SPS Commerce sell decision

What happened: SPS Commerce, Inc. (SPSC) reported Q1 2026 earnings, with total revenue growing 6% year-over-year (YoY) to $192.1 million. However, adjusted EBITDA was $57.9 million, and nearly all free cash flow was used to repurchase $47.1 million of shares. The core business excluding Amazon revenue recovery performed in line with expectations, but this segment faced significant headwinds due to Amazon's policy changes.

Market impact: The divergence in performance between the core business and the Amazon revenue recovery segment raised concerns. Conestoga Capital Advisors, an asset management company, advised investors to consider selling their position in SPSC due to these headwinds and broader market volatility. This narrative affects companies in the e-commerce and supply chain management sectors, as Amazon's policy changes can significantly impact their revenue streams.

What to watch next: Investors should closely monitor SPSC's Q2 earnings, scheduled for late July 2026, to assess the impact of Amazon's policy changes on the company's financial performance. Additionally, any updates or announcements from Amazon regarding its policies could further influence SPSC's stock price and the broader e-commerce sector.