Stamps.com (NASDAQ:STMP) reported a sharp increase in second-quarter revenue and profits on Aug. 2.

The provider of online postage and shipping software has been one of the biggest beneficiaries of the rapid growth of e-commerce in recent quarters -- a trend the company expects to continue in the year ahead.

People placing packages on a conveyor belt.

More e-commerce means more profits for Stamps.com. Image source: Getty Images.

Stamps.com results: The raw numbers

Metric

Q2 2017

Q2 2017

Year-Over-Year Change

Revenue

$116.1 million

$84 million

38%

Net income

$31 million

$14.3 million

117%

Earnings per share

$1.71

$0.79

118%

Data source: Stamps.com Q2 2017 earnings release.

What happened with Stamps.com this quarter?

Total revenue leapt 38% year over year to $116 million, driven by a 37% jump in mailing and shipping revenue, to $111.8 million.

Helping to fuel these results is the powerful combination of more customers spending more money on Stamps.com's services. Paid customers rose 14% to 738,000, while monthly average revenue per paid customer (ARPU) increased 20% to $50.51. Better still, average monthly churn rate improved to 2.8% from 3.2% in the year-ago quarter.

"Reduction in churn was primarily a result of our continued focus on acquiring shipping customers who tend to have a lower churn versus our traditional small business office users," Chairman and CEO Ken McBride said during a conference call with analysts (transcript by Seeking Alpha).

Moreover, Stamps.com is enjoying margin expansion as it grows, thanks to its scalable, capital-light business model. EBITDA -- adjusted to exclude stock-based compensation expense, acquisition-related charges, and certain other items -- surged 52% to $58 million. In turn, adjusted EBITDA margin improved to 50%, up from 48.8% in Q1 and 45.5% in the second quarter of 2016.

All told, adjusted net income rocketed 62% higher to $37.8 million, or $2.08 per share.

Looking forward

Management expects the good times to continue, and the company boosted its full-year outlook, including:

  • Total revenue of $435 million to $460 million, up from a prior forecast of $405 million to $430 million.
  • Adjusted EBITDA of $220 million to $240 million, up from $205 million to $225 million.
  • GAAP EPS of $5.15 to $6.07, compared to $4.78 to $5.69.
  • Adjusted EPS of $7.50 to $8.50, versus $7.00 to $8.00.

McBride explained in a press release:

In addition to our strong revenue and earnings growth during the second quarter, we reached our highest level of paid customers and average revenue per paid customer, we saw continued strong growth in our shipping business areas, and we experienced strong contributions from all of our subsidiaries. We remain very excited about our future business opportunities which, combined with our second quarter performance, led us to increase our guidance for 2017.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Stamps.com. The Motley Fool has a disclosure policy.