Stamps.com Inc. (STMP, Financial) filed Quarterly Report for the period ended 2010-03-31.
Stamps.com Inc. has a market cap of $142.88 million; its shares were traded at around $10 with a P/E ratio of 20.83 and P/S ratio of 1.74. STMP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Total revenue in the first quarter of 2010 was $21.0 million, an increase of 5% from $20.0 million in the first quarter of 2009. PC Postage revenue, including service revenue, product revenue and insurance revenue, in the first quarter of 2010 was $19.5 million, an increase of 6% from $18.3 million in the first quarter of 2009. PhotoStamps revenue in the first quarter of 2010 was $1.5 million, a decrease of 12% from $1.7 million in the first quarter of 2009. The following table sets forth the breakdown of revenue for the first quarter of 2010 and 2009 and the resulting percentage change (revenue in thousands):
Product revenue increased 17% to $3.1 million in the first quarter of 2010 from $2.6 million in the first quarter of 2009. The increase was primarily attributable to the following: (1) growth in our paid customer base; (2) marketing our Supplies Store to our existing customer base; (3) the additional SKUs we added to our Supplies Store; and (4) growth in postage printed, which helps drive sales of consumable supplies such as labels. Total postage printed by customers using our service during the first quarter of 2010 was $101 million, an 18% increase from the $85 million printed during the first quarter of 2009. As a percentage of total revenue, product revenue increased two percentage points to 15% in the first quarter of 2010 from 13% in the first quarter of 2009.
We reduced our PhotoStamps sales and marketing spending in the first quarter of 2010 compared with the first quarter of 2009 and plan to continue to reduce our sales and marketing spending on PhotoStamps in future periods to improve profitability in that business. As a result of this decision, PhotoStamps revenue decreased 12% to $1.5 million in the first quarter of 2010 from $1.7 million in the first quarter of 2009. As a percentage of total revenue, PhotoStamps revenue decreased two percentage points to 7% in the first quarter of 2010 from 9% in the first quarter of 2009. Total PhotoStamps sheets shipped during the first quarter of 2010 was approximately 86,000, a 17% decrease compared to 104,000 in the first quarter of 2009. Average revenue per sheet shipped in the first quarter of 2010 was $17.4 compared to $16.5 in the first quarter of 2009. The decrease in sheets shipped and increase in average revenue per sheet was primarily attributable to a higher mix of lower volume, higher priced consumer orders compared to higher volume, lower priced business orders.
Cost of service revenue increased 16% to $3.5 million in the first quarter of 2010 from $3.0 million in the first quarter of 2009. The increase during the quarter is primarily attributable to: 1) an increase in customer service costs aimed at improving our overall customer experience and 2) an increase in promotional expense. The increase in promotional expense is attributable to the increase in customer acquisition and higher redemption rates of our free scale and free postage offers. Promotional expense, which represents a material portion of total cost of service revenue, is expensed in the period in which a customer qualifies for the promotion, while the revenue associated with the acquired customer is earned over the customer's lifetime. As a result, promotional expense for newly acquired customers may exceed the revenue earned from those customers in that period. Promotional expense was approximately $743,000 and $361,000 in the three months ended March 31, 2010 and 2009, respectively. As a percentage of total revenue, cost of service revenue increased two percentage points to 17% in the first quarter of 2010 from 15% in the first quarter of 2009.
Cost of PhotoStamps revenue decreased 17% to $1.1 million in the first quarter of 2010 from $1.3 million in the first quarter of 2009, corresponding to the decrease in PhotoStamps revenue as discussed above. The gross margin from PhotoStamps is significantly lower than that of our other sources of revenue because we include the stated value of USPS postage as part of our cost of PhotoStamps revenue. As a percentage of total revenue, cost of PhotoStamps revenue decreased one percentage point to 5% in the first quarter of 2010 from 6% in first quarter of 2009.
Read the The complete Report
Stamps.com Inc. has a market cap of $142.88 million; its shares were traded at around $10 with a P/E ratio of 20.83 and P/S ratio of 1.74. STMP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We currently have federal and state net operating loss (“NOL”) carry-forwards of approximately $230 million and $150 million, respectively, with potential value of up to approximately $90 million in tax savings over the next 15 years. Under Internal Revenue Code Section 382 rules, if a “change of ownership” is triggered, our NOL asset may be impaired. A change in ownership can occur whenever there is a shift in ownership by more than 50 percentage points by one or more “5% shareholders” within a three-year period. We estimate that as of March 31, 2010 we were at approximately a 34% level compared with the 50% level that would trigger impairment of our NOL asset.Total revenue in the first quarter of 2010 was $21.0 million, an increase of 5% from $20.0 million in the first quarter of 2009. PC Postage revenue, including service revenue, product revenue and insurance revenue, in the first quarter of 2010 was $19.5 million, an increase of 6% from $18.3 million in the first quarter of 2009. PhotoStamps revenue in the first quarter of 2010 was $1.5 million, a decrease of 12% from $1.7 million in the first quarter of 2009. The following table sets forth the breakdown of revenue for the first quarter of 2010 and 2009 and the resulting percentage change (revenue in thousands):
Product revenue increased 17% to $3.1 million in the first quarter of 2010 from $2.6 million in the first quarter of 2009. The increase was primarily attributable to the following: (1) growth in our paid customer base; (2) marketing our Supplies Store to our existing customer base; (3) the additional SKUs we added to our Supplies Store; and (4) growth in postage printed, which helps drive sales of consumable supplies such as labels. Total postage printed by customers using our service during the first quarter of 2010 was $101 million, an 18% increase from the $85 million printed during the first quarter of 2009. As a percentage of total revenue, product revenue increased two percentage points to 15% in the first quarter of 2010 from 13% in the first quarter of 2009.
We reduced our PhotoStamps sales and marketing spending in the first quarter of 2010 compared with the first quarter of 2009 and plan to continue to reduce our sales and marketing spending on PhotoStamps in future periods to improve profitability in that business. As a result of this decision, PhotoStamps revenue decreased 12% to $1.5 million in the first quarter of 2010 from $1.7 million in the first quarter of 2009. As a percentage of total revenue, PhotoStamps revenue decreased two percentage points to 7% in the first quarter of 2010 from 9% in the first quarter of 2009. Total PhotoStamps sheets shipped during the first quarter of 2010 was approximately 86,000, a 17% decrease compared to 104,000 in the first quarter of 2009. Average revenue per sheet shipped in the first quarter of 2010 was $17.4 compared to $16.5 in the first quarter of 2009. The decrease in sheets shipped and increase in average revenue per sheet was primarily attributable to a higher mix of lower volume, higher priced consumer orders compared to higher volume, lower priced business orders.
Cost of service revenue increased 16% to $3.5 million in the first quarter of 2010 from $3.0 million in the first quarter of 2009. The increase during the quarter is primarily attributable to: 1) an increase in customer service costs aimed at improving our overall customer experience and 2) an increase in promotional expense. The increase in promotional expense is attributable to the increase in customer acquisition and higher redemption rates of our free scale and free postage offers. Promotional expense, which represents a material portion of total cost of service revenue, is expensed in the period in which a customer qualifies for the promotion, while the revenue associated with the acquired customer is earned over the customer's lifetime. As a result, promotional expense for newly acquired customers may exceed the revenue earned from those customers in that period. Promotional expense was approximately $743,000 and $361,000 in the three months ended March 31, 2010 and 2009, respectively. As a percentage of total revenue, cost of service revenue increased two percentage points to 17% in the first quarter of 2010 from 15% in the first quarter of 2009.
Cost of PhotoStamps revenue decreased 17% to $1.1 million in the first quarter of 2010 from $1.3 million in the first quarter of 2009, corresponding to the decrease in PhotoStamps revenue as discussed above. The gross margin from PhotoStamps is significantly lower than that of our other sources of revenue because we include the stated value of USPS postage as part of our cost of PhotoStamps revenue. As a percentage of total revenue, cost of PhotoStamps revenue decreased one percentage point to 5% in the first quarter of 2010 from 6% in first quarter of 2009.
Read the The complete Report
