Vistaprint 2010 Annual Report Download - page 54

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•Conversion rates. The conversion rate is the number of customer orders divided by the
total number of sessions during a specific period of time. Typically, we strive to increase
conversion rates of customers entering our websites in order to increase the number of
customer orders generated. Conversion rates have fluctuated in the past and we anticipate
that they will fluctuate in the future due to, among other factors, the type of advertising
campaigns and marketing channels used.
•Average order value. Average order value is total bookings, which represents the value of
total customer orders received on our websites, for a given period of time divided by the
total number of customer orders recorded during that same period of time. We seek to
increase average order value as a means of increasing revenue. Average order values have
fluctuated in the past and we anticipate that they will fluctuate in the future depending upon
the type of products promoted during a period and promotional discounts offered. For
example, among other things, seasonal product offerings, such as holiday cards, can cause
changes in average order values.
We believe the analysis of these metrics provides us with important information on customer
buying behavior, advertising campaign effectiveness and the resulting impact on overall revenue
trends and profitability. While we continually seek and test ways to increase revenue, we also attempt
to increase the number of customer acquisitions and to grow profits. As a result, fluctuations in these
metrics are usual and expected. Because changes in any one of these metrics may be offset by
changes in another metric, no single factor is determinative of our revenue and profitability trends and
we assess them together to understand their overall impact on revenue and profitability.
Revenue increased 30% to $670.0 million, from fiscal 2009 to fiscal 2010, primarily due to
increases in sales across our product and service offerings, as well as across geographies. The
overall growth during this period was driven by increases in website sessions, which grew by 29% to
305.2 million, and increases in average order value, which grew by 6.8% to $35.12. Revenue from our
non-United States websites accounted for 45% of total revenues for fiscal 2010 as compared to 39%
of revenue during fiscal 2009 and the weaker U.S. dollar positively impacted our revenue growth rate
by an estimated 200 basis points over the same period. These increases were partially offset by a
decline in conversion rates of 10 basis points to 6.3% and a decrease in revenue from third-party
referral fees which declined from approximately $25.9 million to $12.4 million over the same prior year
period. Referral fee revenue from membership discount programs was approximately 3.9% of total
revenues in fiscal 2009, but declined to 0.8% for fiscal 2010 as a result of the termination of the third-
party membership discount programs in the second quarter of fiscal 2010 that were previously offered
on our websites. We did not generate any revenues from third party membership discount programs
in the second half of fiscal year 2010 and do not expect to generate any such revenues in the future.
As our total customer base has grown, we also have continued to experience growth in purchases
from existing customers. Bookings from repeat customers accounted for 67% of total bookings for the
year ended June 30, 2010 as compared to 66% of total bookings for the year ended June 30, 2009.
Revenue increased 29% to $515.8 million, from fiscal 2008 to fiscal 2009, primarily due to
increases in sales of our micro business marketing products. The overall growth during this period
was driven by increases in website sessions, conversion rates and a positive impact from new product
and service offerings. During this period, our website sessions grew by 22% to 235.9 million,
conversion rates grew by 50 basis points to 6.4% and our average order value remained constant at
approximately $33. As our total customer base has grown, we also have continued to experience
growth in purchases from existing customers. Bookings from repeat customers increased from 64% of
total bookings in fiscal 2008 to 66% of total bookings in fiscal 2009. Revenue from our non-United
States websites accounted for 39% of total revenues for fiscal 2009 as compared to 38% of total
revenue during fiscal 2008. In addition, our revenue growth rate was negatively impacted by an
estimated 700 basis points resulting from a stronger U.S. dollar as compared to the prior fiscal year.
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