SPS Commerce Inc (SPSC)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	210,714	182,069	153,065	131,678	99,836
Inventory	US$ in thousands	—	0	52,755	44,529	37,502
Inventory turnover		—	—	2.90	2.96	2.66

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $210,714K ÷ $—K
= —

The inventory turnover ratio for SPS Commerce Inc has shown a slight increase over the years, from 2.66 in December 31, 2020, to 2.96 in December 31, 2021, and then a slight decline to 2.90 in December 31, 2022. However, the data is not available for December 31, 2023 and December 31, 2024.

The inventory turnover ratio indicates how efficiently the company is managing its inventory by measuring the number of times the inventory is sold and replaced within a given period. A higher turnover ratio is generally preferred as it suggests that the company is selling its inventory quickly and efficiently.

In the case of SPS Commerce Inc, the inventory turnover ratio is in the range of 2.66 to 2.96, which indicates that the company is able to convert its inventory into sales between approximately two to three times a year. This suggests that the company is managing its inventory reasonably well, but further analysis would be required to determine the effectiveness of their inventory management practices relative to industry standards.