Stamps.com 2011 Annual Report Download - page 36

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The following table sets forth our results of operations as a percentage of total revenue for the periods indicated:
Revenue
Service revenue increased 5% to $64.6 million in 2010 from $61.4 million in 2009. The increase in service revenue consisted of a 9% increase in
service revenue from customers acquired through our non-
enhanced promotion channels, which more than offset the 27% decrease in service
revenue from customers acquired through our enhanced promotion channel. The 9% increase in service revenue from customers acquired
through the non-
enhanced promotion channels consisted of a 6% increase in successfully billed customers and a 3% increase in average service
revenue per customer. As a percentage of total revenue, service revenue increased to 76% in 2010 from 75% in 2009, primarily as a result of the
decrease in revenue from our PhotoStamps product.
Product revenue increased 10% to $11.7 million in 2010 from $10.7 million in 2009. The increase in product revenue was primarily attributable
to the following: (1) growth in our paid customer base; (2) marketing our Supplies Store to our existing customer base; (3) additional SKUs we
added to our Supplies Store; and (4) growth in postage printed, which helps drive sales of consumable supplies such as labels. Total postage
printed by customers using our service during 2010 was $447 million, a 26% increase from $354 million in 2009. Store orders increased by 18%
in 2010 compared to 2009, while the average revenue per store order decreased by 7% in 2010 compared to 2009. As a percentage of total
revenue, product revenue increased slightly to 14% in 2010 from 13% in 2009, primarily as a result of the decrease in revenue from our
PhotoStamps product.
Insurance revenue increased 27% to $2.0 million in 2010 from $1.6 million in 2009. This increase was primarily attributable to (1) the
expansion of our existing package insurance offering to cover packages being shipped to international destinations and (2) insurance purchases
resulting from our new partnership with Amazon.com. As a percentage of total revenue, insurance revenue was unchanged at 2% in each of 2010
and 2009.
Table of Contents
Twelve months ended
December 31,
2010
2009
Total Revenues:
Service
75.5
%
74.7
%
Product
13.7
%
13.0
%
Insurance
2.4
%
2.0
%
PhotoStamps
8.4
%
10.3
%
Other
0.0
%
0.0
%
Total revenues
100.0
%
100.0
%
Cost of revenues:
Service
15.5
%
14.4
%
Product
5.1
%
4.9
%
Insurance
0.7
%
0.6
%
PhotoStamps
6.3
%
8.0
%
Other
0.0
%
0.0
%
Total cost of revenues
27.7
%
27.9
%
Gross profit
72.3
%
72.1
%
Operating expenses:
Sales and marketing
36.4
%
38.6
%
Research and development
11.0
%
10.6
%
General and administrative
17.1
%
15.8
%
Legal Settlements
6.1
%
0.0
%
Total operating expenses
70.6
%
65.0
%
Income from operations
1.7
%
7.1
%
Asset write
-
off
-
0.7
%
0.0
%
Interest and other income, net
0.9
%
1.1
%
Income before income taxes
1.9
%
8.2
%
Income taxes expense (benefit)
-
4.6
%
0.7
%
Net income
6.5
%
7.5
%
32