Stamps.com 2013 Annual Report Download - page 34

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As discussed above, our expectations are subject to substantial uncertainty and our results are subject to macro economic factors and other
factors which could cause these trends to be worse than our current expectation or which could cause actual results to be materially different than
our current expectations. These expectations are “forward looking statements”,
are made only as of the date of this Report and are subject to the
qualification and limitations on the forward-
looking statements discussion on page 1 of Part I of this Report and the risks and other factors set
forth in Item 1A “Risk Factors”. As described in our forward-
looking statements discussion, we do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Report.
Years Ended December 31, 2012 and 2011
Total revenue increased 14% to $115.7 million in 2012 from $101.6 million in 2011. PC Postage revenue, including service revenue, product
revenue and insurance revenue, in 2012 was $110.0 million, an increase of 18% compared to $93.3 million in 2011. Core PC Postage revenue
increased 19% to $107.0 million in 2012 from $90.2 million in 2011. Non-
Core PC Postage revenue decreased 5% to $3.0 million in 2012 from
$3.2 million in 2011. PhotoStamps revenue decreased 32% to $5.7 million in 2012 from $8.3 million in 2011. Other revenue increased 9% to
$7,000 in 2012 from $6,000 in 2011.
The following table sets forth the breakdown of revenue for 2012 and 2011 and the resulting percent change (revenue in $000s):
30
Table of Contents
• We expect Non-
Core PC Postage revenue and PhotoStamps revenue will continue to be down in 2014 compared to 2013 as we expect to
continue to minimize investments in these areas of our business.
• We are targeting small business customer acquisition spending on our Core PC Postage marketing channels to be up 5% -
10% in 2014
compared to 2013. We will continue to monitor our customer metrics and the state of the economy and adjust our level of spending
accordingly.
•
Customer acquisition spending is expensed in the period incurred while the revenue and profits associated with the acquired customer is
earned over the customer's lifetime. As a result, increased customer acquisition spending in future periods could result in a reduction in
operating profit and cash flow compared to past periods.
•
We expect research and development expenses to be higher in 2014 as compared to 2013, primarily related to an expected increase in
headcount costs to support the growth in our products and services.
•
We expect general and administrative expenses to be higher in 2014 as compared to 2013, primarily related to an expected increase in costs
to build and support the infrastructure necessary to grow the business.
• We expect capital expenditures for the business to be approximately $2.5 million.
2012
2011
% Change
Revenues
Service
$
88,173
$
75,535
17
%
Product
14,710
13,465
9
%
Insurance
7,120
4,321
65
%
PC Postage Revenue
110,003
93,321
18
%
PhotoStamps Revenue
5,651
8,258
(32
%)
Other
7
6
9
%
Total revenues
115,661
101,585
14
%