Stamps.com 2015 Annual Report Download - page 34

Download and view the complete annual report

Please find page 34 of the 2015 Stamps.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 102

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102

TABLE OF CONTENTS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Item
6. “Selected Financial Data” of this Report and our financial statements and the related notes thereto included in this Report. This
discussion contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially
from historical results or anticipated results including those set forth in Item 1A. “Risk Factors” of this Report. See the discussion of
forward-looking statements on page 1 of Part I of this Report.
Overview
Stamps.com®isaleadingproviderofInternet-basedmailingandshippingsolutions.UndertheStamps.comandEndiciabranded
solutions,ourcustomersuseourservicetomailandshipavarietyofmailpieces,includingpostcards,envelopes,flatsandpackages,
usingawiderangeofUnitedStatesPostalService(“USPS”)mailclasses,includingFirstClassMail®,PriorityMail®,PriorityMail
Express®,MediaMail®,ParcelSelect®,andothers.CustomersusingourservicereceivediscountedpostageratescomparedtoUSPS
retailoncertainmailpiecessuchasFirstClasslettersanddomesticandinternationalPriorityMailandPriorityMailExpresspackages.
Ourcustomersincludeindividuals,smallbusinesses,homeoffices,medium-sizebusinessesandlargeenterprises.Wewerethefirst
everUSPS-licensedvendortooffermailingandshippinginasoftware-onlybusinessmodelin1999.Wealsooffermulti-carrier
shippingsolutionsunderthebrandnamesShipStation®andShipWorks®.
Mailing and Shipping Business References
Whenwerefertoour“MailingandShippingbusiness”,wearereferringtoourmailingandshippingproductsandservices
includingourMailingandShippingServicesandIntegrations,Mailing&ShippingSuppliesStores,BrandedInsuranceofferingsand
Multi-carrierServices.WedonotincludeourCustomizedPostagebusinesswhenwerefertoourMailingandShippingbusiness.
WehavehistoricallybrokenoutourMailingandShippingbusinessbetweenCoremailingandshippingandNon-Coremailing
andshipping.
Wepreviouslyreferredtoour"Coremailingandshippingbusiness"astheportionofourmailingandshippingbusinesstargeting
oursmallbusiness,enterpriseandhighvolumeshippingcustomersacquiredthroughourCoremailingandshippingmarketingchannels
whichincludepartnerships,onlineadvertising,directmail,directsales,traditionalmediaadvertisingandothers.
Wepreviouslyreferredtoour"Non-Coremailingandshippingbusiness"astheportionofourmailingandshippingbusinessthat
targetedamoreconsumerorientedcustomerthroughtheonlineenhancedpromotionmarketingchannel.
Inlightofouracquisitions,includingtheEndiciaacquisition,wehaveconcludedthattheNon-Coremailingandshippingbusiness
isnotmaterialenoughtobreakoutseparatelyin2015asitnolongerprovidesinvestorswithmaterialadditionalinsightsintoour
business.Suchinformationisshownforpreviousperiodsbelow.
Whenwerefertoour“Mailingandshippingrevenue”,wearereferringtoourservice,productandinsurancerevenuegeneratedby
allofourmailingandshippingcustomers.
Acquisitions
OnJune10,2014,weacquired100%oftheoutstandingequityofAuctaneLLC,whichoperatesShipStation,inacashand
contingentstocktransaction.ShipStation,basedinAustin,Texas,offersmonthlysubscriptionbasede-commerceshippingsoftware
primarilyunderthebrandsShipStationandAuctane.ShipStationisaleadingweb-basedshippingsoftwaresolutionthatallowsonline
retailersande-commercemerchantstoorganize,process,fulfillandshiptheirordersquicklyandeasily.ShipStationsupports
automaticorderimportingfromover100shoppingcartsandmarketplaces,includingeBay,Amazon,Shopify,Bigcommerce,Volusion,
Squarespaceandothers.ShipStationoffersmulti-carriershippingoptions,andautomationfeatureslikecustomhierarchicalrulesand
productprofilesthatallowcustomerstoeasilyandautomaticallyoptimizetheirshipping.UsingShipStation,anonlineretailerore-
commercemerchantcanshiptheirordersfromwherevertheysellandhowevertheyship.
30