Good day, and welcome to the SPS Commerce, Inc. Q1 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. To ask a question, you may press star then 1 on a touch tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the call over to Irmina Blaszczyk. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us on the SPS Commerce, Inc. first quarter 2026 conference call. We will make certain statements today, including with respect to our expected financial results, go-to-market strategy, and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. Please refer to our SEC filings, specifically our Form 10-K, as well as our financial results press release for a more detailed description of the risk factors that may affect our results. These documents are available at our website, spscommerce.com, and the SEC’s website, sec.gov. In addition, we are providing a historical data sheet for easy reference on the Investor Relations section of our website, spscommerce.com. During the call today, we will discuss adjusted EBITDA financial measures and non-GAAP income per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, including reconciliations of these measures with comparable GAAP measures. I will now turn the call over to Chad.

Thanks, Irmina, and good afternoon, everyone. Thank you for joining us today. SPS Commerce, Inc. delivered a solid first quarter. Q1 revenue grew 6% to $192.1 million. Recurring revenue grew 7%, driven by Fulfillment growth of 8%. Amid rapidly evolving global supply networks, SPS Commerce, Inc. innovations are critical in addressing trading partner needs across the supply chains of manufacturers, retailers, logistics providers, and brands. Tariffs, geopolitics, and risk mitigation are fundamentally restructuring global trade. In this environment, supply chain partners need real-time coordination to respond to disruptions, demand shifts, and capacity constraints, and SPS Commerce, Inc. is uniquely positioned to deliver the AI automation trading partners need at scale. Before I provide an update on how customers are leveraging our AI-enabled solutions, I will review current business dynamics across our product portfolio. First, with respect to our revenue recovery business, we continue to manage the headwinds from Amazon’s policy changes. For example, to better align pricing with the value we deliver to our 3P take-rate customers, we are introducing a subscription platform fee. Joe will be providing further detail. Second, we are pleased with our cross-selling momentum among 1P customers, and I will share some examples of that shortly. Third, our business without revenue recovery is performing in line with our expectations, with early indications that the invoice scrutiny we observed last year as a result of tariff and macro headwinds is subsiding. We continue to expect these transitory headwinds will be largely behind us by the end of the second quarter as we remain focused on delivering the solutions our customers need to succeed in a dynamic trade environment. A great example of how suppliers are realizing value from the SPS Commerce, Inc. portfolio is Siete Foods, a customer since 2018. Over the past year, Siete made the transition from a high-growth emerging brand into an enterprise-scale operation, driven by their acquisition by PepsiCo and rapid expansion across mass retailers like Walmart, Target, Whole Foods, and Costco. As their scale increased, so did the complexity of their supply chain. We worked closely with Siete to modernize their operations and support their goal of full supplier compliance, while integrating tightly with their ERP to ensure they are able to handle higher volumes and evolving retail requirements with greater data consistency across orders, shipments, and invoicing workflows. Recently, Siete became an early adopter of MAX, SPS Commerce, Inc.’s AI agent, embedding our proprietary network intelligence directly in day-to-day operations. Their team is using MAX to quickly diagnose issues that previously required manual investigation, such as identifying why shipments failed or invoices were rejected, before those issues impact their retail partners. MAX is also helping Siete surface broader operational patterns across thousands of transactions to address root causes of inefficiencies, enabling them to scale and handle greater order volume with stronger compliance without adding operational overhead. This customer engagement demonstrates how an SPS Commerce, Inc. partnership evolves beyond trading partner connectivity and compliance to become a core intelligence layer within our customers’ supply chains. Siete Foods is one of many brands participating in the MAX beta release, providing valuable insight into how agentic capabilities are being applied and where customers are realizing value across their workflows. For Siete, by catching undetected inventory failures, MAX is projected to protect up to 8% of revenue that would otherwise be lost to stockouts. Based on feedback from more than 400 MAX beta customers, the biggest impact AI can have on trading partner collaboration is identifying issues early before they cause disruptions. MAX is already demonstrating its ability to do exactly that. SPS Commerce, Inc. is also leveraging agents to improve operational efficiency. Early applications within our agentic network are already driving measurable gains in customer treatment strategies, reinforcing our competitive moat through proprietary network data and intelligence, and reducing onboarding and setup time from weeks to days. In parallel, product engineering has advanced significantly, with much of our software development now agent-driven, accelerating innovation cycles and improving productivity. In sales, our data-powered growth strategy is using demand signals from customer activity across our network to identify upsell and cross-sell opportunities. As we continue to advance our network-led go-to-market motion, cross-selling momentum continues to build across our customer base. For example, Fulfillment customers are expanding into revenue recovery, while revenue recovery customers are adopting Fulfillment, reinforcing the strength of our network and the value of our integrated solutions. Explore Scientific, a precision optics company that designs and manufactures telescopes, binoculars, and other scientific instruments, was a SupplyPike revenue recovery customer. After spending over a year with a different EDI provider during their NetSuite ERP implementation, they faced ongoing usability challenges, unreliable workflows, and incomplete automation, at times requiring manual order processing just to keep pace. More importantly, these inefficiencies created a downstream financial impact, with inconsistent data and limited visibility leading to shipment failures, invoice rejections, delayed payments, and revenue loss through deductions and write-offs. By transitioning to SPS Commerce, Inc., Explore Scientific reestablished a reliable operational foundation. With a fully functioning ERP integration and standardized workflows across orders, shipments, and invoices, they gained consistent, accurate data flowing across their business. This shift enabled their team to move from reactive problem solving to proactive management, identifying issues earlier, understanding root causes, and preventing disruptions before they impact financial outcomes. As their operations stabilized, Explore Scientific expanded their use of SPS Commerce, Inc. solutions, adding analytics and system automation to operate with greater confidence and control. What began as a need to fix operational gaps has evolved into a broader transformation, positioning Explore Scientific not just to process transactions more efficiently, but to actively protect and recover revenue. Explore Scientific’s experience highlights how customers are realizing meaningful value on the SPS Commerce, Inc. network by restoring operational stability and visibility. In addition to cross-selling our products, we are unlocking incremental growth opportunities by unifying them. For example, Walmart suppliers using SPS Commerce, Inc. Fulfillment can now recover overages directly in the SPS Commerce, Inc. solution. This underscores the value of the platform approach and enables trading partners to collaborate better along the entire value chain. In closing, SPS Commerce, Inc. is well positioned to capitalize on significant growth opportunities ahead. Our product portfolio continues to advance with AI-driven solutions for both suppliers and retailers, powered by proprietary data that improves efficiency and unlocks meaningful value across supply chains. As a result, SPS Commerce, Inc. is the leading intelligent supply chain network, embedded in the daily flow of commerce, driving automation, insights, and increasingly AI-powered optimization. Lastly, over the past 16 months, we have added seasoned SaaS leaders to the SPS Commerce, Inc. team who bring the operational rigor necessary to scale our product and go-to-market strategy. Today, I am pleased to formally introduce our new CFO. He joined us on March 16, and we are excited to have his expertise on board as we enter this next phase of our journey. Welcome.

Thank you, Chad, for the warm welcome. This is my first earnings call as SPS Commerce, Inc. CFO. I would like to take the opportunity to express my excitement and share my reasons for joining SPS Commerce, Inc. at such a pivotal time. First, I believe SPS Commerce, Inc. is uniquely positioned to capitalize on the dynamics that are driving a growing need for supply chain optimization. Second, with a large global market opportunity, disciplined capital allocation, and a clear path to scale, SPS Commerce, Inc. is well equipped to deliver durable growth, margin expansion, and long-term shareholder value creation. Lastly, and most importantly, having engaged with the management team and many SPS Commerce, Inc. employees, I am truly impressed by the strength of the organization’s culture. I look forward to being part of such an energetic, driven, and highly collaborative team. I share the organization’s strong sense of momentum and enthusiasm for the opportunities that lie ahead. Now let us review our Q1 results. We reported a solid Q1 2026. The core business is strong and continued to show momentum throughout the quarter. However, as Chad called out, we continue to see headwinds in the Amazon portion of our revenue recovery business. Revenue was $192.1 million, a 6% increase over Q1 of last year. Recurring revenue grew 7% year over year. The total number of recurring revenue customers in Q1 was approximately 54,200. Consistent with our expectations, the number of 1P customers was flat sequentially while the number of 3P customers declined by 400. ARPU was approximately $13,550. As Chad mentioned earlier, we are generating cross-selling momentum across our network, and we remain strategically focused on servicing and expanding the 1P customer base, where we see the greatest cross-selling potential for our products. To improve profitability across our smaller customer cohorts, we are in the process of introducing a subscription platform fee to our 3P take-rate customers to better align pricing with the value delivered, while helping offset servicing and infrastructure costs associated with these accounts. We expect this change to increase churn within this cohort, with a projected decline of up to 4,000 3P suppliers in 2026. We do not anticipate this action to result in a material impact to revenue. Adjusted EBITDA increased to $57.9 million, and we ended the quarter with total cash and cash equivalents of $154 million. In Q1 2026, we deployed nearly 100% of free cash flow to repurchase $47.1 million of SPS Commerce, Inc. shares. Now turning to guidance. For Q2 2026, we expect revenue to be in the range of $194.5 million to $196.5 million, which represents approximately 4% year-over-year growth at the midpoint of the guided range. We expect adjusted EBITDA to be in the range of $60.9 million to $62.4 million. We expect fully diluted earnings per share to be in the range of $0.53 to $0.56 with fully diluted weighted average shares outstanding of approximately 37.3 million shares. We expect non-GAAP diluted income per share to be in a range of $1.06 to $1.09, with stock-based compensation expense of approximately $19 million, depreciation expense of approximately $5.2 million, and amortization expense of approximately $9.4 million. As we look to the rest of the year, three dynamics are shaping our outlook: First, we continue to expect headwinds impacting the Amazon revenue recovery business. Second, excluding Amazon, we expect the revenue recovery business to continue to outpace overall company growth. Third, we expect our business without revenue recovery to continue to perform in line with our expectations. For the full year 2026, we expect revenue to be in the range of $796 million to $802 million, representing approximately 6% growth over 2025 at the midpoint of the guided range. We expect adjusted EBITDA to be in the range of $262.8 million to $267.3 million, representing growth of approximately 14% to 16% over 2025. We expect fully diluted earnings per share to be in the range of $2.66 to $2.69 with fully diluted weighted average shares outstanding of approximately 37.3 million shares. We expect non-GAAP diluted income per share to be in the range of $4.73 to $4.76, with stock-based compensation expense of approximately $69.8 million, depreciation expense of approximately $23 million, and amortization expense for the year of approximately $37.4 million. For the remainder of the year, on a quarterly basis, investors should model approximately a 30% effective tax rate calculated on GAAP pre-tax net earnings. To wrap up, I am encouraged by our momentum entering the year. I am excited to be part of this driven team, and I am committed to maintaining the rigor and discipline necessary to scale our success and fully capitalize on the market opportunity in front of us. With that, I would like to open the call to questions.

We will now open the call for questions. Please limit yourself to one question and one follow-up. To ask a question, you may press star then 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star then 2. Our first question comes from Scott Randolph Berg with Needham & Company. Please go ahead.

Hi. This is Ian Black on for Scott Randolph Berg. When should we expect to see the 3P revenue recovery business start to trough?

I can take that question, Ian. I think on the 3P—the way we are explaining it a little bit more is the Amazon revenue recovery side of the business. Right now, that continues on a negative trajectory. It probably troughs somewhere in the middle of this year towards the end of this year. As we enter into 2027, we would probably see a little bit more momentum in that business. But right now, we still see a lot of headwinds in 2026 as it relates to that business.

Thank you. And then you reported some delayed enablement campaigns exiting 2025. What is the progress of those campaigns?

Yes. Overall, our pipeline and activity on the retail relationship management campaigns is quite strong. Some of the specific campaigns that we cited in Q4 that were going to carry into 2026 have now either closed or are near closure, so that momentum has continued. As these programs affect customer count, keep in mind there is some delay to actually run the program and get the suppliers on and initiate the invoicing with those suppliers. We do expect that to affect customer count and be more impactful in the second half of the year versus the first half of the year.

Our next question comes from Parker Lane with Stifel. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking the question. Chad, I think you said tariff and macro headwinds that you started to see in the middle of last year should start to dissipate as we lap them this year. Obviously, we have seen more conflict in the Middle East and some talk about what that could mean for global supply chains. Any thoughts on what your customers could be facing or are facing as a result of that? And is there any belief that, as you look through the year, that could have any follow-through effect that maybe knocks that recovery timeline off of the 2Q that you outlined?

Absolutely. We are seeing the contract scrutiny driven by the cost pressures from the tariffs begin to dissipate. You will remember that most of that took effect beginning the latter half of Q2 last year. We are cautious in watching how we run through the final renewals that may be more susceptible to that on the annual renewal part of our business. As it relates to the broader global situation, we have not yet seen any indicators on that. As I reflect on this situation versus the tariff situation, we were hearing from our customers more directly that the tariffs were a bit more acute to their business with immediate impact on their cost of goods sold, and we are not hearing that type of thing from our customers at this point in time given some of the more global situations that we have right now.

Understood. And maybe one for you as well on the 3P churn you referenced—about 4,000 third-party customers could churn off the platform as a result of the changes you are making. Comparing that to the roughly 7,300 today, what is it about those—are these the smallest of them in nature and most sensitive to cost, or is there something else you would characterize amongst that base that puts them in the category of likely to churn?

Yes. These are the very smallest of our 3P take-rate-only Amazon customers. One, they do not have a high volume of recovery opportunities for us, so they are very low revenue customers. When we introduce this subscription fee, which is quite modest at $19.99 a month, we could find ourselves in some situations where they periodically process a recovery but do not feel there is enough volume to pay a $19.99 per month subscription fee. That is how we arrived at our churn numbers. They are very small revenue customers. In fact, we have a cost to service those customers—platform, monitoring, all those things—so we think there is some benefit to us from a cost perspective to not service those very low revenue customers if they do churn as a result of this platform fee.

Our next question comes from Dylan Tyler Becker with William Blair. Please go ahead.

Hey, gentlemen. I appreciate it. Maybe, Chad, starting with you on early takeaways from the MAX program and how customers are implementing it and seeing value across the network. Any incremental color you can provide? I know you had a couple of ROI case studies. Also, the opportunity outside of the prebuilt agents you are spinning up and offering to clients—what about clients building their own agents over time? How do you think about custom-built versus prebuilt deployment over time?

Great question, Dylan. In the MAX beta, we have 400 customers now, and the feedback has been particularly strong. What is interesting is where they are finding value—combining their data in our network with the proprietary databases we have on major retailers’ and distributors’ supply chain expectations for their suppliers. For example, the differences in rules for shipping an order to Target versus Walmart or Costco. When you combine those nuances with a customer’s specific data, it allows you to answer questions like the difference in time to acknowledge an order from Target versus Walmart and how that affects workflow. A good example is Siete Foods, where MAX helped them determine they had less inventory than they believed due to transactions with a supply chain partner involving detailed lot codes and expiration dates. MAX helped them identify and correct their inventory position so they could make more commitments to sales—hard ROI where MAX helped with inventory and generated sales. On customers building agents versus using agents in the tool, our approach is with the MAX Connect product we have launched, which is an MCP endpoint that gives customers access to their network data as well as our proprietary databases around retailer supply chain expectations. Some customers will utilize it within the product itself, but others will want agent-to-agent interaction, and that is where MAX Connect fits in and can handle agent-to-agent communication.

Fantastic. Thank you, Chad. And maybe for you on margins—understand the third-party dynamics, but the core business continues to track relative to plan. Historically, we talked about gross margin as a big lever, but it sounds like you have other initiatives underway to improve unit economics of the third-party piece. How reliant is the 200 basis points target on growth, and how many levers do you have to sustain that trajectory as we navigate these idiosyncratic dynamics?

Thanks, Dylan. Some of the savings on the 3P side are a pretty small impact on EBITDA and our ability to drive the 200 basis points. A couple of levers you already saw in Q1 with the ability to overperform guidance. We are seeing initial success on time to onboard customers and how much more efficient we can be using AI internally. There are efficiencies on the product engineering side—our ability to iterate much faster. You will see levers across sales and marketing, R&D, and G&A throughout the year. I am working closely with IT on where AI can add the most value internally. There will be more to come on future calls on where we are leveraging AI to drive margin.

Our next question comes from Christopher Quintero with Morgan Stanley. Please go ahead.

Hey, Chad and team. On the medium-term targets—historically at least high single digits—you are guiding Q2 to 4% to 5%. I understand the Amazon headwinds. Is high single digits still the right framework, and how should we think about the path back to that growth rate?

Yes, we believe high single digits over the mid to long term is the appropriate growth rate for the business. The headwind is very specifically from the Amazon revenue recovery piece. The other portions of our business—revenue recovery without Amazon—is growing faster than the overall business, and the business excluding all revenue recovery is executing per our expectations. If you take out that headwind, you are back in that high single-digit range, which is consistent with our mid to long term expectation.

I will add a couple more data points. On Q2 year-over-year, there is a comp dynamic: Q2 this year has the first full-year comp for Carbon6. That growth rate is probably not directionally where we are headed. If you look at our full-year guide and do the implied growth rates for Q3 and Q4, you see pretty strong reacceleration. Lastly, if you remove Amazon revenue recovery from Q1, the rest of the business is already growing high single digits. There is a huge part of our business growing high single digits; you just cannot see it because of the Amazon revenue recovery headwinds.

Our next question comes from Analyst with Citi. Please go ahead.

Thanks for taking the questions. On approach to guidance: we have seen revenue come in towards the lower end of the range a few quarters in a row. Any learnings or shift in approach toward embedding more conservatism? It sounds like spend scrutiny is improving—has that been baked in or could it be a source of upside?

There is no major change in guidance philosophy. On the annual guide, the Amazon revenue recovery business is posing a strong headwind, and we wanted to make sure we were factoring all the risk we are seeing in that part of the business. If you take that out, the rest of the business is in line with expectations. We saw momentum coming out of Q1 into Q2. On EBITDA, there is likely to be upside—we raised the full-year guide and are exploring other AI use cases internally. Overall, no major change in guidance philosophy.

Got it. And on the Amazon revenue recovery pricing changes—can you give details on the timing of the rollout and how churn from the subscription fee translates through the metrics so we can get a sense of that 4,000-customer number?

We will begin rolling that program out into Q2, and the rollout will go into Q3 a little bit. The churn may happen over time, so even though we are rolling it out in Q2 and early Q3, the churn may come throughout the year.

Our next question comes from Lachlan Brown with Rothschild & Co and Redburn. Please go ahead.

Appreciate that we are cycling off the second quarter of 2025 where we began to see lower document volumes within Fulfillment. How have these trends been as we exit the first quarter, and what is your confidence we will see strong year-on-year growth in the volume-based component as we head into the coming quarters?

We have seen a dissipation of the headwind related to contract scrutiny, which had customers looking at their document plans and any trading partners they could reduce from their contracts. As we have moved into 2026, we have not seen the same level of pressure as in 2025. As we engage with customers who have renewals through the year, that gives us more confidence about that dynamic in 2026 versus what was a challenge in 2025.

And with those 400 customers on MAX, how has consumption/usage been through the beta stage—over or under expectations? Has usage been helpful in formulating the monetization strategy for MAX?

The 400 number was above our internal targets, which speaks to the communication to customers and their ability to see benefits even in beta. As with anything, some customers have heavy use cases and others are smaller with less volume. All of that is informing how we plan to monetize. Our current thinking—although not final—is that we will try to include MAX in a lot of our base subscriptions to get customers using the feature, with usage throttled somehow, and then have an uptick in subscription based on incremental usage.

Our next question comes from Joseph Vruwink with Baird. Please go ahead.

On AI increasing development velocity—you spoke to that inside the company. What are you seeing outside—competitors wielding that capability as well? To what extent is AI making automation easier to build such that suppliers who historically looked to SPS Commerce, Inc. might now consider doing it internally?

There is still a fundamental difference between a do-it-yourself approach and being in a proactively managed network like SPS Commerce, Inc. The majority of competitors facilitate DIY connections—good tooling and now AI tooling to help manage maps—but you still need to manage it yourself. We do not believe most customers, especially small to medium, will get the efficiencies from DIY that they would in a managed approach. In a managed network, one change a retailer makes can immediately cascade to all our customers, which is more efficient. Also, our average revenue per customer is about $13,000 per year; if a customer is dedicated to rebuilding their enterprise IT stack, they will likely prioritize bigger spend applications before a $13,000-per-year connection to the SPS Commerce, Inc. network, which gives us some protection.

Thanks. A clarification on the subscription change in Amazon 3P. You said it will yield logo churn but not a material revenue impact. Yet the revenue guide is coming down and relates to revenue recovery. Are the headwinds absorbed in the Q1-to-Q2 timeframe, and is that the source of change?

These are two different topics. Specific to the subscription fee and churn, while the count seems high at 4,000, the revenue from those is quite modest. For those that remain and absorb the platform fee—again, modest—there is potential for even a small revenue uplift. Netting those effects out, the platform fee and related churn are not material to revenue. The reduction in the guide is related to overall headwinds from the Amazon space tied to policy changes Amazon has made that reduce the amount we can recover for customers. That is separate from the introduction of the platform fee.

Our next question comes from Matthew VanVliet with Cantor Fitzgerald. Please go ahead.

Thanks, and welcome aboard. On the product roadmap, how has the ability to get product to market faster using AI tooling pulled forward items that were “nice to have” but not high enough priority before? Do you think you will roll out functionality that helps expand that $13,000 per-year average customer spend?

Absolutely. A few key areas drive higher ARPU. In revenue recovery, we continue to execute our strategy to build out to more retailers—the more retailers we cover, the more market that opens up. We are making enhancements to our Analytics product and underlying technology to provide more data access and AI capabilities, which we are optimistic about. We are also advancing strategies around ERP connections—for example, our longstanding partnership with NetSuite, where we are investing in technology so customers using NetSuite together with the SPS Commerce, Inc. network can get more full features. These are examples underway in our product roadmap that have benefited from the velocity we are experiencing using agentic engineering.

Overall, we are focused on running the business and buying back stock. We bought $47 million in Q1, and the board has authorized up to $300 million in total. That is our major focus right now—run the business and buy back shares.

The most efficient use of our capital today is buying back shares. Over the long term, we view M&A as part of our strategy in three areas. First, further consolidating in the EDI market—there remain players, and every time we add an EDI company, customers benefit by moving to the SPS Commerce, Inc. network, and those have been efficient transactions. Second, broadening our product solutions for supplier customers—as we drive more cross-selling and build the discipline into our go-to-market teams, we will gain more confidence over time to add to the product portfolio for cross-sell opportunities. Third, activity outside the U.S. has been strong, and as those businesses scale, there could be longer-term opportunities to gain more scale with acquisitions outside the U.S.

Our next question comes from Jeff Van Rhee with Craig-Hallum Capital Group. Please go ahead.

This is Daniel on for Jeff Van Rhee. Regarding the pricing increase for 3P customers, what was the timetable for deciding on that, and to what degree had it already been anticipated in guidance?

Strategically, if you look at revenue recovery, going back to SupplyPike—SupplyPike was a 100% subscription business with broad retailer coverage, a lot in Walmart, not much in Amazon. We saw an opportunity to quickly gain the world’s two largest retailers, Amazon and Walmart, by acquiring Carbon6. Carbon6’s revenue model was more of a take-rate, where we took a portion of what we recovered for customers. We have always had two revenue models, and we believed portions of the 100% take-rate business could convert to a more predictable subscription model or hybrid over time. That has always been part of our thesis. We decided to start with the very small 3P customers, particularly those that, because they are small in revenue, had cost-to-serve questions relative to the revenue we were getting from them.

On guidance, as briefly mentioned earlier, it is revenue-neutral. We believe there will be some churn and these customers are low value, but that will be offset by customers that accept the fee. From a guidance standpoint, assume a net zero impact to revenue for the rest of the year.

And as you are coming on board, what opportunities drew you to SPS Commerce, Inc., and what are your top priorities stepping into the role?

My focus areas: first, ramping on the business and industry quickly so I can help drive strategic decisions. Second, keep driving EBITDA—there is a strong track record, and I want to ensure we stay on that course. Third, there is real opportunity on the AI front internally to drive leverage, and I will be laser focused there. At the highest level, the network we have built between retailers and suppliers and our ability to use that data—plus our proprietary data—and apply AI is a huge opportunity. We are early with MAX, but there is a lot of upside as we introduce AI into the product set.

Our next question comes from Mark William Schappel with Loop Capital Markets. Please go ahead.

Thanks for taking my question. There is a new Chief Commercial Officer on board for a little over a quarter. With the recent expansion of your product portfolio into revenue recovery and AI, how is the commercial team streamlining the cross-sell motion to ensure these products are effectively adopted by your current client base?

Historically, our go-to-market motion focused on acquiring new customers. As we established our market-leading position and moved further into our TAM, there is still opportunity for new customers, but the larger driver of growth is expanding ARPU with existing customers—first by expanding their total usage of the network, especially for Fulfillment customers where there is opportunity to add more connections and features, then cross-selling revenue recovery and Analytics, and, as we move into monetizing MAX, cross-selling MAX. In response, we have focused sales and marketing on engagement with customers and full lifecycle relationships, making investments in treatment strategies to retain and grow customers. There is a new operational rigor that our Chief Commercial Officer and our new Chief Marketing Officer have brought to expansion within existing customers while simultaneously maintaining a strong motion, especially on the retail side, to continue adding new customers.

Our next question comes from Nehal Sushil Chokshi with Northland Capital Markets. Please go ahead.

Thank you for the reminder. Good to see that the guidance implies an inflection of overall revenue growth in the back half of 2026. Given the core business, excluding Amazon 3P, is already growing high single digits, what is the driver for the inflection implicitly projected here?

The right way to think about the dynamics is in three parts. First, the Amazon revenue recovery portion has strong headwinds based on policy changes Amazon has made, which reduce the amount we are able to recover—this drove coming in at the lower end of our range this quarter and the reduction in guidance. Second, all of our revenue recovery business excluding Amazon—for retailers like Walmart, Target, Lowe’s, Home Depot, and others—is growing very nicely with great cross-selling momentum and is growing faster than the overall company. Third, our business without revenue recovery is growing consistent with expectations, and we are seeing improvement compared to 2025—downsells and contract scrutiny are not at the same level, and our forward visibility for 2026 is positive.

So the core business is inflecting up because you are anniversarying the scrutiny in Q2 2026?

Yes, that is a large effect. We are lapping some of the negative effects from 2025, which appear more one-time in nature, leading to a reacceleration in the back half of 2026.

We are sticking with the annual guide we gave you. If that changes throughout the year, we will update you, but for now we remain within the guidance provided.

At this time, there are no more questions. This concludes our question and answer session. Thank you for attending today’s presentation. The conference has now concluded. You may now disconnect.