Reports Mixed Q2 '21 Results

Stamps.com (STMP) reported mixed Q2 ’21 results. Both adjusted EBITDA of $54.8 million (28.7% margin) and non-GAAP EPS of $1.95 were slightly ahead of Street expectations for $54.5 million and $1.84, respectively, despite revenue of $191.1 million (-7.6% Y/Y) coming in modestly below consensus of $192.0 million. As we were projecting revenue and adjusted EBITDA above consensus, the results were short of our expectations. In terms of the company’s key customer metrics, the paid customer count was 909,000 (-5% Y/Y) versus our estimate of approximately 1 million (+5% Y/Y), and monthly ARPU was $70.04 (+2% Y/Y) versus our estimate of $64.88 (-6% Y/Y). Gross margin of 77.7% was 100 basis points above our assumption. From an expense standpoint, spending on sales and marketing came in lower than we modeled but was more than offset by higher research and development and general and administrative expenses. Non-GAAP EPS beat both our estimate and consensus by a wider margin due to a lower tax rate.

Due to Stamps.com’s pending sale to Thoma Bravo, the company did not host an earnings call to discuss the results or provide any guidance. Although we updated our model to reflect the company’s Q2 ’21 results, we did not adjust any of our prior assumptions for the remaining forecast period. The decline in our estimates for Q3 and beyond, which should not be relied upon, principally reflects the lower subscriber count exiting Q2. Our price target remains $330.00, matching the transaction price.

Our report with model and disclosures is available here.

Disclosure(s):

The analyst, a member of the analyst’s household, and/or an account in which the analyst exercises discretion hold(s) a long position in the common stock of Stamps.com (STMP).