STMP - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Stamps.com Second Quarter 2019 Financial Results. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions]

to conference like host to now Ms. would turn over the your I Park. Suzanne Please go ahead.

Suzanne Park

you. Thank

review outlook. today our our call talk Jeff today's follows: update we'll second agenda the CEO, discuss provide we'll and Carberry. for of our an we'll about partnerships; quarter as finally, XXXX; is elements On and call are model The financial CFO, of results Ken on results business our business the McBride; and and

Securities deferred strategic Harbor will those made in Safe including products, the Annual cause includes statement the first the our Stamps.com, the and statement. But reports current of to economics all from release on Harbor for Litigation uncertainties. successfully Commission time-to-time by X-K. its its Securities quarterly to for and December ability Important and this factors, anticipated fiscal results, materially Act Form risks Form timing the XX-K statements desirable XXst, ended forward-looking its and which benefits differ company’s approval, maintain actual under Reform which and of XX-Q complete and Exchange Report company results products, could Safe the including year when XXXX, Private about including involve utilize of or from on maintain realize regulatory with reports on Form obtain detailed tax filings financial integrate XXXX, the in the are metrics the forward-looking assets statements company’s or and acquisitions investments, or ship ability of to future its the its past

to or events circumstances forward-looking the of to release after obligation the events. any publicly undertakes any reflect hereof revisions or unanticipated statements reflect occurrence date to Stamps.com to no

GAAP second we results call share income include In discuss $XX.X was $X.XX. GAAP fully measures. income was financial the of financial XXXX net on million net today quarter per and The non-GAAP diluted the

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

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

revenue, our and Our mailing and see XXXX GAAP Investor any revenue shipping and second earnings Please insurance to revenue include reconciliation do metrics measures include customize website quarter corresponding from numbers posted postage. the on of release and non-GAAP not a XXXX product for our measures. our financial revenue service

hand Now, call over Ken. let the to me

Ken McBride

Thanks, $XXX.X revenue $XX.X XX% adjusted non-GAAP you EBITDA quarter was us a GAAP year-over-year. down for Suzanne. year-over-year; Thank included X% Today second million, of joining million we of our today. which announced that results down

quarter, to from we in global During the efforts carrier diversify the second continued our business single domestic model model. progress business to multicarrier make a to

drive We carrier us. very work to for continued for remains our proactively USPS partner to value USPS important the a with as customers the

We diversification also Post, our make our Australia relationships carrier Post, our French including with Global of continued non-traditional strides Program. with to posts Advantage Mail, international in Royal carriers

Our our financial in expectations direction. quarter line of our second in light were for new with results the strategic

market market accelerate. in changes time which incumbents to well bit The industry the as as rapidly. newer to the recent continues The the some seen in change spend I'd we've like of other from shipping the of of into Now, most a industry shipping the to recently industry. has entrants both discussing shipping pace change carrier announcements, highlight continued

with expands They the That CBS, Auto also Advance of they'll They adding in be announced reach. recently and delivery pickup in some of their seven-day new for pickup XXXX. in Michaels delivery meaningful and broad to to move very announced and UPS addition starting dramatically Parts. January that, Sunday made packages XX,XXX announcements. drop-off order a already points partnership

wide-body squarely new XXXX. to increase on to to to model rapidly more sort more with to business continues significant its its continues add its ground and XX has centers made Likewise evolve focused by also airlift jets and announcements e-commerce. FedEx several automation UPS capacity

morning In was it to online for plans FedEx its meet will goal the announced business with with the June also as ability to ending traditionally which more increasing e-commerce network ground focus shippers market. announced low-cost that the FedEx that it the the the relationship balance stated of to of well termination on this e-commerce Amazon; utilized air have shipping its announced broad serving of allow its of contract in-source it clearly smart its post shoppers. delivery and USPS demands last-mile earlier

inside deliveries, goal addition was course USPS's announced Dollar points create X,XXX General for area the residential in providers the competition e-commerce to space e-commerce changes of and them just and continue non-traditional of and traditional in with XXXX. The strength. which also stated of drop-off evolve directly in new industry. by exciting recently the positions carriers low-cost be FedEx logistics the and stores shipping to the They pickup recently their that producer

its expand and network, logistics investments shipping to expansion continues electric service, operations. newer economics one-day air recent with in like Amazon technologies to its announcement of vehicles capabilities the its shipping the of further prime and shipping of improve

and Shopify significant such to Postmates U.S. dynamic. and providers. Uber, industry delivery. and progress on traditional announced to on launch their both shipping and of recently the as new of both driver Deliv logistics fulfillment and The to eBay will make be extraordinarily is this businesses see ourselves entrants number year that next itself continue a non-traditional strong and We services carriers showing year value same-day focused as in new very

reseller developments now in me USPS area. on the Let provide an latest update the

everyone, As between resellers discounted individual reseller, provides contracts Service agreement. Postal a customer or a or can negotiated that each based for which the customized agreements vary are and have NSAs, service which an negotiated rates on called what are refresher

to reseller's to many resellers allows Etsy the forms Each robust ecosystem in from postage then of to Amazon, at being and marketplaces NSA rate created houses. postage providers companies precisely higher from reseller and of with customers logistics at like fulfillment Companies and deep partner NSAs those package have resell to innovation. USPS that like are and eBay the e-commerce come a rate that reseller business companies in margins a to partnerships a a primarily fueling it's that and shipping for third-party one buy

We're a USPS XXX order these small business management software fulfillment in e-commerce tools, solutions NSAs. software some aware marketplaces, solutions, solutions, of approximately created shipping in software margins and that solutions other the way and participate by portion reseller of multi-carrier

leader robust and The with have this have accrue deep the largely USPS phenomenal market in growth. of the e-commerce-related USPS driven benefits innovative, to shipping the opinion our and be to and ecosystem

USPS compound their total the their through shipping XX% rate Postage growth Over the their past a seen XX for volume years, PC and partnerships. has reseller

partners length of discussed that negotiation at quarter, certain with We last initiated has USPS ours. the the seller

ongoing investors like the are USPS current outcomes, of to with these the our resellers. we While understanding limited conducted given have provide status that and visibility negotiations are negotiations. We negotiations with uncertain between the solely the being our those of

we've margins the Since our however, June reseller starting of shift partners our with their through of be Back last current would the extended USPS position reseller the Recently seen decreasing call, of negotiating the of end XXXX. NSAs respect that USPS economics of partners. in its some a XXXX. at USPS's positive the in to in told the resellers earnings some April, their

that that to margins post the The but resellers USPS understanding that seem recognize positive bring office. latest collaborative sign. the USPS to remains value are has that intends resellers conversations we in also productive more our to recently It XXXX, believe for conversations the engaged in a decrease the

years, the of the to structures We we USPS's continue in partners. past reducing costs negotiation. less e-commerce very XX the incentive USPS with e-commerce more focused disagree on recent as on growth its strategy the its that programs the business this continue rapidly to USPS's While evolving positive encouraged and apparent strong the becomes we're approach and by have ecosystem, important driven over the hope shift that technology focused growing regarding supporting discussions package complex cutting for

goal company diversify continue out as this play of and trends outcome Our best to is long-term these for all to the business. our to position

put shipping volume e-commerce shipping by a billion. great in as of over unfold. shipping significant that changing the have have our trends succeed We and assets of $XX to world all number done rapidly these a is of customers global wide Worldwide us amassed position

that priority XXX our into mail domestic We're shipping the with billion packages also with USPS in U.S. the X.X integrated our or We're of partnership for generate over USPS embedded their solutions we solutions. currently we partner strength the packages. worldwide those also software largest in with where are partnerships of XX% significant -- partner over representing have network

in We is shipping and built and over ShipStation, force they're with all technology. solutions market-leading logistics U.S. highly strong and XXX have software e-commerce software ShipWorks. knowledgeable that sales We've the a multi-carrier ShippingEasy

marketing where in year. have -- than significant million spend external expertise per $XX internal We we more

us and onboarding strategy technology We customer take acquisition MetaPack support and also management have customer our significant positioned our worldwide. of to resources, multi-carrier account capabilities, has

Following size our we model properties, and and by that relationships. the provide enhanced marketing proposition recognize the and very strength the driven have discussions domestic with been February, strength our value carriers scales changes and announced force success and multicarrier number integration and very we positive. we traditional new had nontraditional and in discussions international productive They These and multiple regarding business both have the level of our sales strong partnerships national programs. the of of the our of

to assets incredible continue workforce. a e-commerce We're drive an leader our this built direction. multicarrier organization in well extraordinary we've and global new to we Overall, We're exceptionally positioned with in amazing will become confident company shipping.

will to I over now, call the that, Jeff. turn With

Jeff Carberry

XXXX results financial non-GAAP Thanks include financial our Ken. financial of today, We'll discussion second review measures. quarter results. now our The

of GAAP measures the be As our measures Suzanne in in website. to earnings found investor our on reconciliation metrics described XXXX our release, can a non-GAAP corresponding financial

inclusion elimination year-over-year XXXX. In $XXX.X second million. of revenue revenue growth that was of Total was managed driven commission of X% of program. in our was by the QX MetaPack the revenue offset quarter The revenue million versus the USPS revenue was QX QX XXXX. down decrease excluding versus was in global in by Total by that XX% down QX and in MetaPack the $XXX.X year-over-year and

Advantage the total $XXX.X versus in and was XXXX. and in revenue commission of QX revenue. growth X% was Global X% XXXX. revenue and Program year-over-year MetaPack of down USPS and Mailing Mailing inclusion in Shipping revenue and that QX the year-over-year and in excluding QX million MetaPack offset the growth that up $XXX.X Mailing our elimination was driven was of versus by Shipping Shipping was and of revenue by million The QX was

in revenue that the shipping declined from customers year-over-year high was approximately from in shipping in at that estimate flat estimate was customers of QX, derived We our total revenue the percentage We derived range. a a in as a range. MetaPack and as revenue XX% was low-double-digit excluding high and XX% of total percentage QX our year-over-year rate revenue

estimate We low revenue that total and high-teens Mailing at rate. as grew our in the several from percentage derived mailers, our was Shipping a a of and revenue year-over-year single-digit

gross Shipping of impacted negatively our USPS by attributable was continued QX and versus Global to The XX.X% in primarily offerings including also commission revenue. decrease XX.X% margins in QX our It was margin of Program. in was Mailing elimination of international our increase gross the Advantage XXXX.

revenue lower in GAAP also approximately margin to QX. programs generated These have profile which XX% were under inclusion negatively gross margins of The components. by margin of our U.S., tend MetaPack than fee a the impacted other gross gross service

in including We innovation investments our had of to R&D and primarily the operating cost and QX our business support Shipping in increase G&A strategic marketing, and and to Mailing MetaPack. the a growth strong related inclusion due year-over-year to and sales

million operating EBITDA QX QX down versus and in that of of was was was income QX QX EBITDA in QX XX% and XXXX. was Adjusted of versus QX margin million $XX.X year-over-year XX% down year-over-year $XX.X Adjusted was in XX.X% versus in XXXX. that Non-GAAP XXXX. XX.X%

MetaPack the adjusted the of operating offerings; our elimination EBITDA and in EBITDA margin commission gross margins lower our international USPS margins. inclusion investments; operating expenses EBITDA to primarily following: attributable associated has with which revenue; lower of again and the and adjusted decreases higher income, The adjusted with of shipping-related were scaling the gross non-GAAP associated

was non-GAAP share diluted XX.X the million million was QX XX% XX% on rate fully $X.XX tax and share of Non-GAAP QX XX%. expense a calculation non-GAAP XXXX. QX tax XXXX, for based that based adjusted for of shares in of EPS of and in expense used $X.XX versus Fully rate in a was QX for income on diluted XX.X per year-over-year down

discuss now Let's metrics. customer our

the churn past the X% line year-over-year. our $XX.XX with broadly total ARPU over Our and seen paid second X.X% for metric was XXX,XXX, year-over-year, was our the customer several ARPU quarter. we've churn rate year-over-year, was customers Paid in flat up were was quarters. churn X.X% was but up And

which customers our customary commission a customers continue elimination technology monthly receive As solution we our of discussed last the volume service higher revenue our fee to without USPS our quarter of results paid segment with ARPU those our paid metric. count, customers excluded those metric and exclusion from accordingly in The customer paid some our our from impacts churn of being customer count. customer of metric,

benefited in metric and ARPU Program. our MetaPack inclusion financials in growth this our from Additionally, our of quarter from also benefited Advantage revenue Global the

shipping steady USPS see X% billion, versus that continues quarter was a both XXXX. postage $X.X that volume, up traditional and mail postage printed second quarter Total non-package to volume higher Total the and second metric USPS was to growth per of printed related includes decline. which

the was at primarily down decrease and cash. end with cash debt We investments a QX. discuss million the partially ended cash The million now was cash QX $XXX which and of net strong from in debt was Let's uses repurchases, by million investments, working $X our and $XXX and cash, repayment capital scheduled offset following: operating flow. driven in share in by and changes of

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

XXX,XXX During at a cost shares, company repurchased approximately $XX QX, of total approximately the million.

On February the the our board last Board X its of year, March scheduled expiration purchased prior repurchase to of expire XXXX, plan XX as the September share On XXXX plan, under plan May approximately an this year. Directors on parameters repurchase September in XX And is of million this discussed of from July million XXXX. Board of through quarter. a approved current date, adjusted To plan. in of Directors the XXXX, of has X $XX extension the been approved that which

not understanding with are limited to partners And reseller XXXX turning of as have while Now of reseller extensions extensions. have some ongoing partners have and the negotiations. in end current today, decline of half could others margins those second USPS our of these their received agreements we the It into guidance, through our that Ken our discussed received visibility negotiations yet is XXXX.

this the therefore our understanding partners our have current reflect to guidance for year. our margins reseller refined of contract We of

range We of expect fiscal to previous the of revenue XXXX our million million. million, $XXX million to guidance $XXX be to compares $XXX in which $XXX to

decrease earned is reseller in of arrangements, through year-over-year. revenue and USPS our commission to sharing elimination the With the expected continue decline revenue to some revenues expected revenue shipping-related

XX% and mailing SOHO derived expect our be year-over-year. down shipping postage year-over-year. And We customized will mailers revenue revenue to flat from XX% approximately between we expect our and be

as expect to We the XXXX, the as additional of MetaPack in in our and reflecting continuing XXXX we expenses to made investments inclusion anticipate in XXXX in operating we well financials. make the investments increase strategic

million. previous be $XXX to expect million, of to We the million XXXX fiscal $XXX $XXX range EBITDA adjusted $XXX compares million which to in to of guidance

of our the business. on mid-XX% Our revised a the guidance margin adjusted factors implies aforementioned to all year based low in full range, EBITDA affecting

financials. again inclusion expense guidance elimination in sharing increases, had MetaPack revenue of headcount inclusion of our reseller decrease USPS arrangements. of through earned revenue margin reflects an in The the expected commission revenue the Our

expense We non-GAAP expect non-GAAP XXXX, unchanged our will be previous income XX% estimates. remains pre-tax approximately tax for from which of

Our rate current estimates a full number from based could tax year XXXX factors. differ of our on effective

compares in estimate shares to $XX.X diluted fully expect and and of $XX.X million million. to our million which $XX.X $XX.X million be XXXX, between We previous

$X.XX. non-GAAP be $X.XX fiscal range $X.XX, $X.XX share of to diluted compares XXXX expect previous We estimate adjusted which per our and fully the between in to income to

of increased our year. exhibit metrics usage would during the focus shipping the on financial reflective customer our ordinarily With shipping, seasonality

same received commission of expect the to extensions. guidance the some However, not partner a of degree we the our necessarily partners reseller latter with in with impact shares our financial of of even reduction negative year elimination associated and degree now to previous with USPS the continue revenue to this due lesser a trend that would revenue that reseller-related to

adjusted And and revenue half continue XXXX. in million we be second negatively to expect to particularly to expect approximately capital be expenditures to $X we particular, million In finally, EBITDA impacted. $X

revenues successful. understand proposals the by we our XXXX. And not and in global years. not those at will reductions we we earnings in earned strategies, of ultimately will know in become XXXX, USPS provide least, and in on the significant changes, do Although, meaningful long-term in currently resellers USPS's impact as not beyond it also This could margins be result turn believe could have we do current does while guidance our a what multicarrier them business proposed be alter which XXXX

questions up And with we'll open call for that, the

Operator

with Your first Sutton [Operator Craig-Hallum. George from line the question of Instructions] comes

Your open. line is

George Sutton

that appreciate enthusiasm are you at, to specifically the your reseller I can these relative Are to I'm understand and changes what call respect timeframe. referring curious to relative I XXXX, which of hearing them. you. terms therefore negotiations some -- Thank or of compartmentalize relative in those speed you people some XXXX? as to affect of indication is would the might you with make some if

Ken McBride

Well, on I clear again starting just April would of I we've down it a part -- heard, think course, NSAs the terminated were initially and going were mean decreasing. of be in -- reseller based there's I The -- was concrete was in what not think not to decreasing. been we're and of -- we're we've the June economics general very in negotiation, be the came what economics largely and XXXX, but

digging it's perhaps ensued. complicated partners there We and believe what just very so came was some area. And more area, into some a happened was forward discussions the

some the of shifted. conversation USPS so for The resellers in conversations. decrease are XXXX the believe change. tenor at seemed the other June And resellers. removed to And the some of of still The we least was

at conversation really but as at a be our looked attitude hope point, will change general I conversations positive well. the in and that XXXX are perhaps the has think knowledge the us changed around to the gives tenor so not this collaborative that And that sign

George Sutton

Okay. That's helpful.

been So might program opportunities Service. the it's a was your that in six been game carriers. you amount then. I'm now six months there commission we growing can moves point musical wondering pursue thought at U.S. what can your made versus since of with Postal And of terminated relative with months ago. you tremendous effectively characterize the anticipated other position since has was have if chairs this Obviously

Ken McBride

Yeah, I thought in were easy making immediately terms changes massive to carrier talking we were partnerships. or mean are we're be or space their it's takes going very to I to were don't simple think of time our large we to going in -- the The change complicated and some result it strategies. a organizations some of carriers organizations and for large course of them examine

very domestically came in and announcements internationally. the I a carriers with our think with team up behind carrier your the I when starting revenues. that February we certainly your would conversations to we your given organization get clear built and if we -- add player that we that And to there assets a and was driving both think the out recognition across took step be your strong board a

So The conversations February. in increased the to active. continued be really very dramatically conversations have

around discuss of the that I some have think new think in the that changes quickly ever we're terms would happen more coming would very I changes. something hopeful concrete be we'll we this don't partnerships. in in But that to thought months the

George Sutton

question Last if could. I

have very sales strong a You force.

curious, space. e-commerce sort force the retention in integrations of integration. of us and if lot you just a update have could I'm You sales on

occurred relative changes retention ago. might If you to or months again to call six it have say any want there that

Ken McBride

that team, year. -- sales in I same this the been with otherwise it's we -- continued done still place we've terms the mean down the in without would commission have Yeah, think of path our I

drive We continue the USPS's to business.

continue We gain customers. new to

commission haven't terms changes overall and since change our Our seen the made. any personnel plans sales were changed retention of we haven't in of the

broaden about customers to their can all portfolio solutions of they're USPS. they the offer to opportunity think potentially beyond I the just excited

hopeful we're the hear them are loop, as keeping what -- in soon they're new the the carriers we're is that our with this I waiting direction able and carriers. early to progressing the and think their also but for driving alter if half not focused perhaps year be on year we'll second revenue them get of their additional path really to direction next and conversations

George Sutton

you very Appreciate it. Thank much.

Operator

from comes question the of next B. Riley Your Cummins with line Zach FBR.

is line Your open.

Zach Cummins

questions. Hi. Thanks Good afternoon. my for taking

incremental of reseller end were of there terms In would the beginning that are for XXXX? back again, these contracts renegotiation, helpful. be that at right of any around sort color Just to extended up the the XXXX of

Jeff Carberry

Yes, Zach.

the happen. current So year. additional the an are currently those received the -- of for negotiated. That of creates end margin the resellers The through negotiations under extension received contracts resellers their some being to simply runway

But continue, it's the our those answer coming contracts that So our between the lower continue and question, are to ongoing the reseller in still your resellers will understanding. to understanding negotiations margins USPS but at will years. the

Zach Cummins

a in be Understood. of to That's guess, customer that Just standpoint? looking the them terms to software, ways at your road? set. as curious it the high-volume to of for customers helpful. your And currently charged what's kind Is then, going down I to monetize other approach being not of use your that to approach that are matter this with

Ken McBride

Yes.

really agreements -- charging picking agreement are cost haven't fee on segment up where adding a I the commission our negotiated service think that of customers the where aren't, fee, really customers. USPS the of when high-volume about traditionally we we're those we talked of so serving at these surcharge, because a been -- and a the potentially small was looking we that

had with a discussed conversations We've that. -- understand behind reasoning we had solutions. the surcharge conversations They We their to adding have customers. those

making in UPS we how carriers slowly alternative that FedEx certainly about the course, that and been do so solutions, cautiously a approach it. and has charge move sure we for not Of factor their

monetizing the with through at looking We other to we're lose don't as them carriers. relationships want potentially customers, new particularly

in been we to and in we cautious charged -- that area. approach cases, -- customers. have a We surcharge our But have begun commission charging some we've -- large, selected in have by service

Zach Cummins

know like ever sort this, question. divulged while just your And any give Understood. still you've us have And of sounds the the based partners, to don't on those number final but anything along it you ongoing guess, are of as could or reseller that in I others terminated, commentary some of been I negotiation. agreements if indication lines? then,

Just any helpful. of be sort incremental color would

Ken McBride

broadly think -- a at some that I some the time ability one and of out north we point form there the mentioned from different have there's that to we think reseller I Amazon fulfillment some USPS the counted some the with back of like resell of of higher there's at have XX marketplaces And Yes. agreement companies margin. and Etsy to houses

would what those -- have call in then, And been really maybe more pure the like of sales ones resellers. business driving USPS through the are of we through business and call development resellers business kind the traditional the activities the that play primarily

ones and have large on aware conversations three organizations. those that really the There's of we're primarily focused three been

primarily those So talking about, the really conversations in you conversations. at three the look we're shift when

Zach Cummins

in second you again luck Well, that’s thank best the questions taking Understood, of for the my half helpful. and of year.

Ken McBride

Thank you, Zach.

Operator

Your the next Kevin from comes of Liu K. & Liu line Company. with question

open. Your line is

Kevin Liu

afternoon. Good Hi.

First question for me.

customers sort of update would could use? things versus and us generally, kind of that the rates changed you by your of terms you ability on have of And NSAs being be new of NSAs for all since just USPS, guys that other could those I moved at those in what those run to like the away strategically? alternatives some approved you has pursue curious if Just kind are eVS

Ken McBride

and and other our on multiple are came the board, of there's in board NSAs the with of some Governors those NSA. slowdown I changes some guess, the I mean, customer. members clear within NSA. saw in some talked think and of USPS agreements the we the flavors or I some of customers new of saw the business the areas we the USPS NSAs, directly of Board between in approval We about And

that think for customer improvement I we've in area some NSAs. seen

So I question. some haven't, Perhaps, I your ask don't you follow-ups. if if know there's can answered I --

Kevin Liu

Yes.

to being providers? think some Are NSAs going still be, historically, you volumes do like like new would eVS pole would of that guys that's these of or seems adding are approved, you to follow-up PC alternatives a guys it those. or in as with other NSA position be these the Postage you kind other to approvals, Just take

Ken McBride

those large No, majority are coming I customer relationships. the the think the terms of and of PC us vast Postage We're still to in by industry.

we significant uptick any haven't really adoptions And to behalf eVS We there. of an out customer on defections customers. really seen haven't other alternatives in seen the

So, it's really by stamps.com coming and its large properties. to and still

Kevin Liu

growth if are great your driving paid a just hear. that I'm could particular you customer specific most well as And basis to up That's if nicely channels within portfolio maybe curious talk your sequential was of on then that year-over-year. as count brands about of there any today. marketing products or are

Jeff Carberry

Yes. Good Kevin. question

and testing new things. So, approach experimental we as you highly innovative know with us take a portfolio to marketing we're and in

of in better that generally be mixed that So, that as any generally well. other find quarter and more of they than is were working working a things it's things bag given we are may not what previously

we're quarter channels. continue will experiment drove TV having would two we that and change. good a I particularly I nothing There's point at that to those radio this say in lot I and of success that can to in say

Kevin Liu

just lastly then And it. for me. Got

You talk of you're the or out about carriers, these international with and to are -- carriers some with national be Are in your private services of do expansion are opportunity out that the there. in you of more there? discussions postal some talks tend these the

Ken McBride

We're both.

by conversations and carriers MetaPack. carriers we continue both about with there's the as of having ShipStation We to economics accelerated do international when there's have talk with arena of have have talk the the move carriers into well we're share international. many conversations the smaller all them. about do of a there's -- think larger of There's you -- carriers have lot agreements in we and with with and carriers, as openness encouraged conversations both of I more also when you conversations obviously Those and a ShipStation very we're lot -- worldwide, there we're with MetaPack. the existing some we national post to as out potentially

Kevin Liu

Great. Thanks for the questions. taking

Jeff Carberry

Thanks Kevin.

Ken McBride

Kevin. Thanks

Operator

with [Operator Allen from comes Instructions] next line the Maxim question of Klee Your Group.

is line Your open.

Allen Klee

hi. Yes,

also or they said on it's to them understand. ones, Just following rates that it then you're you're a that in wanted you major one that that guidance your Of rate? up the cut sure three been taking at account now USPS I did new getting true make actually just for resellers. for some, you're I lower of actually but is into two postponed paid and

Ken McBride

they of and the year -- The answer around three positive characterized in like amongst make. they're we they might the continued is to changes either delayed in conversations have end they're the still conversations definitively been that potential or any cuts

So we're conservative conversations within agreement for cuts the our definitive are of at that that be assuming knowledge all that have conversations to the postpones to very purposes received happen the assuming ones new cuts rate I rate that we're this point, guidance guidance. our and continued the the positive. haven't think those that But

Allen Klee

commented side the happen of one But something what deals presentation you. carrier how potentially do you like and you gone these of or Thank Okay. your -- to your have with think on And a needs then on Amazon, to large in make U.S. their or winning those business happen? side for negotiations positively. likes

Ken McBride

footprint complexity I has of in position has and which we take approach business, the small that think properties of the extent with just we team. these significant and larger a the of sales carriers have been to businesses partnership in the the of the e-commerce some multicarrier into the part it such new is our Well, the a done likes market, never

work trying what large with our USPS likewise, that years together the was do was very the I There's to migrate do talking way sales meld making There's coordinate? board two we're those of teams works customers to in And customers? Board? How you larger a on potentially just to in have you both across work have the complicated. solutions? footprint. footprint kind things you a complexity and large organizations needs around is do organizations I a How really how of lot e-commerce complexity think a of for to XX And happen. existing how in How our onto around mean you new do together the lot agreement work.

Allen Klee

were Okay. if small about this businesses and something marketplaces to partnered is significant? you go How a could that I this ShipStation going Recently opportunity, an you an be believe do U.S. up their with such were on pretty as size in is this do made they to think them Alibaba -- announcement think to opening -- that. you be could

Ken McBride

Alibaba. the And is I about they've think did up in -- announced purchases we're mean, not sales We of We small small Yes. their opened that. the U.S. early. we the just integrated it. Alibaba allowing just the excited as very of but I but businesses it, now mean, between integration just I allowing business,

I integration think their knowledge ShipStation ShipEngine. first my to with was really

do has go sales I aggressively. over been property. philosophy so XXX to the as And we out think channels a our various partnerships always partnerships there And and just and and rapidly ShipStation have result, in

opportunity said, as into potential the that about market. those. it's one but of they another And drive early everybody excited is so size We're And and I the Alibaba move like of they could volume sure. Alibaba the knows for yet

Allen Klee

Great. Thank much. you so

Operator

Your of with final Klasell question comes the line Securities. Tim from Northland

Your open. line is

Ken McBride

Tim. Hey,

Tyler Wood

This question. on taking is our actually. Tyler Tim for for Hey. Thanks Wood

As about can of is also on shipping any the of the under and forward software Thanks. side fees going specific we rates numbers think for new the business? strategy, growth there put international you the source growth

Jeff Carberry

Yes, Tyler.

those with what I broader and e-commerce dollars perspective we're our at is increasing e-commerce trends broadly percentages going global ever from think correlating of looking a business. through

anniversary rates and us. internationally a Now domestically be function with of structures ultimately and carriers both growth for other stabilize revenue will when

like. are we would think strokes I and transactions terms e-commerce those and that therefore think future broad are and will of trends effectively I in the to you internationally our correlation see what business. But monetizing when broader domestically look strong premature So say numbers it's both with a

Tyler Wood

you. Thank

Jeff Carberry

Thank you.

Operator

over at There time. are this now the back turn no Ken I will further questions to call McBride.

Ken McBride

Thank you for us. joining

Investor our XXX-XXX-XXXX. Relations have Thank always, anytime hotline you if follow-up very much. as you So at available questions we're

Operator

This concludes today's teleconference.

may You disconnect. now

Stamps.com (STMP) 7 Aug 192019 Q2 Earnings call transcript