SPSC

SPS Commerce, Inc.

HALAL

Score: 90/100

stock

Is SPSC Halal?

Cloud-based supply-chain-management network connecting retailers, suppliers, and logistics partners — a permissible software business with a debt-free balance sheet.

What You Should Know

SPS Commerce, Inc. is a publicly-traded provider of cloud-based supply-chain-management software, operating a retail-network platform that automates electronic-data-interchange (EDI), order, fulfillment, and analytics connections among retailers, grocers, distributors, suppliers, and logistics firms. Cloud supply-chain and trading-partner-connectivity software is a general-purpose technology activity that is unambiguously permissible at the activity level under standard Sharia methodology. SPS Commerce maintains a debt-free balance sheet with a substantial net-cash position, so it comfortably passes the debt-to-market-cap screen; the primary financial-screen consideration is the interest income generated by its cash and investment balance, a small portion of which should be purified. Subject to verifying ratios at the time of investment, most major Sharia advisory boards classify SPS Commerce as permissible with purification of small interest-income components.

⚠️ Concerns

•SPS Commerce holds a substantial cash and investments balance that generates interest income — verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of any returns
•Debt-to-market-cap ratio should be confirmed against the 33% Sharia threshold at the time of investment, though SPS Commerce typically operates debt-free with a net-cash position
•SPS Commerce periodically acquires complementary supply-chain businesses — acquisition activity can affect the balance sheet, so the financial screen should be re-verified following material transactions
•Receivables-to-assets ratio should be checked against the preferred board's threshold at the time of investment