Stamps.com 2010 Annual Report Download - page 38

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TABLE OF CONTENTS
As discussed above, our results are subject to macro economic factors and other factors which could cause these trends to be
worse than our current expectation. See Item 1A. “Risk Factors” and the discussion of forward-looking statements on page 1 of
Part I of this Report.
Years Ended December 31, 2009 and 2008
Total revenue in 2009 was $82.1 million, a decrease of 3% from $84.9 million in 2008. PC Postage subscriber related
revenue, including service revenue, product revenue and insurance revenue, in 2009 was $73.6 million, a slight increase of 1%
compared to $73.0 million in 2008. PhotoStamps revenue in 2009 was $8.5 million, a decrease of 29% compared to $11.9
million in 2008.
PC Postage revenue for customers acquired through our enhanced promotion channel for 2009 was approximately $6.3
million, a decrease of 31% from approximately $9.1 million in 2008. PC Postage revenue for customers acquired through our
non-enhanced promotion channels for 2009 was approximately $67.4 million, an increase of 5% from approximately $63.9
million in 2008.
The following table sets forth the total number of paid customers originally acquired through our non-enhanced promotion
channels on a quarterly basis (in thousands):
our PC Postage business. We are currently expecting a neutral to improving small business economic environment in
2011; however, any unexpected deterioration from current levels could negatively impact our results including our PC
Postage customer metrics and revenue.
• We expect PhotoStamps revenue and marketing spending to decrease in 2011 compared with 2010, although this will
depend on many factors, including our assessment of the state of the economy in the fourth quarter (which is traditionally
our seasonally strongest quarter) of 2011. We believe macro-economic factors are still negatively impacting our
PhotoStamps revenue through reduced customer purchases of our product.
• We expect research and development expenses to be modestly higher in 2011 primarily related to expected increased
headcount costs.
• We expect General and Administrative expenses to be higher in 2011 driven by higher legal costs primarily resulting
from our litigation with Endicia, which continues to be a material expense for us. However, the amount and timing of our
legal expenses are volatile, so our ability to predict the resulting increase or decrease in general administrative expense is
limited.
• We expect interest income and other income, net to decrease due to lower invested cash balances and continued lower
interest rates.
We believe that the increase in paid customers in 2009 was attributable to our increased customer acquisition spending. For
customers originally acquired through our non-enhanced promotion channels, our average subscriber related monthly revenue
per paid customer in 2009 was $17.63 compared to $17.16 in 2008.
Year
Paid Customers (000)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2009
321
317
315
320
2008
305
314
312
311
31