Stamps.com's (NASDAQ:STMP) torrid growth continued in the third quarter. The leading provider of online postage and shipping software solutions continues to profit from the relentless growth of e-commerce. 

Stamps.com results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$115.1 million

$92.6 million

24%

Net income

$46.2 million

$18.7 million

148%

Earnings per share

$2.49

$1.03

142%

Data source: Stamps.com Q3 2017 earnings release.

What happened this quarter?

Total revenue jumped 24% year over year to $115.1 million, fueled by a 21% increase in mailing and shipping revenue to $106.5 million, and a 75% surge in customized postage revenue to $8.6 million.

The key drivers of Stamps.com's business continue to strengthen: The number of paid customers increased 13% to 736,000, while monthly average revenue per paid customer (ARPU) rose 7% to $48.23. In addition, average monthly churn rate remained low at 3%.

"The churn continues to benefit from our focus on shipping customers who tend to have lower churn rates compared to our traditional small business customers," Chairman and CEO Ken McBride said during a conference call with analysts. "Note that two years ago, our third-quarter churn metric was 3.4%, so we have continued to see a nice long-term down trend in that metric."

All told, total postage printed through all Stamps.com's solutions exceeded $1.4 billion in the quarter for a year-over-year increase of 8%.

In turn, EBITDA -- adjusted to exclude stock-based compensation expenses, acquisition-related charges, and certain other items -- grew 24% to $56.6 million. And adjusted net income soared 77% to $49.8 million, or $2.68 per share.

A small shopping cart filled with boxes on top of a computer keyboard

As e-commerce grows, so too does Stamps.com profits. Image source: Getty Images.

Looking forward

Stamps.com reiterated its guidance for full-year total revenue of between $435 million and $460 million and adjusted EBITDA of $220 million to $240 million. It also raised its 2017 profit forecast, which now includes:

  • GAAP net income of $116 million to $132 million; up from a prior estimate of $97 million to $100 million
  • GAAP EPS of $6.20 to $7.16, up from $5.15 to $6.07
  • Adjusted EPS of $9.00 to $10.00, compared to $7.50 to $8.50

"Our shipping business continues to drive our solid top line results and strong margin profile through contributions from each of our shipping subsidiaries," Chairman and CEO Ken McBride said in a press release. "We believe we are well positioned as we enter the seasonally strong fourth quarter and we remain very excited about our long-term business opportunities."

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