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Stamps.com (NASDAQ:STMP)
Q1 2021 Earnings Call
May 06, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Greetings, and welcome to Stamps.com's first-quarter 2021 earnings conference call. [Operator instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Suzanne Park, vice president of finance. Thank you, Suzanne.

You may begin.

Suzanne Park -- Vice President of Finance

Thank you. On the call today are CEO, Ken McBride; and CFO, Jeff Carberry. The agenda for today's call is as follows: We'll review the results of our first-quarter 2021. We'll discuss the continuing impact COVID-19 is having on our business.

We will discuss the progress and go-forward plans on our various business initiatives in the U.S. We will discuss our progress and plans on our various initiatives internationally, and then we will discuss our metrics, financial results, and our business outlook. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Our comments and responses to your questions reflect management's views as of today, May 6, 2021, only and will include forward-looking statements, including statements regarding our fiscal year 2021, management's expectations for future financial and operational performance and other statements regarding our plans, prospects, and expectations.

These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Important factors which could cause actual results to differ materially from those in forward-looking statements include: the significant and unprecedented uncertainty regarding the business and economic impact of the ongoing COVID-19 pandemic as well as the impact of efforts of governments, businesses and individuals to mitigate the effects of such pandemic on the company, its customers, its carrier and integration partners and the global economy which makes it particularly difficult to predict the nature and extent of impacts on demand for our products and services, making our business outlook subject to considerable uncertainty. The company's ability to successfully integrate and realize the benefits of its past or future strategic acquisitions or investments. The company's ability to diversify its relationships with carriers and the impact of foreign exchange fluctuations and geopolitical risks.

Additional information about factors that could potentially cause actual results to differ materially is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. We undertake no obligation to update forward-looking statements, except as required by law. Further, during the course of today's call, we will refer to certain adjusted financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for or in isolation from GAAP measures.

Additional information about these non-GAAP measures, including reconciliation of non-GAAP to comparable GAAP measures, is included in our press release provided today. Our press release, investor metrics, and SEC filings are available on our Investor Relations website at investor.stamps.com. Now let me hand the call over to Ken.

Ken McBride -- Chief Executive Officer

Thanks, Suzanne. Thank you for joining us today. The first quarter of 2021, we saw continued strength in our financial and business metrics. The results we announce today included many highlights, including total first-quarter revenue of $189.1 million, which was up 25% compared to the first quarter of 2020 and up 28% when excluding the discounted customized postage business.

Non-GAAP adjusted EBITDA was $59.5 million, that was up 43% compared to the first quarter of 2020. We're very pleased with our financial performance, and it continues to demonstrate the strength and relevance of our best-in-class global multicarrier e-commerce solutions. Last quarter, we provided some additional visibility regarding general e-commerce trends as well as our strong overall position in the e-commerce ecosystem. Today, I will provide some updates on those points.

As we've discussed, our customers have largely been strong beneficiaries of increased e-commerce consumption, which is driven by their own end customers, generally consumers that have moved more of their purchasing online versus traditional retail locations. Some estimates have been published by various marketing research firms that e-commerce spending has been pulled forward by two years or more. During the first quarter, we continued to see the results of those trends in our metrics and financials. For example, total first-quarter total volume -- total dollar value of domestic shipping labels printed by all of our customers in the U.S.

was up more than 40% year over year. More broadly, our customers worldwide printed $5 billion in total first-quarter package volume, which was up 40% year over year. For the first quarter of 2021, we estimate that the gross merchandise value, or GMV, shipped by our collective customer base was over $50 billion, increasing by more than 50% year over year. When you look at our total GMV processed as a percent of worldwide e-commerce, our position in the global e-commerce ecosystem continues to be significant.

In the U.S., we estimate that the total GMV shipped by our solutions was over 15% of all U.S. e-commerce. In aggregate, the GMV that is collectively shipped by our U.S. customers is second only to the GMV that is generated by Amazon and its platforms.

Worldwide, we estimate that our customers reflected 5% of e-commerce GMV. The strong performance in our package volume and the growth in the total GMV shipped using our solutions continue to demonstrate the value proposition of all of our software solutions. Let me now provide a quick update on our UPS partnership. We continue to see very strong adoption of UPS across our customer base.

We have now had more than 130,000 customers that connected to UPS through our enhanced partnership integration. We've also seen a dramatic increase in the dollar value of the UPS labels under the partnership driven by those customers, with continued strong growth sequentially during the first quarter. As a reminder, using UPS is very simple for our new or existing customers with an automatic account set up for each customer as soon as they log in. And we also continue to offer customers attractive discounts, which are as much as 66% off UPS standard daily rates.

UPS and Stamps.com have become great partners. We expect to continue to see increasing UPS volume and customer usage as the relationship builds. With that, let me now turn to some of our 2021 initiatives in the U.S. market and the progress we have made so far this year.

First, we plan to continue to expand our shipping solutions through new partnerships and marketing programs. We recently announced that merchants who participate in Buy on Google can now pull orders directly in the ShipStation. Buy on Google is a checkout experience that allows shoppers to easily purchase products directly from retailers on Google merchants. Using ShipStation, these merchants can now easily manage multichannel shipping on our platform.

We also recently announced our participation in the Shopify Plus certified app program. The program gives joint ShipStation and Shopify Plus merchants access to key capabilities to manage shipments and fulfill orders such as order sinking, product information, and discount codes. We established new selling channels, connections with a large online outlet website and a next-generation cross-border e-commerce solution. In addition, we continue to expand our carrier relationships.

For example, during the first quarter, we entered into carrier agreements with a leading less-than-truckload or LTL data and solutions provider. We plan to scale our sales and marketing in 2021 with a focus on acquiring high-volume shipping customers across a variety of industries and to continue to utilize and test a variety of these and other marketing channels and partnerships. Second in our 2021 plan, we plan to expand the features and functionality of our solutions, particularly in the multicarrier shipping part of our business. The e-commerce shipping industry is very dynamic, and we invest a significant amount of our development resources and continuing to innovate in the market.

We're focused on continuing to deliver new and enhanced capabilities, such as more sophisticated third-party logistics support, drop shipping, branded tracking, returns and pickup, drop-off, more sophisticated mobile application solutions, online returns portal and QR code drop-off returns with USPS retail locations and simplifying the process for customers to obtain and pay for shipping insurance. Third in our 2021 plan, we will continue to bring innovative and cost-effective solutions to U.S. customers that are sending packages to other countries, primary focus of our GlobalPost solution where we offer customers access to discounted international shipping rates through our private label carrier partnerships. In April 2021, GlobalPost launched a new harmonized code lookup tool.

Harmonized codes help shipments get through customs faster to avoid overpayment of duties and taxes. After customers type in the product name and confirm the characteristics, the tool will automatically generate the approved harmonized code for that product. We expect to continue to drive these and other international package solutions for our domestic customers in 2021. With that, now let me discuss some of our continuing international expansion efforts.

In 2021, we are investing in our marketing, business development, and product development efforts in significant ways. For ShipStation and ShipEngine, we're developing partnerships, carrier relationships, product enhancements and marketing strategies in our target markets. We continue to see strong adoption of ShipStation in Canada, the U.K., and Australia. ShipStation's international shipments increased over 195% year over year versus the first quarter of 2020.

ShipStation's first-quarter international merchant count increased by more than 70% versus the first quarter of 2020. We're also continuing to expand our support of new languages as we target new markets. We're now supporting Spanish on the ShipStation platform, a French version of ShipStation is live in Canada, and we support a beta version in France as well. All ShipStation users will now be able to log into their accounts and choose their preferred language, selecting from English, French, and Spanish.

We also continue to actively partner on the international front. For example, during the first quarter, we executed agreements with an order management system in Australia and renewed existing agreements with several important carrier partners globally. For our sales efforts, international wins included a notable fashion brand in the U.K. and a large charitable organization in Australia.

During 2021, we plan to further expand our international footprint to New Zealand, Ireland, and Mexico. We're actively evaluating and planning for additional markets across the EU and around the world. In our Metapack business, we're making progress in both customer acquisition and technology. Metapack experienced a strong quarter with over 50% of new business generated from non-label shipping software, including delivery tracker, delivery options and delivery intelligence products.

In particular, we're seeing very strong adoption of Metapack's delivery tracker product within both new and existing customers. Early adopters of the new delivery tracker product have reported meaningful call center contact reductions. We had a big customer win when J Barbaro and Sons, a very large British luxury and lifestyle brand, chose Metapack's delivery manager, delivery options, and its returns portal to lead its online shipping and returns operations. Other key deals in Q1 included a global B2C coffee retailer, a global pet food retailer, and one of the U.K.'s top four mobile phone operators.

Large e-commerce retailers continue to invest in the e-commerce customer experience, particularly in the post-ship space. Metapack continues to align with retailers' core strategy to improve consumer satisfaction levels on deliveries and returns. With that, now I'll turn the call over to Jeff.

Jeff Carberry -- Chief Financial Officer

Thanks, Ken. We'll now review our first-quarter 2021 financial results. The discussion of our financial results today include non-GAAP financial measures. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures can be found in our earnings release and financial metrics on our investor website.

Total revenue was $189.1 million in Q1, and that was up 25% year over year versus Q1 of '20. Growth in revenue in the first quarter was primarily driven by strong shipping growth attributable to the continued shift to online e-commerce purchasing that has been driven by COVID-19. The year-over-year revenue growth in the first quarter was negatively impacted by the termination of the customized postage program in June of last year, resulting in no revenue from that area in the first quarter of 2021. Excluding the effect of the customized postage termination, our mailing and shipping revenue was $189.1 million in Q1, up 28% year over year versus Q1 of last year.

We estimate the total revenue derived from our shipping customers grew approximately 30% year over year and was in the mid-80% range as a percentage of total Q1 revenue. We also estimate that our total revenue derived from mailing customers as a percentage of total revenue was in the mid-teens and grew year over year in the mid-teens as well. Mailing and shipping gross margin was 77.6% in Q1 versus 74.8% in Q1 of last year. Mailing and shipping gross margin was positively impacted by the strong growth in revenue associated with e-commerce-driven shipping.

We had year-over-year increases in our Q1 operating costs, primarily driven by growth in sales and marketing and R&D related to customer acquisition and strategic investments to support innovation and long-term growth. We continue to aggressively scale our operational investments to drive our domestic and international business initiatives. Non-GAAP operating income was $58.6 million in Q1, and that was up 45% year over year versus Q1 of last year. Adjusted EBITDA was $59.5 million in Q1, and that was up 43% year over year versus Q1 of last year.

Adjusted EBITDA margin was 31.4% in Q1 versus 27.4% in Q1 of last year. The increase in adjusted EBITDA margin was driven by strong revenue growth and a more favorable mix of higher-margin service revenue. Non-GAAP adjusted income per fully diluted share was $2.08 in Q1 based on a non-GAAP tax expense rate of 30%, and was up 58% year over year versus $1.32 per share in Q1 of last year based on non-GAAP tax expense rates of 40%. Fully diluted shares used in the EPS calculation was 19.6 million for Q1 versus 18.2 million in Q1 of last year.

Let's now discuss some of our customer metrics. Our total paid customer metric was $991,000, which was up 28% versus Q1 of last year. This was driven by strong new customer acquisition, but partially offset by an increase in customer churn. Our first-quarter churn rate was 5%.

Churn was up approximately 200 basis points year over year. The increase was primarily driven by churn in the mailing segment of our customer base. Furthermore, the churn uptick was expected among the mailing segment customers, given the large magnitude of customers acquired during the second, third, and fourth quarters of 2020. This is because mailing customer churn was meaningfully higher in the first approximately 1 year of the customer lifecycle.

Therefore, the churn uptick appears to be ordinary customer behavior, and we believe that customers we are acquiring now are in equal quality to those that we acquired before COVID. Most importantly, however, the churn rates in our shipping customer base are at similar levels versus pre-COVID churn rates. Our long-term focus, as you know, has been on acquiring shippers, and we continue to see a very high ROI from those customers. Our first-quarter ARPU was $63.58.

ARPU was flat year over year, driven primarily by strong growth in mailing customers who have generally lower ARPUs than those of our shipping customers. Total first-quarter USPS postage printed was $2.0 billion, and that was up 20% versus the first quarter of 2020. The total USPS postage printed metric includes both higher growth shipping volume and traditional nonpackaging mail volume. After consecutive quarters of growth in 2020, we started to see a decline in mail volume in 2021, which is consistent with the long-term trend of declining mail usage in the U.S.

Let's now discuss our cash and use of cash. We ended Q1 with $567 million in cash and investments, which is up $124 million from $444 million at the end of last quarter. The increase in cash and investments was primarily driven by strong operating cash flow, normal changes in net working capital and cash from option exercises, and that was partially offset by share repurchases. We continue to have no debt outstanding.

During Q1, the company repurchased approximately 137,000 shares at a total cost of approximately $27 million. Our current $120 million share repurchase plan that was approved by our Board of Directors on February 26 of '21, remains in effect through August of 2021. Now let's turn to our business outlook. The COVID-19 pandemic contributed a meaningful financial benefit to our business in 2020, driven by an increased need for online mailing and shipping solutions and driven more generally by the shift to online purchasing behavior, unprecedented worldwide e-commerce growth.

However, as we discussed in February, we are not providing specific numerical guidance for 2021 revenue and earnings as we do not feel that we are able to accurately forecast the various global macroeconomic and COVID-19-driven factors that are expected to affect our business. We do expect that our shipping volumes will continue to track broader trends in e-commerce, given the large percentages of GMV that our customers collectively shipped. As we move into the second quarter of 2021, we will, like the rest of e-commerce, face tough year-over-year comparison as we lapped the e-commerce acceleration that began in mid-March of 2020. During 2021, we expect to continue to invest in our sales and marketing area as it continues to demonstrate a very strong long-term ROI.

And we will continue to make significant investments in our R&D to support the long-term strategic initiatives that we discussed today. Therefore, we would expect our total operating expenses in 2021 will increase by 20% or more for the fiscal year. We remain very excited about the longer-term secular trends of shipping e-commerce, our global market opportunities, the strength and defensibility of our technology platforms and the strong value proposition of our service offerings. And with that, let me hand it back to Ken for some additional comments.

Ken McBride -- Chief Executive Officer

Thank you, Jeff. We remain extremely excited about the future of our company and the enormous value proposition of our e-commerce technology and service offerings. The events of 2020 catapulted e-commerce into a period of incredibly rapid change. We successfully navigated those changes and set ourselves up for long-term growth.

We've achieved a significant position as the shipping solution of choice in e-commerce with an estimated more than 15% of total U.S. commerce and more than 5% of worldwide e-commerce being shipped using our software solutions. The value proposition we provide is very strong, driven by the strength of our multicarrier properties, the breadth and depth of our partnerships and integrations, the size and strength of our U.S. and international sales forces, the scale and success of our marketing programs.

We have a significant number of opportunities in 2021 to continue to accelerate innovation, we plan to reinvest back into our business aggressively. Our goal is to continue to position this company for the best long-term outcome as the myriad of e-commerce worldwide trends play out in 2021 and beyond. We believe we're in a great position to continue to execute our business plans to continue to be the global leader in multicarrier e-commerce shipping. And with that, let me open it up to questions.

George Sutton -- Craig-Hallum Capital Group LLC -- Analyst

Hi, guys. I will perhaps sound like a broken record from Q1, but, you know, I was challenged -- or I'm sorry, from the Q4 earnings call. I was challenged by the lack of guidance then. The stock did I think come in as a result of the lack of guidance and clarity.

And to your credit, you doubled your share buyback program I believe in response to that. So I'm curious the thought process sitting here today, again without guidance, but a very optimistic attitude in terms of where the business should go. Is there something that we're missing relative to partnerships or relationship changes or anything that would suggest a discomfort other than just a tough comparison year over year?

Jeff Carberry -- Chief Financial Officer

Hey, George. Thanks for the question. So there is truly, honestly, nothing there that we're concerned about. There's simply a lot of uncertainty that makes the potential range of outcomes very wide, such as to make.

And, you know, honestly, reasonable potential outcomes based on those myriad of factors and just makes the guidance range so wide to encompass those potential outcomes, that it becomes a little less relevant. So at the end of the day, we are incredibly excited about the business. We think the fundamental aspects of the business we've developed through many, many years in terms of technology and marketing and our position in the marketplace have positioned us to be truly an exceptional company with e-commerce and really a dominant e-commerce software provider. We're incredibly excited about that opportunity going forward.

We think it's going to pay huge dividends for us in the long run. In the short-term for 2021, there's just too much uncertainty to really provide, you know, a confidence guidance range just given the myriad of factors. So at the end of the day, we're super excited. Where '21 ends really is anyone's guess, given the impact of those factors and how they impact e-commerce.

But for the long run, we are very, very excited about the business. And we think that there are long-term secular trends we're going to be able to capitalize on.

Ken McBride -- Chief Executive Officer

Yeah, George, I'll just add, so I think we've talked a little bit now more for the last couple of quarters about our position in e-commerce. And I think perhaps it was a little surprising to people to hear that we are over 15%. Our customers collectively process over 15% of U.S. e-commerce.

So clearly our trends are very much correlated with trends in e-commerce. And I think that – you know, I think what we really do is point you to the various third-party reports, which I'm sure you've generated several as well as other analysts to really try to understand where it's going. I think we're not in a position to be able to forecast macro trends. And I think that those macro trends are going to be heavily correlated with the outcome of our business.

George Sutton -- Craig-Hallum Capital Group LLC -- Analyst

Just as an adjunct to that, you talked about 20% operating expense growth. I don't think you give the corollary go-to-market benefits that you should see from that kind of expansion in expenses. Can you just talk to that and further as what impact that might have on 2022 and beyond where comparisons extensively will be easier?

Jeff Carberry -- Chief Financial Officer

Sure. So especially now, George, we make these investments on the sales and marketing side to acquire customers. And those customers then deliver financial benefits to us and our shareholders over their expected lifetime. So you have really kind of a frontloading of costs and then the revenues associated with those in the out years.

As you mentioned, with our commentary on the metrics, you know, we've done very well obviously with 2020 and 2021 with acquisition trends. And, you know, those customers that we've acquired based on our analysis of cohorts, pre- and post-COVID, they're looking very similar. So given the empirical experience of pre-COVID cohorts and the value they derive for us and the customers we're acquiring now, we'd expected similar benefits. So we're confident as to the impact they're going to have in the out years.

In the short term though, again, you spend the money day one to acquire the customer and they deliver the benefits over the longer run. So I'd expect that the investments we're making in acquisition and the customers we're acquiring to continue to drive benefits throughout 2021 as we acquire them throughout the year and then haven't really hit the financial performance for us in 2022 as they're fully ramped, and we realize the full benefit of those customers.

George Sutton -- Craig-Hallum Capital Group LLC -- Analyst

One other question, if I could. Ken, you mentioned a number of features and functions that were going to be added to the platform. Historically, you've built some of the functionality through ShippingEasy as your way to go to market, at least that was sort of the test. And then I think you deployed at ShipStation.

I noticed the focus was ShipStation, which honestly makes sense to me. I just want to make sure I understood the development platform and sort of where you see that heading. Thank you.

Ken McBride -- Chief Executive Officer

Yeah, sure. So we actually have really kind of combined our operations in Austin. So when you talk about ShipStation and ShippingEasy, the development teams are largely one team now. And so we're working on features together.

We'll grow the -- we'll roll those features out within the various brands as appropriate. But I think what we're really doing is we're positioning ShipStation as the brand for the more complicated user case and ShippingEasy is really kind of more of the on-ramp for the simpler, get up and running solutions. So as we develop these features, they're available through our ShipEngine API really on the backend to all of our products. And it's just a matter of choosing the features across the different product sets in order to meet the needs of the target customers in those areas.

Jeff Carberry -- Chief Financial Officer

So one thing I'd add, George, is that, you know, throughout the organization, we have [ pockets ] of development, and they're all great ideas. What Ken is really speaking to is the fact that we are kind of coordinating that across the brands. It's part of a brand strategy in terms of offering those products throughout the platform. So there's greater coordination of the development.

But in terms of the [indiscernible] development, it's really throughout the entire company. And we're just -- we're coordinating that strategically, entering it through ShipEngine to be able to deploy it to the brand and then deploy it through the brand strategy the brand has.

George Sutton -- Craig-Hallum Capital Group LLC -- Analyst

Understand. Very clear. Thanks, guys.

Questions & Answers:


Operator

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

Kevin Liu -- K. Liu & Company LLC -- Analyst

Hey. Good afternoon, guys. And congrats on a strong start to your year here.

Ken McBride -- Chief Executive Officer

Yes. Thanks, Kevin.

Kevin Liu -- K. Liu & Company LLC -- Analyst

First question I had for you, I was wondering if you could offer us any sort of color on how April turned out for you just in terms of volume growth either on a year-over-year basis or relative to what you start -- saw at the start of the year?

Jeff Carberry -- Chief Financial Officer

Sure, Kevin. So we didn't give any specific April metrics, but what you see with our metrics that we've provided, as you see this general trend of moderation. Now the numbers are still obviously very good through Q1. And you see that moderation.

It's very early obviously, but you expect to see that continued moderation, but still obviously strong performance. So -- and that's part of what leaves us with, you know, some uncertainty as for the balance of the year. We're coming from really, really tough comps. So those numbers will certainly reflect those tough comps I'd expect going forward.

But as you see, you know, empirically with the business now for several quarters, you're seeing some moderation from just extraordinarily high growth rates to very, very good growth rates, but certainly some moderation on those growth rates. And, you know, again, we're early on in the year. I'd expect to see continued moderation. But ultimately where things up for '21, again, there's just a lot of uncertainty from a macro perspective.

Kevin Liu -- K. Liu & Company LLC -- Analyst

I mean -- yeah. I mean, just in terms of difficult comps, have you -- certainly moderation I think has been kind of the trend over the past few quarters and would assume that continues to happen, but have you actually started to see declines in overall volumes though? Or is it still holding positive just at lower levels obviously?

Jeff Carberry -- Chief Financial Officer

On the shipping side, we're still seeing very good growth obviously. On the mail side obviously we start -- as you mentioned on the call, we're seeing declines now in mail-related volume. On the shipping side, we're still seeing very strong growth rates. As one would expect, right? I think mail very likely reverts back to kind of its longer-term secular trend of declines in terms of mail usage.

But as we know obviously the business model on the mail side of the business is purely monthly subscription fees so that the volumes are not particularly relevant as it relates to our business model on the revenue side. On the shipping side obviously that's where the revenue -- the volumes really matter in terms of the impact on the financials, and we're still seeing strong growth there, moderating in levels of growth, but still very strong growth rates.

Ken McBride -- Chief Executive Officer

Yeah, Kevin, I mean, I would add that April is our single toughest month year-over-year comparison of the entire year. That's the month where last year everything just kind of spiked like crazy. I think we had triple-digit growth in almost every metric across the board. So I think that, you know, generally speaking, out there in the world, the numbers that we've seen published by some of the analysts are moderating quite a bit given that that's kind of the trend overall in e-commerce.

But I think overall we're happy with the performance that we're seeing so far in the business. We're certainly happy with Q1. And we're optimistic about the rest of the year in terms of growth of e-commerce and therefore, growth of our business.

Kevin Liu -- K. Liu & Company LLC -- Analyst

Yeah. Understood. Wanted to ask a couple of questions on Metapack as well. One kind of housekeeping.

Do you guys have the revenue and kind of gross margin for the segment breakout? And then, Ken, I know you talked a little bit on the call about some of the non-label-related business where you guys are getting some traction. Any insight you can give us in terms of what, you know, a typical annual contract value might look like? I assume these are all subscriptions and how big of an opportunity you feel this represents, you know, over the next couple of years?

Jeff Carberry -- Chief Financial Officer

I didn't get the first part of the question, Kevin. What housekeeping did you want to go through?

Kevin Liu -- K. Liu & Company LLC -- Analyst

Oh, just the Metapack revenue and gross profit numbers, just the segment breakouts that you guys are giving [Inaudible].

Jeff Carberry -- Chief Financial Officer

Oh, got you. So Metapack, in terms of their gross margin, it was 73% for the quarter. And in terms of their revenue, their revenue was $16.5 million.

Ken McBride -- Chief Executive Officer

Yeah. And Kevin, I guess I would say, you know, the Metapack solutions that we've launched really like above and beyond the label solutions that we provide. And so it's really the -- a lot of the post-ship capabilities like the delivery tracker, delivery intelligence products. And so we generally offer those on a similar model per transaction, but it varies by customer size and by, you know, opportunity, but generally speaking, I think we've just seen a nice win.

And it's really in some ways it's just completing the product. So we're able to offer these retailers more of a Amazon-like opportunity to make their solutions more akin to what the kind of post-order experience that you see on Amazon with, you know, some of the delivery tracking, the returns and all of the post-shipment capabilities.

Kevin Liu -- K. Liu & Company LLC -- Analyst

Got it. And just one last one. I know it's still kind of early days in terms of this USPS 10-year plan, and they just talked about their USPS Connect program where they're going to give small and large shippers direct access to their network. As you kind of look through some of the initial details that have been put out, do you guys see any sort of opportunities for you to partner more directly or closely to benefit from any of these types of programs? Or do you think this is kind of a nonevent for your business?

Ken McBride -- Chief Executive Officer

Yes. I think the 10-year plan, generally speaking, overall, we were happy to see that it really had a big focus on growing packages. Certainly, as they get better at packages, we benefit, given the fact that we're more than a third of all priority mail being processed through our solution and almost half of first-class packages go through us. So to the extent that they get better and better in their operations, they start to offer seven-day package delivery, some same-day solutions and additional higher service levels on packages, we will be the beneficiary.

So I think we were -- we are optimistic on the plan. I think it has a lot of challenges. Certainly, there's going to be some congressional action required for some portions of it, like the prefunding requirements and waiving those. But I think overall, we're optimistic, we're confident in the new leadership there, and we're excited to see what they can do.

Kevin Liu -- K. Liu & Company LLC -- Analyst

OK. Great, I appreciate all the insight.

Jeff Carberry -- Chief Financial Officer

Thanks, Kevin.

Ken McBride -- Chief Executive Officer

Thanks, Kevin.

Operator

[Operator instructions] Our next question comes from the line of Allen Klee with Maxim Group. Please proceed with your question.

Allen Klee -- Maxim Group -- Analyst

Good afternoon. What stood out to me on the quarter was the degree that the bottom line grew faster than the top line. I think your revenue up 25% year over year, adjusted EBITDA up 43%. And I noted operating expenses were up 16%, but you're guiding to 20%-plus for the year.

So you got a little bit of benefit there. But in general, it seems like the bottom-line outperformance. Could you comment a little on kind of what you think the key drivers are behind that? And to the extent that they're sustainable?

Jeff Carberry -- Chief Financial Officer

Sure, Allen. Very good question. So really what you're seeing is really the inherent leverage of the shipping side of the business. That's really why we've done the emphasis we have and have really positioned the company that what we have is to really capitalize on e-commerce, secular trends revenue e-commerce and the fundamental economics that underlie the e-commerce business.

So you're really seeing the benefits of that and the continued growth for us of the shipping side of the business obviously growing faster than the mailing side of the business. So you're seeing that attribution as well. On the opex side, you know, it's a good observation. We always try to -- we have ambitious plans with hiring.

And, you know, like a lot of companies with experiencing the COVID economy, finding people is tough. So we'd expect over the year to see opex increase at 20% or better. But obviously a big portion of our opex is in the form of head count expense. And obviously with things improving in the economy and the restrictions lightening up, hopefully we can accelerate the hiring plans that we have in place when people be able to get out and interview more freely.

So, you know, I'd expect, as you mentioned, to see opex increase 20% or better. But a big variable on that is just our ability to source talent and get them in the door.

Allen Klee -- Maxim Group -- Analyst

Thank you. I'm not asking for an exact number, but can you just give me a sense of -- for international growth versus the company overall how -- if you -- how you're thinking about how international can be in '21?

Jeff Carberry -- Chief Financial Officer

Yes. I mean, international is very exciting. Look at Metapack's growth rates. Kevin asked the question of what was the number for Metapack.

We mentioned $16.5 million. That's growth of 19% year over year. And then volume of ShipStation and our other products that we're launching around the world, they are much, much higher growth rates, but off a smaller basis. So, you know, look, international I think at the end of the day is a huge opportunity for us, both for our customers in the U.S.

to ship abroad as well as for our national customers shipping internationally as well as into the U.S. and bringing Metapack in the U.S. So I think international obviously, while the U.S. remains incredibly attractive, and we continue to invest aggressively in the U.S.

by virtue of how attractive that market is, internationally is also very attractive, and it is a huge opportunity for us. And we think with our technology solutions and our position in the marketplace in the U.S., we have a very good opportunity in front of us to tackle not just the U.S., but really the entire world and bringing our e-commerce solutions to merchants around the world. So it's a very attractive market. The TAM is very large.

Our growth rates now are principally being driven by Metapack, but our ShipStation scales internationally. They will be a larger contributor, and we'd expect to see even higher growth rates internationally.

Allen Klee -- Maxim Group -- Analyst

That's great. It's nice to see Metapack doing so well. Last quarter you gave a comment on the quarter before that of the cost of acquiring customers being down a certain percent year over year. Is there any commentary you can talk about of the effectiveness of your sales and marketing to get a customer?

Jeff Carberry -- Chief Financial Officer

And I think we didn't give a specific metric. And I think obviously coming on tough comps and with the economy opening up, you'd expect some moderation in those CPAs. In terms of the ROI, though, the ROI remains very, very attractive. So I think with a lot of things now with the economy opening up, with people deploying marketing dollars into various marketing channels, things will get more expensive.

As we've seen with our company for many, many, many years, we find a lot of really innovative ways to deploy marketing dollars. And as you know, we also deploy them with a strict set of economics in mind. We calculate our LTVs on our customers by channel and by program, and they remain very, very attractive. So I think we highlighted the fact that CPAs were coming down dramatically historically.

You saw us increase marketing dollars and we're able to capitalize on that, given the strength of e-commerce. Having CPAs moderate in terms of declines or even increase is not surprising, and I'd expect that to continue to go on throughout the year. But in terms of the ROIs, the ROIs remain fundamentally very, very attractive. And I don't think that is going to squeeze us out of material amounts of marketing spend.

Ken McBride -- Chief Executive Officer

Hey Allen, I'll just add, like that for more than a decade, our cost of acquisition has been tracking in a really small band between probably about $80 and $120. So it fluctuates depending on the different programs and the different availability of, you know, advertising opportunities out there. So with the COVID, there's been some distortion. Clearly, we had a big surge of mailers that were looking for solutions that, you know, subsequently churned out, and those obviously drove the acquisition numbers down.

So I think you've got to really like, you know, go one level under the covers to understand the economics. And I think Jeff said, you know, the ROI is terrific, and we're really excited about particularly the acquisition of the shippers that we see. And overall, you know, the economics are continuing to be really, really good.

Allen Klee -- Maxim Group -- Analyst

Thank you. My last question, it's following up a question on Kevin asked. Clearly, it makes sense that the percentage changes year over year or going -- or moderating with tougher comps. But just in terms of how do we think about it from an absolute basis? Are you -- maybe if you looked at the months in the quarter or something you've seen in April, are you seeing absolute moderation?

Jeff Carberry -- Chief Financial Officer

I mean we're seeing moderation in growth rates. And as Ken mentioned, when you look at just the -- when things really started spiking dramatically, it was also April of last year. So I think what we're trying to say at the end of the day is what you'd expect, which is a moderation. The macro factors that impact the business make it really tough to forecast ultimately a range for guidance that really is instructive for people.

And then in terms of April itself, given just the dramatic explosion of the business in April last year, you know, extrapolating too much out of the April numbers, given that the magnitude of spike with the last year I think is further challenging. So moderation for sure, ultimately that will manifest itself in raw numbers ultimately obviously. Where they end up, I think we're just a little bit too early now just given how tough the comp April is and given moderation we're seeing, combined with just the macro factors for the balance of the year, that makes it a little tough really to forecast the business. But again, in terms of the long run, we are very confident with the long-run business and secular transfer in e-commerce.

And we're fundamentally really excited about that. '21 is just -- there's a lot of uncertainty in '21. But again, the fundamental drivers of the business, the drivers of long-term shareholder value, those are incredibly attractive, and we're incredibly excited about our ability to capitalize on those in the longer run.

Allen Klee -- Maxim Group -- Analyst

Yeah. I apologize. I think I asked the question the wrong way. I was kind of thinking sequentially absolute -- like on an absolute basis sequentially, are you like April versus March or 1Q, you know, what you're seeing on an absolute basis?

Jeff Carberry -- Chief Financial Officer

Well, we didn't give the numbers. And like I said, it's, you know, pulling too much out of one month. I think it is challenging. But the numbers on the shipping side of the business, obviously you're still seeing growth.

That's very exciting for us. So I think I'll leave it at that and not get too far in front of what the balance of the year is going to look like.

Ken McBride -- Chief Executive Officer

I think, Allen, generally speaking, if you look at the – you know, everybody knows the main driver of our business overall financially is the volume growth in both the USPS and now increasingly UPS. And if you look at our growth versus a graph of e-commerce growth that comes from a third party like, say, a Bank of America or something like that, you can see the lines are very parallel and are squared between them, if you do statistics would be very, very high. So as you look at our growth and e-commerce, they are heavily correlated. And so as we've seen e-commerce I think go from, you know, 50%, 60%, 70% year over year, month by month, down to I think in this past month 24% is a number if I remember correctly, then, you know, likewise, we've seen kind of our growth track those numbers.

And so I think we're very much following the trends in e-commerce. And so as you think about the year, I think it really is a macro question on our business. And being able to handicap what may or may not happen in the world in terms of the various activities that are going on related to vaccines and opening -- reopening the economy, shifts back to offline purchases by consumers, it's generally speaking, whatever e-commerce does, we're going to follow. And so that's likewise what's happened in April.

And, you know, I think we saw incredible growth in April of last year. So we didn't expect to see, you know, another up year year over year. But we're happy with the trends we've seen. And generally speaking, and you know, e-commerce will do.

What happens there is going to happen to our business as well.

Allen Klee -- Maxim Group -- Analyst

Great. Thank you so much.

Operator

We have reached the end of our question-and-answer session. And I would now like to turn the call over to CEO, Ken McBride, for closing remarks.

Ken McBride -- Chief Executive Officer

Thanks for joining us today. And as always, if you have any follow-up questions, you can contact us through our investor website at investor.stamps.com or you can call our investor hotline at 310-482-5830. Thanks for tuning in.

Operator

[Operator signoff]

Duration: 49 minutes

Call participants:

Suzanne Park -- Vice President of Finance

Ken McBride -- Chief Executive Officer

Jeff Carberry -- Chief Financial Officer

George Sutton -- Craig-Hallum Capital Group LLC -- Analyst

Kevin Liu -- K. Liu & Company LLC -- Analyst

Allen Klee -- Maxim Group -- Analyst

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