and many of them had already joined the SPS network. What we saw in Q1 was a little bit of that same type of work, but also some work where it was a new retailer, we had not worked with that retailer before to run an enablement campaign. In that type of scenario, we tend to uncover more suppliers that have not we've not asked them yet to join the SPS network.

So they come in as new subscribing customers through those programs. So it's really more how much we've worked with given retailers that drives that. Yep. Got it. And Kim, pleasant surprise, you got more new customers.

In Carbon six than you expected. Just what was the process of discovery there? Where did you see that surprise play out?

Sure. So as it relates to carbon six, before we had acquired Carbon six, you might recall this was when we announced our intent to acquire and there was a delay between that and then actually closing transaction. So when we put together our initial view, it was just simplicity it really wasn't a complete list. Of all of their customers. Once we then owned the acquisition, or the company, we then had access to the complete view of all of the customers, and it was just a more rigorous exercise we were able to go through once we actually owned Carbon six. And by doing that, there ended up being approximately 8,500 customers versus the 6,500 customers.

Okay.

And I guess just last one on the supplier count. If you look at the rest of the year, like if I exclude Carbon six this quarter, we're roughly flattish, maybe very low single digit.

Organic growth. I know you don't break down the ARPU versus customer count metrics terms of the guide specifically. But should we at least think that customer count should not go negative on an organic basis?

I'm talking year over year sequential, however you want to calculate it, but organic.

Sure.

Yes. So as you know, when you think about the customer count, again, I'm ignoring acquisitions, so it's that organic concept biggest driver of that customer count really does come back to that community enablement activity. So specific for Q1, you saw a net 300 customer count excluding the acquisition. When we're getting closer to running the community enablement activity, we have a little bit better visibility into where we think that will be. But that visibility is obviously much less later in the year. So what I could tell you is for Q2, our current view that we would expect that net customer count to be similar to what we experienced and saw in Q1. It's a little premature, in which to have a view as it relates to the back half of the year, but we still see very strong community enablement activity for this year.

Encouraging. Great.

Thank you. Your next question comes from Nehal Chokshi from Northland Capital Markets. Please go ahead.

Thank you. Couple of questions, please. First one is that how fast is Carbonifix adding customers?

So Carbon six has approximately 8,500 customers that is heavily skewed to the 3P, so think about that as the Amazon marketplace. So the vast majority of that customers are on the Amazon Marketplace side. So in that area, those tend to be customers that they're a lot smaller in size, So if you think about it, they tend to probably more frequently add, they also can more frequently subtract or churn over time. So overall, when you look at the net customer, that 8,500 that we had announced at which reflects the number at the end of the quarter, it is similar to what that number would have been at the time we actually acquired them. Think about that as sort of a net zero in the net customer add in that sort of call it that month, month and a half in which we have owned Carbon six.

So does that mean that basically carbon fixed is their growth is coming from wall Shergensen more or less?

Well, it just means that when you think about, we set expectations of what the revenue is, and we're we're aligned with that. Carbon six actually did slightly better, than we had originally anticipated in Q1, and the customer count is the 8,500 of how it is at the end of the quarter, about the same as the number was in, call it, mid February when we acquired the acquisition.

Okay.

And then with respect to solid organic customer adds on the quarter, congratulations by the way on that. What space was this new retailer in that drove that solid customer new adds?

We ran a number of enablement campaigns as this quarter, as we do in every quarter, and was really across traditional grocery retail distribution so kind of the same areas that we typically run campaigns in.

Got it, Okay.

Thank you.

Thank you. Before we take the next question, a reminder to everyone if you wish to register for a question, you may press star. Then one. Our next question comes from Mark Schappel from Loop Capital Markets. Please go ahead.

Hi, thank you for taking my question and nice job on the quarter. Chad, question for you regarding the broader economy, what are some of the leading indicators that you're looking at with respect to the macro environment and the business?

Yeah, so as it relates to our business, we really look first and foremost at this pipeline on community enablement. Campaigns, both in terms of the magnitude and scale of that and how quickly we're able to move retailers through that. Because the enablement program programs are just kind of at the tip of the spear in our business. And then I'd say the other thing that we're looking at is just sort of the health and retention of that supplier base. And that's an area where if there's a little more pressure in the macro we can see more pressure just on the retention of our suppliers. As Kim mentioned earlier, it tends to show up a little bit more in analytics, which is more of a discretionary area. And less so on the fulfillment due to both the price point and pricing policy, but also it's pretty sticky, it's really the way that these getting their orders from their customers, so it's a pretty important piece of their business.

Okay. And then as a follow-up, could you just also comment on what you're seeing with respect to your not to your, but to the ERP and WMS projects within your supplier community Are you seeing any slowdown of those projects given the recent uncertainties?

No, we are not yet seeing any slowdowns, but that is something that again we are closely monitoring. I think we would expect that [indiscernible] if there really is you know, macro pressure driven from the environment, that that area would slow down and that be a potential headwind to our business. Right now, we're not really seeing that, but we're very closely monitoring it.

Thank you.

Thank you.

This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.