SPS Commerce Inc (SPSC)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	88,883	87,024	82,052	75,920	77,247	73,376	72,467	71,402	71,182	67,541	61,372	58,933	55,085	53,269	53,702	51,284	50,158	47,365	44,344	42,563
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	854,690	829,365	703,421	682,965	667,475	626,844	600,981	565,889	537,073	507,663	497,020	491,521	484,259	470,528	454,749	440,523	420,721	394,940	373,310	355,188
Return on total capital		10.40%	10.49%	11.66%	11.12%	11.57%	11.71%	12.06%	12.62%	13.25%	13.30%	12.35%	11.99%	11.38%	11.32%	11.81%	11.64%	11.92%	11.99%	11.88%	11.98%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $88,883K ÷ ($—K + $854,690K)
= 10.40%

The return on total capital for SPS Commerce Inc has exhibited some fluctuations over the provided time period, ranging from 10.4% as of December 31, 2024, to a high of 13.3% as of September 30, 2022. Overall, the company's return on total capital has shown a generally positive trend, with a few intermittent declines. It is important to note that a return on total capital above the company's cost of capital signifies that SPS Commerce Inc is generating value from its operations and investments. The consistent performance above 10% indicates that the company has been effectively utilizing its capital to generate profits for its shareholders. However, the recent decrease in return on total capital from the peak of 13.3% in September 2022 to 10.4% in December 2024 may warrant further analysis to understand the factors influencing this decline.