STMP - Earnings call transcript Q1 2018

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Operator

Good day ladies and gentlemen and welcome to the Stamps.com Inc.

First Quarter 2018 Financial Results Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer-session. And instructions will follow at that time. reminder maybe a As Instructions] this recorded. call [Operator introduce for of today's would now Suzanne host to like Director I conference, your Park, Finance. Senior

begin. may You

Suzanne Park

Thank you, Sarah.

the call is Kyle follows. McBride, Carberry, On The as is and CFO. today's President; Jeff CEO; for agenda today call Huebner, Ken

to to long-term an of factors, and and talk review or will uncertainties. partnership. our we'll which involve outlook. products, under products, complete results of anticipated includes and deferred first, Securities undertakes on Private of report acquisitions on Stamps.com our company's its -- in and will no Commission benefits provide provide about obtaining XX-Q utilize We'll Harbor per Exchange some the and those are of ended any or XX, risks tax including our its events. of elements after reports The we December Safe Stamps.com, results X-K. business release to net million successfully forward-looking integrate or forward-looking non-GAAP for the finally, compete on the occurrence Form economics of to or XX-K year its on company's assets hereof quarter XXXX. financial its or fiscal all ability reflect any net with Securities Act circumstances our discuss We our reports ship the current include Important XXXX, on including and Form ability fully statement. publicly call from maintain realize first on will time-to-time financial $XX to the first obligation by its the And GAAP XXXX, was regulatory of $X.XX. Safe unanticipated But for to reflect strategic past was desirable the annual of our materially the today and quarterly comments Reform and about Form statements, forward-looking company the financial diluted to income statements release metrics events revisions income approval in outlook. which results GAAP the including results the We'll In could date future cause the update results, discuss when the the made Harbor business differ share investments, measures. actual the model XXXX. and statements timing quarter financial and detailed from statement filings This Litigation maintain

$X.X expense measures expense million financial of and intangibles compensation non-cash non-GAAP issuance and million costs. Our exclude of following quarter items. non-cash first $X.X stock-based amortization the of acquired debt

non-GAAP non-GAAP $XX.X income also in include the a additional of measures million quarter. financial expense tax Our

numbers will any do revenue the GAAP see from Postage. discuss the include Additionally to non-GAAP Please investor and and metrics measures mailing Customized we shipping not service today posted XXXX revenue XXXX and measures. insurance on reconciliations our corresponding product of financial first our website for quarter revenue, and release include our revenue earnings

over the Now, to let Ken. hand call me

Ken McBride

first quarter EBITDA our year-over-year. was which you XX% of which up of XX% million was which us share results, $XXX.X announced and up fully adjusted per which non-GAAP year-over-year non-GAAP Thank $XX.X up today. $X.XX, year-over-year, Today you, GAAP Thank Suzanne. included joining income we was million adjusted diluted for revenue XX% of

performance. are our very with We financial pleased first quarter

Paid growth by Mailing million revenue Revenue Customer. up growth $XXX.X and the XX% turn of our business. was in now that customers the shipping driven detailed paid the both and the was growth Average year-over-year. or was first quarter me in in Let The to discussion Per ARPU

ARPU number but our more a has revenue paid which shift customers. versus XXX,XXX. customers each Paid strategic growth growth has where been of growth focusing of has this is in in with up in of driven were Our the shift Shippers customers With it quarter X% driven in consistent by total focus, paid modest higher our lifetime numerically value. paid first XXXX. fewer are on was customer acquisition than much metric The this been customer by

Our average quarter have the rate that's monthly first over we churn past was during quarters. seen X.X%, rate churn the with consistently the several

growth first rev business businesses or We volume our dollar on XXXX. our metric lower the will benefit average quarter to focus billion, to customers. on trend in The long-term was printed has continued volume, and quarter X% additional the that to or revenue of postage small of in churn ARPU we of per process paid monthly shipping, first the customers $XX.XX our in of process e-commerce up traditional note that particularly see quarter central XX% business. continues non-packaged subscription continues from customer XXXX. commissions churn significant rates our printed position tend total APRU mail also tied behalf traditional nice shipping of steady payments first The volume in Total behalf shipping of benefited both collected higher that exhibited partner a a volume higher than shipping the customers. share, growth compared areas to postage who Shipping transactions the which that have versus our and first was quarter and includes on generally our decline. of downward customers, X.X we With growth to shippers. packages and the versus fees from the was pay small The was up focused

Of shipping total one-third half of than billion For our collectively packages X estimate systems. and more and for number, total one class than XXXX the over U.S. packages first processed billion represented mail through We that packages whole mail all USPS X more packages. a as printed of customers are all our labels in packages. over pieces mail that

some to for me the and our proud business on that, are discuss of for Our we're the With of financial now and continuing generated success team very shareholders. XXXX. continued management employees we initiatives our let focus

have scale in and a on time sales significant to years seen the a shipping we average focus great to plan value to focused acquisition life with customer in XXXX the on marketing our With that XXXX. significant continue With over e-commerce and our of past we acquiring a expense increase our we high shipping customers. of of we up investment, our continue several shippers. First, our plan versus marketing focus scale is sales the A return acquire. volume and total on investment other to on

expand features to continue to our solutions. plan of we core and functionality shipping the Second,

of support providers, fulfillment One the propositions we our of solutions, sales value marketplaces channels, number including third-party e-commerce integration tools. that key of the and

additional quarter, first integrations. the added new several During we

of continue adoption that we customers. We provide proving see our And mobile add strong is brand. value platform our under our to great to ShipStation also that

with available engine such e-commerce API, marketplaces traction our capabilities all an interfaces. the are our market into We as also to continue of user of which leading and ShipStation tools solution third-party the solution form see API ship offers that own integrating in great that the their

to During marketing API. integrations we continue marketplaces industry channels, we've will and XXXX, selling we engine tools, platform. continue new also and new with developing to continue will And our e-commerce develop ship our leading mobile develop

supporting Third, we feature customers. plan new e-commerce continue to developing

solutions new we two XXXX great and During and inventory customer called launched built management marketing.

the with those we already charge further develop fees great base. investment acquire customer to solutions, quarter, solutions to continue We first to see and in and sales solutions lifetime customer increase we customers. to allows service traction we these the so and for additional us values new leverage shipping within have both During the this our easy made our marketing

and solutions drive adopt these We that results also lower thus thus and solutions greater customer that stickiness customers greater believe from our churn. value in

During features inventory to solutions. plan in XXXX, continue our enhance to marketing we the customer management our and

we're access Program. enhanced Through international existing to called includes portion discounted is the our program for on well postage a carrier free continue as international and Global revenue a to benefits. of program package international USPS shipping our delivery focusing new We a launched and on for receive this other USPS' through to Advantage in a new marketing. the customers Fourth, new do represents initiative We The free which as will those utilize we also insurance, Advantage pickup, share procedures the continue grow us, and going partnerships can speeds, work international customers. label market The simpler volumes. customer to customs we rates, such companies private rates. upgraded solutions whereby Program great USPS monetize program solutions their Advantage Global recently opportunity that shipping our as a as work offer Program discount tracking, expanding Global benefits international our

Canada in during respective on nice the able introduced share our solutions marketing Also increase the with saw the revenue Global area, developing in are Post, After packages first and We Advantage Post, revenue under in we our to quarter. these we incremental Australia USPS Mail Program a already countries. international work We are program. and under UK, integrations those in Royal completing partnerships international in markets. the ShipStation earn

we've also Amazon to countries have e-commerce order channel Magento, support Shop there. the the Press Open support including done an to in selling We done as well. WooCommerce, Square with that the in three BigCommerce, UK integration also integrations Card and customers in Space, And all

we in already Australia. and quarter, to-date, the those During several customers And to customers the thousands countries. continued have new Canada of UK, gain first we acquired in

over that, throughout efforts ramp for Jeff to will and With a discussion our the to We call marketing continue let now of our countries development financial the me business in results. hand those detailed XXXX.

Jeff Carberry

first Ken. financial financial The today our results. includes discussion measures. you, quarter of review Thank now non-GAAP We'll results XXXX our financial

a increases The and and Mailing was year-over-year revenue year-over-year up was in revenue was customers measures of earlier. found Investors was our in QX was release earnings As our growth XX% and our and revenue by the QX be estimate from of Suzanne strong to that quarter QX that and on derived measures as million $XXX.X in our in mailing and paid excess that of up 'XX. XX%. shipping in as in revenue was We versus revenue Ken described, metrics versus by XX% mailing percentage GAAP 'XX. growth growth our Total revenue of shipping The million in grew year-over-year non-GAAP reconciliation in and website. driven financial strong shipping and ARPU, driven the a XXs, first shipping mid can in in discussed corresponding was primarily our $XXX.X XXXX business. customers total

sales Mailing mailing of lower QX businesses. as of including in experienced also the and was estimate margin in a costs international and shipping of other innovation to year-over-year the in attributable support server derived single-digits. year-over-year margin can margin of that related QX mailers scaling from profile XX.X% investments and approximately low and decrease The components. versus was grew our the a in in G&A 'XX. R&D in XX%, revenue gross revenue and and in the total revenue percentage continued was have gross than our gross marketing, shipping that XX.X% and our We Program to our growth offerings primarily which our our mailing shipping the to increases Global Advantage services QX strong We

of to sales Ken innovation. marketing, initiatives was the new in balance growth in XXXX continue QX quarter earlier, have planned be to in see diluted up and $XX.X rate estimated of shares our expect particular, discussed was million in those and higher per the in we and income in year operating Non-GAAP $X.XX anticipated pace G&A and fully $X.XX would $XX.X XX.X% relative 'XX. our QX the rate initiatives throughout drive 'XX. reduction from full and number invested to the In calculation elevated for year, to order at a of R&D to to the for which of QX, for XXXX. in invest each was primarily exercises cash share by to changes from margins 'XX XXXX adjusted As partially our Non-GAAP a tax mandatory XX% was absolute associated levels up and dollars we ended in year-over-year from of 'XX. driven XX% and million in we Fully was and the EBITDA by initiatives that expect share investments offset in $XX for repurchases EBITDA million a offset per accrual attributable used QX QX, year-over-year benefited 'XX. capital than quarter. estimated adjusted of costs in XX% with of million EPS gross We that expected option quarter. 'XX. QX The and $XX.X headcount 'XX. factors cash EBITDA in investments and net lower in XX.X% debt was versus QX to income and primarily versus QX quarter was exercises year-over-year flows million Adjusted versus and our sales QX previously in associated up that by was as the The with of end in international previously driven for and higher tax was with margin increase diluted of lower XX.X% of the share versus of than margin cash was working anticipated of QX $XXX the the and QX XX.X% XXXX operating offerings, discussed, in lower expenses QX by million operating of scaling was $XXX reduced decrease was strong hiring associated option with and was ongoing Adjusted up at repayments. cash the first 'XX partially from

excluding million costs million. total agreement debt resulting QX required under During credit made we issuance $X.X repayment of $XX.X the in of debt a principal

company approximately stock of at effect repurchase the the the its April date. take repurchase this million year, to the company XXX,XXX of shares will plan of to approximately quarter, and of total that six $XX $XX share first approved a over up On a May current following year expiration months the Board the repurchased million. of of XXth During new XXth authorizes cost this effective on on Directors plan

turning Now $XXX range million the we fiscal to XXXX in revenue continue million. to guidance, $XXX of to expect be to

growth to on expect our we to single-digits mid-XXs revenue in business. server continue revenue XXXX expect range shipping year-over-year. from also be We e-commerce continued revenue to to low expect the particular, driven low driven our in to our would grow mailing to shipping our shipping and continue We derive by growth focus in to would In our year-over-year. the to mailers flat be range

not would high saw expect from year-over-year we a we expect contribution Finally, XXXX. to higher XXXX postage in in customized would to down orders that than our repeat necessarily expected as revenue volume be we

common expect be and higher expect year of the revenue to to a relative initiatives of each XXX to rate in than expenses basis to operating to year XXX fruition. order discussed of points see On We in marketing, XXXX for to side growth the the earlier a to and operating greater invested dollars to would of basis, see total to we QX expenses the R&D absolute expect relative increase would revenue and in XXXX. this to of approximately percentage sales G&A in balance bring as we we quarter increase

expect last impacted incur. expense we G&A we expect As discussed would and quarter, see discussed, we to we particularly tax to continue would given the which to sales

EBITDA expenses. in to We year a continue operating to mid-XXs, third holiday adjusted our second quarters quarters. increases expect with headcount to margin combined $XXX investments in EBITDA revenue and the million to slowness associated third second sales sequentially margin with EBITDA shipping the fiscal of range $XXX pressure both the and fourth strength in This margin quarter expect full EBITDA with our investment million. due XXXX associated the seasonal headcount the with traditional our would QX adjusted reflecting implies We trends. tax the the and in We seasonal in expenses be believe higher in

tax expect of of be non-GAAP to income for expense estimate We will XX.X% non-GAAP XXXX our pre-tax previous which XX.X%. approximately compares

quarter. for option As by we expected rate in exercises of the discussed reduction the was earlier, first XXXX driven our

number experienced balance tax current level from the factors the rate effective on XXXX that the our year option full estimates of of year. Our could based exercises for a differ of including we

million of XX.X in be We shares and to expect XX.X in XXXX. a million fully diluted range

that, to a guidance be over our and $X.XX that of expenditures to compares range income finally, per expect approximately And call to diluted $XX.XX capital $X.XX on we $X for expect million to between million hand in some our Kyle We share XXXX. adjusted fiscal be to $X With me to to XXXX $X.XX. comments long-term outlook. our in and fully let non-GAAP XXXX the initiatives additional

Kyle Huebner

four achieved focus increased significant the our five transformation in our With years. our Jeff. shipping, acquisitions, past over Thanks, and business on a we've

to We shipping on future. focus our for to the foreseeable expect continue efforts

shipping capitalize been our growth in Growth the the in e-commerce to e-commerce base running tailwind mid to high-teens. and are provides e-commerce a in opportunities. year-over-year well natural has to We positioned growth line on very US

grow above have growth related to shipping demonstrated typical ability several rates the revenue our e-commerce We reasons. the for

the are e-commerce largest our suitable sellers. skimming sophisticated solutions effectively our the universe of suite companies for the and and attract the of cream solutions First, the successful the need at sellers top e-commerce e-commerce provide the that which into top, we of creaming off as solutions we largest most

of e-commerce outside scope inventory shipping offer we new and things the areas customer expanding mentioned we management marketing like Second, are Ken traditional and that what the including earlier. of features into

solutions countries. are multi-carrier destinations international for our to and platforms, customers and we focused are our domestic volume expand international business USPS new our solutions other we to Fourth, using our expanding of with Third, potential opportunities relationships carriers. ship traditional both for to US within core outside and going international sharing new able their revenue with outside with

discussed Jeff in of of the pass XXXX. excess be last grew XX% of we This acquisition growth QX revenue continues year-over-year. our and all earlier, As QX related organic anniversary as shipping in to

So ecommerce faster much we than already overall early our even growing market. of very the with state initiatives, the

XX% Our to and able will shipping five year I we revenue is expect rate through and mailing growth that be we have outlined, initiatives and exceed the that target target. Ken

is new revenue in our opportunities to priority the growth. investments increasing and maximize business main long-term Our current strategic

expansion New require and investments beyond within growth. drive growth investments and revenue initial opportunities upfront in generate shipping subsequent to order e-commerce expanding such international revenue as to

maximizing revenue margin of adjusted over EBITDA growth the strategy expansion. long-term our we So long-term, expect the

are by it the excited are open increased shorter reflect our expect for we making. In EBITDA summary, the the to of investment And we'll in our for questions. term up to forward level we strong future. with results we that, adjusted look delivering continued performance and currently However, great margins

Operator

Thank you. Instructions]. [Operator

first Our with Riley. question B. comes Kevin from Liu

is now open. line Your

Kevin Liu

I with a gross if sort some quarter. revenues of sort was pass-through new impacting just services hoping, could the the wondering, or of expansion little margin you elaborate But had in that of any you was were that on the like bit more postage bit. I any It number? relationships seem in carrier international a that came

Ken McBride

obviously initiatives last as international in So along of them a the on further others. look with for global call, the terms we mentioned we advantage with

except or The rather with Advantage bump So associated Global nice our what quarter can first program from a than be margins. from that that saw existing Program. margin less certainly

you a As are year XX% attractive. know very, clearly, from And margins last little were still range. EBITDA the bit lower margins the in very

seeing servicing EBITDA you're terms gross of So the really on margin side. is in side and

the really first Program into Global since of seeing initial a You impact good of introduction step course. Advantage the

Kyle Huebner

just mentioned And I add as to Kevin.

upfront costs period, lower X-year that of being inflection start-up over you launching initiatives are as scale that you get these that. of the time over of in revenue initially costs a additional a operating as point, that inflection goal in some have with there and to margins these you programs ramping realize point and and benefits you're result Some but get costs beginning the the scale build and the

Ken McBride

Kevin. It's a point good

growth go the seen Those financials, you some historically in directly point If to gross business. efficiencies kind margins. in scale of to obviously to

it I at historically that context will in Kyle gross scale to mentioned. look think margin, back you when think I So step our comments

Kevin Liu

hoping we shipping themselves. Amazon trying I to topic. eBay's kind pricing more Prime capture separate things as flexibility a on or might just feel, of certainly bit you They're you Guaranteed have, program of Seller then could at a And for little Fulfilled understood. like the Delivery. economics look comment was you Yes, the on

easy your things you guys, are you the for make to for hand, On trying customers. as other possible as

may So sell these ensure the can you them of about to still out in a them return of you're programs? the access how while balancing earning economics perhaps enable good your to are capabilities thinking customers kind that you that on giving

Ken McBride

as last Sure. Amazon programs bit Yes of We to these and adds nice eBay our customers. value a I think little about looking at are we kind talked from really quarter. new

with shipping customers Amazon those like us. things Amazon programs or the are program or eBay benefit other come extent out, the or to the benefit So to that to

solution as possible order those is So just to to that provide make looking strategy as for. our available our to the them solutions readily customers they in typically are

Kevin Liu

I from pay guys to you someone themes those to for question your if offering, transaction like customer kind want that they guess Do uptake that Fulfilled for extra your the ensure that if charge? I to capability, are base mean could Prime, have on do they ShipStation guys you Seller further fees. that transaction wants of going I have get

Ken McBride

very seen we're we uptick the incremental I doing solution for that and started fee Yes, nice opportunity started a to saw that believe about a add something saw actually customer. We -- small nice year providing to that the and we an we potentially from the that small capability was we've ago opportunity -- it.

Operator

Thank you.

Our George from next Craig-Hallum. Sutton question comes with

Your now is line open.

George Sutton

have your capital allocation a question, big I given flow. cash strong position Guys cash and

contemplated I you but along I'm am of million build the you've just opportunities. if M&A? something you a obviously that number could accelerate encouraged are thinking you necessarily about those am seeing side. on of I not So aggressive you lines? $XX through more Are this things wondering And buyback some the what see pursuing curious buy are

Ken McBride

Yes, opportunities in out the M&A be about are market. specific I we think don't generally comment seeing may speaking there we

point We haven't to continue this been company finding to an be But acquisition a and potentially we one us. open be find able at acquiring to strategic that to may

Kyle Huebner

Yes, I to would just that. add on

on you I the think is dependent year do that have in not are an realize acquisition seeing place we order build goal. we so in our to strategically path finding are five what that

that also to out that we something But to we our acquisitions certainly path where fit will build right feel our more successful valuation, that right with be means open right look that's it business, opportunistic. and so then the be in the it's we if fit, model, as the considering. makes like we we acquisitions Ken something strategic opportunistic are place mentioned and business have And find so and a that the

Jeff Carberry

George, would options I to allows one The the us for cash. really that the model, business strength -- add, given is the the in pursue multiple

has buyback disciplined been approach, cash. a the historically repatriating So long-term

As cash opportunities well as potential organic acquisitions. reserves fund for cash and to for sufficient generation investments growth operations, as

to I with think we're pursue well multiple capital have. position the pass we structure

George Sutton

did you've you spend planned some accelerate what spend of necessarily new some what planning more the just in curious has and against again given past to like thoughts not had you you in there? of the of like originally to spending increased sort I'm these it programs learned opportunity to sounds confidence the an of quarter sounds that promote It some aggressive of those. you're curious

Ken McBride

related mentioned And can there those highly candidates in longer finding initially of expect. I you which qualified that for can some investments are headcount sometimes a you take lot expect as of initiatives than principally headcounts that, that the investments. goals

as expense So headcount perhaps the more quarter and are strategy. my you'd There comments to relates little such in definitely and as it expenses of that to driven expect first of around as a a than around expected. change opposed spending shifting less a

So of than any issue timing are a about perception bit shift opportunity or on reflects our excited doesn't it. anything in but else, more how we the

George Sutton

providing customer term your some capabilities. Last customer If of marketing. have customer I'm longer bases? across call I'm about is thoughts and those customers there the curious, from question management substation to it inventory these

Ken McBride

Yes.

focus So and management marketing. customer inventory the with initial

As our we organization. solutions develop those within ShippingEasy

this and including and to customers base, ShippingEasy marketing out those those at customers. existing our new And base be really we point rolled customer so

that understand, are as the to solution. complete open what we new is focused is sure so have goal need adding in things And really features customer needs out. on the we them, we we to the see ultimately order that making And to

participation those the well. make to So ship but just customer for and customer and also ShippingEasy base, [indiscernible] its not as base across and available solutions Stamps.com

Operator

question with comes Allen Sidoti. from next Klee Our

now open. Your is line

Allen Klee

that Any and hires you some how of of new you. Post to thoughts of out on the initiatives Office, just play Board think for potentially Postal the or impact Thank the thoughts U.S. you for color the to of could review guys? U.S.

Ken McBride

Yes. Sure.

the how while, confirmation nominated three a their that's in like out, looks of Governors had last may hearings. they, taken So And Trump Board it's fall. it administration but playing of finally terms

the you Governor Deputy the had to than Governors recall As were There and Postmaster may or outside Board Board General General has those Board no Member. Postmaster a postal other of other of service Governors. of not

are time. appointees first Board some the in to So the join these administration three Trump by the

be choices. get there when that confirmed. happen of candidates But than the in shortly they on on with them some directly So the it more good have effectively vote of experience They thought the to hasn't that, we're and We and new been seem we're all world as -- expecting Board others. will postal a positive Governors three There we by appointees large, were but here. yet happy that.

Force, In view. their think terms of he Task the Trump -- I what the you was mentioned referenced

from understand something it's XXX then are consider too whether a a they where Agency really business basically in deadline April really out as do at and profits effectively was many whether focus past it's of That process Executive is they business fact triggering model. far financially in viable task of task forces in the President the USPS. the on, Trump basically the up area And Order to model third which force to days the that and to signed the of Order. of set -- that the that has So had date trying force moved Executive US which private Setting have looked the the task the sector. going

the three a chair force happened. think such large I of a a close already that task complex appointed and there chair to is situation. far it's So review force We but month -- not lot complex and understand to short has a been too has by problem and task been a months

out and come the hoping result we such to -- a not passed, task and the from lot that is by frame we time change of will with large short going clear but force that So this a already something of are positive force. not are month a task it's

Allen Klee

have multiple one you number bigger brands solutions. market brands gaining going the that, Do just more in think through you of may and at then acquisitions And picture them doing point by be of value there's reducing now whatever? Okay. of of or with multi-carrier ShipStation you've some efficiencies to -- like

Ken McBride

that the We about ways multiple better other having some actually of the have Each things brands. than in solution. like are it solutions

So case ShipWorks is focusing including the In case most management. it's providing I different really other are on marketing, we customers. ShipStation web number the which in high integrations are on really there. solution, have broader that than solutions, of really inventory so the the think a ShippingEasy customer And based the two out a solution the very volume of of client-based focused solutions a very the it's

them the each of on the segment for kind place great of that customers sales It have a portfolio makes allows valuable really So them and target it to as you side. we them strategy. market really about see customers something different and

Kyle Huebner

I brand factors make equity distribution that equity would really strong of also and one those community. platforms brand each does within

Operator

with Partners. from question next Our Darren Aftahi ROTH Capital comes

Your line open. is now

Darren Aftahi

the Thanks for taking Nice questions. Hey, quarter. guys.

are year If that's on Global margins on curious, throughout what And assumption guiding Jeff the the to XX to mid heard Program. XXs. the back your am that be with thereabouts you circle on numbers? back I the or think law is then year metric to it conservatism, to gross growth over if is deceleration large Advantage wanted a question underlying I I QX correct, said the shipping you Just just was you for and correctly then lower is, of

the that is customers. year? cost. we are sort international there I And several this year Should down So of for appreciate on lastly margins service then on upfront the thousand assume

character carriers that's reiterated going to get with as geographic the about profile, how also any maybe kind into just then of talked You this. and of quarter curious other last that well? Thanks. thoughts the I’m new and kind countries

Ken McBride

Yes.

So based growth. on side, are bit which we that the about, servicing growth numbers a inherently moderation actually which large a talking certainly you is you on are of in and something -- seeing deceleration

revenue the now, there in talked USPS and -- of with re-negotiated we anniversary that, quarter. but agreements the this anniversary have also You bump we the and with at end some two associated that we [indiscernible] about

saw a you particularly And well. nice as on there initial Global headwinds some have the you Advantage So Program.

the that There packages. want sure you really it's touching obviously, a to program. guidance new are are actually if So in make we partners, from

ourselves that So sure terms Global Program. we we Advantage of in on getting make not ahead of want estimates the are to

is we that terms would margins. effect gross this So to consistent that, EBITDA expect of is of be what with what in margins well in as as the margins I quarter seen net have

the margins investments our EBITDA on additional sequentially QX side a I'd see expect QX at seasonal on to slowness, EBITDA probably strength. and deceleration and actually roll the QX and for given seasonal margins the OpEx getting On

think or I questions that that. the service margin you fee and answers range components of the can So on broad on take

Kyle Huebner

So question the characteristics the the last is of international was that correct? customers, about

Darren Aftahi

Yes.

that through on was a kind last these new can that those about XXXX? days on the it period quarter, customers Just even curious [country] just I are talk of of work you kind several to you of a thousand potential mentioned new XX u security in then What as past. and plus any pertains and postal off

Ken McBride

to Sure. say something Yes, marketplaces. there particularly probably process the orders. various then to They have And They the these the similar that's via shopping orders. U.S. in their so aggregate they carriers I and they’re product online solution a multiple can’t automation using capabilities mean, are the to using the about different out a shipping their cart sellers, there, customers. are that I selling is to

those And several we so ones in characteristics as of are we largely to do and U.S.. same ours the have countries. that customers the become the characteristics thousand of market the customers, manage The them of in the

I countries, other three initial for us so solution go the to countries. were were really and that I ones picked, of think English we after terms that new mean, easiest countries the speaking the In

So countries. understand will any for those looking marketing at be countries additional expanding for trying countries and test there are initiatives to really year our in are and those whether into needed on But in we now, this understand customers. we really differences are the that really focused

Kyle Huebner

is three mention countries also of talked they would The expanding the within only we carriers I are we ShipStation, about the thing support. with number

postal of a ShipStation other those the certifications also mentioned, each -- Ken in supports markets. they as private So but of number carriers

think carrier of market. the in as almost of I those that get critical So market the than comprise US goals to Europe fragmented really where to three And coverage is in typically the carriers the customer achieve strategic that's the use. there a one would integrations little our more countries base that kind mass especially are all carriers

internationally part of as countries. strategy necessarily before going the coverage that's So achieving carrier critical support to additional on the

would international we economics also but marketing process I how terms in and to are becomes we we it marketing spend. are acquire thing looking on do and dollars spending that a customers at the optimize other The learning mention of is,

it do it the trying are managed at risk a we learn where and to scale way optimize go. in as we but we can same So time

Operator

from Klasell comes Northland Our Securities. next question with Tim

Your now line is open.

Tim Klasell

[indiscernible] mention. I did

may that to progress is you opportunity deeper to carriers and business better United on with margins update with alluded can have some it the and you type relationship does type may two us better of giving economic States? maybe relations. reseller be any How in internationally, for be to get maybe able work get then the may with You that other the that

Ken McBride

in would Yes a of and for building get of building volume thing relationship the it's able I carriers create long the for out typically to value the the package helping terms carrier is with first attractive process being and them. volume point the

where But we we be last that whether scale. mind over or grow they are development. of so their time I that US develop these opportunities can think are five the focus years a over they just extent for the with exist, business if been year as and relative that the to XX think to I And we of in relations process now internationally other context going years the with XX for working keep carrier think in that we other stage in the in have but the an carriers USPS I earlier private you the some them given take carriers years those help XX value USPS out the to look the and a relationship result next for and create

Darren Aftahi

think And other summer. as the contracts with horizon renegotiated then contracts as you negotiations USPS? can term we you Anything two with alluded far with I on going on other Jeff share us last that near

Jeff Carberry

We’ve [all] given of that the that opaquely of light in rather change quarter. in mentioned in On light of the accounts. metrics

but I around really to of contracts, before talked we kind any those get the of be into really As the you. when contracts honest specifics tenure are these can’t we'd term with longer contracts, expect renegotiation of on

Kyle Huebner

market. And focus in the to say How e-commerce the be successful we value more I'd continue on USPS. help broadly, create to for how them package to

we so than opportunities successful are and we be helping that And that value expense decade. long-term in the of seen part the successful creating to the have past the in over those market create that USPS the type partnership of

Operator

Thank the you. would to now turn session. remarks. CEO concludes I over back McBride, further our any for That question-and-answer call to Ken like

Ken McBride

joining Thank you for us today.

If Relations, XXX-XXX-XXXX. please Investor our telephone us you contact have questions at any investors.stamps.com or follow-up numbers Thank you. our

Operator

and does in participating thank conclude program. Ladies gentlemen, today's for conference. you This today's

You have disconnect. Everyone may day. all a great

Stamps.com (STMP) 3 May 182018 Q1 Earnings call transcript