VistaPrint Q2 Profit Up 35%
Press release from the issuing company
HAMILTON, Bermuda, Jan. 24, 2008 - VistaPrint Limited, the leading online supplier of high-quality graphic design services and customized printed products to small businesses and consumers, today announced its financial results for the three month period ended December 31, 2007, the second quarter of its 2008 fiscal year.
Revenue for the second quarter of fiscal year 2008 was $105.0 million, an increase of 64 percent when compared to revenue of $64.0 million in the same quarter of fiscal year 2007.
Net income on a GAAP basis for the second quarter of fiscal year 2008 was $11.2 million, which was 10.6 percent of revenue and $0.24 per share on a fully diluted basis. In the same quarter of fiscal year 2007, the Company achieved net income on a GAAP basis of $8.3 million, which was 13.0 percent of revenue and $0.18 per share on a fully diluted basis.
On a non-GAAP basis, excluding share-based compensation expense, adjusted net income for the second quarter of fiscal 2008 was $14.9 million, 14.1 percent of revenue, and $0.32 per fully diluted share. During the same quarter of the prior fiscal year, non-GAAP adjusted net income, excluding share-based compensation expense, was $10.0 million, 15.7 percent of revenue, and $0.22 per fully diluted share.
"VistaPrint delivered an outstanding second quarter: our first with revenue in excess of $100 million and also our first with over a million new customers," said Robert Keane, president and chief executive officer. "Our growth investments continue to generate returns. Two great examples from the second quarter were our growth in Europe and a promising strategic partnership with Intuit." Continuing, Mr. Keane stated, "As always, VistaPrint remains focused on the long term and we look forward to continuing growth, increasing our competitive advantage, and strong profitability."
Financial Metrics:
* Revenue for the second quarter of fiscal year 2008 grew to $105.0 million, a 64 percent increase over revenue of $64.0 million reported in the same quarter a year ago.
* Gross margin (revenue minus the cost of revenue) in the second quarter was 62.0 percent, compared to gross margin of 64.0 percent in the same quarter a year ago.
* Operating income in the second quarter was $11.8 million, or 11.2 percent of revenue, and reflected a 38 percent increase over operating income of $8.5 million in the same quarter a year ago.
* GAAP net income for the second quarter was $11.2 million, or 10.6 percent of revenue, representing a 34 percent increase compared to GAAP net income of $8.3 million in the same quarter a year ago.
* Non-GAAP adjusted net income for the second quarter, which excludes share-based compensation expense, was $14.9 million, or 14.1 percent of revenue, representing a 48 percent increase over non-GAAP adjusted net income of $10.0 million in the same quarter a year ago.
* Non-GAAP adjusted net income per fully diluted share for the second quarter, which excludes share-based compensation expense, was $0.32, versus adjusted net income per fully diluted share of $0.22 in the same quarter a year ago.
* The Company had $125.0 million in cash, cash equivalents and marketable securities as of December 31, 2007.
* Capital expenditures in the second quarter were $18.1 million.
* During the second quarter, the Company generated $38.0 million in cash from operations and $17.6 million in free cash flow.
Operating Metrics:
* VistaPrint acquired over 1.1 million new customers in the quarter ending December 31, 2007.
* Repeat customers generated approximately 63 percent of total quarterly bookings, consistent with the same quarter a year ago.
* Average daily order volume in the second quarter exceeded 30,000, an increase of 67 percent over average daily order volume of approximately 18,000 in the same quarter a year ago.
* Referral fees generated revenue of $6.6 million or 6.3 percent of total revenue in the second quarter of the current fiscal year, compared to $4.4 million from referral fees, or 6.9 percent of total revenue in the same quarter a year ago.
* Advertising spending in the second quarter was $20.9 million or 19.9 percent of revenue compared to advertising spending of $13.3 million or 20.8 percent of revenue in the same quarter a year ago.
* VistaPrint web sites that target non-U.S. markets contributed 39 percent of total revenue in the second quarter, up from 34 percent in the same quarter a year ago. Non-U.S. revenue increased 91 percent year over year in U.S. dollars. Excluding the impact of changes in foreign currency exchange rates, non-U.S. revenue grew 72 percent year over year. Quarterly revenue from U.S. websites grew 50% year over year.
* Average order value in the second quarter including revenue from shipping was $35.50 compared to average order value of $35.94 in the same quarter a year ago.
* Web site sessions in the second quarter were 53.0 million, a 55 percent increase over 34.3 million web site sessions in the same quarter a year ago.
* Conversion rates were 5.4 percent in the second quarter of fiscal 2008, compared to conversion rates of 4.9 percent in the same quarter a year ago.
Growth Investments, Innovation, and Partnerships:
* Invested $18.1 million in capital expenditures in the second quarter of fiscal 2008.
* Introduced wall calendars and an online caricature tool.
* Entered into a strategic partnership with Intuit to provide a white label, Intuit-branded web site for small business printing services as well as design and print functionality that will be integrated into future releases of the QuickBooks software. Intuit's QuickBooks is a leading provider of small business services with approximately 3.5 million active small business customers.
"VistaPrint marked milestones in the second quarter, both in terms of new customer acquisitions and revenues," noted chief financial officer Harpreet Grewal. He continued, "Our holiday performance in the second quarter was strong, and we are now well positioned to drive and meet the seasonal increase in demand for SOHO marketing products and services that we typically see in our third fiscal quarter."
Financial Guidance as of January 24, 2008:
As previously discussed, VistaPrint ceased issuing quarterly gross margin guidance following the quarter ending September 30, 2007 and does not plan to provide annual gross margin guidance beyond fiscal year ending June 30, 2008. In addition, the Company does not plan to provide non-GAAP adjusted net income per fully diluted share guidance for any periods beyond the fiscal year ending June 30, 2008. However, the Company will continue to disclose share-based compensation expenses in its reported results to facilitate non-GAAP earnings per share comparisons during a transition period.
Based on current and anticipated levels of demand, the Company expects the following:
Revenue
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects revenue to be $102 million to $107 million.
* For the full fiscal year ending June 30, 2008, the Company expects revenue to be $385 million to $395 million.
Gross Margins
* For the full fiscal year ending June 30, 2008, the Company expects gross margins to be 62 percent to 64 percent.
GAAP Fully-Diluted Earnings Per Share
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects GAAP fully-diluted earnings per share to be $0.20 to $0.24.
* For the full fiscal year ending June 30, 2008, the Company expects GAAP fully-diluted earnings per share to be $0.78 to $0.86.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects non-GAAP adjusted net income per fully diluted share, which excludes share-based compensation expenses, to be $0.28 to $0.32.
* For the full fiscal year ending June 30, 2008, the Company expects non-GAAP adjusted net income per fully diluted share, which excludes share-based compensation expenses, to be $1.10 to $1.18.
Capital Expenditures
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects to make capital expenditures of approximately 18 to 22 percent of fiscal year 2008 third quarter revenue.
* For the full fiscal year ending June 30, 2008, the Company expects to make capital expenditures of approximately 17 to 20 percent of fiscal year 2008 revenue.
Guidance for the full fiscal year ending June 30, 2009
* For the full fiscal year ending June 30, 2009, the Company expects GAAP fully-diluted earnings per share to be $1.10 to $1.20, which assumes 47.5 million weighted average shares outstanding.
* The Company is providing the following assumptions to facilitate comparisons with non-GAAP adjusted net income per fully diluted share: non-GAAP fully diluted weighted average share count for the fiscal year ending June 30, 2009 of approximately 48.2 million shares, share based compensation of approximately $20 million, and, based on those assumptions, fiscal year 2009 non-GAAP adjusted net income per fully diluted share range of approximately $1.50 to $1.60. Please note, however, that earnings per share guidance for any period beyond June 30, 2008 is GAAP-based and any additional assumptions are provided solely to facilitate comparisons.
Revenue for the second quarter of fiscal year 2008 was $105.0 million, an increase of 64 percent when compared to revenue of $64.0 million in the same quarter of fiscal year 2007.
Net income on a GAAP basis for the second quarter of fiscal year 2008 was $11.2 million, which was 10.6 percent of revenue and $0.24 per share on a fully diluted basis. In the same quarter of fiscal year 2007, the Company achieved net income on a GAAP basis of $8.3 million, which was 13.0 percent of revenue and $0.18 per share on a fully diluted basis.
On a non-GAAP basis, excluding share-based compensation expense, adjusted net income for the second quarter of fiscal 2008 was $14.9 million, 14.1 percent of revenue, and $0.32 per fully diluted share. During the same quarter of the prior fiscal year, non-GAAP adjusted net income, excluding share-based compensation expense, was $10.0 million, 15.7 percent of revenue, and $0.22 per fully diluted share.
"VistaPrint delivered an outstanding second quarter: our first with revenue in excess of $100 million and also our first with over a million new customers," said Robert Keane, president and chief executive officer. "Our growth investments continue to generate returns. Two great examples from the second quarter were our growth in Europe and a promising strategic partnership with Intuit." Continuing, Mr. Keane stated, "As always, VistaPrint remains focused on the long term and we look forward to continuing growth, increasing our competitive advantage, and strong profitability."
Financial Metrics:
* Revenue for the second quarter of fiscal year 2008 grew to $105.0 million, a 64 percent increase over revenue of $64.0 million reported in the same quarter a year ago.
* Gross margin (revenue minus the cost of revenue) in the second quarter was 62.0 percent, compared to gross margin of 64.0 percent in the same quarter a year ago.
* Operating income in the second quarter was $11.8 million, or 11.2 percent of revenue, and reflected a 38 percent increase over operating income of $8.5 million in the same quarter a year ago.
* GAAP net income for the second quarter was $11.2 million, or 10.6 percent of revenue, representing a 34 percent increase compared to GAAP net income of $8.3 million in the same quarter a year ago.
* Non-GAAP adjusted net income for the second quarter, which excludes share-based compensation expense, was $14.9 million, or 14.1 percent of revenue, representing a 48 percent increase over non-GAAP adjusted net income of $10.0 million in the same quarter a year ago.
* Non-GAAP adjusted net income per fully diluted share for the second quarter, which excludes share-based compensation expense, was $0.32, versus adjusted net income per fully diluted share of $0.22 in the same quarter a year ago.
* The Company had $125.0 million in cash, cash equivalents and marketable securities as of December 31, 2007.
* Capital expenditures in the second quarter were $18.1 million.
* During the second quarter, the Company generated $38.0 million in cash from operations and $17.6 million in free cash flow.
Operating Metrics:
* VistaPrint acquired over 1.1 million new customers in the quarter ending December 31, 2007.
* Repeat customers generated approximately 63 percent of total quarterly bookings, consistent with the same quarter a year ago.
* Average daily order volume in the second quarter exceeded 30,000, an increase of 67 percent over average daily order volume of approximately 18,000 in the same quarter a year ago.
* Referral fees generated revenue of $6.6 million or 6.3 percent of total revenue in the second quarter of the current fiscal year, compared to $4.4 million from referral fees, or 6.9 percent of total revenue in the same quarter a year ago.
* Advertising spending in the second quarter was $20.9 million or 19.9 percent of revenue compared to advertising spending of $13.3 million or 20.8 percent of revenue in the same quarter a year ago.
* VistaPrint web sites that target non-U.S. markets contributed 39 percent of total revenue in the second quarter, up from 34 percent in the same quarter a year ago. Non-U.S. revenue increased 91 percent year over year in U.S. dollars. Excluding the impact of changes in foreign currency exchange rates, non-U.S. revenue grew 72 percent year over year. Quarterly revenue from U.S. websites grew 50% year over year.
* Average order value in the second quarter including revenue from shipping was $35.50 compared to average order value of $35.94 in the same quarter a year ago.
* Web site sessions in the second quarter were 53.0 million, a 55 percent increase over 34.3 million web site sessions in the same quarter a year ago.
* Conversion rates were 5.4 percent in the second quarter of fiscal 2008, compared to conversion rates of 4.9 percent in the same quarter a year ago.
Growth Investments, Innovation, and Partnerships:
* Invested $18.1 million in capital expenditures in the second quarter of fiscal 2008.
* Introduced wall calendars and an online caricature tool.
* Entered into a strategic partnership with Intuit to provide a white label, Intuit-branded web site for small business printing services as well as design and print functionality that will be integrated into future releases of the QuickBooks software. Intuit's QuickBooks is a leading provider of small business services with approximately 3.5 million active small business customers.
"VistaPrint marked milestones in the second quarter, both in terms of new customer acquisitions and revenues," noted chief financial officer Harpreet Grewal. He continued, "Our holiday performance in the second quarter was strong, and we are now well positioned to drive and meet the seasonal increase in demand for SOHO marketing products and services that we typically see in our third fiscal quarter."
Financial Guidance as of January 24, 2008:
As previously discussed, VistaPrint ceased issuing quarterly gross margin guidance following the quarter ending September 30, 2007 and does not plan to provide annual gross margin guidance beyond fiscal year ending June 30, 2008. In addition, the Company does not plan to provide non-GAAP adjusted net income per fully diluted share guidance for any periods beyond the fiscal year ending June 30, 2008. However, the Company will continue to disclose share-based compensation expenses in its reported results to facilitate non-GAAP earnings per share comparisons during a transition period.
Based on current and anticipated levels of demand, the Company expects the following:
Revenue
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects revenue to be $102 million to $107 million.
* For the full fiscal year ending June 30, 2008, the Company expects revenue to be $385 million to $395 million.
Gross Margins
* For the full fiscal year ending June 30, 2008, the Company expects gross margins to be 62 percent to 64 percent.
GAAP Fully-Diluted Earnings Per Share
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects GAAP fully-diluted earnings per share to be $0.20 to $0.24.
* For the full fiscal year ending June 30, 2008, the Company expects GAAP fully-diluted earnings per share to be $0.78 to $0.86.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects non-GAAP adjusted net income per fully diluted share, which excludes share-based compensation expenses, to be $0.28 to $0.32.
* For the full fiscal year ending June 30, 2008, the Company expects non-GAAP adjusted net income per fully diluted share, which excludes share-based compensation expenses, to be $1.10 to $1.18.
Capital Expenditures
* For the third quarter of fiscal year 2008, ending March 31, 2008, the Company expects to make capital expenditures of approximately 18 to 22 percent of fiscal year 2008 third quarter revenue.
* For the full fiscal year ending June 30, 2008, the Company expects to make capital expenditures of approximately 17 to 20 percent of fiscal year 2008 revenue.
Guidance for the full fiscal year ending June 30, 2009
* For the full fiscal year ending June 30, 2009, the Company expects GAAP fully-diluted earnings per share to be $1.10 to $1.20, which assumes 47.5 million weighted average shares outstanding.
* The Company is providing the following assumptions to facilitate comparisons with non-GAAP adjusted net income per fully diluted share: non-GAAP fully diluted weighted average share count for the fiscal year ending June 30, 2009 of approximately 48.2 million shares, share based compensation of approximately $20 million, and, based on those assumptions, fiscal year 2009 non-GAAP adjusted net income per fully diluted share range of approximately $1.50 to $1.60. Please note, however, that earnings per share guidance for any period beyond June 30, 2008 is GAAP-based and any additional assumptions are provided solely to facilitate comparisons.
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