STMP - Earnings call transcript Q4 2020

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Operator

Greetings, and welcome to the Stamps.com Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Suzanne Park, Vice President of Finance. Ms. you Thank begin. may Park, you

Suzanne Park

Thank you.

of the are our discuss CFO, follows: the Ken and business. results and continuing impact having today Carberry. On we'll year The on We'll the as CEO, Jeff is agenda McBride; call quarter is call for XXXX. fourth our COVID-XX review fiscal today's

We business US. the initiatives the and plans go-forward progress discuss in will on various our

on our our will will and various internationally. and discuss We and we metrics, our And XXXX. results discuss financial plans our for QX progress XXXX then, outlook initiatives our

we As in you listen encourage includes well to you you, on of and have today's our release conference the press metrics results as call, as our which financial to front commentary quarter.

questions partners those XX, prospects our include: today, and your and uncertainty forward-looking and the actual cause future materially the business uncertainties, differ investments; our global nature economic of to and which to integrate not Important which foreign such impact actual of business our or on customers, difficult promises and guarantees on pandemic benefits materially views and are as particularly statements Our realize exchange the future company's unprecedented ongoing geopolitical operational and its risks year its will successfully well risks. our include our of its of relationships and and the results. and responses them its differ reflect and demand services, XXXX uncertainty; regarding These from effects including which impacts predict and management's economies, the to ability as the other forward-looking from mitigate could of impact subject and the results the significant comments February factors, governments, cause the pandemic, and the plans for could extent carriers or it to in to with and of statements strategic diversify integration outlook regarding past subject statements XXXX, acquisitions regarding financial or COVID-XX are the to individuals and performance products impact company's statements makes expectations. fiscal of to of only, for considerable ability to management's expectations the efforts and company, to statements making fluctuations businesses carrier

We as financial the to call, SEC, to information about is statements should XX-K differ in results annual included law. Form from by not during actual update as measures. except required and could Further, obligation today's course most measures on filings. These financial recent release that measures. cause press the GAAP no refer potentially materially forward-looking Additional including factors report in undertake adjusted for our filings addition in to non-GAAP to, our isolation but subsequent and considered today's we a substitute be of or certain will with

these about press comparable information of non-GAAP is provided measures, release non-GAAP Additional today. including in our GAAP to included measures, reconciliation

Investor website filings Our are investor and on SEC press Relations metrics at available investor.stamps.com. our release,

the hand to over me Ken. let Now, call

Ken McBride

today. us joining Thanks, for Suzanne, and thank you

e-commerce best-in-class our pleased milestone XXXX; million global of a history. fourth it and we and over $XX XXXX; financial solutions. up the XX% the quarter highest the fourth and significant including metrics. and quarter of demonstrate in EBITDA fourth of the very paid results of total impressive results million, performance, revenue The with XXXX, adjusted very reached fiscal $XXX.X announced to non-GAAP highlights, compared compared million, continues relevance We're strength in total included quarter of our up and During that throughout many financial to today the company's one customers, quarter saw fourth to was we we of our multicarrier business XX% the

of XX briefly current on we milestone and company a experienced. to leadership, that the to I XXXX, wanted and year evolution this years have team impressive use reflect During under the significant reach our anniversary will

late Our postage, small as mailing XXXXs PC services businesses. from a focused meter originally Internet-based on the postage developed for alternative a to convenient

years, various our the major we minor and strategy. in shifts have Over made business

in our For began rapidly shipping we a and and In We've UPS as MetaPack been solutions shipping our e-commerce. we acquire and solutions to into e-commerce, build we with began XXXX as international for markets example, to successful partner. with carrier key acquisitions move and e-commerce. in and homegrown XXXX, XXXX and later added to we expanded

Globally, highlight However, global is the sometimes by volume in not fully I few customers of of metrics. the shipping e-commerce is done breadth a to our always our so wanted position appreciated impressive.

over customers Service others. X and billion the US from additional carriers shipping we in they purchased support billion such US and DHL in purchased in During XXXX, US an US; as of in the shipping Postal our UPS, all X the FedEx, other

group. had through total In five than the various shipping over dollar done products all and our we our total XXXX, our approximately shipping billion $XX of in During US billion. X.X outside world worldwide XXXX, more solutions than during packages billion a more of in software volume sent value business representing customers MetaPack the of

We of eight ShipWorks, U.S. own that and mail are e-commerce packages are the all we for over Endicia, all solutions ShipStation, US US over in brands or XXX partners software where And US billion we of over packages a we integrated and ShipEngine worldwide; with generated packages. seven the Postal seven first-class support ShippingEasy, embedded into partner Service Within significant represent over and Stamps.com, domestic domestic our we within solution. the in solutions, market-leading with XX% one-third priority integrate MetaPack. those

the shopping the software of SAP, such WooCommerce management with And others. we XXX Facebook, warehouse Square, ShipBob carriers solutions. Wix, our selling Etsy, carts as partnership we e-commerce with US of Amazon, others. and eBay, of others. Google, tools over Magento, unmatched. Amazon, and business We in and integrate for QuickBooks, Walmart, network worldwide. e-commerce In support We total Shopify, integrate and strength and by Volusion, generally all the We BigCommerce, transportation Fulfillment ChannelAdvisor with small with more a integrate channels solutions the integrate packaged accounting than as such and of as major NetSuite, CRM shipping XX is major carriers solutions, and For and ERP example, such solutions all packaged management fulfillment

goal Our best customer. is the broad customer and to bring the us of a allows each solution carrier such for tailor having carriers the to individual library to

trillion. you Merchandise optimize may percentage by it processed is XX% for Value worldwide the significant. our worldwide more GMV that all We we at total our Thus, they worldwide XXXX increased the our GMV have shipping GMV X% ecosystem was e-commerce. e-commerce of total is billion, done that When in So through using as US, of estimate at XX% our the an the global versus GMV million or total GMV estimate reports our e-commerce US $X.X customers and associated e-commerce. In that Gross one shipped business. than of nearly by collective shipped the a over of software $XXX with Various their third-party estimate over e-commerce worldwide estimated look represents XXXX. solutions position

our of let great trends discuss on me rapidly significant pandemic we shipping and continuing business. COVID-XX number the position that years, both e-commerce XX e-commerce all to the e-commerce past of COVID-XX unfold. benefited is a put changing impact from in succeed positive have activity business growth shipping worldwide with in as we on the continues having the in that. customers the us to to volume. a remained have quarter elevated our and throughout US significant global impact significant that assets continue now continue to amassed fourth have Over With

fourth acquisition more customers cost by We customer an of our XX% with strength This to per high By XX% customers. strong the in acquisition to of with dropping January the reached acquisition a approximately one the date quarter year-over-year. the up we of customer XXXX in XX% fourth highest in of resulted million approximately And year-over-year. quarter, number company. all-time total For saw than paid paid acquisition the acquisition the up our history end whole, accelerated our channels as customer our continues was remain year-over-year.

As new these solutions. packages that to the significant of carrier brand and awareness properties businesses incredible of office to flexibility alternative process order e-commerce starting post our an in all businesses or it's offer look the location or shippers led we savings and of many into their the is a existing our of that to because go across for provide financial can because our This online customers. solutions to retail

packages. XX% USPS offer service off up for we prices partnership, with XX% retail able daily For rates. to are example, our standard And off UPS' currently up UPS to to customers postal save

longer solutions short-term a We analyze term. our if whether they will new using as to with just customers stick our continue are measure or the solutions

While of both certainly, be the our of analysis customers acquired positive. will we to types expect continues behavior a that, be pandemic COVID-XX of there during continued to date mix

For rate is paid example, trial with after trial that consistent customers conversion period to remaining conversion the rates. remains pre-COVID customers – our customers of paid

customers to the to and Nothing it customer churn within before are the that note the first Furthermore, and consistent continue base. of the is versus quarter acquired customers quality did We also of in cycle. that We equal X.X% the shippers in segment to churn to acquiring mailing be COVID-XX the we higher third are believe ordinary saw primarily shipping the life continue because rates the churn see churn anything is behavior that, in of other acquired we on customers, uptick we uptick and pandemic. QX the driven We year e-commerce pre-COVID customer course magnitude to X.X% normal and We'll are pattern appears churn customer are customer trends, now customer amongst customer that favorable increase with primarily mix in unusual customers approximately quarters, a our acquiring meaningfully of of seeing large those we during than these that now. was strength decrease monitor by We're our of XXXX. from in fourth in a of the circumstances new our shippers customers. of focus types segments mix X.X% segment that, by are primary the second, mailers. driven expected in the right underlying business churn mailing during analyze the rates. to given did was of see the customers which shipping, versus churn churn coming would the the given highlights customer of our fourth of The increase by continue we high-quality

saw In dollar addition acquisition, new fourth continued labels. shipping customer to also the total quarter in strength strong of we the value

of For the growth quarter second dollar labels of This example, for fourth value U.S. carriers continues quarter third than of quarter trends and more in XX% was printed year-over-year in more the XX%. shipping up growth XXXX total our than prior of XX%. the

growth value dollar and shipping labels trends for XX% fourth quarter of than year-over-year USPS, quarters respectively. second saw also the than of XX% extending and than from more We the of XX% in specifically third the more more

along are to shipping volume we of announced This subset package qualify with to customers our available currently. discounts a during volume XXXX, with standard brands. increased that very the of customers continues with to by solutions by in partnership customers discounted through products under customer to we needs increasing our customer versus than the labels during that that partnership. third largely been first UPS' went update the UPS increased is me all our purchasing value our and consumption, product. have the necessary are simple existing rates for shipping majority of use the for Our in pandemic. that in it XX% of and positive account build With UPS live available e-commerce ShipStation the the performance XX% we're The UPS and well offer our that, discounts quarter, required to of in our the UPS the discounts And as to purchase when discounts to strong the In customers. across adoption our UPS automatic products new our the Strong much or great have of existing at UPS, solution with begins of quarter. customers of strong as to The labels solution have success shifted directly very new sequentially, which The beneficiaries growth our Accessing retail a as UPS. US customers continue are Stamps.com After partnership in of value during quick under excited when frequently working during us XXXX, QX released package UPS locations of rates. this a XX% online let more demonstrates with partnership. the dollar allows very daily customers is any off partners new XXXX. new sequentially XXXX. attractive give address dollar our late immediately to fourth saw become customers. working end on without our we over an

discuss of now XXXX in the US market. me some Let the initiatives

First, we expand programs. will and partnerships shipping through solutions marketing further our new new

with During XXXX. our to and continue Google Alibaba, Salesforce, XXXX, activity new we SAP, we and plan in announced partnerships others, partnering Shopping

recently with also featured programs. to a We with home Wolfgang more our advertisement solution with in Puck recently on work customer partnered his Wolfgang partnership are beginning online TV our new so and marketing for produced an advertisement closely we store. Puck them UPS

customers continue a variety shipping and our scale to of marketing XXXX in to and sales a partnerships. test industries high-volume will utilize channels with We focus acquiring of variety and a and marketing across on

the functionality options XXXX, shipping business. December we particularly for the of customers. in and part very and In launched of in the to is significant development in-cart solutions, we in new e-commerce plan our resources The a multicarrier merchants innovate Second, continuing delivery expand we of market. dynamic shipping amount and to invest industry features our a the

add process, any options control carriers. customers rate flat capabilities multiple their to checkout With live from free, flexibility select best The new of connected the the and in-cart their can rate delivery option. options, options shipping and merchants delivery give to including the website's

continuing third-party are support, such enhanced solutions. tracking more new and dropshipping, returns track and to we logistics and capabilities, sophisticated brand on For sophisticated more branded XXXX, as pickup drop-off – mobile also focused application deliver

rates more fast to Plus to see We've we that access includes in customers plan service, we provides countries. and Mexico day, shipping solutions discounted and carrier XX to GlobalPost taxes to partnerships. Third, and customers continue that other duties prepaid label going which In private bringing launched November packages GlobalPost cost-effective international US innovative shippers XXXX, to our fulfill solution, sending SmartSaver UK, growth international to continued alternative or Canada. high-volume are offer we shipping our a packages low-cost through for parcels for per the where

in international these other package continue We our XXXX. drive to expect for to and customers solutions domestic

in development ways. let of discuss some product to continuing in development and In XXXX, invest Now we'll our me efforts. expansion our continue international marketing, efforts business our significant

strategies carrier targeted product ShipEngine our First markets. relationships, we're ShipStation for and developing partnerships, marketing enhancements and in

over of of ShipStation in continue the fourth ShipStation's Canada, year-over-year We quarter strong versus and XXXX to quarter Australia. adoption fourth U.K. see international XXX% shipments XXXX. increased the by

whole fiscal For as shipments international year-over-year. XXXX increased by XXX% a ShipStation's

We continue we're XXXX, that supporting In we Spanish of to languages. announced expand ShipStation our on platform. January new support the now

months. expand version live in French where version beta launched French is A of coming ShipStation expect in a language also in support We during the ShipStation Canada. We're live broadly in in XXXX. France, to we more

selecting Spanish. from preferred and New and users into existing to be French ShipStation English, account language, now their their log will choose able and

to on front. the continue partner also international actively We

MercadoLibre, partnership largest Latin than for payment and the largest XXX a online Latin America marketplace ecosystem with the For in during world new XXXX, shoppers. fourth we the in more with American example, announced million commerce

We also carrier La and Colissimo Express Canpar Chronopost announced with in La and Poste, in relationships new France Canada. others. Poste

the XXXX, Australia, continue UK, to our we Canada and solutions France. international expect to footprint. marketing Currently in the For expand

our and expand Zealand, footprint to to Ireland During expect and XXXX, others. Mexico we New include

for many our solution EU other across the and around evaluating We of are regions planning and world. actively countries a the other in launch

platform features. technology in both to continue business releasing in acquisition Second, the our and including re-architecting make customer technology we new and MetaPack progress

print uptime, quarter technology leading industry volume levels fourth shipping provided warehouse platform and availability. label season, of a During speeds MetaPack's record

encouraging strategy our satisfaction new e-commerce center returns. the our retailers' and delivery product with experience also such customer call for to in retailers customer in tracker. MetaPack rates have Early tracker levels space. improve and portal on and to align delivery e-commerce products adoption ship We saw of continue returns continues core And new contact as delivery adopters invest post large the particularly the reductions meaningful reported to

manager chose lead delivery HelloFresh from its Germany Austria. services to shipping across highlight MetaPack's UK, a last and As year,

a We quarter. last deal our proposition e-commerce significant of the with also future enormous about service offerings. of fashion extremely value company a luxury excited world-leading technology and signed multi-year our remain brand and We

and always proud purchased and success around a We're to over to and and strength marketing We've Our customers very in the very integrations with of printed very size in service company $XXX e-commerce depth position last outcomes our out. best sheet strong of and we and for the that driven sales and over The debt. our scale flow have our and goal those we this and the and long-term in investments billion the is ship shipping XX of of value partnerships billion approximately multicarrier and world. managed programs. our properties, one used myriad of to the balance labels our as US breadth trends labels proposition no play company's by is strong million more carefully year than cash international as $XXX healthy the worldwide cost provide structure forces strength million and cash a result the GMV

a now multicarrier for a awareness brand solutions. demonstrating e-commerce we the in created our We XXXX significant beyond. global With that plans acceleration in and our I'll the in the and in to to our Jeff. shipping position be business have And are continue great call over experiencing business to to market-leading we to continue turn large are execute leader

Jeff Carberry

revenue $XXX.X QX. derived $XXX.X versus and XX% in XXXX We of worldwide quarter in COVID-XX the revenue year in The Mailing in XX%, in investor was That of by reconciliation the QX, release in A million year-over-year measures termination can QX our million XXXX Discussion fourth the and of our June XX% non-GAAP of quarter year-over-year revenue and financial review year million up fiscal was measures year-over-year and of of GAAP found versus estimate XX% e-commerce XXXX up be in revenue our $XXX XXXX $XXX.X postage fiscal $XXX.X and customized year-over-year customers XXXX. resulting has million for of XX% pandemic. the in up on quarter million XXXX shipping was no measures. MetaPack versus from was revenue total results. non-GAAP was shipping revenue shift that QX financial today attributable growth from was and corresponding strong $XXX.X driven Total negatively fiscal now year XXXX, fiscal XX% was website. XXXX. our second XXXX metrics QX the and fiscal $XXX.X in year and and up was was We'll area was was Ken. total up XXXX. earnings as fiscal in the for up was to and revenue. by program versus excluding that includes and and the Thanks, that revenue versus of excluding in percentage of impacted a versus XX% year results that XXXX. fourth year half was revenue The that in by grew was driven million our QX year versus financial our of XXXX, up and the year-over-year, that XX% in in in million primarily XXXX. the was shipping to shipping the that million online year been versus growth growth purchasing up Mailing year-over-year, QX and fiscal for $XXX.X to QX fourth and QX Total approximately the range MetaPack mid-XX% XXXX was XXXX in XX%

marketing gross XX.X% total versus and the shipping derived margin R&D estimate gross in increases customers, year year in primarily with in and sales strategic XX.X% gross acquisition and from The QX, mailing QX in XXXX. revenue by also in shipping. We MetaPack as XX% in innovation in versus margin of year-over-year and percentage shipping to in and total in business support fiscal margin that Mailing XXXX. growth as and We to strong in in was the impacted growth had our mid-teens XXXX, was revenue, related XXXX a investments, Mailing And XXXX and fiscal year-over-year of revenue the was mid-teens grew was and growth. QX and costs, associated long-term our positively and e-commerce-driven operating XX% driven well. was QX by customer XX.X% XX.X%

and XXXX XXX%, expense shares QX X.X% by drive operating up XXXX. based Ken XX.X%. we share XX.X% XXXX. million and a and share XX% was $XXX.X and of of income expense on $XX.XX share in scale diluted and of non-GAAP XX% year-over-year, in XXXX XX.X Non-GAAP was As per tax XXXX Fully per XXXX, international year-over-year, in driven more in XXXX. of QX $X.XX EPS was up and our XXXX, XXXX million on and diluted XX.X QX XX.X% tax up versus non-GAAP XXXX EBITDA Non-GAAP based for XX.X% was and versus XX.X rate up EBITDA in XXXX. million up of XX% fiscal based income in a EBITDA versus of QX, for fiscal That $X.XX million rate was of XXXX, for revenue non-GAAP $XX.X XXXX was in rate adjusted XX% year-over-year, XX.X%. QX was of $XXX.X continue tax versus based margin in calculation year aggressively XX.X% mentioned, in rate Adjusted a business benefit to QX of in QX our that was QX. was XXXX XXXX. the was service versus on versus to a in was XX.X% margin XX.X Adjusted investments million in was adjusted $XX.X mix growth XXXX million versus was operational income year and was QX initiatives. revenue. tax was on of QX. The increase strong That fiscal year higher-margin million in in for That domestic $X.XX non-GAAP versus up million and expense fully XX% fully of favorable versus adjusted Non-GAAP diluted per was

now discuss metrics. customer our Let's

Our company's new total of customer number partially was but history. offset an was million, by was QX driven represents versus of metric This paid paid customer in acquisition, customers increase and in XX% the XXXX strong customer highest X.X up which by churn. our

fourth year-over-year. Our churn was basis rate quarter was up X.X%. XXX points Churn

As discussed mailing driven large churn earlier, magnitude increase was and the the churn, expected, in normal the base which primarily the in segment Stamps.com in dynamics of meaningfully churn the customer given was the customer by and higher the mailing especially of segment recently acquired first customers is of year. in

Historically, postage total postage decline total in billion, area growth in the The USPS Our in Total XXXX. fiscal ARPUs, much record year-over-year, growth mailing fourth year, metric lower includes USPS ARPU and the and of volume. X.X up seen by postage quarter non-package USPS those And this XXXX year was fiscal our XXXX. a total down volume. total -- versus customers, both, customers. was volume X.X mailing quarter mail growth XX% have we printed than quarter non-package shipping driven XX% primarily saw steady $XX.XX. traditional But generally for in up this printed we've higher ARPU paid quarter was customers billion, strong of fourth mail fiscal versus fourth who fourth XXXX. X% our shipping was a both, for

end million and share changes in was from cash and XXXX. investments working in discuss was and million, The was capital. from which flows with offset of partially investments and net of We primarily cash our cash. increase $XX up in ended driven by QX of debt by $XXX cash, and option million, operating strong cash repurchases QX, Now uses at I'll $XXX the exercises cash and

debt We to no have, continue outstanding.

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

plan $XX August was our million XXXX, $XX new current Board month. a On through million plan in Directors this approved of runs, February repurchase XX of approved that earlier of XXXX. completed Our our August XXXX Board by Directors that repurchase was

to driven Let's in by meaningful The need, mailing worldwide to global driven by solutions, increased generally COVID-XX for e-commerce behavior, pandemic now growth. turn the to contributed our and that outlook. business drove financial shifts business a shipping online our benefit, XXXX, unprecedented and an online purchasing more

this March business nine of specific remaining growth provide to thoughts general implementation affect outcomes we help XXXX revenue our some the for might about difficult continued XXXX. we more of look that lieu very the forward the These myriad could to months, of or factors accurately such timing and restrictions, specific associated benefits risks, and have our in year-over-year do the shift are that could our will started could back those the degree the pandemic, business think the However, global given numerical on that strong XXXX. office-based any XXXX. factors of range Safer our changes at associated accurately moderation, have with effects resulting providing with XXXX, overall fiscal In Home XXXX. the not earnings ones, on global dynamics time. around include Financial restrictions unfold an in business control, certain of as to as, in forecast. the to environment. And throughout that thus, macroeconomic we guidance, factors in beyond ongoing with see middle investors are we to of our are the to to Safer that Home circumstances, And of at the not potential forecast, things Thus, COVID-XX, e-commerce. And we those working at of business feel large-scale we guidance, able are

note, saw, would our of the we growth However, we has that that pace slowed quarter. each

quarter fourth approximately in of second XXXX, and approximately XX% second For of quarter XXXX we total XX% over the X% was XX%, support approximately over up example, shipping Also, quarter quarter, third the acquisition carriers fourth processed was in in across XXXX. quarter and dollar XX% of that in over total quarter third US the XXX% in customer in US, volume, the the the XXXX. the we all in up of the

to seems XXXX, a we see continue slowed Customer But, growth year-over-year once XXXX. in fiscal was During over growth. January volume the saw XX% versus acquisition shipping was the total up have up of January we pace strong US US across of that to all in and a bit, during the XXXX dollar support carriers in we processed, XX%, approximately we XXXX. again, January

into quarter that also very number wide and move be reach XXXX. negative the may COVID-related growth begin began point rates, significant earlier, we face second revenue we light tough year. very of of range to growth to once As strong year-over-year of other in we potential comparisons that in not of the XXXX, unreasonable given of Hence, outlined that March macroeconomic include consider a factors would the it of the outcomes we

operating that growth. of or investments Accordingly, XXXX. operating XXXX, operating Ken in continue expenses XXXX, RD invest we would terms to the R&D we annualized investments long-term In in made our more. may reflects expenses XX% discussed increase to expected in both, initiatives as -- much as in our annualizing -- of plan in expenses, throughout expect The additional and strategic growth

customer very heavily expense saw we Additionally, predict. in to difficult in was dependent on operating acquisition, as which is new growth XXXX

and Despite elevated our fiscal global and very are the our e-commerce our EBITDA the we offerings. sensibility service term the levels adjusted longer value platforms from secular we likely excited proposition of of trends the opportunities, strength saw the strong shipping significant technology in of a about risks As our and uncertainties, year remain result, market we margins near-term to the XXXX. anticipate that moderate

we financial we our the term longer expect would volatility, fundamentals we'll offer call term business open a while profile. very believe questions. of the for long-term potentially attractive And that, with So shorter

Operator

question-and-answer question with will Sutton from Please proceed session. your Instructions] we George now first Craig-Hallum. gentlemen, and Ladies [Operator Our with question. a conducting comes be

George Sutton

Thank you.

First, believe that's would thank to done you relative the Ken the for helpful first like very good volumes found you've that. I to I ever market. I to providing really say and the be time perspective. that

you looked you anything to obvious? for that there into are obvious, providing the from be specifically not about the concerned fairly which aside might guidance QX comparisons, As that not providing else QX tough is are or XXXX, fundamentally

Jeff Carberry

There's question. I think not Thanks an that for is nothing obvious.

large are e-commerce factors COVID And, very not a forecast. just myriad outcomes on us business impact to obviously that anyone. useful to make global has but think has of particular e-commerce. range for the variables the of a create really And us -- reality and an and impact in unreasonably not is I that therefore, COVID our entirely shown subject they just effectively guidance what is that possible are for to wider related very those broader impossible

is I extraordinarily guidance line given the year and this uncertainties. level the that those relevant and just difficult So associated -- ranges not for of make the think really particularly us bottom risk

Ken McBride

view U.S. at -- the XX% I mean, Yeah, of process I'll the that of all merchandise think I we value for e-commerce. I George. value, just the add represent was beginning, think expressed of the we punch-line of point I merchandise shipping

sit to So the being are guys there. may it I think an just analyst. forecast you clearly be are I tied in a able than the heavily to as probably challenging forecast position e-commerce And what mean, to very that you to the growth -- we we're in are outcomes in that. and position it's better I think

it's think challenging happened magnitude in -- XXXX. it's so of in given And for the what I XXXX us

our result think to to are forecast that I ones so decided e-commerce just of to we to that do themselves. be investors that for as the a business the allow And not trying

George Sutton

beyond So look potential the of what secular XXXX. still XXXX? discuss XXXX? growth Obviously an are XXXX by pretty you driven have growth e-commerce clearly a compare significant. beyond beyond, we we and opportunity But that's to tough also you international rate Can in if were and

Ken McBride

about tough think a it's challenging position. year really great talk this we're to certainly for in Yeah. that can't more I mean, happens us -- even think the kind I talk about talk of about I out-years. it's But we likewise what if to

greenfield as other If we you or there like you you areas, wide solution we're lot look Europe our expansion a as that markets customers. you solution we It's if in at new have a out of when finding world. mentioned, these into go look across the is worldwide ShipStation solution and no with go other is there. a There really as And really and resonating for Stamps.com we will these open. Australia out new

just we're that so And kind started in getting area. of

a a it. as of we're We just e-commerce going worldwide of and aggressively percent. only we're X%. few shipping a about lot a But worldwide plans of percent have we're percent And after as

in So and I able runway And XXXX access out-years. more the think certainly that a start meaningful that we'll we lot a beyond. be international huge that have to here in to will with be

George Sutton

you anything you're the if scaling how given than scaling on just can marketing? up not I that marketing and and other Can assume Finally, up sales you, you are the business. to is your sales would perspective quote grow provide the behind the thoughts XXXX. to effort in conservative do of I

Ken McBride

think all the the that of we things like I in interesting TV, us available about for Yes terms talked and we've cost-effective their entertainment like some effects that our inventory the the business, saw -- and we a things of in marketplace to companies pulled also happened were mean go advertising, lot sure. really saw companies in advertising of aside I that back get travel companies allowed of and some from rates advertising. things and from

continue --we -- a makes ROI where We'd to evaluate our we'll now. spending as on earning we huge at So, We continue think it on right aggressive to I look are to sense. be certainly investments like that.

Jeff Carberry

well and take Yes. add know sales us I'd manual we you and thing very and is The quantitative George marketing. to obviously a only approach very

spend modulate eye So channels. of those cases that have we close those to number an we the all a very obviously myriad a ability lot And channels real-time of we keep on a in with utilize. virtually of

risks. well marketing judicious I But sales on and money be we spend how the looking balance we are both as opportunities the obviously the So, I think on think to to as modulate going real-time other spend how that to shakes factors. But we point and to investing an with see out what Ken's based the growth. ability COVID on we're obviously with have we economy for our

George Sutton

Understand. Thank you.

Ken McBride

Thanks George.

Operator

you. Thank

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

Kevin Liu

Hi, good guys. afternoon

the specific obviously you're that think different as large levers with. you an about here with no know question into extremely than paid terms we higher guys you much base in came subscriber First have XXXX I of for guide. But outlook year the XXXX. just what there's coming the into

to kind is are generally your fair assume of So arrangements e-commerce your benefit? And existing some long current and various so as e-commerce in the is to see stable? growth with US commensurate in is it the growing there volume relatively extent for that partners us abroad It's should just those really dependent. that you guys

Jeff Carberry

Yes.

I obviously. And e-commerce impact both acquisition and world on the they on labels. performance for those To speak and well all shipping post-COVID continue us a XXXX how of nature specifically think see we for manifests things consistent to as can you when about customers as in really basis obviously with regard the those volume point though of nature in XXXX look of is pre- how it our your uncertainty. talk a the very has huge COVID terms and to

scenario one where in have growth. certainly So is you moderation

also could see down You economy to can the as where other up. as potentially people scenarios things growth capital allocate go opens

COVID-related So highlights the it variables. even XXXX forecasting in in just potentially of on really risks some and based XXXX inherent

to are purchasing financially of that shipping e-commerce e-commerce on the But at itself the correlate day for well impact us us. understand through with those e-commerce. you're of to I as going of end the see manifest us in people volume generally, think but I terms some you dynamics So, broader for have how then and think obviously

Kevin Liu

outlook for The could then more wondering kind kind relates how XXXX a cross-border is here companies of growth of was e-commerce a bit global your Understood. and about if shipments. most And I of you XXXX. certainly in one lot cross-border little area talk COVID. that's your business positive trends it performed has what the for in mix been to as

Jeff Carberry

Sure.

-- And So cutting-edge always quickly. cross-border of an area to standpoint are from be with very our needs and platforms pushing the customers. an developments is a technology of that's developing those obviously on we the where that example our of

world the the gets customers for What things connected becomes humanly make more that use as ensuring can more US abroad. cross-border domestically and obviously process as our what is duties that doing things that and globally well extraordinarily as efficient like possible both forms complicated So and around tax with you in controls as and of sales import we import nature. and and and regulations can't we're as

evolving and prioritize So that world area as it we one as for see us attractive And eye opportunity that's our closely have a on certainly becomes more R&D. very the we again as a globally. we do highly interconnected

Kevin Liu

higher expand this as kind investments fixed of year. the acquisition? you've the order lastly, your And to need And international then continuing grow expenses as operating extent, get CPA Can customer this talk kind seen your Got just to to variable of for you expectation are those it. how make more towards to the business levels to for comfortable spend starts the much back to historically or versus you about more that XX% rate? to you spend are metric at in extent

Jeff Carberry

Yes.

there I think saw of QX. as if kind part XX% of was -- down XX% pre-COVID, in ROI. CPAs But attractive the CPAs. which year-over-year even were I'll were start with They is they last question, we still the back very a

attractive and OpEx, discretionary as in that spend it's as And combination very headcount very it's we extraordinarily And run, of principally in sales well lot are related to R&D, to which opportunities, on. for the it are expense. in to obviously, high to in headcount we the efforts. early international have is tapping of be ROIs marketing, As early believe increase longer but we relates A a expense. there clear on

from a after retailer. large building kind are scratch of merchants, we So business mid-sized to omni-channel MetaPack internationally preeminent that is the low e-commerce for whereas effectively going

But certainly So, is long in a multi-year feel could modulate think of being framework. we in we extraordinarily mind investments the attractive for I the would I we about run. But that. modulate in a are those lot that able bear to obviously think, terms investments way we're that are that making of

example in saw back for as as a we modulate certainly well to the global something as far obviously, we marketing, like can COVID, As of of if terms recession sales modulate that headcount on and marketing back as spend. on sales and result a

a internationally. we're is long-term multi-year not But spend good to of drive spend that us opportunities of for a headcount-related portion So going to portion recklessly. that obviously

investments. shorter the with you see aggressively, in risk pretty downside some spend the run us with headcount that drives even see COVID, stuff on might still especially might you multi-year So

Kevin Liu

for XXXX. the in questions Thanks good taking Okay. here luck and

Ken McBride

Kevin. Thanks,

Jeff Carberry

Kevin. you, Thank

Operator

Thank you.

comes with proceed with Please next from question. National Our question Allen Securities. Klee your

Allen Klee

Maxim at I'm Hi. Yes. now.

the about you what think in directly over from envision that you volumes you on get the do do US can paid play carriers? the how or that out you international, with how two? next the shipper year the hope where progression to the do How get you On potentially to getting from could the

Ken McBride

go be particular into interested we that a and that look Certainly our are part in to will world at US customer base to get as accessing for the the those able in a that going carriers we effectively revenue be goal like in is our we out Yes. carriers of and share activity.

customers think other the the US we I So actually that customers effectively customers, million than hundred our vast have -- of majority a few right? one in are US. all well

And today. so that customer here and base now is extremely attractive

able we do to partnerships so And partnerships. other carriers. do been were with We've to the able

effectively others. and UPS with partnership share rev a with have USPS and We with

So internationally -- comer. still still we're we're I up think and

markets. it's we We've mean, that mentioned growth growth. going build that we into incredible I as to we think in customer year-over-year kind base seen for I XXX% international with go to shipments So these saw ShipStation some time of new particular. take

in complex that's are faced. other many However, markets and companies off base we're a than small have more And complex these ways early.

relationships work have XXX the really that to only U.S. As vast over lots the there. a the we are There's lot of in market. carriers carriers -- we we There's through with the of in support go three of majority worldwide.

So is complicated. market each more

We business into have relationships. to development go

a matter more the the we markets. those arrangements revenue then the it's we'll able in customers And those markets. carriers with market do be And in so, building to believe share presence of

Allen Klee

Thank you.

out your would you at? the prices things may cash up M&A. -- you built on not lot think curious but about what balance I'm But where there's sheet. probably you be chest guessed You've of nice what I interesting there of how would want. you looking be a war generically would If a

Ken McBride

out think right Well certainly in are you're mean that I high the market. yes valuations in pointing I the

think and We we've hit picky. company in years the you activities we pretty the guess X, that we did vast home averaging we've when majority done team having so right? to one within this And that we at the -- I of do If we're -- four run done. XX look runs years. acquisitions every and of think we're I like management we're So

M&A be So the distracting team. for can we're for picky. very company the management

we something we want the we certainly able so that right make And company, right haven't point when the to the to do we're always valuation. the it, obviously been it's culture, sure But as And right fit, searching actively find at right meets our we do. this criteria.

Allen Klee

Okay. Thank you so much.

Ken McBride

Allen. you, Thank

Operator

further like turn management the There this I'd back any to questions to for are closing floor time. over remarks. at no

Ken McBride

in us. joining tuning us come for appreciate your (XXX) appreciate everyone Relations or Investor our website We today. our as follow-up you can Thank number XXX-XXXX. We And investor.stamps.com contact to questions it. if always through you you have

Operator

gentlemen and concludes Ladies webcast. this today's

for You may Thank have at day. your a and participation now great you disconnect your this lines time.

Stamps.com (STMP) 18 Feb 212020 Q4 Earnings call transcript