SPS COMMERCE INC Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) – marketscreener.com

 This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements regarding us, our business prospects and our results of operations are subject to certain risks and uncertainties posed by many factors and events, many of which may be amplified by the coronavirus (COVID-19) pandemic, that could cause our actual business, prospects, and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. In some cases, you can identify forward-looking statements by the following words: "anticipate," "assumes," "believe," "continue," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "will," "would," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Similarly, statements that describe our future plans, objectives or goals are also forward-looking. Forward-looking statements may also be made from time to time in oral presentations, including telephone conferences and/or webcasts open to the public. Shareholders, potential investors and others are cautioned that all forward-looking statements involve risks and uncertainties that could cause results in future periods to differ materially from those anticipated by some of the statements made in this report, including the risks and uncertainties described under the heading "Risk Factors" appearing in our Annual Report on Form 10-K for the year ended December 31, 2020, as may be updated in our subsequent Quarterly Reports on Form 10-Q from time to time. We expressly disclaim any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that advise interested parties of the risks and factors that may affect our business.  Overview  SPS Commerce is a leading provider of cloud-based solutions that make it easier for retailers, suppliers, grocers, distributors, and logistics firms to orchestrate the management of item data, order fulfillment, inventory control and sales analytics across all channels. The solutions offered by SPS Commerce eliminate the need for on-premise software and support staff by taking on that capability on the customer's behalf. We derive the majority of our revenues from numerous monthly recurring subscriptions from businesses that utilize our solutions.  We plan to continue to grow our business by further penetrating the supply chain management market, increasing revenues from our customers as their businesses grow, expanding our distribution channels, expanding our international presence and, from time to time, developing new solutions and applications. We also intend to selectively pursue acquisitions that will add customers, allow us to expand into new regions, or allow us to offer new functionalities.  For the three months ended September 30, 2021, our revenues were $97.9 million, an increase of 23% from the comparable period in 2020, and represented our 83rd consecutive quarter of increased revenues. Total operating expenses increased 23% for the same period in 2021 from 2020.  

Key Financial Terms and Metrics

  We have several key financial terms and metrics, including annualized average recurring revenues per recurring revenue customer. Beginning in 2021, we added Adjusted EBITDA Margin as a financial metric. There were no additional changes in the definitions of our key financial terms and metrics, which are discussed in more detail under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC.  To supplement our financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures. We believe that these non-GAAP measures provide useful information to our management, board of directors, and investors regarding certain financial and business trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses and planning purposes. Adjusted EBITDA is also used for purposes of determining executive and senior management incentive compensation.  These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this "Management's Discussion and Analysis of Financial Condition and Results of Operations."                                                                   Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         18                     September 30, 2021    
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Critical Accounting Policies and Estimates

  This discussion of our financial condition and results of operations is based upon our condensed consolidated financial statements, which are prepared in accordance with GAAP and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. Our actual results may differ from these estimates under different assumptions or conditions.  A critical accounting policy is one that is both material to the presentation of our financial statements and requires us to make difficult, subjective, or complex judgments relating to uncertain matters that could have a material effect on our financial condition and results of operations. Accordingly, we believe that our policies for revenue recognition, internal-use software, and business combinations are the most critical to fully understand and evaluate our financial condition and results of operations.  During the nine months ended September 30, 2021, there were no changes in our critical accounting policies or estimates. See Note A to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC, for additional information regarding our accounting policies.  

Results of Operations

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

  The following table presents our results of operations for the periods indicated:                                                    Three Months Ended September 30,                                                2021                           2020                       Change (dollars in thousands)                           % of revenue                   % of revenue         $            % Revenues                            $ 97,887             100.0 %   $ 79,557             100.0 %   $ 18,330         23.0 % Cost of revenues                      34,343              35.1       25,045              31.5        9,298         37.1 Gross profit                          63,544              64.9       54,512              68.5        9,032         16.6 Operating expenses Sales and marketing                   22,079              22.5       19,233              24.2        2,846         14.8 Research and development              10,854              11.1        8,053              10.1        2,801         34.8 General and administrative            14,691              15.0       11,939              15.0        2,752         23.1 Amortization of intangible assets      2,399               2.5        1,333               1.7        1,066         80.0 Total operating expenses              50,023              51.1       40,558              51.0        9,465         23.3 Income from operations                13,521              13.8       13,954              17.5         (433 )       (3.1 ) Other income (expense), net             (716 )            (0.7 )        423               0.5       (1,139 )     (269.3 ) Income before income taxes            12,805              13.1       14,377              18.0       (1,572 )      (10.9 ) Income tax expense                     1,356               1.4        2,970               3.7       (1,614 )      (54.3 ) Net income                          $ 11,449              11.7 %   $ 11,407              14.3 %   $     42          0.4 %     Revenues - The increase in revenues resulted from two primary factors: the increase in recurring revenue customers and an increase in annualized average recurring revenues per recurring revenue customer, which we also refer to as wallet share.      •   The number of recurring revenue customers increased 10% to 35,400 at         September 30, 2021 from 32,050 at September 30, 2020.       •   Wallet share increased 10% to $10,350 for the three months ended

September 30, 2021 from $9,450 for the same period in 2020. The increase

        was primarily attributable to increased usage of our solutions by our         recurring revenue customers.   Recurring revenues from recurring revenue customers accounted for 92% and 95% of our total revenues for the three months ended September 30, 2021 and 2020, respectively. We anticipate that the number of recurring revenue customers and wallet share will increase as we increase the number of solutions we offer and increase the penetration of those solutions across our customer base.  Cost of Revenues - The increase in cost of revenues for the three months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase of $7.8 million in personnel-related costs and an increase of $0.7 million in stock-based compensation. Additionally, as we continued to invest in the infrastructure supporting our platform, depreciation expense increased by $0.4 million.                                                                   Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         19                     September 30, 2021    
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                                                             Table of Contents    Sales and Marketing Expenses - The increase in sales and marketing expense for the three months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase of $1.7 million in personnel-related costs and an increase of $0.7 million in variable compensation earned by sales personnel and referral partners. Additionally, an increase of $0.5 million in stock-based compensation contributed to the overall increase.  Research and Development Expenses - The increase in research and development expense for the three months ended September 30, 2021 was primarily due to increased headcount, which resulted in an increase in personnel costs of $2.2 million, and an increase in software subscription expense of $0.4 million.  General and Administrative Expenses - The increase in general and administrative expense for the three months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase in personnel-related costs of $1.9 million and stock-based compensation expense of $0.5 million. Additionally, continued growth of the business led to the increase in general and administrative expenses, partially offset by a decrease of $0.3 million in charitable contributions.  Amortization of Intangible Assets - The increase in amortization of intangible assets was driven by the amortization of the acquired intangible assets related to Data Masons, which we acquired in December 2020.  Other Income (Expense), Net - The change to other expense, net of $0.7 million, compared to other income, net of $0.4 million in the same prior year period, was primarily due to unfavorable foreign currency exchange rate changes.  Income Tax Expense - The decrease in income tax expense was driven by an increase in discrete tax benefits from stock activity, partially offset by an increase in nondeductible executive compensation. Excess tax benefits generated upon the settlement or exercise of stock awards are recognized as a reduction to income tax expense and, as a result, we expect that our annual effective income tax rate will fluctuate.  Adjusted EBITDA - Adjusted EBITDA, which is a non-GAAP measure of financial performance, consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from foreign currency on cash and investments held, investment income or loss, and other adjustments as necessary for a fair presentation. For the three months ended September 30, 2020, other adjustments included the expense impact from the disposals of certain capitalized internally developed software, cloud hosting arrangement implementation costs and an earn-out liability fair value adjustment. The following table provides a reconciliation of net income to Adjusted EBITDA:                                                                  Three Months Ended                                                                 September 30, (in thousands)                                              2021              2020 Net income                                              $      11,449     $     11,407 Income tax expense                                              1,356            2,970 Depreciation and amortization of property and equipment                                                       3,695       

3,198

 Amortization of intangible assets                               2,399       

1,333

 Stock-based compensation expense                                6,849       

4,893

 Realized (gain) loss from foreign currency on cash and investments held                                              854             (559 ) Investment income                                                 (66 )           (107 ) Other                                                               -              103 Adjusted EBITDA                                         $      26,536     $     23,238                                                                      Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         20                     September 30, 2021    
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                                                             Table of Contents      Adjusted EBITDA Margin - Adjusted EBITDA Margin, which is a non-GAAP measure of financial performance, consists of Adjusted EBITDA divided by revenue. Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue. The following table provides a comparison of Margin to Adjusted EBITDA Margin:                                                                 Three Months Ended                                                                 September 30, (in thousands, except Margin and Adjusted EBITDA Margin)      2021          2020 Revenue                                                    $   97,887     $ 79,557  Net income                                                     11,449       11,407 Margin                                                             12 %         14 %  Adjusted EBITDA                                                26,536       23,238 Adjusted EBITDA Margin                                             27 %         29 %     Non-GAAP Income per Share - Non-GAAP income per share, which is a non-GAAP measure of financial performance, consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, and other adjustments as necessary for a fair presentation, divided by the weighted average number of shares of common and diluted stock outstanding during each period. For the three months ended September 30, 2020, other adjustments included the expense impact from the disposals of certain capitalized internally developed software, cloud hosting arrangement implementation costs and an earn-out liability fair value adjustment. To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments. The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.    The following table provides a reconciliation of net income to non-GAAP income per share:                                                                Three Months Ended                                                                 September 30, (in thousands, except per share amounts)                    2021            

2020

 Net income                                              $      11,449     $ 

11,407

 Stock-based compensation expense                                6,849       

4,893

 Amortization of intangible assets                               2,399       

1,333

Realized (gain) loss from foreign currency on cash and investments held

                                              854             (559 ) Other                                                               -       

103

 Income tax effects of adjustments                              (4,178 )         (2,929 ) Non-GAAP income                                         $      17,373     $ 

14,248

 Shares used to compute non-GAAP income per share Basic                                                          35,961           35,295 Diluted                                                        37,015           36,366 Non-GAAP income per share Basic                                                   $        0.48     $       0.40 Diluted                                                 $        0.47     $       0.39                                                                      Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         21                     September 30, 2021    
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Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

  The following table presents our results of operations for the periods indicated:                                                      Nine Months Ended September 30,                                                2021                            2020                        Change (dollars in thousands)                            % of revenue                    % of revenue         $            % Revenues                            $ 282,520             100.0 %   $ 229,322             100.0 %   $ 53,198         23.2 % Cost of revenues                       96,043              34.0        72,915              31.8       23,128         31.7 Gross profit                          186,477              66.0       156,407              68.2       30,070         19.2 Operating expenses Sales and marketing                    65,386              23.1        56,143              24.5        9,243         16.5 Research and development               28,459              10.1        23,087              10.0        5,372         23.3 General and administrative             45,186              16.0        36,591              16.0        8,595         23.5 Amortization of intangible assets       7,734               2.7         3,985               1.7        3,749         94.1 Total operating expenses              146,765              51.9       119,806              52.2       26,959         22.5 Income from operations                 39,712              14.1        36,601              16.0        3,111          8.5 Other income (expense), net            (1,424 )            (0.5 )       1,218               0.5       (2,642 )     (216.9 ) Income before income taxes             38,288              13.6        37,819              16.5          469          1.2 Income tax expense                      6,456               2.3         5,703               2.5          753         13.2 Net income                          $  31,832              11.3 %   $  32,116              14.0 %   $   (284 )       (0.9 )%     Revenues - The increase in revenues resulted from two primary factors: the increase in recurring revenue customers and an increase in annualized average recurring revenues per recurring revenue customer, which we also refer to as wallet share.      •   The number of recurring revenue customers increased 10% to 35,400 at         September 30, 2021 from 32,050 at September 30, 2020.       •   Wallet share increased 10% to $10,100 for the nine months ended

September 30, 2021 from $9,200 for the same period in 2020. The increase

        was primarily attributable to increased usage of our solutions by our         recurring revenue customers.   Recurring revenues from recurring revenue customers accounted for 92% and 94% of our total revenues for the nine months ended September 30, 2021 and 2020, respectively. We anticipate that the number of recurring revenue customers and wallet share will increase as we increase the number of solutions we offer and increase the penetration of those solutions across our customer base.  Cost of Revenues - The increase in cost of revenues for the nine months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase of $19.2 million in personnel-related costs and an increase of $2.2 million in stock-based compensation. Additionally, as we continued to invest in the infrastructure supporting our platform, depreciation expense increased by $1.2 million. Further, software subscriptions increased by $0.4 million.  Sales and Marketing Expenses - The increase in sales and marketing expense for the nine months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase of $4.1 million in personnel-related costs and an increase of $3.0 million in variable compensation earned by sales personnel and referral partners. Additionally, an increase of $1.9 million in stock-based compensation contributed to the overall increase.  Research and Development Expenses - The increase in research and development expense for the nine months ended September 30, 2021 was primarily due to increased headcount which resulted in increases of personnel costs of $4.0 million and stock-based compensation of $0.4 million. In addition, there was an increase in software subscription expense of $1.0 million.  General and Administrative Expenses - The increase in general and administrative expense for the nine months ended September 30, 2021 was primarily due to increased headcount which resulted in an increase in personnel-related costs of $3.9 million and stock-based compensation increase of $2.6 million. Additionally, there were increases of $0.6 million in software subscription fees, $0.5 million in credit card fees, and $0.4 million in professional service fees that contributed to the overall increase.    Amortization of Intangible Assets - The increase in amortization of intangible assets was driven by the amortization of the acquired intangible assets related to Data Masons, which we acquired in December 2020.                                                                     Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         22                     September 30, 2021    
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                                                             Table of Contents      Other Income (Expense), Net - The change to other expense, net of $1.4 million, compared to other income, net of $1.2 million in the same prior year period, was primarily due to unfavorable foreign currency exchange rate changes and decreased investment income.    Income Tax Expense - The increase in income tax expense was due to an increase in nondeductible executive compensation and an increase in pre-tax income, partially offset by an increase in the discrete tax benefits from stock activity. Excess tax benefits generated upon the settlement or exercise of stock awards are recognized as a reduction to income tax expense and, as a result, we expect that our annual effective income tax rate will fluctuate.  Adjusted EBITDA - Adjusted EBITDA, which is a non-GAAP measure of financial performance, consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from foreign currency on cash and investments held, investment income or loss, and other adjustments as necessary for a fair presentation. For the nine months ended September 30, 2021, other adjustments include disposals of cloud hosting arrangement implementation costs and accelerated tenant improvement benefit, which was incurred as part of executing a lease agreement. This tenant improvement adjustment was partially offset by accelerated depreciation, which is included within Depreciation and amortization of property and equipment and was also incurred as part of executing a lease agreement. For the nine months ended September 30, 2020, other adjustments included the expense impact from the disposals of certain capitalized internally developed software and cloud hosting arrangement implementation costs in addition to an earn-out liability fair value adjustment. The following table provides a reconciliation of net income to Adjusted EBITDA:                                                                  Nine Months Ended                                                                 September 30, (in thousands)                                              2021              2020 Net income                                              $      31,832     $     32,116 Income tax expense                                              6,456            5,703 Depreciation and amortization of property and equipment                                                      10,989       

9,474

 Amortization of intangible assets                               7,734       

3,985

 Stock-based compensation expense                               21,273       

14,246

 Realized (gain) loss from foreign currency on cash and investments held                                            1,492             (686 ) Investment income                                                (242 )         (1,079 ) Other                                                            (213 )            257 Adjusted EBITDA                                         $      79,321     $     64,016     Adjusted EBITDA Margin - Adjusted EBITDA Margin, which is a non-GAAP measure of financial performance, consists of Adjusted EBITDA divided by revenue. Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue. The following table provides a comparison of Margin to Adjusted EBITDA Margin:                                                                  Nine Months Ended                                                                 September 30, (in thousands, except Margin and Adjusted EBITDA Margin)     2021          2020 Revenue                                                    $ 282,520     $ 229,322  Net income                                                    31,832        32,116 Margin                                                            11 %          14 %  Adjusted EBITDA                                               79,321        64,016 Adjusted EBITDA Margin                                            28 %          28 %     Non-GAAP Income per Share - Non-GAAP income per share, which is a non-GAAP measure of financial performance, consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from foreign currency on cash and investments held, and other adjustments as necessary for a fair presentation, divided by the weighted average number of shares of common and diluted stock outstanding during each period. For the nine months ended September 30, 2021, other adjustments include disposals of cloud hosting arrangement implementation costs and accelerated tenant improvement benefit, which was incurred as part of executing a lease agreement. This tenant improvement adjustment was partially offset by accelerated depreciation, which is included within Depreciation and amortization of property and equipment and was also incurred as part of executing a lease agreement. For the nine months ended September 30, 2020, other adjustments included the expense impact from the disposals of certain capitalized internally developed software and cloud hosting arrangement implementation                                                                   Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         23                     September 30, 2021    
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                                                             Table of Contents    costs in addition to an earn-out liability fair value adjustment. To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments. The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.    The following table provides a reconciliation of net income to non-GAAP income per share:                                                                  Nine Months Ended                                                                 September 30, (in thousands, except per share amounts)                    2021            

2020

 Net income                                              $     31,832     $  

32,116

 Stock-based compensation expense                              21,273        

14,246

 Amortization of intangible assets                              7,734        

3,985

Realized (gain) loss from foreign currency on cash and investments held

                                           1,492             (686 ) Other                                                           (213 )      

257

 Income tax effects of adjustments                            (12,152 )         (8,841 ) Non-GAAP income                                         $     49,966     $  

41,077

 Shares used to compute non-GAAP income per share Basic                                                         35,873           35,133 Diluted                                                       36,898           36,137 Non-GAAP income per share Basic                                                   $       1.39     $       1.17 Diluted                                                 $       1.35     $       1.14    

Liquidity and Capital Resources

  At September 30, 2021, our principal sources of liquidity were cash and cash equivalents, certificates of deposit and short-term investments totaling $252.0 million and accounts receivable, net of provision for credit losses, of $35.3 million. Certificates of deposit and investments are invested in accordance with our investment policy, with a goal of maintaining liquidity and capital preservation. Our cash equivalents and short-term investments are held in highly liquid money market funds, certificates of deposits, commercial paper, U.S. treasury securities and U.S. corporate bonds.  The summary of activity within the condensed consolidated statements of cash flows was as follows:                                                   Nine Months Ended                                                  September 30, (in thousands)                                2021          2020

Net cash provided by operating activities $ 81,568 $ 65,529 Net cash used in investing activities (32,087 ) (31,975 ) Net cash used in financing activities (3,360 ) (3,850 )

Net Cash Flows from Operating Activities

  The increase in cash provided by operating activities was primarily driven by an increase in non-cash expenses and changes in operating assets and liabilities. Significant changes in non-cash items included increased stock-based compensation and amortization of intangible assets resulting from business expansion. Significant changes in operating assets and liabilities included increases in deferred revenue and accrued compensation balances.  

Net Cash Flows from Investing Activities

The change in net cash used in investing activities was primarily due to increased purchases of property and equipment, partially offset by a decrease in net purchases of investments.

Net Cash Flows from Financing Activities

  The change in net cash used in financing activities was primarily due to the decreases in cash used for share repurchases and net proceeds from stock option exercises.                                                                   Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         24                     September 30, 2021    
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Effect of Foreign Currency Exchange Rate Changes

  For information regarding the effect of foreign currency exchange rate changes, refer to the section entitled "Foreign Currency Exchange Risk," included in Part I, Item 3, "Quantitative and Qualitative Disclosures About Market Risk" of this Quarterly Report on Form 10-Q.  

Adequacy of Capital Resources

Our future capital requirements may vary significantly from those now planned and will depend on many factors, including:

• costs to develop and implement new solutions and applications, if any;

• sales and marketing resources needed to further penetrate our market and

gain acceptance of new solutions and applications that we may develop;

    • expansion of our operations in the U.S. and internationally;     • response of competitors to our solutions and applications; and     • use of capital for acquisitions, if any.  

Historically, we have experienced increases in our expenditures consistent with the growth in our operations, and we anticipate that our expenditures will continue to increase as we expand our business.

We believe our cash, cash equivalents, investments and our cash flows from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months.

Inflation and changing prices did not have a material effect on our business during the nine months ended September 30, 2021 and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, investments in special purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.

Contractual and Commercial Commitment Summary

  Our contractual obligations and commercial commitments as of September 30, 2021 are as follows:                                                                   Payments Due by Period                                        Less Than                                       More Than (in thousands)                          1 Year         1-3 Years       3-5 Years        5 Years        Total Operating lease obligations, including imputed interest            $     4,659     $     8,687     $     7,402     $     2,137     $ 22,885 Purchase commitments                        6,412           5,509               -               -       11,921 Total                                 $    11,071     $    14,196     $     7,402     $     2,137     $ 34,806                                                                      Form 10-Q for the [[Image Removed]]  SPS                                    Quarterly Period ended COMMERCE, INC.                         25                     September 30, 2021    
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