Q1 2025 SPS Commerce Inc Earnings Call
Speaker Change: Good day and welcome to the SPS Commerce first quarter FY25 conference call.
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Please go ahead.
Thank you, Sagar.
Speaker Change: Good afternoon, everyone, and thank you for joining us on SPS Commerce, first quarter 2025 conference goal. We will make certain statements today including with respect to our expected financial results, go to market strategy and efforts designed to increase attraction and penetration with retailers and other customers.
Speaker Change: Please note that these forward-looking statements reflect their 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.
Speaker Change: These documents are available on our website at spscomers.com and at the SEC's website at sec.gov. In addition, we are providing a historical data sheet for easy reference on the investor relations section of our website at spscomers.com
Speaker Change: During our call today, we will discuss adjusted Ibiza financial measures and non-GAAP income per shaft.
Speaker Change: 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 Chad.
Chad: Thanks, Arena, 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% to $181.5 million, recurring revenue grew 23%
Speaker Change: As supply chains continue to evolve and macro dynamics 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 training partners.
Speaker Change: SPS Commerce has committed and uniquely positioned to support and improve all training partner relationships with a product portfolio that now includes fulfillment, analytics, e-envoicing, supply chain performance week for retailers, and revenue recovery.
Speaker Change: In February , we call it 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.
Speaker Change: We're excited to welcome our new employees and customers to SPS Commerce.
Speaker Change: SPS Network participants who recognize the initial benefits of automation tend to implement additional efficiencies over time [inaudible]
Speaker Change: It is not uncommon for SPS to run numerous enablement campaigns from one retailer over the course of several years to reach all trading partners across all divisions of brands. We repeat this process for new compliance requirements and ongoing onboarding of new vendors.
Speaker Change: For example, Fastenall, one of the world's largest industrial distributors has significantly diversified their product line over the years and in thousands of suppliers to their network.
Speaker Change: They started with SPS Commerce in 2009 to run enablement campaigns which included advance shipment notice on boarding and rolling out additional requirements to improve visibility across transportation, logistics, inventory, and assortment.
Speaker Change: Barrela, a globally recognized brand specializing in high-quality pasta, sauces, and Italian food products as operations in over a hundred countries. [inaudible]
Speaker Change: To maintain its competitive edge and me growing the man, Berilah had to overhaul its supply chain model and shift from direct imports via containers
Speaker Change: To Local 3D Alpha Film and Strategy, to Secure Local Inventory, Burela needed to integrate a new local ERP system with its customers and warehouse partners using EDI to streamline critical processes such as order handling. [inaudible]
Speaker Change: 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 the new markets, setting the stage for long-term growth.
Speaker Change: According to a recent survey of 579 supply chain professionals across industries, Gardner 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.
Speaker Change: SPS actively engages with industry groups to promote the tools available to them to advance their supply chain performance.
Speaker Change: We recently participated in the Food Industry Association's supply chain forum and worked with key industry players to evaluate the possibility of deploying a collaborative supply chain performance scorecard
Speaker Change: 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.
Speaker Change: Over the years, SPS has shown the ability to seamlessly and cost effectively implement efficiencies across supply chains and improve vendor compliance, add trading partner connections to grow sales and advance operations in a constantly changing retail industry. [inaudible]
Speaker Change: 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 now navigate challenging macro environment.
Speaker Change: 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 training relationships.
Speaker Change: Within $11 billion dollar total addressable market, we have a tremendous opportunity to transform how treating partners work together as they continue to advance their supply chain technologies.
Speaker Change: With that, I'll turn it over to Kim to discuss our financial results.
Kim: Thanks, Chad. We had a great first quarter of 2025. Revenue was $181.5 million, a 21% increase over Q1 of last year and represented our 97th consecutive quarter of revenue growth, recurring revenue 23% year-over-year.
Kim: The total number of recurring revenue customers in Q1 was approximately 54,150, and RPU was approximately 13,850.
Kim: As a reminder, in February , we close the acquisition of Carbon 6.
Kim: 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.
Kim: Due to the partial period in Q1, the carbon-fix acquisition is expected to have a full quarter or poo impacting Q2 resulting in an expected decrease of approximately 1,400.
Kim: For the quarter, Adjusted EBITDA increased 22% to $54.4 million compared to $44.4 million in 2021 of last year.
Kim: We ended a quarter with total cash and investments of $95 million and repurchased to approximately $40 million of SPS shares.
Now Turning to Guidance
Kim: For the second quarter of 2025, we expect a revenue to be in the range of $184.5 million to $100 per day, $6.2 million, which represents approximately 20 to 21% Euro per year growth.
Kim: We expected just at IBADAW to be in the range of $53 million to $54.5 million. We expect fully diluted earnings for share to be in the range of 41 to 44 cents, with fully diluted weighted average shares outstanding of approximately 38.8 million shares. We expect fully diluted earnings for share to be in the range of 41 to 44 cents. We expect fully diluted
Kim: We expect non-GAAP diluted income per share to be in the range of 87-90 cents, with stock-based compensation expense of approximately $15.5 million, depreciation expense of approximately $5.5 million, in Amart station expense of approximately $9.8 million.
Speaker Change: As we look to the remainder of the year, as Chad mentioned, we are closely monitoring how trade dynamics are impacting the economy and in turn the retail industry.
Speaker Change: However, we believe automation and operational efficiencies across supply chains remain a priority for trading partners
Speaker Change: Given an phenomenal 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's mission critical services.
Speaker Change: As a result, our outlook for the full year 2025 revenue growth remains unchanged, and we expect revenue to be in a range of $758.5 million to $763 million, representing approximately 19 to 20% growth over 2024.
Speaker Change: We expect adjusted EBITDA to be in the range of 229.4 million to 232.9 million dollars, representing growth of approximately 23 to 25% over 2024.
Speaker Change: We expect fully diluted earnings per share to be in the range of $2.06 to $2.13 with fully diluted weighted average shares outstanding of approximately $38.7 million shares.
Speaker Change: We expect non-GAAP diluted income per share to be in the range of $3.86 to $3.93 with stock-based compensation expense of approximately $61.4 million depreciation expense of approximately $23 million and amortization expense for the year of approximately $38 million. We expect non-GAAP diluted
Speaker Change: For the remainder of the year, on a quarterly basis, investors should model approximately a 30% effective tax rate, calculated on gap pre-tax net earnings.
Speaker Change: In summary, we delivered strong first quarter performance and the 97th consecutive quarter revenue growth
Speaker Change: Despite ongoing uncertainty in the macroenvironment, 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 to improve collaboration across the global retail supply chain.
Speaker Change: and with that, I'd like to open the call to questions.
We will now begin the question-and-answer session.
Thank you.
Please note.
Speaker Change: At this time, we will pause momentarily to assemble our roster
Parker Lane: Our first question comes from Bakal Lane, from Stiefel, please go ahead.
Speaker Change: Yeah, hey team, thanks for taking the question. Chad, supply pike done in August , carbon six done earlier this year, so I understand 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 self potential that you're going to see from these solutions going forward.
Speaker Change: Yeah, absolutely. So one 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.
Speaker Change: 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 successfully 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 view it as a positive validation of our hypothesis.
Speaker Change: I appreciate the feedback, and just one follow-up on the analytics piece of the business, if I'm not mistaken, it looks like it was down to touch your encorder or recorder. Just wondering if there's anything you could provide around what you saw there in one queue and how you expect potential customers to evaluate that solution and lighten some of the tariff concerns and macro-transfer seeing.
Speaker Change: impacted depending on what's happening in the economy and to your point there certainly is still a fair amount of uncertainty out there with tariffs etc.
Speaker Change: 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 your basis.
Speaker Change: and it was down again about 2% in the quarter. Therefore, Q2 through Q4 or the remainder of the year, we do expect some flight improvement netting us to about flat on a annual basis.
Speaker Change: We like all the product lines, you know, to have strong, I will remind the analytics is about 10% a little less than 10% of our total business, so on the total scale of the business.
Speaker Change: It's important, but maybe not impactful to the total revenue number. [inaudible]
Got it. Thanks again, I'll jump back in.
Thank you [inaudible]
Speaker Change: Your next question comes from Scott Berg from Needham & Co, please go ahead.
Speaker Change: Hi, this is Robert Marelli, I'm for Scott, this is for taking the question. If there are acts on the quarter, we'd like to just touch on the terror side of things. Are you hearing from any suppliers at all? We're seeing retailers delay enablement campaigns, did all this uncertainty?
Speaker Change: and is leading to some uncertainty about not only how the tariffs will kind of 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, well, let's top of mind, if we look at our information around enablement programs of pipeline for enablement programs.
Speaker Change: 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. But I would say given all this uncertainty is something we're monitoring very closely so we really understand those dynamics. But as of now, not seeing a huge impact. Let's move on to the next one.
Speaker Change: ...out of the cell phonation color. And then you guys had a strong EPS outperformance in the quarter, but the full-year guide or the full-year increase was less than the one key outperformance. Was there a potential change in expense timing or is something else driving the additional rest of your expenses?
Speaker Change: 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.
Speaker Change: Got it. Right through the color in the grass on the corner.
Thank you [inaudible]
Speaker Change: The next question comes from Lachlan Brown from Redburn Atlantic. Please go ahead.
Lachlan Brown: Hi Chad, Kim, I mean, congrats on the solid result. Yeah, I made a tough backdrop.
Lachlan Brown: On the new customer organic, you know, organic splits for the quarter, just given 8500 off the customer out to 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 driver's not the strong delivery in the quarter.
Lachlan Brown: Yeah, so yes, that math all ties together with net 300 ads.
Lachlan Brown: without the carbon-six effect included. And, you know, 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.
Lachlan Brown: As happened a little bit in 2024 was shifted more to existing customers what we saw more currently was more opportunities for new subscribing customers so really just that mix within the campaigns and then
You know, that was really it, just a mix [inaudible]
Speaker Change: Interesting, that's a strong outcome and the upcoming expiry of the Minimumist Exemption, are you anticipating any meaningful impact on your customer base and how should we think about exposure to carbon six just given it to tall famers on sell it?
Speaker Change: Yeah, we do see a little bit of the use of diminished shipments 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 US in bulk and then fulfilling it. So, we don't expect a major impact to that three-piece side of our business, which is the Amazon sellers.
Thank you [inaudible]
Speaker Change: Next question comes from George Kurosawa from City, please go ahead
Speaker Change: Hi Chad and Kim, thanks for taking the questions here. You know, we discussed a little bit about maybe the downside risk from tariffs already. I'd love to talk a little bit about, you know, how we should think about maybe some positive potential offsets, you know, if I think about
Speaker Change: 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 just kind of thinking about those dynamics generally?
Speaker Change: Yeah, so maybe just a quick reminder that, you know, the majority of trading traffic 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 up on our network when they start that trading process and that domestically with the retailers.
I would say that... [inaudible]
Speaker Change: 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.
Speaker Change: some of which are already trading on our network and no longer have that agreement with the retail, 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.
Speaker Change: Okay, okay, that's helpful, Collar. And then, you know, I wanted to talk about, I think, Kim, you referenced some timing of investments. Maybe just in general, how you guys are thinking about the 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 to be more aggressive. Just how you guys are thinking about, you know, where you want to put dollars to work. Okay, let's move on to the next one.
Speaker Change: 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.
Speaker Change: 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 externally and make sure we don't, you know, under-invest or over-invest [inaudible]
Speaker Change: But with most of our business model being somewhat agnostic to what happens to the economy although will 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
Speaker Change: Thank you. Your next question comes from Dylan Becker from William Blair, please go ahead.
Hey guys, nice job here and approaching the question. [inaudible]
Speaker Change: Eddie Chen, kind of touched on this in a little earlier than once, but given the correct backdrop.
Speaker Change: Does that lead to any shifts in resource allocation throughout your enablement campaigns?
Speaker Change: Effectively, our retailers digitizing more and looking to go deeper or as a huge opportunity to your point to have different suppliers touch points at the ecosystem. Maybe it's a bit of both, but how should we be thinking about that?
Speaker Change: Yeah, so 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 campaign, [inaudible]
Speaker Change: System with our expectations. We're not seeing optics in demand, but feel confident in our inability of this business to scale as it has in the past.
Speaker Change: Got it. Okay, thank you. And I may be for Kim to you touched on kind of the opportunity for automation, but as a lot of these suppliers are trying to navigate and make sense of what's going on. Even at the spend level today is a relative drop in the market, as I think you kind of said, how do they think about kind of efficiency and automation in helping kind of circumnavigate that? Yeah, that's it.
Speaker Change: Externally, and then also how you guys are thinking about as the network scale being able to utilize greater automation efforts across large expansion things like that as well too. Thank you.
Speaker Change: Words 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 that 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. [inaudible]
Speaker Change: You know prohibited 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 [inaudible]
Very helpful. Thank you, guys.
Thank you.
Speaker Change: The next question comes from Joe Ruink from Baird. Please go ahead.
Joe Ruink: Great, thanks for your time, my questions. I want to say I'm a terrorist topic and what could change about the opportunity?
Speaker Change: Their supply chains, so as part of a fulfillment transaction, they just realize more information is very helpful in this type of environment. It's very important to implement this.
Speaker Change: and that becomes more documents exchanged over the network. They maybe need to run a Navelman campaign, 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
Speaker Change: Supply Chain Visibility, but that does seem to be really important and rising in attention at the moment.
Speaker Change: 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 and wallet share that comes about? That's right.
Joe Ruink: I definitely could imagine that the more complexity that's out there in the global supply chain for these organizations, the more they're going to want visibility to the full scope of their supply chain, which is beneficial for us. So 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 the ability to onboard new suppliers, but there is a lot.
Joe Ruink: quickly and effectively and make sure that they're tying into all the systems and processes you have for managing your suppliers would really need 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. [inaudible]
Joe Ruink: When, I guess, for a few years now, SPS has discussed 15% plus revenue growth, M&A,
Joe Ruink: This year, just given supply, bike, and carbon-six, M&A is a larger contributor to the growth algorithm than has been the case since the 15% target was established.
Joe Ruink: I guess probably the most common question we've been getting is when you get out of this year and think ahead, you know, 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&A as well.
Joe Ruink: Do you kind of have a rough sense of how those two average out over time and what kind of the organic contribution to the 15% ultimately should be?
Joe Ruink: Sure, so let's start with this year. We are well within those parameters of what was our, you know, 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 eb at the dollar growth.
Joe Ruink: 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. Thank you very much for your time, and we'll see you next time.
Joe Ruink: So we've reiterated our expectations for this year and we talk about the reasons why we feel confident with reiterating what that top-line growth rate is for this year.
Joe Ruink: We're comfortable with 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 acquisition. So that's something we're certainly mindful of.
Joe Ruink: We're taking that into account internally, but at this point in time we've reiterated what our expectations is for 25
Joe Ruink: And as it gets closer towards 26, or later in this year we will certainly re-look at what information we may or may not feel would be helpful to share two investors.
Okay. Thanks, Jim. Thanks, Jeff.
Thank you.
Joe Ruink: 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…
Speaker Change: I guess Kim, if we look at the enable, this is for both of you, I'm the enablement campaigns .
Speaker Change: Why are the more recent 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 year, a handful of 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? Yeah, I think so.
Speaker Change: where there was more overlap in the suppliers. So in a lot of cases we'd been through that retailer's list of suppliers before and many of them had already joined the SPS network.
Speaker Change: 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 and 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. And so they come in as new subscribing customers to those programs. So it's really more how much we've worked with given retailers that drives that. And so it's more how much we've worked with the SPS network. And so it's really more how much we've worked with the SPS network.
Speaker Change: Yeah, got it. And Tim 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?
Speaker Change: 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 6. And by doing that, there ended up being approximately 8,500 customers versus the 6,500 customers.
Speaker Change: Okay, and I guess just last one on the supplier count [inaudible]
Speaker Change: Carvin VI, this quarter, we're roughly flatish, maybe very very low single digit organic growth. I know you don't you break down the arpevers of customer count metrics in terms of the guide specifically, but should we at least think that customer count should not go negative on an organic basis? Yes.
Speaker Change: I'm talking year over year sequence, however you want to calculate it, but organic [inaudible]
Speaker Change: Yeah, so as you know, when you think about the customer count, again, I'm ignoring acquisition, so it's that organic concept. The biggest driver of that customer count really does come back to that community enablement activity. So specific for Q1, you saw a net 300.
Speaker Change: Customer Account, 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.
Speaker Change: But that visibility is obviously much less later in the year. So what I could tell you is for Q2, our current view is that we would expect that net customer count to be similar to what we experienced and saw in Q1. The little premature in which they 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.
Great, okay, thanks so much [inaudible]
Thank you.
Speaker Change: Your next question comes from Nehal Chokshi from Northland Capital Markets. Please go ahead.
Nehal Choksi: Thank you. A couple of questions please. First one is, is that how fast is Carpenter's adding customers?
So, overall, when you look at the net customer, [inaudible]
Nehal Choksi: That 8500 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. So think about that as sort of a net.
Nehal Choksi: Zero in the net customer ad 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 6 is...
Their growth is coming from Wallachir Gainesen, more or less
Nehal Choksi: Well, it just means that when you think about, we set expectations of what the revenue is and we're aligned with that. Carbon 6 actually did slightly better. Then we had originally anticipated in Q1 and the customer count is the 8500 of how it is at the end of the quarter is about the same as the number was in call it mid-February when we acquired the acquisition.
Nehal Choksi: We ran a number of enablement campaigns as this quarter as we do in every quarter and was really consistent across traditional grocery, retail, distribution. So kind of the same areas that we typically run campaigns in. [inaudible]
Got it. Okay. Thank you.
Thank you [inaudible]
Speaker Change: Before we take the next question, a reminder to everyone. If you wish to register for a question, you may press star, then one.
Speaker Change: Next question comes from Mark Schappel from Loop Capital Markets. Please go ahead
Speaker Change: Hi, thank you for taking my question and a job on a quarter. I've had 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 your business? What are you looking at with respect to the macro environment and your business?
Speaker Change: of that and how quickly we're able to move retailers through that because the enablement programs are just kind of at the tip of the spear in our business.
Speaker Change: And then I'd say the other thing that we're looking at is just sort of the...
Speaker Change: 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 they're getting their orders from their customers so it's pretty important piece of their business.
Speaker Change: Okay, thank you. 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?
Speaker Change: No, we are not yet seen any slowdowns, but that is something that, again, we are closely monitoring. I think we would expect that if...
Speaker Change: If there really is macro pressure driven from the environment that that area would slow down and that could be a potential headwind to our business Right now we're not really seeing that but we're very closely monitoring it [inaudible]
Thank you [inaudible]
Thank you.
This concludes our question and answer session.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation.
NOTE Confirmed