Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the Pitney Bowes Fourth Quarter Earnings 2022 Results Conference Call.

Your lines have been placed in a listen-only mode during the conference call until the question-and-answer segment. Today’s call is also being recorded.

If you have any objections, please disconnect your lines at this time.

I would now like to introduce your participants for today’s conference call, Mr. Chief Ms. and President Lautenbach, Executive Officer; Marc Ana and Mr. Vice President Financial Officer; and Chief Chadwick, Executive Ned President, Zachar, Vice Investor Relations.

Mr. call Zachar, with the the Safe will Harbor overview. now begin

Ned Zachar

Relations Zachar. Good my to like duties Part Safe appreciate to morning. the manage morning, your is this everyone Pitney Harbor Ned include call these very everybody. the and covering This welcome calls. Investor information of We program the I’d interest for Bowes participation. I for much and

statements about forward-looking future Included business performance. in are today's financial our and presentation

involve risks to statements our and Forward-looking cause uncertainties actual be projections. that results from could materially different

For our more Form our XX-K risks at clicking by website that filed Relations. uncertainties XXXX earnings and Report please SEC other reports www.pb.com and information see about Investor these Annual with on our on press located release, the and are

Please developments. appropriate we keep our any new release materials in find our presentation update any on the not result press reconciliations for you statements also used the can discussed measures obligation in the Also, information release are non-GAAP to to undertake website. of in our as that attached in a and to that forward-looking tables GAAP or or do mind press measures

historical a and slide call. Additionally, website we have provided on a segment spreadsheet our summarizes of presentation discuss the today’s will during with many information that Relations Investor points we

on meeting. a of be to one issued response that this nominations for recently annual not we our announced XXXX shareholders XX will questions seen answering our have may You call. relating release We and on with the nominations the any press January director

financial with by remarks Executive Marc will our Lautenbach, Financial Ana which an Officer, of Officer, as will is will President our today our followed discussion follows: and in-depth format provide Chief results. who Chadwick, be Chief opening begin Our

now to presentation floor the the like is Marc, to turn over Marc. yours. I’d

Marc Lautenbach

appreciate everyone. morning good and call I morning. everyone our Ned joining Thanks, this

solid flow and divestiture, after grew comparable quarter, shortly. a for that Ana will up for change quarter and made strongly. For detail revenue portfolios flat SendTech performance. progress adjusting and on perspective, businesses to currency, a both was shifting from flat revenue the two predictable were growth. and revenue Presort a their continued the is In EBIT essentially a and cash basis presentation comparable good a and businesses the profit slightly aggregate,

for point] This means device, our this revenue. Presort, In [ph]. and include recent IoT PitneyShip SaaS In direct XX% along mail America have from and They products. winning most our to SendTech, coming investments result this including SendTech, we award business. the North made and These bound revenue Mail is matter our printed and marketing of now [parcel in over products new Station, offerings, sit PitneyAnalytics. Cube, is a of shipping

services Again, are be Margins business financial the in Presort model. at add market. improve within these to performed I a long-term have well again business. are of improvements these well. result our I continue remiss aggregate, in margin a choppy perform businesses in in continued investments automation the very two if to In we would direct also didn't and Presort made

even but for well very future We more were activities headline substantial is managed. Finance In write-downs, an and the collections, the expecting growth, this. important across we're harbinger Deposits, to credit funding progress. grew progress of minimal. were all important and many receivables, GEC, losses quarter made make

over the our course the XX year. of points increased Specifically, satisfaction customer

a by performance XX% network domestic points in parcel year-to-year improved our difficult us volumes quarter, on These the In a market. helped items XX basis. grow over

but of piece improved good year-to-year $X.XX labor XX%. Lots better. On improved margin the cost improved expecting side, a basis. even XX% and All-in, we're gross improvement, transportation to productivity productivity close on per

there it down, boil were issues. you two When

gross volume. the margin This not heavyweight did positive enough and levels. within our ultimately too get revenue lower piece parcels First, depressed per

our improved to implementing order transportation XX%. continue we're our to the improve year. Second, enhancing system a on transportation our new In execution, We're counting improvement. XX% and the half of processes to a in management first close transportation

to our have personal we on increasing higher plenty time, have get and but mix, that parcels, shortage just markets bit volume will focus opportunity, so higher no backlog our It take resources in weight parcels. pipeline of there's of our that opportunity. rate of are Specific to we with a A the we need into network.

to middle face the changes the of strength continues dollar Our our year. unprecedented cross-border services will the way access the to and to largest of of clients headwinds the potential business one in due our

for I result, to business continue to a some expect As pressure this time. be under

in still opportunity and we the guided rate] our strong. volume but said, as even high-end very profitability. [ph], the do relative had in was long-term GEC, our our the to moved for factor the pipeline toward forward] domestic a we is [exit This harbinger of That conclusion, So, to [ph] and better. the what expectation backlog we is the future to and principal implementation reaching good volume is [bar

Thematically, A strategic capital balance and be our on flexibility. sheet. allocation allocation few continues and around for capital to our emphasis our words balance sheet

we of indicated flexibility our going the was also execution our agreement, Part working good outset, on and capital, funding. for at quarter. cash afford I which deposits, of the importance, was performance of revolver strong performance us As renegotiated around very will but Also forward. very was the collections, timing there more

opportunistically. We'll to to back on comment of Finally, continue our we began portfolio. purchase on the opportunistic debt tranches an repurchases pursue basis, A final debt.

markets a to unlock we said, where board and being to look permission our I portfolio That win. to for Our to opportunities have continue in shareholder believe value. continue brand coherent is we the

in-bound is and recent segments. inquiries. for may within times it opportunities there even Sometimes of in to and The how proactively to this reacting means other our of example means be portfolio excellent looking simplify larger XXXX opportunities sale Borderfree further, an business

unlock opportunities [like value short, for for our we in [ph], is will process to that look So, shareholders continue a and ongoing. portfolio] to

to the Ana. Let me now over turn conversation

Ana Chadwick

morning Thank good you, everyone. and Marc,

my a net contract affects costs profitability the the currency, and year-over-year Ecommerce begin in a the to X, extent note to started of the pass-through basis. border from is of that a effective revenues. USPS change the free lesser quarter solutions. those I'm going the disposition The gross review, Global primarily not discuss presentation with July our of financial Adjustments I due certain on impact and does information I'll revenue as change shipping in comparable revenue of change to digital for of a revenue modification Before affect fourth This presentation to include SendTech.

EPS adjusted basis. the basis. Total compared will high year, items a X% an increase. Gross review is The for quarter was million, XXX other I quarter on of million, noted, to EBITDA, is of a profit a flat such which fourth following otherwise revenue XXX for unless Also, comparable speak and year-over-year the level results. period to comparison million as the EBIT, on for company was the last XXX same our

XX variable prior timing year's were Gross XX margin ago, was accrual. was million XX EBIT slightly Corporate last a year was X% million from XX%, million, is EBITDA a million quarter for compensation expense year, up was million, from last of XX XX level. up Interest XX% million, XX ago. million the XX year year. XX a by increase. from up million, driven which from expenses the down up from

EPS year. same were For was $X.XX expenses the X% prior as quarter, Adjusted in lower. year, the the corporate

improvement in Turning was million flow cash items million in XXXX. compared to in driven drag the earlier cash to to was free lower quarter million capital in-part year. and XXX CapEx cash for favorable by year. XXX prior million, the was from XX XX the working in from CapEx last were year. in down GAAP a flow cash flow. XX operating that XX was activities The million quarter, compared Free million,

quarter, now annual in payments. million made During in dividends paid points data we XXXX. X key and touch the for will on X I restructuring million the

the were was loss XXXX basis. billion, $X.XX the was year. prior lower Adjusted X.X EPS EPS XXX versus EBIT on was $X.XX year. For last for GAAP companywide year. year $X.XX XX% revenues versus $X.XX a a than comparable similar last million, year, to

Full-year XXX approximately compared end versus million million diluted average shares flow weighted in million. was XXXX. cash the million, of the XXX At compared XXXX. XXX in to XXX to million, million outstanding were cash was XX quarter, XXX million. was spending from operations XXX Free Capital

press at Higher by Looking quarter-end. the Relations website. X.X third billion, XXXX. on sheet. both debt billion the XX X.X at approximately at balance Cash summarized investments information are and were as and following million year-end $XXX our release approximately in year-end presentation, slide million of to XXXX. segment posted of Investor to compared our compared Total was short-term which is The at quarter

quarter, the X% revenues year. XXX a start I'll last in Presort. Presort improvement were with which from is million

down was per EBIT a volume to revenue X Total XX%, higher versus XX% prior compared X% of piece year. EBIT to basis up quarter fourth XX pieces million, and billion XXX year. XXXX. customer New revenue which quarter the point gain. is nearly additions margin last was was versus the improvement sortation contributed for

and driving in investments improvement. ongoing productivity, sorter resulting is the automation margin refresh Our better is in which

The revenues long-term in-line time with with levels XXX model. annual important our profitability for topped headline is Presort’s million first the

growth in build supplies. prior margin million continues XX% XXX the continued comparable SendTech. year. to in at was segment for revenues XX%. XX% pipeline. down million revenue, EBIT related in to progression. increased the year SendTech revenues EBIT revenues and a offset quarter, prior XXX stable prior of shipping fractionally which compared to rentals, which was declines to million, comprises compared now reported year of in Shipping Growth and XXX SendTech shipping quarter Moving team the related SendTech the sales basis. was on their financing, Equipment versus

year-over-year performance basis trends SendTech. spend healthy are Finance the basis year-over-year. of our points, year-end, delinquencies XX billion. of I'll $X.X down finance the financing just and portfolio across on portfolio. see receivables inside services we a payment XX-day financial continue are up At totaled our business now X% XXX moment points to

indicators made the continued both future in positive In and strides of summary, services, SendTech solid and which are of performance the shipping, its business. for financial

the Ecommerce. Global where to improved Especially significantly, gross progress made compared segment to Global profit The Parcel Moving operations quarter the substantial fourth XXXX. quarter. Ecommerce in in Domestic

However, XXX comparable over and expectations. grew basis. strong short a prior of on improvements Global as Marc stated, our year slightly reported fell in million the Ecommerce revenues

margin Global in negative quarter million X.X improvement. from margin segment total to million Parcel million loss XX gross of quarter to Total XXXX. XX million compared ago Segment a Domestic to was XX year growth improved of Strong a was loss segment XX ago. negative fourth gross EBITDA XX a EBIT in million, in for million. year million, a the Ecommerce compared XX

an of volumes exited roughly we our the as expected, that we year-over-year clients. projecting year to XX down, million. XX% improvement. with about run In highlights the we XXX First, were context volumes the that And up gain XX% Parcel let's resonate with our industry talk of where Domestic saw rate is be to million. services

XX the For quarter, gross Parcel improved million Domestic profit year-over-year.

$XX gross improved profit which the million. $X.XX, for full-year, For translates Parcel to

in in the of our technology. despite quarter. the robotics, to we note, [ph]. spend production Let's processing Service were direct This met XX% a improvement result levels itself quarter, year, near versus is Parcel] XX% [more prior reduced the or continue XX% by throughout labor and and investments automation, mark

a As scores for XX XXXX. net XX improved full-year our result, points promoter to

Finally, pipeline rate planned XXXX. heading quarter double in strong quarter implementations running the with was first into near it our XXXX first client is the

skewed in-spite anticipated. hand, resulting volumes X.X toward million, revenue margin of rates, mix and fell we per than our the we in lower December, the improvements, parcel goal EBITDA by in other parcel lighter On especially positive of short of these

Also, the the clear, of difference we are be in but [mix] [ph] what Marc profitable, still the majority goal. lighter as from volumes from caused expected To our weight the mix areas. Parcel cost actions of decreased but productivity these per year two approximately short address our materially, XX% We're to driving to taking transportation noted, fell XX% expectation. compared prior improvement, specific

some perspective for on Ecommerce. Global share full-year now the me Let

year, lost XX the years year-over-year. was million in million respects Global to many gross the line, Borderfree but For improvement, EBITDA, were the XXXX, Ecommerce excluding the profit XX quite in similar At different.

Let's improvement gross unpack illustrates Domestic more which profit, in the precisely the Parcel.

the remainder, XX due lower profit in by quarter. gross million, substantial XX macro Parcel Parcel Overall, increase by Domestic profitability declined XXXX, very are primarily cross-border, million. we environment. digital Domestic In in a and The with fulfillment increased volumes this pleased difficult volumes and to

the gross XXX Parcel increase expect in will building to basis XXXX. profit continue We on points point by XXXX Domestic improve in XXX basis that

well than of Though represents for the success in Domestic Parcel now results XX% our bodes been will approximately the which of financial future revenue, they more be have segment past. seasonally the segment. driven

the Now, structure. conversation our capital I'll shift to

the details we we credit adjustments an seen, X agreement. December have on may you As X-K filed made that in our

period received the financial flexibility our a capital We which of volatility have are our of augment markets. during pleased to the substantial support in lenders,

buyback We discount. a our have to begun at debt

To maturities across ample not revolver million effective date, to solution expect [XXXX regarding [ph] Anticipating question we flow to we a plan continue XX do market available. our and [ph], XXXX] purchased that and obligation have so should [XXXX the approximately capital meet a that cash access opportunistically. and to will cost be cash, maturity] be

with my XXXX. remarks conclude on perspective I'll

single-digit expect revenue We on basis. flat-to-mid comparable growth a

We percentage revenue expect Global continues growth to profitability EBIT growth Ecommerce to improve. outpace as

Finally, in expect continued partially and uncertainties Domestic in macro gross positive in EBITDA expansion driven Ecommerce by Global increasing we Parcel to be margin offset softness and largely XXXX, cross-border. by

providing are additional We on the perspective following XXXX.

year. million prior of approximately approximately And of we million. interest Also, expectations rate rates expect to result higher compared effective $XX our in finally, expense, will interest XXX CapEx to roughly tax incremental be XX%. our reaffirming are We

In Presort Parcel In significant performance. continuing deliver solid forward we closing, continue momentum look Domestic Global especially this XXXX. to in made and predictable and to Ecommerce, and SendTech progress, into

I will call the back to Q&A. operator for the turn

Operator

Thank Baird. Please ahead. from [Operator go of Instructions] comes Matt first from Your question the Swope you. line

Matt Swope

open know options that business, Good further be positive hear being and talked side are would or And explore? of year, part little year, for disappointment this the business? a of you other EBITDA the about Ecommerce morning, shutting might on selling Global what business? another guys. consider how at EBITDA in strategic but you you're can part the you Could I negative I talk looking the I bit think, you alternatives

Marc Lautenbach

Yes.

appreciate the So, question.

there. the The is, first be not did do progress have It we're we would say however to slightly disappointed. There's expectation thing lot more. accurate, a of

with that. I'd So, start

years, offer. that divestiture to is business In it more at terms but a business if the than be look serious to years what through] somebody [ph] work a last worth hold us for for Ecommerce, certainly XX whether that. not contemplate that. it's I've we then assets, software business, just other for alternatives of the or said would of Global [indiscernible] XX is is else We you if And it or [we've any

the divestiture a I your we was speaks question. that portion to was It That of business. Borderfree, Most something of like think, recently, Ecommerce. the Global

We us. continue it cross-border, it worth to was to to was in more be but globally than

selling portfolio shareholder shutting we that but be would value we business, for selling coherent look I think, think something a the part we're at that indeed or optimistic about any So, we forward. do whole unlocks it how business be alternative we as of our whether and something down, our said, continues to go

Matt Swope

for unit now, the I You a And further would of shipping. XXXX? year on last that see dynamics XX% of mind interesting talk supplies I in partially coming Can you offset on rentals new in declines about sales basis that of comments and thought. seeing your commenting a some you about that, Thank how finance and by talked were Marc. SendTech you you. from also couple SendTech? products but appreciate One

Marc Lautenbach

Sure.

mean the business. currents different through SendTech two there's I running So,

which secular decline, The first the experience Mail continues changed. that business, hasn't is to

to The is other are markets shipping And about that's current a together growing. a market. continues $X billion those revenue, aggregate be business which good two

So, grow. a expectation shipping business higher and higher percent our of is the to becomes continues and total revenue

And flat out. two at You other last as those was each cancel dynamics know to said, Ana that SendTech begin XX% overall, it essentially look you year.

about together. of quarter kind equipment the was Equipment the two dynamics the From low a up year. way revenue and revenue for That's unit to of those single coming the probably digits confluence perspective, for easiest is think that.

the like Presort together we would continue business and I our as balance in provide Global for sheet say SendTech improve to business. balance Ecommerce. I that So,

Matt Swope

continue say continues you all number where when to could Mark, decline see decline, quantify And experience Mail guys that? about secular you at secular that you

Marc Lautenbach

I less. a Mail little Mails mean, to would down depending you Class marking know bit First is, down high-single-digits, so on quarter, say X% the XX% I

declines mail. So, it's depending – of say which I would single-digit on segment

Matt Swope

last pieces, you curious flow looks us for gave comment for then I flow XXXX? how Ana, And free for me. just XXXX? a you but for on just just cash your great. total model a one from expectations could that think cash That's on free basis

Ana Chadwick

Yes.

gave the and The hard one bit tax. commented, around gave as there CapEx, a working here So, call I interest, on you capital why pieces. we pieces and you EBIT little the is to that's you

business we harder. and moves capital the here] is That's the in you As out to the seasonal [ph] greater to working little quarter components. adjustments the movements [path why the moved in fourth a give calling

Matt Swope

your Thank help. it. both Got for you

Operator

ahead. & comes question Sidoti next Co. from line Anthony of go Please from Lebiedzinksi Your the

Anthony Lebiedzinksi

the Yes, taking good and morning thank for you questions.

So, first GEC. on

new you of a or think of a hurting but you or overall had better a result light new of mix the this a that. this of guess, sense was choice mix light of clients is less profitability to better weight maybe this a than significant volume wins talked that old Just was expected I signed just about client higher more on, shipping you of clients that it did most So, words, get from that impact than of wanted have expected, that parcels really, these just more volume?

Marc Lautenbach

That's great question.

lower things are clients. new a those new quarter of I bringing would there's have We successful in a say So, weight true. did clients on than very a had slightly average. couple that

we our for In and we think we lack plan expected. get customers, what of expected that volume the didn't as couple we sales XX, for XX, a of weeks as same existing that quarter, weeks of What last of better However as than from term. the as is that. read was from store them different XX, much

than good but the still more. performance, quarters expecting we're slightly got and We had more previous we volume

good look we many sales, slightly last from was It of weeks. So, just less same than were our they or those got at store clients. expected we you – increases three two if

Anthony Lebiedzinksi

Understood.

Okay.

when Is about you you to now kind weight more, going you parcels? of assess that be in are have little So, how diligent how to forward, of make could mix that heavier going sure to on thinking out of as just clients, bit be managing looking as targeting new a kind GEC? who more you that you a as you, bring who to profitable thinking better maybe you're and are more talk you're or trying far about

Marc Lautenbach

Sure.

I I from light and is, that understand a sight don't positive parcels were weight even people lose really margin important thing one of So, gross that's to the want perspective.

as So, under that as capacity, take to etcetera. to accretive absolute volume. long our is margins it's we'll network profitability, It adds

will weight We higher higher pipeline will, more marketing within and skew of too. the terms more weight total stuff diligent will in resources be you and to we stuff the realizing get if our sales

that it's lower I like don't not weight like So, I the stuff, it.

as and system long it's is take under more our skewed also and As on true comment – be sales to that ensure weight that marketing networks important. it, capacity, my stuff. know the more you of our that's, get we And our but we'll backlog management will higher

we've we've and now network. got stuff weight plenty in get into just the that right higher of So, need backlog stuff a got big to We there.

Anthony Lebiedzinksi

okay. Got Speakers] [Multiple you,

Marc Lautenbach

Hold on you a will. second, if

per domestic last you double-digit. piece at our was business, up look in year If it our revenue for

fear chase per lower was XX%. XX% So, that to always piece at year, last I up know it revenue but margin stuff, there's you if look you our a

the at mix fair bringing amount right that a you focused gives the assurance right is price. in that the of team So on

Anthony Lebiedzinksi

the know, expect year? talked we Okay. going that expected? of comp incentive that corporate the those I for through in as the expenses, should impacting, how flow than higher expenses And corporate unallocated unallocated, explanation. forward, for as timing came about then the you Ana, or Thanks to far

Ana Chadwick

Yes.

or a continuing our to as strict I a for have company cost what of expect And we mentioned into is, to as expecting So, are compensation move last performance, incentive relevelize we're program. some XXXX. as we replenish we quarter very

pull you of So, through. see those the net two should

Anthony Lebiedzinksi

economy, be think the progress, as should then versus helpful? put how the as far as to quarterly half the be the can revenue to the as do how on want guidance, or progression, about half going Sure. given XXXX color you the what's with as the softer you think And we to us as if in as first different far mouth, you segments? year expect a quarterly I very the about Thank give lastly, Thanks. us things we And Okay. but outlook in could far for back don't you. give any that should words your would sense

Ana Chadwick

Sure.

think I in more Domestic the Global fourth that loaded more anticipate the be will especially biggest we probably As growth I to here Ecommerce, back-end driver year, be Parcel our around quarter in and everything. than mentioned, the

as So, company would a well. to follow profile I that as anticipate our

Marc Lautenbach

important I also get. [indiscernible] – you point, know really entire a think, I the which guys

heavily the the can Global skewed know the market. quarter You to fourth seasonality see across and of is you entire it Ecommerce

So, the got Presort think and it, about as that are year. throughout pretty you've I SendTech consistent

GEC will You we is it's realized that year. entering the more customers that have as a on the business, more also back of and half seasonal in also bring true be

kind different, the market seeing, consistent a than think overall industry. but skew to we're it's the seeing, dynamics with is the within it's I So, used of

Anthony Lebiedzinksi

All right. thank luck. best of you and Well,

Operator

[Operator Instructions] of go Peter ahead. from CreditSights. Please Sakon Next, line the to go we'll

Peter Sakon

morning. Good

about can the higher average to you is volume? the weight on now you with a about of parcels, gain package, Following up what the talk targeting weight the strategy talked higher weight additional and

Marc Lautenbach

positive kind I of I got we pounds. about last a that the mean, pounds, X X.X between pounds. X.X X.X closer and I so couple margin mean, at said, it Average like I the overall pounds the you was that to variance weeks of to as even is pounds the contribution went mean, In quarter, X that We of X.X, saw. business. know, it’s

don't higher not weight that right got the we've to get It's ensure parcels. those absolute of business. that we it's just So, like we number

right number about parcels. absolute of know – million we're don't you plus think mix. absolute targeting need the about think we XXX right We this, of this percent So, as parcels heavyweight within heavyweight if we that,

Peter Sakon

were are improve how this? this? about to talk strategies that you'll you what achieve the important Like Can

Marc Lautenbach

plenty I said, of there's is our backlog, heavier – the within mix there. as parcels weight So,

in So, those look which retail degree the is, tends focus say would we'll hunting the at have higher a higher more also on mid-market within general, of have principal marketplaces kind I weight mid-market to where and parcels. our of is if parcels. you ground

our of in, to is compensation kind is already market towards well. say with model as our I [ph] our [bias] So, go skewed stuff. heavier system And mean I would

So, and sensitive largely which by although exclusively we pay to is price. profit, – driven weight

Peter Sakon

the What XXXX? network Okay. is And capacity of currently? utilization your do what's the over target here

Marc Lautenbach

right said to of So, million our the the exit year of the north of now, XXX end rate between of in which the fall parcels. say, year, on we we're would was that. XXX million I kind

parcels. little a above XXX got XXX capacity that's network about million million parcels. So, bit for Think a

Our north objective probably million parcels. million of is be that to to this business year for XXX XXX

kind that that's basic the So, looking of at. we're math

of a XX%. think So market that's or XX%

Peter Sakon

in a a by Okay. for so, I XX% And roughly XXXX And what's in for and sort XXXX? your quarterly CapEx Global talk mix of Ecommerce see on expectation each about for segment – can the capital allocation, segment XXXX? disclosure for we the

Ana Chadwick

[ph] be I be be will year-over-year expectation we'll bit percent] still [XX-ish would higher of thing with other similar We as commerce, Marc spend to of expectation rather as will good roughly the keep to point out on interesting down, of a that had The so network in we total. past. optimization proportions will ecommerce here little segments expansion capacity the than feel And The noted. the of as global decline we have mentioned on basis. be what Yes. just they've is continue And that around in globally would capacity. a the will the that XXXX, the than – a we mentioned, in

Marc Lautenbach

want I CapEx, million, parcels. context, million somewhere to spent I range two mean build-out in additional accommodate largely [ph] to the make two of Put on network the ago, That XXX $XXX million CapEx. number $XXX I was CapEx CapEx in around those on or believe that [just] that So, points. we years

in that is context. [ph] [XXX] of the So, kind

said, reaching still I number that about the that team working XXXX point it and environment, would but capital other EBITDA look if macroeconomic consumption you dramatically. CapEx down positive. more dynamic The I've Ana I've for. targeting little say, that of is the plan to what minus is, at that's in We're for said, as a a cautious have given is become still the GEC,

Peter Sakon

on on It how And are I'm ecommerce – positive XXXX? guessing to domestic struggling international that you business what those exit turn EBITDA, business? in of the up international just seem following be. And Could business or international? versus EBITDA the EBITDA like much – doesn't separate more they is or

Ana Chadwick

Yes.

So about think we margin a And way to it is proportion the the to we margin. from – and will Parcel the Domestic dynamics out way XXXX, what move gross easiest become gross is mentioned even perspective. want I point changing into are as greater a that of

as more improvement into at XXX points we go least additional basis XXXX. basis XXX and mentioned, I an As

come more anticipate we in revenues of domestic that that more already XX% profitability domestic parcel. from our and parcel. So, And of will that are

So, it gives sense the of a proportionality. you

Peter Sakon

you good, I if greater maybe you last being if could could mean just maybe a is necessarily is something doesn't my to differently, if it because it's This or doesn't smaller, proportion? still a mean or if it's But question. is I that smaller despite just keeping guess necessarily negative, proportion – international say will worth is argue

Marc Lautenbach

GEC? is [indiscernible] the to specific That question

Peter Sakon

GEC. Yes, portion the of international

Marc Lautenbach

would as It worth could globally than cross-border say, with keeping? if serious margin we a certainly any on outside on it's perspective. market. worth a offer. and it us, consider witnessed I then business fetch the it to would the bit little Is depends positive somebody It's else more gross still from to what you is

going P&L positively So, the our contribute intend businesses to to is all those forward.

reason next that's the the so of I will say on going Parcel forward, in the the of comes is couple fixated appreciation years. Domestic from where as about margins we're you most the business and think

Peter Sakon

time. for you your Thank

Operator

comes question the next Loop from Valero Capital. line from Please of ahead. Your Alek go

Alek Valero

Hey, it Ananda. how's on going guys? Alek, for I'm It's

quarter relative it So color Maybe provide you Street to macro if high? expectations to my guys Was what December where macro just too December on bit or more a were the the could little bit at? Street is focus was extent a you. regarding question more quarter. impacted Thank

Marc Lautenbach

per high. XX, said, quarter-to-quarter. about for less business. million was we think in we that mean, and too The XX, higher don't the also meaningfully line improved Street the I items expectations piece in and That had I two transportation than a One in XX year-to-year, meaningfully bit they weeks as thought. little would and us Global revenue it those was I I Ecommerce variance improve mentioned. costs well, principal was was cost was $X

So, XX% was also quarter-to-quarter. improvement we same said north about year-to-year of the

We are expecting benefit another million there. $X of probably

EBIT So of were the together – to that of those than closes the $X.XX Street. $XX that's more kind two million

Alek Valero

for I may. was helpful. That the much that. question, second Awesome. Thanks so And if

So, guidance of driven mentioned by having you primarily that's primarily to given Global revenue – was outpaced your growth, going that EBIT be Ecommerce.

do So, profitable you be Global in to Ecommerce guys XXXX? expect

Marc Lautenbach

be profitable EBITDA in To XXXX?

Alek Valero

Yes.

Marc Lautenbach

think mean $XX [minus of this perspective mean, to I there about XX] was [ph] EBITDA year, $XX million EBITDA so from it right I improvement. positive way. is so an last million

things more just you've than that's expect and kind that, But of We expense got headwinds you're some running the that against. math. of but other basic interest

Alek Valero

it. Got it. Got

so Thanks for sure. much that. For

Operator

turn are further any And at this closing I'll to for you there time, questions. remarks. it no back

Marc Lautenbach

Thanks.

I didn't. be So, about commitment if this the team, to pleased to miss impressed to do with I people's I by thanking listen Bowes and the continued last business. quarter. unpack am Pitney And

cities, and volunteers of to sign dedication just shift first where it the have our of to You not to and forward. business all that's over good and the just lots peak in second or true moving folks third in and help a shift in centers not but this middle and saw we of distribution

the for said, dimensions expecting I our expect Global across of made Ecommerce, continue we're [steady to quarter performers] SendTech touch continue. So, good Presort progress is, lots headline many in we to we different to as [ph] more. be that and and

focus move there's We've little may we accommodate year. the how call currents different as that providing into to economy. flexibility happen we about XXXX different lots the more cautious So, more things through got environment. a We're the in on of running much

to get get economic our how wipe is That be this calm continue being out to our this more to waters of hand. we business said, continues and positioned focus and moment as

the options positioned. strategic will certainly any I like way, at We themselves we’re how that but present look along

and So, morning, thanks this we'll for soon. your talk time

Operator

your conference teleconference. using and Ladies participation that for does for today. Thank you conclude for AT&T and gentlemen, your

disconnect. now may You

Pitney Bowes (PBI) 31 Jan 232022 Q4 Earnings call transcript