Stamps.com, a leader in online postage sales, recorded $20.2 million in total revenue in the second quarter of 2009. Net income for the quarter was $1.2 million, compared to $1.3 million for the second quarter in 2008.
“In the current tough macroeconomic environment, we were happy with the strength in our earnings this quarter,” said Ken McBride, Stamps.com president and CEO. “We continued to experience growth in our PC Postage business outside of the enhanced promotion channel, albeit at a slower rate than we did before the current economic downturn. We are also making good progress in our strategic investment areas of enterprise and shipping.”
Revenue From Postage Sales, Custom Stamps
Stamps.com’s total PC (online) postage revenue, including service fee revenue, store revenue, and insurance revenue, was down 2 percent compared to the same 2008 quarter, but still generated a solid $18.2 million for the company.
The company’s customizable PhotoStamps generated $2 million in revenue, a 31 percent drop from the same quarter in 2008. McBride attributed this drop to a 56 percent reduction in marketing support for the PhotoStamps product compared to the second quarter of 2008.
“We believe the weak economy continues to have a negative impact on our [customer] acquisition trends, as small businesses may be less willing to take on new monthly expenses when they are struggling,” McBride said.” Our cost per acquisition for the second quarter was $126.00, which was up slightly from the $122.00 in the first quarter of this year. Despite the small increase we continue to believe we are earning a very good ROI on our marketing investment. We continue to estimate that our lifetime value is at least 2 times the cost of acquiring a customer.”
Many online retailers use Stamps.com or its competitors to purchase both U.S. postage and manage FedEx shipments.
Stock Went Public in 1999
Stamps.com was founded in 1996 and first sold common shares to the public in 1999. Those shares trade on the NASDAQ exchange under the symbol “STMP.” On August 5, 2009, the closing price of the stock was $8.45. The 52-week high price of the stock was $15.22 in September 2008, while the 52-week low price was $7.14 in November 2008. With approximately 16 million shares outstanding, Stamps.com’s market capitalization (price of stock times number of shares outstanding) is roughly $137 million in early August 2009. UPS, the publicly traded shipping company, has a market capitalization of roughly $53 billion, by comparison.