Stamps.com (STMP) reported sharply higher sales and earnings in the fourth quarter, as the shipping solutions company has become the platform of choice for a steadily growing number of online businesses.
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Stamps.com results: The raw numbers
|
Metric |
Q4 2016 |
Q4 2015 |
Change (YOY) |
|---|---|---|---|
|
Revenue |
$105.896 million |
$69.876 million |
52% |
|
Net income |
$29.028 million |
($0.071 million) |
N/A |
|
Earnings per share |
$1.61 |
($0.00) |
N/A |
Data source: Stamps.com Q4 2016 earnings release.
What happened with Stamps.com this quarter?
Total revenue leapt 52% year-over-year to $105.9 million, with mailing and shipping revenue jumping 52% to $102.3 million and customized postage revenue rising 34% to $3.6 million.
Helping to drive those results was an 8% year-over-year increase in paid customers to 681,000 and a 42% rise in monthly average revenue per unit to $50.03. Moreover, total postage printed in the fourth quarter was $1.6 billion, a 53% increase from the prior-year period.
The company also continues to improve its profitability metrics, with mailing and shipping gross margin rising to 85.7% versus 84.2% in Q4 2015. And EBITDA (earnings before interest, taxes, depreciation, and amortization) -- adjusted to exclude stock-based compensation expense, acquisition-related charges, and certain other items -- soared 85% to $55.9 million, as the adjusted EBITDA margin increased to 52.8%, up from 43.2% in the year-ago quarter.
All told, non-GAAP net income surged 75% year-over-year to $49.2 million, and non-GAAP earnings per share climbed 74% to $2.73.
What management had to say
In a press release, Chairman and CEO Ken McBride touted the benefits of the company's acquisition strategy:
This was another exceptional year for Stamps.com with strong execution in all of our business areas. During 2016, we continued to see the benefits from our 2014 acquisitions of ShipStation and ShipWorks, and we successfully integrated and realized synergies from our 2015 acquisition of Endicia. During 2016, we completed our acquisition of ShippingEasy and began the integration of that exciting new business as well.
Looking forward
Stamps.com issued its forecast for 2017, including the following points:
- Total revenue of approximately $400 million to $425 million, up 13% at the midpoint of the range compared to 2016.
- Adjusted EBITDA of $200 million to $220 million, up 20%.
- GAAP earnings per share of $4.20 to $5.10, up 13%.
Looking out even further ahead, management believes Stamps.com can grow sales at a 20% annual clip, as CFO Kyle Huebner explained during a conference call with analysts:
We expect our long-term growth rates to naturally benefit from the growth in e-commerce, which has been growing at about 15% year-over-year recently. In addition, we believe there are opportunities for us to grow in excess of e-commerce growth rates through increased adoption of our multicarrier and technology solutions. Our five-year revenue growth rate target is 20%.
"Across all of our products and services, we are realizing synergies in sales and marketing, operations, customer service, and product development, and we believe that we have built a strong platform for pursuing all of our target customers," McBride added. "We are very excited about our opportunities in 2017 and beyond."
