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--= Paragraph 1 =
++= Overview =
--Overview
++Stamps.com (NASDAQ: STMP) is the leading provider of postage online and shipping software solutions to customers including consumers, small businesses, e-commerce shippers, enterprises, and high volume shippers. Stamps.com offers solutions that help businesses run their shipping operations more smoothly and function more successfully under the brand names Stamps.com, Endicia®, ShipStation®, ShippingEasy®, ShipWorks®, and MetaPack™. Stamps.com’s family of brands provides seamless access to mailing and shipping services through integrations with more than 500 unique partner applications.{{footnote}}https://investor.stamps.com/company-information{{/footnote}}
++= Services and Products =
--Stamps.com (NASDAQ: STMP) is the leading provider of postage online and shipping software solutions to customers including consumers, small businesses, e-commerce shippers, enterprises, and high volume shippers. Stamps.com offers solutions that help businesses run their shipping operations more smoothly and function more successfully under the brand names Stamps.com, Endicia®, ShipStation®, ShippingEasy®, ShipWorks®, and MetaPack™. Stamps.com’s family of brands provides seamless access to mailing and shipping services through integrations with more than 500 unique partner applications.
++== Mailing and Shipping Business ==
++The company offer the following mailing and shipping products and services to its customers under the Stamps.com, Endicia, MetaPack, ShippingEasy, ShipStation, and ShipWorks brands:{{footnote}}https://www.sec.gov/ix?doc=/Archives/edgar/data/1082923/000108292319000102/stmp-930201910q.htm#s24A77462A35B5C388CBFED41EED93A5A{{/footnote}}
++=== USPS Mailing and Shipping Solutions ===
--Services and Products
--
--
--Mailing and Shipping Business
--
--
--The company offer the following mailing and shipping products and services to its customers under the Stamps.com, Endicia, MetaPack, ShippingEasy, ShipStation, and ShipWorks brands:
--
--
--USPS Mailing and Shipping Solutions
--
--
  Under the Stamps.com and Endicia brands, customers use its USPS-approved mailing and shipping solutions to mail and ship a variety of mail pieces and packages through the USPS. Customers can purchase and print postage 24 hours a day, seven days a week, through its software or web interfaces. Typically, customers fund an account balance prior to using its service.
--
  The company's USPS mailing and shipping solutions enable users to print "electronic postage" directly onto envelopes, plain paper, or labels using only a standard personal computer, printer, and Internet connection. The company's solutions support a variety of USPS mail classes including First Class Mail®, Media Mail®, Parcel Select®, Priority Mail, Priority Mail Express, and others. Customers can also add USPS Special Services to their mail pieces, such as Certified Mail®, Collect on Delivery, Insured Mail, Registered Mail®, Restricted Delivery, Return Receipt, Signature Confirmation™, and USPS Tracking®. The company's customers can print postage (1) on NetStamps® labels, which can be used just like regular stamps, (2) on envelopes and postcards or on labels in a single step process that saves time and provides a professional look, (3) on plain 8.5" x 11" paper or on special labels for packages, and (4) on integrated customs forms for international mail and packages.
--
  The company's mailing and shipping solutions incorporate address verification technology that verifies each destination address for mail or packages sent using its solutions against a database of all known addresses in the United States. The company's mailing and shipping solutions are also integrated with common small business and productivity software applications such as word processing, contact and address management, and accounting and financial applications. The company's shipping solutions feature integrations with hundreds of partners including popular shipping management products, shopping carts, online marketplaces, and other e-commerce solutions.
--
  The company target different customer categories with service plans that provide various features and capabilities. The company target smaller offices, home offices, and smaller online sellers that need a more basic set of mailing and shipping features. The company target larger enterprises that need a richer set of mailing capabilities such as multiple-user functionality, automated Certified Mail forms, additional reference codes and higher allowable postage balances. The company target shippers such as e-commerce merchants, online retailers, fulfillment houses, warehouses, and large retailers that need shipping specific features such as direct integration into the customer's order databases, faster label printing speed, and the ability to customize and save shipping profiles. The company target large corporations with multiple geographic locations that need enhanced reporting and the ability for a central location, such as a corporate headquarters, to have greater visibility and control over postage expenditures across their distributed network of locations. The company target large volume mailers that need features designed for presort mail, Certified Mail, and bulk address updating.
--
  Customers may pay it a monthly fee, based on a subscription plan which may be waived or refunded for certain customers, for which the company provide them access to its platform. Stamps.com has been, and in the future potentially could be, compensated directly by the USPS and/or other carriers for shipping labels printed that meet certain requirements. The company may earn revenue from customers that have access to its platform when they purchase postage or print shipping labels. The company may earn revenue that may take the form of some or all of the spread between the rate a customer pays and the rate the carrier or integration partner receives, either charged directly or paid by its partners. The company may earn other types of revenue shares or other compensation from specific customers that have access to its platform or through integration partners.
--
  For a description of some of the recent and potential future changes to its shipping and mailing business and related risks, see "Risk Factors~-~-Risks Related to its Industry~-~-The discontinuation of certain financial compensation arrangements with the USPS will have an adverse effect on its revenues and operating results, unless Stamps.com is successful in replacing the lost revenue and profit with similar compensation from the USPS or other potential partners, of which there is no assurance," "Risk Factors~-~-Risks Related to its Industry~-~-The USPS could modify, discontinue or terminate agreements and other financial compensation arrangements, which would have an adverse effect on its revenue and operating results," "Risk Factors~-~-Risks Related to its Industry~-~-The USPS or its integration partners could cause discounts its customers receive to be diminished or terminated, which would have an adverse effect on its results of operations, reputation and competitiveness," and "Risk Factors~-~-Risks Related to its Industry~-~-Strategic business Partners or carriers could modify or terminate agreements and other financial compensation arrangements, which could materially adversely affect its results of operations and prospects," in its Annual Report on Form 10-K for the fiscal year ended December 1, 2018, filed with the SEC on March 1, 2019.
++=== Multi-Carrier Shipping Solutions ===
--Multi-Carrier Shipping Solutions
--
--
  The company offer multi-carrier shipping solutions through its MetaPack, ShippingEasy, ShipStation, and ShipWorks brands and are in the process of preparing to offer non-USPS carrier shipping solutions through its Stamps.com and Endicia brands. MetaPack, ShippingEasy, ShipStation, and ShipWorks offer leading multi-carrier solutions for shippers including e-commerce merchants, online retailers, warehouses, fulfillment houses, large retailers, and other types of shippers that use multiple carriers such as Canada Post, DHL, FedEx, Royal Mail, UPS, USPS, and many others.
--MetaPack, which the company acquired on August 15, 2018, provides multi-carrier enterprise-level solutions to many of the world’s preeminent e-commerce retailers and brands. MetaPack provides its customers access to a carrier library with support for over 450 parcel carriers. MetaPack's platform also provides sophisticated solutions including carrier management, a carrier optimization engine, a track and trace system, a parcel returns system, a delivery analysis and carrier service-level agreement (SLA) monitoring system, a sophisticated cross-border solution, and a system that provides dynamic delivery options right in the shopping cart. From a single integration, Metapack’s customers are able to offer delivery choice and convenience in all major e-commerce markets around the world. Metapack’s software also improves its customers’ shopping cart order conversion rates and order delivery satisfaction ratings.
++**MetaPack**, which the company acquired on August 15, 2018, provides multi-carrier enterprise-level solutions to many of the world’s preeminent e-commerce retailers and brands. MetaPack provides its customers access to a carrier library with support for over 450 parcel carriers. MetaPack's platform also provides sophisticated solutions including carrier management, a carrier optimization engine, a track and trace system, a parcel returns system, a delivery analysis and carrier service-level agreement (SLA) monitoring system, a sophisticated cross-border solution, and a system that provides dynamic delivery options right in the shopping cart. From a single integration, Metapack’s customers are able to offer delivery choice and convenience in all major e-commerce markets around the world. Metapack’s software also improves its customers’ shopping cart order conversion rates and order delivery satisfaction ratings.
--ShippingEasy, which the company acquired on July 1, 2016, offers web-based multi-carrier shipping solutions that allow online retailers and e-commerce merchants to organize, process, fulfill, and ship their orders quickly and easily. ShippingEasy's solutions feature over 50 integrations with partners and carriers, including marketplaces, shopping carts, and e-commerce platforms, allowing its customers to import and export fulfillment and tracking data in real time across all of their selling channels. ShippingEasy's solutions download orders from all selling channels and automatically map custom shipping preferences, rates, and delivery options across all of its supported carriers. ShippingEasy's easy-to-use solutions also include complimentary access to ShippingEasy customer service shipping specialists helping merchants to streamline workflow and save on shipping costs.
++**ShippingEasy**, which the company acquired on July 1, 2016, offers web-based multi-carrier shipping solutions that allow online retailers and e-commerce merchants to organize, process, fulfill, and ship their orders quickly and easily. ShippingEasy's solutions feature over 50 integrations with partners and carriers, including marketplaces, shopping carts, and e-commerce platforms, allowing its customers to import and export fulfillment and tracking data in real time across all of their selling channels. ShippingEasy's solutions download orders from all selling channels and automatically map custom shipping preferences, rates, and delivery options across all of its supported carriers. ShippingEasy's easy-to-use solutions also include complimentary access to ShippingEasy customer service shipping specialists helping merchants to streamline workflow and save on shipping costs.
--ShipStation, which the company acquired on June 10, 2014, offers web-based multi-carrier shipping solutions that target e-commerce merchants, online retailers, fulfillment houses, and warehouses.  ShipStation's solutions feature over 325 integrations with partners and carriers, including marketplaces, shopping carts, and e-commerce platforms. 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.
++**ShipStation**, which the company acquired on June 10, 2014, offers web-based multi-carrier shipping solutions that target e-commerce merchants, online retailers, fulfillment houses, and warehouses.  ShipStation's solutions feature over 325 integrations with partners and carriers, including marketplaces, shopping carts, and e-commerce platforms. 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.
--ShipWorks, which the company acquired on August 29, 2014, offers software-based multi-carrier shipping solutions that target e-commerce merchants, online retailers, fulfillment houses, and warehouses.  ShipWorks offers simple, powerful, and easy to use solutions for shippers. ShipWorks' solutions feature over 100 integrations with partners and carriers, including marketplaces, shopping carts and e-commerce platforms. ShipWorks offers multi-carrier shipping options and features including importing orders from any marketplace or shopping cart, easily comparing shipping rates and services, sending email notifications to buyers, updating online order status, generating reports, and many more.
++**ShipWorks**, which the company acquired on August 29, 2014, offers software-based multi-carrier shipping solutions that target e-commerce merchants, online retailers, fulfillment houses, and warehouses.  ShipWorks offers simple, powerful, and easy to use solutions for shippers. ShipWorks' solutions feature over 100 integrations with partners and carriers, including marketplaces, shopping carts and e-commerce platforms. ShipWorks offers multi-carrier shipping options and features including importing orders from any marketplace or shopping cart, easily comparing shipping rates and services, sending email notifications to buyers, updating online order status, generating reports, and many more.
++== Consolidation Services ==
--Consolidation Services
--
  As part of its mailing and shipping business, the company offer domestic and international shipping services through consolidators, who group packages by destination and ship the packages directly or through partners. These services seek to take advantage of economies of scale, with the goal of yielding lower shipping costs for its customers.
--Mailing and Shipping Integrations
++== Mailing and Shipping Integrations ==
--
  As part of its mailing and shipping services, the company offer back-end integration solutions where the company provide the technology to print mailing and shipping labels for transactions to partners who manage the front-end users. The company's solutions integrate directly into many e-commerce platforms, allowing web store managers to completely automate their order fulfillment process by processing, managing, and shipping orders from virtually any e-commerce source through a single interface without manual data entry. Managers can retrieve order data and print complete shipping labels for all types of packages.
--
  Stamps.com has integration partnerships with the USPS where the company provide electronic postage for mailing and shipping transactions generated by certain USPS-branded programs. For example, the company provide the electronic postage for Click-N-Ship®, a web-based service available at USPS.com that allows USPS customers to purchase and print shipping labels for certain domestic and international mail classes or packages at no additional mark-up over the cost of postage.
--
  In addition, Stamps.com has hundreds of integrations through its various brands with partners and carriers, including marketplaces, shopping carts, and e-commerce platforms as part of their multi-carrier shipping solutions.  Integrations with partners include Amazon, BigCommerce, ChannelAdvisor, eBay, Magento, PayPal, Shopify, Volusion, Yahoo! Stores, and many others. Carrier integrations include Canada Post, DHL, FedEx, Royal Mail, UPS, USPS, and many others.
++== Mailing & Shipping Supplies Stores ==
--Mailing & Shipping Supplies Stores
--
  Stamps.com and Endicia's mailing & shipping supplies stores (our "Supplies Stores") are available to its customers from within its mailing and shipping solutions and sell NetStamps labels, shipping labels, other mailing labels, dedicated postage printers, scales, and other mailing and shipping-focused office supplies. The company's Supplies Stores feature store catalogs, messaging regarding free or discounted shipping promotions, cross-selling product recommendations during the checkout process, product search capabilities, and same-day shipping of orders with expedited shipping options. The company's multi-carrier solutions do not have mailing and shipping supplies stores as part of their solutions.
++== Branded Insurance ==
--Branded Insurance
--
  The company offer branded package insurance to its customers so that they may insure their mail or packages in a fully integrated, online process that eliminates any trips to the post office or the need to complete any special forms. The company's branded insurance is offered by certain brands including Stamps.com, Endicia, ShippingEasy, ShipStation, and ShipWorks as part of their USPS and multi-carrier solutions. The company's branded insurance is provided by its insurance providers.
++== International ==
--International
--
  The company offer international mailing and shipping solutions for both its US domestic customers mailing and shipping to destinations outside the US and, primarily through its subsidiaries, mailing and shipping solutions for customers outside the US directly from international posts and carriers. International carriers include Australia Post, Canada Post, French Post, Royal Mail, and many others.
++== Customized Postage ==
--Customized Postage
--
  The company offer customized postage under the PhotoStamps® brand name. Customized postage is a patented form of postage that allows consumers to turn digital photos, designs or images into valid USPS-approved postage. With this product, individuals or businesses can create customized USPS-approved postage using pictures of their children, pets, vacations, celebrations, business logos, and more. Customized postage can be used as regular postage to send letters, postcards or packages.
++= Acquisitions =
--Acquisitions
++**MetaPack**
--
--MetaPack
--
--
  On August 15, 2018, Stamps.com ,through its wholly owned subsidiary Pacific Shelf 1855 Limited, completed its acquisition of MetaPack Limited. The net purchase price totaled approximately £171 million, or $218 million using the August 15, 2018 GBP to USD exchange rate, and was funded from current cash and investment balances.
  In connection with the acquisition, the company granted inducement stock options for an aggregate of 320,250 shares of Stamps.com common stock to 72 MetaPack employees.
++= Financial Results =
--Financial Results
--
  Total revenue decreased 5% to $136.2 million in the three months ended September 30, 2019 from $143.5 million in the three months ended September 30, 2018. Total revenue decreased 1% to $410.9 million in the nine months ended September 30, 2019 from $416.7 million in the nine months ended September 30, 2018. Mailing and shipping revenue, which includes service revenue, product revenue, and insurance revenue, was $132.9 million in the three months ended September 30, 2019, a decrease of 3% from $136.5 million in the three months ended September 30, 2018. Mailing and shipping revenue was $401.2 million in the nine months ended September 30, 2019, a decrease of 0% from $401.9 million in the nine months ended September 30, 2018. Customized postage revenue decreased 52% to $3.3 million in the three months ended September 30, 2019 from $7.0 million in the three months ended September 30, 2018. Customized postage revenue decreased 34% to $9.8 million in the nine months ended September 30, 2019 from $14.8 million in the nine months ended September 30, 2018.
++**Revenue as a percentage of total revenues**
--Revenue as a percentage of total revenues
--
  Service        91.5
  Product        3.8
@@ -117,9
+117,8 @@
  Customized postage        2.4
++= Business Outlook =
--Business Outlook
--
  As previously disclosed, its agreement with the USPS that provided for Package Incentive Payments to be paid directly to it by the USPS for certain classes of shipping labels terminated on December 31, 2018. In addition, Stamps.com has become aware of potential adverse amendments, renegotiations, changes, or termination of certain contracts between the USPS and certain of its strategic partners who are part of the USPS’s reseller program, and through which the company derive material revenues and profits (such potential events, collectively the "Reseller Restructuring"); however there is significant uncertainty as to whether, how and when any Reseller Restructuring may be implemented.
  The company expect its mailing and shipping revenue to decrease in 2019 compared to 2018 primarily due to the termination on December 31, 2018 of its agreement with the USPS which provided for Package Incentive Payments, partially offset by an increase due to MetaPack results being included for the full fiscal year in 2019, compared to the period from August 15 through year end in 2018. The company's mailing and shipping revenue is also dependent on its ability to increase its sales and marketing spend to acquire new customers and to retain its existing customers. To the extent Stamps.com is not able to achieve its target increase in spending and acquire or retain customers, this would further negatively impact its 2019 mailing and shipping revenue expectations.
@@ -140,49
+140,28 @@
  As discussed earlier in this Report, its expectations are subject to substantial uncertainty and its results are subject to macro-economic factors and other factors which could cause these trends to be worse than its current expectation or which could cause actual results to be materially different than its current expectations. These expectations are “forward-looking statements,” are made only as of the date of this Report and are subject to the qualifications and limitations on forward-looking statements discussion in the beginning of Item 2 of this Report and the risks and other factors set forth in Item 1A “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 1, 2019. The company's business has grown through acquisitions during 2014 through 2018; however the expectations above do not assume any future acquisitions or dispositions, any of which could have a significant impact on its current expectations. As described in its forward-looking statements discussion, the company do not undertake any obligation to release publicly any revisions to its forward-looking statements to reflect events or circumstances after the date of this Report.
++= Future plan =
--Future plan
++•Invest for growth in the shipping part of its business{{footnote}}https://d1io3yog0oux5.cloudfront.net/_0f4785ac1650d91f551bcd2d351c0537/stamps/db/641/4666/pdf/2019+Company+Presentation+-+Website+%28Nov-19%29+FINAL.pdf{{/footnote}}
--•Invest for growth in the shipping part of its business
--
  − Expand the features and functionality of its shipping solutions
--− Add new features and functionality that will improve the value proposition of its solutions for
++− Add new features and functionality that will improve the value proposition of its solutions for shippers including adding new integrations for easier data export and import, and adding new carrier and partner integrations
--shippers including adding new integrations for easier data export and import, and adding new
++− Expand support for new products such as inventory management, customer management, mobile solutions, and services such as its international shipping program, which bundles international shipping with valuable customer benefits such as free package pickup, free lossprotection, upgraded delivery speeds, enhanced tracking, simpler customs procedures, and other benefits
--carrier and partner integrations
--
--− Expand support for new products such as inventory management, customer management,
--
--mobile solutions, and services such as its international shipping program, which bundles
--
--international shipping with valuable customer benefits such as free package pickup, free lossprotection, upgraded delivery speeds, enhanced tracking, simpler customs procedures, and
--
--other benefits
--
  − Continue to develop partnerships and market its solutions in international markets
--− Continue driving its international shipping program which bundles international shipping with
++− Continue driving its international shipping program which bundles international shipping with valuable customer benefits such as free package pickup, free loss-protection, upgraded delivery speeds, enhanced tracking, simpler customs procedures, and other benefits
--valuable customer benefits such as free package pickup, free loss-protection, upgraded
--
--delivery speeds, enhanced tracking, simpler customs procedures, and other benefits
--
  • Leverage its portfolio of mailing and shipping solutions to drive growth
--− Leverage its technology, product features, partner integrations and supported carriers across
++− Leverage its technology, product features, partner integrations and supported carriers across our branded solutions to acquire new customers and retain existing customers
--our branded solutions to acquire new customers and retain existing customers
--
  • Increase its sales and marketing investment
--− Increase its total sales and marketing expense through its marketing channels including
++− Increase its total sales and marketing expense through its marketing channels including direct sales, direct mail, traditional media, radio, television, search engine marketing, and search engine optimization
--direct sales, direct mail, traditional media, radio, television, search engine marketing, and
--
--search engine optimization
--
  − Refine its customer acquisition process through affiliates, partners, telemarketing and others
  • Enhance its distributed Enterprise sales marketing efforts
@@ -189,5
+189,6 @@
  − Increase, optimize and refine its lead generation and sales and marketing efforts
++= References =
--[[https:~~/~~/d1io3yog0oux5.cloudfront.net/_0f4785ac1650d91f551bcd2d351c0537/stamps/db/641/4666/pdf/2019+Company+Presentation+-+Website+%28Nov-19%29+FINAL.pdf>>url:https://d1io3yog0oux5.cloudfront.net/_0f4785ac1650d91f551bcd2d351c0537/stamps/db/641/4666/pdf/2019+Company+Presentation+-+Website+%28Nov-19%29+FINAL.pdf]]
++{{putFootnotes/}}