Vistaprint 2010 Annual Report Download - page 53

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Form 10-K
Results of Operations
The following table presents our historical operating results for the periods indicated as a
percentage of revenue:
2010 2009 2008
Year Ended June 30,
As a percentage of revenue:
Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0%
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.8% 37.2% 38.5%
Technology and development expense . . . . . . . . . . . . . . . . . . . 11.7% 11.8% 11.2%
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . 32.3% 30.9% 31.9%
General and administrative expense . . . . . . . . . . . . . . . . . . . . . 8.7% 8.2% 8.1%
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5% 11.9% 10.3%
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1% 0.4% 1.0%
Other (expense) income, net. . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2)% (0.1)% 0.1%
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2% 0.3% 0.4%
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2% 11.9% 11.0%
Income tax provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1% 1.1% 1.1%
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1% 10.8% 9.9%
Fiscal Years Ended June 30, 2010, 2009 and 2008
In thousands
2010 2009 2008
2010-2009
% Change
2009-2008
% Change
Year Ended June 30,
Revenue . . . . . . . . . . . . . . . . . $ 670,035 $ 515,826 $ 400,657 30% 29%
Cost of revenue . . . . . . . . . . . $ 240,195 $ 191,944 $ 154,122 25% 25%
% of revenue .............. 35.8% 37.2% 38.5%
Revenue
We generate revenue primarily from the sale and shipment of customized manufactured
products, as well as certain digital services, such as website design and hosting and email marketing
services. We also generate revenue from order referral fees, revenue share and other fees paid to us
by merchants for customer click-throughs, distribution of third-party promotional materials and referrals
arising from products and services of the merchants we offer to our customers on our website. Unlike
tangible products that we offer, these third party referral offerings do not require physical production
and have minimal corresponding direct cost of revenue. During the fiscal year ended June 30, 2010,
we eliminated the third party membership discount program previously offered on our websites and
terminated our relationship with our partner for these programs.
To understand our revenue trends, we monitor several key metrics including:
•Website sessions. A session is measured each time a computer user visits a Vistaprint
website from their Internet browser. We measure this data to understand the volume and
source of traffic to our websites. Typically, we use various advertising campaigns to increase
the number and quality of shoppers entering our websites. The number of website sessions
varies from month to month depending on variables such as product campaigns and
advertising channels used.
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