SPS Commerce Inc (SPSC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 66.96% | 66.09% | 66.05% | 65.82% | 68.07% |
| Operating profit margin | 13.94% | 14.39% | 15.79% | 14.30% | 16.04% |
| Pretax margin | 15.60% | 15.94% | 15.82% | 13.90% | 16.85% |
| Net profit margin | 12.08% | 12.26% | 12.23% | 11.58% | 14.58% |
SPS Commerce Inc's gross profit margin has shown a slight decrease over the years, from 68.07% in 2020 to 66.96% in 2024. This indicates that the company is generating slightly less gross profit per dollar of sales.
The operating profit margin has also trended downwards, from 16.04% in 2020 to 13.94% in 2024, reflecting a decline in the efficiency of the company's operations in generating profits after accounting for operating expenses.
Similarly, the pretax margin has fluctuated over the years, reaching a peak of 16.85% in 2020 and then experiencing some variability but ending at 15.60% in 2024. This implies that the company's profitability before taxes has seen some fluctuations, but it has remained at a reasonable level.
The net profit margin, which reflects the company's profitability after all expenses including taxes, has also shown a decreasing trend, declining from 14.58% in 2020 to 12.08% in 2024, indicating a reduction in the company's bottom line profitability over the years.
Overall, the profitability ratios demonstrate that SPS Commerce Inc has experienced some challenges in maintaining its profit margins over the years, with a general decline in gross, operating, pretax, and net profit margins.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.62% | 9.38% | 10.58% | 8.94% | 9.53% |
| Return on assets (ROA) | 7.47% | 7.99% | 8.19% | 7.24% | 8.66% |
| Return on total capital | 10.40% | 11.57% | 13.25% | 11.38% | 11.92% |
| Return on equity (ROE) | 9.02% | 9.86% | 10.27% | 9.21% | 10.84% |
The profitability ratios of SPS Commerce Inc over the period from December 31, 2020, to December 31, 2024, indicate mixed performance.
1. Operating Return on Assets (Operating ROA):
- SPS Commerce Inc's Operating ROA decreased from 9.53% in 2020 to 8.62% in 2024. Despite a slight fluctuation, the company maintained profitability relative to its operating assets but experienced a downward trend in recent years.
2. Return on Assets (ROA):
- The ROA also saw a decline from 8.66% in 2020 to 7.47% in 2024, indicating a reduction in the company's ability to generate profits from its total assets over the period.
3. Return on Total Capital:
- SPS Commerce Inc's Return on Total Capital improved from 11.92% in 2020 to 13.25% in 2022 before declining to 10.40% in 2024. The company's ability to generate returns from its total invested capital shows some variability, with an overall decrease in the later years.
4. Return on Equity (ROE):
- The Return on Equity decreased from 10.84% in 2020 to 9.02% in 2024, reflecting a decline in shareholder returns over the period.
Overall, while SPS Commerce Inc exhibited some fluctuations in profitability ratios, there are indications of a general downward trend in the company's profitability performance from 2020 to 2024. Investors and stakeholders may need to further investigate the factors driving these changes and assess the company's future prospects.