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
Continue Reading Below
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.
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."
10 stocks we like better than Stamps.comWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Stamps.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 6, 2017