STMP - Earnings call transcript Q3 2019

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Operator

Greetings and welcome to the Stamps.com Third Quarter 2019 Financial Results Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions]

I would now like to turn the conference over to your host, Suzanne Park, Vice President of Finance. Thank you.

begin. may You

Suzanne Park

Thank you.

third Act CEO, for The follows. of today's the of are McBride; CFO, We'll our today provide our results and release We'll under But harbor statement. partnerships. Ken safe forward-looking call our we'll results business talk Carberry. model call the Securities on And agenda our Jeff metrics financial the Private the anticipated review and This an risks about of and On and update XXXX. finally, first, elements our discuss uncertainties. of quarter Litigation about is as statements results, Reform harbor includes which business statement XXXX. and outlook. financial Safe involve all

realize current or of strategic or approval, its forward-looking products customers' ship for factors, regulatory in XXXX, report assets are carriers, could reports maintain or time future and from including past investments, with its differ utilize on the XXst, quarterly results by Commission economics Form X-K. its including reports to tax and benefits on filings for the Company to Important Form on Company's Exchange Securities made statements the products, and integrate detailed the year XX-K December including complete obtain acquisitions in its ended those time its and cause materially from annual Form fiscal to Stamps.com, which will monetize deferred Company's the ability actual the its XX-Q the when the ability to desirable and timing of with maintain and transactions successfully

the to or The today events circumstances forward-looking include financial the of to release after we on obligation the measures. non-GAAP call events. any publicly undertakes any reflect hereof revisions or results discuss unanticipated statements reflect occurrence will date financial to Stamps.com to no

net third GAAP fully per $X.X was income share $X.XX. XXXX, million the was In diluted and of GAAP quarter income net

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

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

product postage. XXXX Mailing numbers do customized to posted GAAP our Our Shipping and third Please from not non-GAAP service website insurance release and our see any on measures include revenue and XXXX corresponding revenue financial for quarter include reconciliations revenue investor earnings our a the measures. metrics of and revenue,

Now let to call the me hand over Ken.

Ken McBride

today. Thank us you, you Suzanne. Thank for joining

ShippingEasy domestic e-commerce we drive to execute into new our to print innovation, the the Within integrations. continue like significant features, company. and and and partnerships things several third our our continued to tracking. quarter, solutions transform split to During quarter, during multi-carrier shipments, including expand we strategy multi-carrier returns introduced scan And global which international on products, include we and business a ShipStation, ShipWorks, and our

We XX also partnership more signed agreements. than new

XX%. to we new quarter, expand early returns launch international XX%. sophisticated MetaPack, to and In platform more the business In the US also launched large on rearchitecting advancements And ShipStation than more our in Total than new tracking the accounts XXXX, with portals. solutions by including increased and third international by small shipments product. our increased quarter. continue platform both we in US a MetaPack to in the track signed customer the third technology successfully new continued innovations. new and in progress We to We're make driving

We new the with significant relationships our and also of of UPS. recent milestone our achieved strides carrier in partnership announcement with diversification made strategic the

those we our as to short-term financial expected, expectations. in be business into for the and transition quarter As our strategy, were results new with there financial impact third continues line

e-commerce ways our minutes UPS working discussing multiple including provided we Within across Through very closely UPS ShipStation, elements capability. always will key Let we and have new our a some partnership. of with ShipWorks, me be partnership, in ShippingEasy properties, now UPS this shipping multi-carrier our few spend organization. a new

effectively within shipping the actively partnership more more us products drive customers to convenient make and accessing UPS those allows volume customers. new new much to this for However, and partnership UPS. will The

be new a existing a new by up by will rate example, discounted and UPS set For account default all be new will that new and for available in default UPS customers, account.

today can some requires with versus and So shipping customer immediately a up and that effort. get UPS time the process

those offering year. result Stamps.com that are exclusivity of previously with had shipping an longer place this the products, as made will branded decisions we no Endicia Within a the entirely new now earlier arrangements UPS the and be products, USPS Within capability. we in

UPS So we're products. include for side USPS customers solution the able with to those by a now shipping side solution of

be convenient Within available very to discounted also a accessing rates those the begins UPS and account product. customer default immediately first with when will use the products,

to of As a start will customers product. the teach and about customers early broad many in do, with Stamps.com solutions their result that of we life Stamps.com us And this the marketing the those in customers' great cycle. shipping brand UPS the allow us

new XX% under discounts daily attractive. package UPS' UPS partnership the off now to able The Discounts standard we rates. discounts The are surcharges. very our various are as offer waived include are customers much as

also surcharges We types of customers expect our that that confusion, do. and particularly typically reduce the relevant the to waived waived customer shipping are will surcharges the

volume currently. for through products qualify available to customer existing without working frequently when necessary shipping discounts is required with our are that discounts any The UPS

solutions begin great of capabilities our within We of products able XXXX, quarter within discounts the UPS capabilities new across we rolling software fourth will expect changes and year. some UPS Starting these and the enable be will our utilize to this of in that products. the discounts the all in our to out customers

UPS logistics. to been is the changes their solutions in best the strive evolving leader e-commerce. to shipping address and also the in to to rapid We customers, our bring leader the always business has and model global continue in UPS

U.S. quarter solutions provide to they add XX,XXX make Both delivery attractive. more last the For quarter, announced to to seven-day our dropoff example, and those the value pickup will and their move they new of last announced e-commerce even additional customers package locations in UPS that partnerships

to many solution strategic with offerings the by be and good with partnership, to USPS drive offering we that would over the UPS still with the their proposition customers We and note our productively in forward The many UPS areas new as control choice service with respective customers The partners continue needs. them. great our of value of further move we very their more them very shipping our USPS strategic will provides empower and a of businesses. work for relationship

work across to USPS with We organization. the will our continue closely

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

what rates to called service or NSAs, reseller, negotiated which service vary resellers Companies Amazon, are to between refresher, individual provides fulfillment a come each Etsy many discounted eBay companies postal contracts and an agreements forms, marketplaces from customized are which business based houses. logistics that or agreement. As and with providers on being customer in negotiated resellers have in like like that are NSAs primarily of third-party the the

and deep NSA a allows postage innovation. one for It and fueling rate at those a postage companies margins created that of a a reseller's the then buy have customers USPS to partner to reseller from higher partnerships robust ecosystem and rate. e-commerce Each resell is shipping precisely the to package at

discussed partners. year, negotiations previously, earlier this we the initiated USPS with As certain reseller

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

As told of you starting decreased USPS in XXXX. economics June back that recall the their the resellers April, in of some be would

of And in XXXX. by there changed were USPS course. by expectation XXXX. existing a the the the still USPS that However, discounts At would make June, and time, agreements reseller quarter, the the reseller XXXX through was in end an third reduction that extended

understanding there discussions it resellers active and continues Most and is the our that recently, be between the USPS. to positive

to USPS remains the our what the to not starting on XXXX, it intends is exactly the it offered the yet on understanding clear impact resellers in us. changes While resellers and might financial restructure have that economics

this competition shift evolution business partners. time e-commerce and approach by We its on USPS the hope the growing very technology focus the encouraged its rapid USPS' positive important and its supporting that in very to the We're in this keep apparent growing continued continues e-commerce of during to ecosystem, negotiation. packaged

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

February, the that in we productive Following have traditional, non-traditional we announced to enhanced internationally continue with relationships. model domestically both regarding new and business discussions very changes carriers and

driven been the All partnerships of the of by the strong proposition these marketing positive, the scale the level solutions, our of of team our our our success provide, and national we of the strength programs. strength and sales size and multi-carrier discussions have integrations, number value and and very recognizing

across with in assets forward our begin step we've new work excited relationship direction. organization. our to to represents strategy. with exceptionally closely in continue significant to incredible an very a organization We're We're Our new an built this them drive very extraordinary workforce. well Company positioned to amazing UPS new Overall, and our

are the multi-carrier e-commerce shipping. become in global we leader We confident very will

to that, And the call Jeff. with I turn now over

Jeff Carberry

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

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

by 'XX. and excluding year-over-year versus Program. $XXX.X down of was that the MetaPack revenue inclusion and third down and XX% Total versus revenue, was The in by of in was our QX, decline X% million revenue Global growth of offset the 'XX. Total QX Advantage QX, $XXX.X driven USPS elimination full in that in quarter in was revenue commission of was year-over-year million QX the quarter by MetaPack revenue

of customers a of and of million and, total derived in the in year-over-year Mailing declined $XXX.X of versus revenue was 'XX. at and in and revenue Global The revenue X% MetaPack in QX, USPS X% Advantage and high decline driven Shipping that QX commission Shipping growth revenue by offset QX, revenue year-over-year was was QX that shipping a revenue, down that total our the revenue XX% estimate by $XXX.X million down We our and was full mid-single-digit in and inclusion excluding from year-over-year 'XX. Shipping Program. the range. QX, quarter was elimination versus Mailing of in as was percentage Mailing rate MetaPack

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

our mailers as also at rate. revenue XX% total approximately our derived and Mailing a that revenue of percentage year-over-year was and grew We SOHO estimate Shipping a from mid-single-digit

R&D also of in our full XX.X% and costs, than generated in negatively of our GAAP a our These gross sales increase support U.S. USPS to MetaPack. G&A, negatively service gross components. Shipping QX of 'XX. investments continued margins in gross gross profile to QX under commission XX% elimination versus year-over-year strategic QX and of in margins the in primarily was the of attributable and was Shipping margin the MetaPack Program. also XX.X% quarter and growth QX. offerings, Mailing were fee of approximately tend inclusion full impacted quarter to a including in lower increase revenue by The It We to which international margin Mailing primarily was had decrease and gross impacted related a business programs inclusion including and to marketing, other The due operating innovation Global by have our margin Advantage the the our revenue.

Adjusted in decrease million 'XX. in of down to million margin our operating and QX was with that down 'XX. Adjusted in and EBITDA of investments; versus higher revenue; and margin EBITDA attributable Non-GAAP QX, adjusted XX% in primarily The QX which associated and has USPS year-over-year of QX lower finally, inclusion margins. 'XX. margins income was with EBITDA $XX.X XX.X% operating adjusted expenses of was the commission EBITDA scaling our income, of gross operating was in versus international The QX, and the year-over-year MetaPack, that EBITDA XX.X% $XX.X associated was the of adjusted non-GAAP XX% versus gross elimination were following. lower offerings; shipping-related QX

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

customer our discuss now Let's metrics.

Our XXX,XXX. was total metric paid customer

Paid was quarter. several rate X% ARPU ARPU churn we've the the X.X%, year-over-year. Our customers $XX.XX third year-over-year and up was past our and but in was X% down was X.X% broadly the line year-over-year. up were with seen quarters, for Churn over churn

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

The count, exclusion was of $X.X USPS Total traditional count third includes quarter versus customer quarter our billion, quarterly impacts our higher postage and mail third from our see up that churn customers paid USPS decline. and nonpackage to and paid of both those our was printed volume, metrics. ARPU X% Total the volume postage shipping metric printed which XXXX. growth a steady continues customer

and and end cash, was uses million QX up of net million $XX capital, operating adjustment from by exercises ended option share We QX related and in exchange cash scheduled increase at and debt $XXX changes by debt cash. Let's was investments, driven now foreign net of which with repurchases a working a of The discuss in primarily repayment. and to $XXX 'XX. partially equity million from cash was and offset proceeds investments the flow, our in cash strong

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

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

On a Xst repurchase of Board repurchase expire XXXX, adjusted was Directors March as in XXXX. May our plan previously of of Directors the which discussed. approved Xth On XXXX, of million to Board of the scheduled $XX the September plan, parameters share

in year, expiration of Directors XXXX XXst XXXX. plan. $XX date, September an XXXX of plan July additional XXXX. of the this prior of February And extension been approximately that the approved On most its approved Board from current of under extension Board expiration To through XXth October has million its plan Board Directors at May of February on in 'XX, through the prior recent from repurchased the an of meeting the

guidance. to turn now Let's

our earlier, with for UPS discounts As a in services partnership customers. signed we Ken which we agreement to discussed significant offer UPS, will

to so. We to expect the the rates year development necessary XXXX of our expect of of quarter them work we all these to customers to offer the customers quarter this in to some begin offering do as our in would fourth of first complete and

partners also are Ken we As USPS negotiations mentioned, negotiations. limited reseller and with ongoing, those into our visibility have

the end have agreements of of all extensions partners reseller However, our this received year. of current their through

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

which important by multiple understand, and new volume It's on that rates to would the previously. some the to however, of will that implications that The of potentially gone to the by our of quarters; following. have preferential the financial UPS happen USPS over agreements UPS UPS, migrate offerings based impacted and rollout service will fact are

environment important our revenue the the facing will that some in UPS It's results. when competitive it degree partnerships. on that offset financial USPS And happens, challenging financial the also negative also has losses gains be impact of by to and reflects to increasingly guidance our from our understand USPS

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

the facing the shipping-related USPS year-over-year. continue revenue the competitive environment commission With the USPS, is expected and to revenue elimination our decline increasingly of to

XX% down We to customized be and expect from XX% year-over-year, our revenue to as compared postage revenue several approximately XX% year-over-year previously. expect to be our Shipping flat down derived we to will Mailing mailers year-over-year and XX%

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

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

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

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

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

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

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

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

However, trend negative continue competitive we elimination the with commission do degree year same facing to revenue increasingly financial the not associated expect this the that and USPS. with the the the USPS environment to challenging impact of

impacted approximately between in revenue particularly million quarter And historical fourth expenditures expect be we patterns. negatively to be to EBITDA to to finally, expect $X $X particular, continue In adjusted we XXXX. to million relative capital and

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

let's for with questions. up that, open And

Operator

this Thank be a we'll session. time, you. conducting [Operator At question-and-answer Instructions].

Our your with comes Please George Sutton question. first question state Craig-Hallum. from

George Sutton

having of UPS via help to Thank to inabilities confirm, it UPS just Obviously, relative you the with there the relationship? with could or if UPS-specific a responses discussions? And work I to the to partnership you number carriers new and partners. you and carriers And those no decelerate are discuss congratulations the accelerate for discussions. Does you're on those want other curious I'm deal. potential with conversations

Ken McBride

is the and the really key And with U.S. discussions discussions, of the the we mean, carriers been about in UPS our to original multiple active strategy that we're conversations with February, very relationship. as so having leader with having be think been to since well ever one continue as global in I in logistics, we've we've all we've And I internationally. discussed as Obviously, excited was continue -- obviously, both Yes. multiple have discussions targets positive. carriers.

I obviously, with precludes we can't work on think relationship of in to disclose specifics or our terms ability of whether your carriers, not this UPS. with other contract the question the

to -- sense customer However, carrier to really going carriers, a multi-carrier and the we're we support any solutions, continue makes perspective. that already from the within XX support

additional a expect Within products, of point we're we currently don't we couple the We quarters, those UPS Endicia any -- within the over Stamps carriers need and and products. a add have If at XX to plus see adding that, to really to next customer this for major going ShippingEasy, then we're big need them just ShipStation, don't USPS up carriers. a ShipWorks solution. they other move to

we're broadly, pursue UPS to business with but think, going carriers, And continue we're I our as just the So one one. to We -- to first multiple relationship. excited not want model. really in about work new

George Sutton

for Relative a interested set I'm mentioned guidance. in UPS UPS to you to included would QX. your your work, get just customer relative

what or how QX of XXXX? versus You're customer assuming -- maybe your pushing in into the percentage rest base

Ken McBride

get it's QX, question, to expect guidance. the With in into base to included in introduce it rate and in what George. we our that. customer certainly is quantifying of that guidance rest don't those regards we those we adoption But of We guidance. terms bifurcating in good the the in impact migrate don't our versus customer a Yeah, kind for is included would assured,

George Sutton

a quickly Are your And pieces also, any important wondering added. would partnerships. you for that new that of XX meaningful And give could that specifically a mentioned product more you number sense new Ken, others? strategic ran Thanks. any you you've of you I'm than as reference of there us those And are lastly, then through benefit? if

Ken McBride

if, products, we've that And mean really think we It a migrated onto launch which order In part multiple added progress X.X board. and across isn't across in shipments, part our big is of the carriers, that the it I the call ability which customers is split we've flexibility or of version, had Sure. instance, pleased provide multi-carrier and kind we majority with within Well, the stock. go so significant and several really split new solution. mentioned made a extra we're for we version new in multiple to say, of take I mean shipments order stock order the features. the ShipStation of solution. to of the in an I

international as small The business product into returns really other things -- new capability several our the and And ShipStation agreements, adding to solution. that we international significant. tracking international our partnership to as like were continue very move

We haven't yet. those made announcements

more the that So we about in in excited particular. new we'll two -- expect very some significant quarters. a be new one couple announce But able to next we're partnerships or partnership

carriers the of and it provides while, integrating and form it continues it to really and easier. of we I on ShipStation solution, that various of which reflect the in a with website also tools lot leadership solution own of really And other integrating our makes ShipEngine, of a also the ShippingEasy our capabilities API integrations lot ShipStation e-commerce the think discussed a with so marketplaces haven't with in so but or where the also ShipStation market capabilities that's into ShipWorks, into and and API, your we're an but UIs,

I think in about MetaPack, the in really technology. continued excited innovation we're

we that utilize of do platform be the in broader kind within a I of went some moving it of international technology that of to our think bit we'll work when -- to in strategy. able the in in there, terms little we we direction had

U.S. in move were the that. customer into been to the third significant large wants with effectively It's really meantime, signed But quarter, and to organization on so excited MetaPack new significant able that we've solutions we installation the platform a a global. take the their large we a in U.S., about

as teams U.S. the here drive that solution bring was traction in to synergies of And when bought the the a our was sales recall, really the we and And a European fit U.S., solution. MetaPack, ability we in our identified didn't a in lot really capabilities have of really primarily like They it perfect them. one really MetaPack them so that you in were that and for acquisition have to

early in successes we've some that nice area. So seen

make And I those we to we've nice of right that a the five countries into our expanding. growth customer shipments. in we're continue markets. There's hard solutions adoption. -- at also far. in think, And to targeted seeing kind the we're now. We're continuing on focused expanding We're so countries international, nice seeing that in We're look push we're

really across think products board, the I of we've seen progress and all nice So in our initiatives.

George Sutton

Very helpful detail. you. Thank

Operator

Our from K. with Company. question. Kevin state next question comes Liu Liu Please & your

Kevin Liu

afternoon. Hi, curious are if any UPS. follow-on that to you good more I of share you of more question hear extent sort earn. wanted at To structure can can or a the someone's regarding for guys on be UPS if additional details, commission-type this to reseller would of point you a there's

of scheme And the of you was But maybe in of how the of the a out. to USPS -- this. program? of time take total see reseller losses revenue opportunity Do going wondering and fraction it's things, more there's to the from enough the guys offset experienced you to at Or some the grander impacts fully relationship then is just sort with some kind you've about of kind think obviously, of roll some it event?

Jeff Carberry

Yeah.

But volume, talk is XX% we're we're So rates. the volume question? like as terms fact based of not other the structures, a well relationship those volume, to in significant off UPS the said, discounts to we very to The about the the that getting, able daily we really see significant versus reseller of both is other we're end rate, are solution these that. the which customers whether expect into we to on able disclose the as offer not haven't I the customers. expect the moving able than financial I part exactly mean discount. And second really -- to existing structure that -- new

Ken McBride

Yeah.

second what So it's going means our incrementally customers to important strong terms the strategic in this benefit terms component question, of us. forward. in part partnership an the bring to certainly Certainly, of It's financially. does us for and a of

There 'XX of with XXXX is. regarding what is and be are uncertainties resellers. that impact in the The impact lot the the would to impact structure, beyond to degree -- reseller a the And resellers. relative on and USPS, to

certainly do beneficial it, with to with And it we're clarity is our in excited without will that financially certainly assume, a say strategy the big goal. talked now part further for our I and right resellers. is think partners. safe was it's It's ultimately the our obviously, achieving USPS impossible to about what on diversification relationships of We that us. about carrier step of financial this But

very about quantification So given point this USPS. we're USPS, uncertainties definitely But to at relative think, the excited premature is I around it.

Kevin Liu

And access able way, these had customers guys to can through your them? all of then, that there with opt-in all for to Or in you UPS, are you Do master default, show any mentioned that and establish kind by services. Understood. go Ken, a just have sort your with to account have information will that UPS you accounts be these just you so of directly? to of process that customers order have will

my and you. that related last then you let first, to well And that I'll then answer ask just actually, -- question. I'll Thank

Ken McBride

Yes.

But solution, they're already -- the automatically there, currently, be is automatically the signs when using service, begin also, up obviously. our UPS account USPS their there. now will account they So as customer for their

whereas customers go UPS, So with other have out to of now sales go there. automatically getting to and may up forms or previously had reach set out just it account an fill some is ways UPS or

well USPS be the a way big at to ease convenience And cost of the with push perspective. the automatically. people attractiveness done rates the as the UPS of kind the really benefit will attractiveness their for the into of and really we rates optimizing then to always their will it into think we've be right a ability So solutions from there packages, that look as customers start-up, go the will

get you one. discount to have So will be and one, a from today, go discounts available may first some from day package volume UPS. Those whereas to build

So it will utilizing incent people start off be in a and right bat. UPS nice the way to to go

Kevin Liu

accounts to UPS for your question And aren't of to this the offer? have part just final able customers of this have be -- if then rates multi-carrier it. agreement in under established, was they the Got are those relationships that exactly your already new if monetize you able tied just that kind who

Ken McBride

obviously, the mean, I carriers of we about running significant a -- we've Yes. talked a have USPS. other volume we already through have outside lot

We other through carriers. volumes all have in about X the billion

And other have so well as like other carriers volume, within that UPS as and volume FedEx we solutions.

some they we up may better setting already the UPS gone have than And that of offer have they as account of their have them, so their or good. can customers ones numbers, that already these account. And are larger through discounts discounts received have aren't process that

think as be will offer whether want question with have. to I one stick So they the a we're move to into discounts they able customer-by-customer the to already it or

Kevin Liu

it. Got

So sound like to to offer those ability kind your you're if rates. it those have of into do does the accounts move customers able better

Ken McBride

have Yeah, will I flexibility. customers that mean I think

Kevin Liu

and Congrats, taking great. thanks for the question. Okay,

Ken McBride

Kevin. Thanks,

Operator

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

Dillon Heslin

Hi. Darren. taking This for is Dillon on Thanks question. my for

a the Could a like option it the there behind be better about potential of sort UPS the platform? in First, making of drop-down menu? default maybe I mean on USP versus UPS. sort a reasoning you that it carrier talk lower shipping if -- notify sort of through rate different might on every will Or rate the that will be instance? mean Does

Ken McBride

Obviously, -- Yeah. by be available the as We didn't account within up are multi-carrier set vast the one to as much default rates for using customers than the products, looking within majority. you by is are and account default. like at, more still that an default going carrier say so there

one to I the place the want adopt first multi-carrier in is because use than reason mean you carrier. more you

the the to a package-by-package, solution weight-by-weight, it's to that carrier question as So best is. what and zone-by-zone -- extent really

cases, that a be still in solution has better might And cell-by-cell. another some there carrier

is that So and all all to not default. and packages by for default all that are rates your It's available the be going UPS customers it's those to be weights across going zones.

terms rates out those getting from and really have in So to and no directly they of -- start-up start-up so shipping don't no in there's UPS, UPS. with and customers go get friction

Dillon Heslin

you've gaining past the know do the helps adding based still one can I then on US And it. of and prime about you sales past, of the of And are of seeing talked just Got with efforts in that in new the leverage MetaPack in about talked about what some customers? Okay. from you that then sort customer? drivers that seeing Was MetaPack, more of you're there. US? sort you some talk And there in you've the in Brexit, attracting what think weakness you ongoing, that sort UK? in

Ken McBride

Yeah.

is yeah, I yes. answer mean So the

and our family up the front of rest world hey, of identified right that, point, at really Stamps.com we solutions MetaPack really that synergies US. are One of is And organization. our key European, is

so of we the together, ability across cross-pollinate have kind the to And world.

several And our initiatives but here a of they zero be so one of make key the haven't. MetaPack had that really they should there's US. organizations MetaPack, using And penetration in initially, sense ton

with sales a team to customers. in have bring the we So and the sales so that could And of we solution to able they conversations people. were that initiate team XXX MetaPack take

some it's about continuing to quarter had accelerate so customer cycle, it's a the time. But excited we long big forward. sales nice so seen win this and strategy here going traction, taken us gets that a past we've And some

of I terms -- in And think Brexit, some a in some have related MetaPack Brexit. around uncertainty U.K. have to seen U.K. with significant spending does of in we business. the the slowdown

it's impact. certainly, some So had

strong, is I their strong. and However, position think they remain

that really just It's long-term we short-term a So as ultimately, see more issue. don't situation. a

Operator

Thank you. [Operator Instructions].

comes Our Please from Wood state question. question Securities. your with next Tyler Northland

Tyler Wood

Thank you.

the kind carriers multi-carrier can in ballpark. opportunity for carriers other or of and products USPS? us try UPS of is through volume going you the with Just the up much those get other than a you size As partnerships feel with how future, of help

Ken McBride

the USPS, big really I FedEx, and the vast in UPS think the up carriers, three I haven't that. disclosed US, We the make of mean majority market.

So have running through that talk USPS. billion when carriers properties, we outside already in about to volume relates our the multi-carrier that that X we

of like market, the that going UPS FedEx. between the and vast Just majority is

Jeff Carberry

strategic pivoting one the their you're businesses. regard blurring really segment, move carrier though own the carrier to our competitive. certain with to I finding they broadening competitive precipitated lines our given given think start in world that as to where marketplace owned kind of it's carrier for extent a threats to relationships a respond those are important that getting to is much historical more relationships, the And changes really understand

So are those things changing.

to those to I think relatively changing. carriers relative USPS exceptional to and point, are our carriers obviously, platform obviously, go is was an Ken's work but things to non-USPS And exposure for our small currently platform business. that after

So competitive it's well. question, of your something to understand the important I think that's dynamics is that as the the import given market, addressable initial which evolving, is

Ken McBride

one your has go is, way been I -- primarily maybe postal service. think, I to our focused comment more thing add more another add would Historically, question. which really one I would on at Well, business

in of is now, add kind world into all just And shipping, as at this focus then all of the and carriers the it's diversifying with billion. them more you among in But about I think size we about the you market, US together, USPS on as the three, the US, a move look the $XX $XXX billion. of

our US. Xx a addressable about increase talking market in we're the So just within

think international When I $XXX is about billion. you shipping worldwide look and the

significantly a larger So number.

part reason at well of more third diversifying business, is So really we've represent business as -- class. gained percent we've than USPS' of in our their both a mail, and of overall already and of position, as significant we're looked than first the US a their a half internationally the more priority high really why

as larger as order to US really So in have business, in look we the continue well the grow our to market to internationally. at

Tyler Wood

helpful. Thanks. one That's then more. And

the to you. that shifting the of Thank impact extent the talked partnership, you confidentiality about that volume revenue what's volume UPS UPS, from shifting the under of You've can margin to about of due the the from USPS talk partnership? new to USPS impact it to but

Jeff Carberry

Yeah. It's I appreciate confidentiality. just we get given unfortunately question. into And can't something the

relative given So margins confidential, at we unfortunately speak can't to just, the on different this point. carriers

Ken McBride

add, that, opens these sense I waived up shifting and really and capture the is we new attractive new the with with to able current both Well, just surcharges, it's really customer aren't discounts offerings. -- volume this today market partnership which our that about about that makes isn't to would extent volume, it a to shifting not it's but also,

aren't don't to the competitive, tends packages, residential So services smaller more USPS USPS rates delivery. be the really go packages that in of competitive because

businesses when packages, larger so that challenging to to been into tend packages gain have have to where we or And account, residences, go -- account. accounts to more going to it's they really heavier win that

us, before. the for allows this So do after brand-new to up also go to opens and able that we market volume haven't been it us

Tyler Wood

me. All partnership. on for Congrats all right. That's the

Ken McBride

Thanks.

Jeff Carberry

Tyler. Thanks,

Operator

There it time. and questions you. gentlemen. further back no this remarks. ladies to are turn closing you, management for I'll at Thank Thank

Ken McBride

at our us joining you always, follow-up website questions, through for if hotline us Thanks you contact And today. our XXX- you. as or can XXX-XXXX. Thank investor have any through

Operator

Thank evening. may you, disconnect. great parties call. today's this All concludes a Have

Stamps.com (STMP) 9 Nov 192019 Q3 Earnings call transcript