Stamps.com Company Presentation November 2019

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Stamps.com Company Presentation November 2019
Stamps.com Company Presentation
         November 2019
                                  1
Stamps.com Company Presentation November 2019
Safe Harbor
  This presentation includes forward-looking statements about anticipated
  results which involve risks and uncertainties. Important factors, including the
  Company's ability to successfully integrate and realize the benefits of its past
  or future strategic acquisitions or investments, complete and ship its products,
  maintain desirable economics for its products and obtain or maintain
  regulatory approval, which could cause actual results to differ materially from
  those in the forward-looking statements, are detailed in filings with the
  Securities and Exchange Commission made from time to time by
  STAMPS.COM, including its Annual Report on Form 10-K for the year ended
  December 31, 2018, Quarterly Reports on Form 10-Q, and Current Reports on
  Form 8-K. STAMPS.COM undertakes no obligation to release publicly any
  revisions to any forward-looking statements to reflect events or circumstances
  after the date hereof or to reflect the occurrence of unanticipated events.

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Stamps.com Company Presentation November 2019
Agenda
   • Service Overview

   • Industry and Marketing Overview

   • Financial and Metrics Overview

   • Additional slides

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Stamps.com Company Presentation November 2019
Stamps.com’s Brands & Solutions
    Stamps.com offers online mailing and shipping solutions under the following brands:
•    Stamps.com branded solutions are USPS mailing and shipping solutions targeted at a
     broad range of customers including SOHO and enterprise mailers, eCommerce shippers,
     and high volume shippers. UPS shipping solutions to be added in 2020.

•    Endicia branded solutions are USPS mailing and shipping solutions targeted primarily at
     eCommerce shippers and very high volume shippers (warehouses, fulfillment houses,
     large retailers, etc.). UPS shipping solutions to be added in 2020.

•    ShipStation and ShipEngine offer web-based multi-carrier shipping solutions targeted at
     eCommerce and high volume shipping customers

•    ShipWorks offers client-based multi-carrier shipping solutions targeted at eCommerce
     and high volume shippers

•    ShippingEasy offers web-based multi-carrier shipping solutions targeted at online
     retailers and eCommerce customers

•    MetaPack offers worldwide shipping and delivery solutions and post-purchase
     optimization tools targeted at brands and large omni channel retailers              4
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Stamps.com Company Presentation November 2019
Stamps.com Branded Service Overview
•   Internet service that lets customers print USPS approved mailing and shipping labels
      −   USPS-approved PC Postage company since 1999. UPS to be added in 2020.
      −   Web or client based solution
      −   Monthly subscription service fee (+ the cost of postage)

•   Multiple form factors, classes, and types of mail supported
      −   Prints on shipping labels, envelopes, stamps (“Netstamps®”), and others
      −   Choose from First class, Priority, Express, domestic and international, media mail, etc.
      −   9 mailpiece types (packages, flats, envelopes, postcards, certified mail, flat rate boxes, etc.)

•   Sophisticated features for higher volume shippers
      −   Batch printing automatically prints 100s of shipping labels in a single step
      −   E-Commerce integrations with over 75 marketplaces, shopping carts, tools, etc.
      −   Automatically take care of daily repetitive tasks (automatic emails, post back shipping details
          to marketplaces, pre-fill customs forms, etc.)

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Stamps.com Company Presentation November 2019
Endicia® Service Overview (acquired November 18, 2015)
•   Leading provider of high volume USPS mailing and shipping labels
      −   USPS-approved PC Postage company since 2000, located in Mountain View, CA. UPS shipping
          solutions to be added in 2020.
      −   Solutions to help businesses run USPS shipping solutions more effectively
      −   A significant strategic investment in our high-volume and e-commerce shipping business

•   Sophisticated features for large retailers, warehouses & fulfillment houses
      −   High volume feature set (e.g., batch printing, scan-based return labels, database integration,
          email shipment notifications, XML integration, thermal printers, etc.)
      −   Integrations with over 250 high volume shipping software products, marketplaces, shopping
          carts, eCommerce tools, etc.
      −   Supports automation & customization (label customization, automatic international customs
          forms, automatic USPS package pickup, etc.)

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Stamps.com Company Presentation November 2019
ShipStation® Service Overview (acquired June 10, 2014)
•   Leading web-based multi-carrier e-commerce shipping solutions
      −   Allows online retailers and e-commerce merchants to organize, process, fulfill and ship their
          orders quickly and easily through ShipStation’s web-based interface and ShipEngine’s API
      −   Supports over 40 different national carriers, regional carriers, international carriers, and
          fulfillment services including USPS, UPS, FedEx, DHL and others
      −   Includes over 275 partner integrations with integration tools, shopping carts and
          marketplaces (eBay, PayPal, Amazon, Etsy, Square, Shopify, BigCommerce, Alibaba, etc.)
      −   Facilitates order management (inventory management, consolidated order views, search
          engine & filters, combined & split orders, order hold, manual order addition, etc.)
      −   Core printing & shipping (automatic tracking data sent to marketplace, generate manifesting
          forms, add insurance, pre-filled customs forms, rate comparisons, etc.)
      −   Provides automation of large volumes of daily orders (batch processing, packing slips, custom
          hierarchical rules, shipping presets, automatic emails, etc.)
      −   Facilitates customization (branded shipping labels, customized emails, custom packing slips,
          custom label messages, etc.)

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Stamps.com Company Presentation November 2019
ShipWorks® Service Overview (acquired August 29, 2014)
•   Leading client-based multi-carrier shipping software company
      −   Allows large retailers, fulfillment houses, and e-commerce merchants to organize, process,
          fulfill and ship their orders quickly and easily
      −   Sophisticated automation features such as a custom rules engine, automated order importing,
          automatic product profile detection, and fulfillment automation
      −   Supports over 15 different national carriers, regional carriers, international carriers, and
          fulfillment services including USPS, UPS, FedEx, DHL and others
      −   Over 100 partner integrations with integration tools, shopping carts and marketplaces (eBay,
          PayPal, Amazon, Etsy, Square, Shopify, BigCommerce, etc.)
      −   Automation of large volumes of daily orders (schedule shipping and order management tasks,
          automatically print pick lists/shipping labels/packing slips, trigger automatic tasks based on
          events, auto learning common tasks, etc.)
      −   Customization (customizable templates for invoices, emails, reports and more)
      −   Rich support of complex shipping solutions (international customs forms, complex
          international documentation, return shipping labels, etc.)

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ShippingEasy® Service Overview (acquired July 1, 2016)
•   Leading web-based multi-carrier e-commerce shipping solutions
      −   Allows online retailers and e-commerce merchants to organize, process, fulfill and ship their
          orders quickly and easily
      −   Supports 7 different national carriers, regional carriers, international carriers, and fulfillment
          services including USPS, UPS, FedEx and DHL
      −   Includes over 50 partner integrations with integration tools, shopping carts and marketplaces
          (eBay, PayPal, Amazon, Etsy, Volusion, Shopify, WooCommerce, etc.)
      −   Robust and easy to use feature set combined with a knowledgeable customer support team
      −   Facilitates order management automation (batch processing, combined & split orders, order
          type filters, management of order notes, gift order management, return management, etc.)
      −   Product management (product catalog support, assignment of product categories, etc.)
      −   Core printing & shipping (rate comparison, customizable packing slips with bar codes, tracking
          status and confirmation emails, multi-location support, automated customs forms,
          consolidator support, multi-printer routing, bar code scanning, etc.)
      −   Value-add features that help e-commerce sellers run their business more effectively, such as
          Customer Marketing and Inventory Management
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MetaPack® Service Overview (acquired August 15, 2018)
•   Global Technology Leader in Omni Channel eCommerce Delivery
      −   Extraordinary eCommerce Delivery Experiences: Allows brands and worldwide omni channel
          retailers to provide an expansive selection of optimized, customizable shipping, delivery and
          post-purchase experiences designed to reduce cart abandonment and increase sales
      −   Expansive Carrier Label Library: Provides a single point of integration into an expansive
          carrier library, with support for over 4,500 different delivery services from over 400 national
          carriers, regional carriers, and international carriers including DHL, Hermes and Royal Mail
      −   Expansive Choice of Delivery Options: Offers access to 200+ countries including an expansive
          network of over 250,000 PUDO (Pick-Up/Drop-Off) locations, plus options for “Ship To Store”,
          “Ship from Store”, and “Click and Collect”
      −   Accurate, Comprehensive End-to-End Tracking: Provides seamless, branded tracking
          experiences featuring customizable tracking portals and customer communications.
          Translates over 25,000 status events across all carriers into 61 common events that are easily
          understood by consumers and customer service teams.

      −   Sophisticated Delivery Intelligence with Real-Time Carrier Performance Data: Offers built-in
          delivery intelligence that provides actionable metrics for past delivery performance and
          allows for real-time adjustments to ensure fulfillment of consumer delivery expectations
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Confiden
Stamps.com Portfolio of Solutions                                                                                             tial

 Year
 Launched                  1999             2000 / 2015           2010 / 2014       2001 / 2014       2012 /2016        1999 / 2018
 / Acquired

 Parcel                                                             Over 40           Over 15           Over 5           Over 400
                          USPS                  USPS
 Carriers1,2                                                     parcel carriers   parcel carriers   parcel carriers   parcel services

 Software              Software or           Software or                                                                Software or
                                                                   Web-based         Software         Web-based
 Solution              Web-based             web-based                                                                  web-based

 Third Party
 Software                   75+                  250+                 275+             100+               50+               50+
 Integrations

                          Mail,                 Mail,
 Piece Types                                                       Packages          Packages          Packages          Packages
                        Packages              Packages

                                                                                                                          Retailers
                     SOHO Mailers
                                              Business                                                                  eCommerce
 Customer                Business                                E-Commerce        E-Commerce        E-Commerce
                                            High Volume                                                                  Shippers
 Targets                                                           Shippers          Shippers          Shippers
                      High Volume             Shippers
                        Shippers                                                                                        High Volume
                                                                                                                          Shippers
 1—Includes fulfillment solutions such as Fulfillment by Amazon, etc.                                                                 11
 2—UPS shipping solutions to be added in 2020 for Stamps.com and Endicia
                                                                                                                                           11
Target Customer Segments
•   Individual Mailers
      − Single users who are primarily mailers but also send some packages
•   Small Business and Home Office Mailers (“SOHO”)
      −   Single home office or small businesses with one or a few employees who are primarily mailers
          but also send some packages
•   Enterprise Mailers
      − Larger organizations with distributed office users who are primarily mailers but also send
        some packages
•   eCommerce Shippers
      − Individuals and businesses that sell online and send packages in medium to high volumes
•   High Volume Shippers
      − Large production shipping environments
      − For example, warehouses, fulfillment houses and omni channel retailers

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Individual/SOHO/Enterprise Mailer Segment Overview

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                                                      13
eCommerce Segment Overview

                             14
                                  14
High Volume Shipping Segment Overview

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Customer Benefits (Shippers)
• Save time by streamlining and simplifying shipping operations
     − Easily access over 400 domestic & international carriers from a single user interface
     − Support all of a customer’s selling channels from a single user interface (multiple marketplaces,
        shopping carts, eCommerce tools, and multi-carrier solutions available)

     − Organize daily shipping tasks into a single unified list (search, filter, combine orders, etc.)
     − Support operations & label printing (e.g. address verification, rate comparison, breadth of high
        volume scales & printers supported, convenient insurance, packing slips, etc.)

     − Automate and simplify processing of large volumes of daily orders (batch processing, custom
        hierarchical rules, shipping presets, automated customer emails, etc.)

• Save money by optimizing between carriers and access to package discounts
     − Optimize between carriers based on package size, weight & delivery times
     − Customers can receive a discount of up to 40% compared to USPS.com or retail, and launching in Q4
        of 2019, up to 55% off UPS daily rates, including various waived surcharges

     − Access to cost effective mail classes & options (First-Class packages, media mail, parcel select, etc.)
     − Shippers can receive additional discounts on domestic and international packages directly or
        through Stamps.com’s partners                                                                     16
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Customer Benefits (SOHO & Enterprise Mailers)
•   Save time by eliminating trips to the post office
      −   All services of the post office available 24x7x365 from any PC

•   Save money versus a traditional postage meter
      −   Save 50% or more versus the total cost of an entry-level postage meter

      −   Also gain greater visibility into postage activity and better support for package shipping

•   Save money with more accurate postage, discounts, and better controls
      −   Avoid costly returned mail with address verification

      −   Avoid wasted postage by calculating exact postage amount

      −   5 cent discount off single piece first class letter mail ($0.50 vs $0.55)

      −   Eliminate unauthorized usage with better tracking and control

      −   Centralized visibility and control of postage spend across multiple distributed locations

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Agenda
   • Service Overview

   • Industry and Marketing Overview

   • Financial and Metrics Overview

   • Additional slides

                                       18
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We Represent Only 4% of Top 4 Carriers’ Revenue

                                                                                                                       1

 Source: Publicly available data for all mailing & shipping revenue in top 4 carriers
 1 Combined 2018 U.S. dollar value of shipping labels printed by Stamps.com, Endicia, ShipStation, ShipWorks, ShippingEasy and MetaPack   19
                                                                                                                                               19
Over 30 million Potential Customers
                                      24,000,000

     16,000,000

     12,000,000

       8,000,000                                                     6,000,000

       4,000,000
                                                                                                   1,000,000                      743,000

                    0
                          Home Businesses Small Businesses Enterprise Mailers                                           Stamps.com

 Source: International Data Corporation, Small Business Administration, Statistics of U.S. Business, Colography, USPS, and Company Estimates   20
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Competitive Landscape
•   In the SOHO and Enterprise mailing & shipping segment we compete against:
      −   Retail post offices
      −   Traditional postage meters, pbSmartPostage
      −   Low volume shipping solutions (Click-N-Ship, UPS.com, Fedex.com)
•   In the eCommerce and high volume shipping segment we compete against:
      −   Single-carrier solutions (e.g. UPS WorldShip, FedEx Ship Manager, etc.)
      −   Other PC Postage Solutions (e.g. Pitney Bowes SendPro)
      −   Other multi-carrier solutions
      −   Internally developed solutions
•   USPS also provides alternative access formats for postage payment
      −   These are basic building blocks that must be productized by a 3rd party
      −   eVS for high volume “bulk” packages (50 packages/day minimum)
      −   ePostage for marketplaces (e.g. Amazon & Etsy)
•   Customer value is created primarily through providing complete solutions (rich
    features, deep integrations, etc.) built around multiple carriers                21
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Stamps.com vs. Competitor USPS Shipping Solutions
                                                                            All Stamps.com                                Other PC Postage                                    USPS eVS,
                                                                                Solutions                                    Solutions                                        ePostage

  Batch label printing                                                                  Yes                                             No                                            No

  Major high volume features1                                                        Over 75                                             0                                             0

  Parcel carriers supported2                                                        Over 400                                             3                                             1

  USPS mail classes supported3                                                           18                                              9                                             8

  USPS mailpiece types supported4                                                         9                                              5                                             5

  Number of unique integrations with
  marketplaces, shopping carts,                                                     Over 500                                             0                                             0
  ecommerce tools, shipping software5

  Upfront cost6                                                                          $0                                             $0                                      Significant

1 For example, SCAN forms, pre-filled customs forms, mobile app, shipping automation (picking class, carrier, adding insurance, etc.), automatically download and upload of order information from/to
  online marketplaces, search engines and filters to organize information, etc.. SendPro has only basic single label printing. ePostage includes no native features (user must build them all).
2 Carriers include but are not limited to USPS, UPS, FedEx, DHL, Newgistics, OnTrac, Asendia, Globegistics, APC Postal, Access Worldwide, Canada Post, DCL Corp, FedEx Canada, FedEx Europe, FedEx
  United Kingdom, First Mile, InXpress, Lone Star Overnight, Preferred Shipping, Unishippers, IBC, UPS Canada, DHL Express, DHL Global Mail, IMEX, LSO, RR Donnelley, Australia Post, UPS Australia,
  UPS United Kingdom, Purolator, FIMS, Sendle and Webgistix. PB SendPro supports USPS, UPS and FedEx. ePostage is a USPS-only solution.
3 Stamps.com, PB and ePostage support First Class, Priority Mail, Priority Mail Express, First Class International, Priority Mail International, Express International, Parcel Select, and Media Mail. PB and
  Stamps.com also support Library Mail. Stamps.com also supports PMOD, PMEOD, scan-based returns, matter for the blind, MBAG, GXG, ePacket, ISAL, IPA.
4 Stamps.com supports letters, standard flats, packages, flat rate boxes, flat rate envelopes, postcards, certified mail forms, NetStamps, and customs forms. PB SendPro and ePostage/eVS support only
  letters, standard flats, packages, flat rate envelopes, flat rate packages, and customs forms.
5 Sample integrations include Amazon, eBay, Yahoo!, PayPal, Google, Etsy, NetSuite, BigCommerce, Shopify, Magento, Volusion, Squarespace, Zen Cart, X-Cart, ChannelAdvisor and others.
6 Stamps.com and PB Sendpro both have user interfaces. ePostage requires significant upfront costs to build a user interface and supporting servers to provide the basic functionality listed in the chart
  here, including address cleansing, label generation, account management, payment processing, label manifesting, tracking generation, customs form generation, carrier pickup, and others. Certain
  MetaPack customers may incur professional services fees to implement the solution.
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Stamps.com vs. Postage Meter
•     We compete against traditional meters in small business and enterprise segments
•     We target distributed offices; we do not compete in centralized mail rooms
•     Stamps.com is typically significantly less expensive than a lower level postage meter

                       Category                                              Entry Level Meter                                                  Stamps.com

                Max. Print Speed                                             18 letters/minute                                            At speed of printer

               Monthly Fee                                                $19.99/month¹                                                       $17.99/month
          (rental plus 5 lbs. scale)                                 (1-Year Auto Renew Lease)                                                  (No Lease)
               Proprietary Ink &
                                                                                   $17 to $24²                                                        None
                    Labels
        Estimated Monthly Total
                                                                                  ~$37 to $54                                                          $18
           Cost of Ownership

    1 Entry level small business meter with an integrated scale
    2 Assumes monthly prints of 60 letters and 10 large envelopes per month; proprietary ink fees of $.09 - $.19 per print; proprietary label fees of $.26 per label
      (source: competitor pricing and STMP estimates)                                                                                                                  23
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Sales and Marketing
•   National salesforce
•   Direct mail
•   Radio
•   Television
•   Search engine marketing
•   Search engine optimization
•   Online media
•   Affiliate programs
•   Lead generation programs
•   Shipping integrations (Online marketplaces, Shopping carts, Shipping mgmt.)
•   Strategic partnerships
•   Telemarketing
•   Tradeshows
                                                                                  24
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Collectively Over 500 Unique Partnerships and Integrations

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2019 Mailing & Shipping Plan
•   Invest for growth in the shipping part of our business
      − Expand the features and functionality of our shipping solutions
      − Add new features and functionality that will improve the value proposition of our solutions for
        shippers including adding new integrations for easier data export and import, and adding new
        carrier and partner integrations
      − Expand support for new products such as inventory management, customer management,
        mobile solutions, and services such as our 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
      − Continue to develop partnerships and market our solutions in international markets
      − Continue driving our 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

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2019 Mailing & Shipping Plan (cont.)
•   Leverage our portfolio of mailing and shipping solutions to drive growth
      − Leverage our technology, product features, partner integrations and supported carriers across
        our branded solutions to acquire new customers and retain existing customers

•   Increase our sales and marketing investment
      − Increase our total sales and marketing expense through our marketing channels including
        direct sales, direct mail, traditional media, radio, television, search engine marketing, and
        search engine optimization
      − Refine our customer acquisition process through affiliates, partners, telemarketing and others

•   Enhance our distributed Enterprise sales marketing efforts
      − Increase, optimize and refine our lead generation and sales and marketing efforts

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Agenda
   • Product Overview

   • Industry and Marketing Overview

   • Financial and Metrics Overview

   • Additional slides

                                       28
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Financial Overview
• The Mailing & Shipping business has a recurring revenue based model
       − Service revenue is earned from different subscription and transaction based models
       − Supplies store and package insurance revenue are recurring with usage
• Stamps.com has an attractive financial model
       − Adjusted EBITDA of $34.5M and Adjusted EBITDA margin of 25% (Q3-19)
       − Low capital expenditure requirements ($1.0M1 for Q3-19)
       − Results in strong cash flow generation
• Stamps.com has a history of returning excess cash to shareholders
       − Stamps.com has returned ~$716M to shareholders since 2002
       − $107M via special dividends and $610M via share repurchases
• Stamps.com has a strong balance sheet (as of 9-30-19)
       − $143M in cash and investments
       − $54M in debt (ex debt issuance costs) and low leverage (debt / adjusted EBITDA < 1.0X)
       − $30M deferred tax asset (no valuation allowance)
• The Mailing & Shipping business generates attractive expected returns
       − Customer lifetime values significantly higher than the cost to acquire the customer
 1 Business capital expenditures which excludes investments in the company’s corporate headquarters   29
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Total Revenue
                                      Q3-19 Total revenue was $136.2M, down 5% YoY

                      Quarterly Total Revenue                                                Annual Total Revenue
                                  ($ Millions)                                                         ($ Millions)

$180                                            $170.2                                                                                      $586.9
                                                                             $600
$160
                                $139.6 $143.5            $136.0 $138.8 $136.2
                                                                              $500                                                   $468.7
$140            $132.5 $133.6

$120   $115.1                                                                $400                                            $364.3

$100                                                                         $300

 $80                                                                                                                  $214.0
                                                                             $200
                                                                                                            $147.3
 $60                                                                                            $115.7$127.8
                                                                             $100    $85.5$101.6
 $40

 $20                                                                           $0
                                                                                     2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                           YoY
       24%      25%    27%      20%    25%       29%      2%     -1%   -5%           4%    19%   14%    11%    15%     45%     70%    29%     25%
Growth                                                                        Growth

                                                                                                                                                30
                                                                                                                                                     30
Mailing & Shipping Revenue
                                 Q3-19 Mailing & Shipping revenue was $132.9M, down 3% YoY

        Quarterly Mailing & Shipping Revenue 1                                                     Annual Mailing & Shipping Revenue 1
                                     ($ Millions)                                                                            ($ Millions)
 $180                                                                                   $600                                                                        $567.3
                                                    $165.4
 $160
                                                                                        $500
                                                                                                                                                            $449.4
 $140                          $134.4 $136.5                 $132.6 $135.6 $132.9
                 $128.5 $131.0
                                                                                        $400
 $120                                                                                                                                                $350.6
        $106.5
 $100                                                                                   $300

 $80                                                                                                                                      $206.7
                                                                                        $200
                                                                                                                            $141.8
 $60
                                                                                                                 $110.0$123.1
                                                                                        $100     $78.4 $93.3
 $40

 $20                                                                                      $0
                                                                                                 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                                     YoY
       21%        26%      28%     20%      28%      29%       1%       1%      -3%                6%      19%     18%     12%      15%        46%    70%     28%    26%
Growth                                                                                  Growth

 1 Mailing & Shipping revenue includes service, store supplies and package insurance revenue from all our mailing and shipping solutions and
   excludes our customized postage revenue

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Paid Customers
                                    Paid Customer trends reflect our focus on shipping customers

                         Quarterly Paid Customers1                                                                  Annual Paid Customers1
                           (Mailing & Shipping Business)                                                            (Mailing & Shipping Business)
   800                                   (Thousands)                                          800                                 (Thousands)
                                                                                                                                                                 733     736
   750                        740      737               736      736     742      743        700
            736      735                        732                                                                                                     656

   700                                                                                        600                                               581
                                                                                                                                        512
   650                                                                                        500                              484
                                                                                                                       439
   600                                                                                        400
                                                                                                              390
                                                                                                      363

   550                                                                                        300

   500                                                                                        200
                                                                                                     2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                                         YoY
       13%          8%       3%       0%       0%       0%       -1%      1%        1%                 1%      8%      13%      10%      6%     14%      13%     12%      1%
Growth                                                                                      Growth

1 Mailing and Shipping paid customers for the quarter is defined as the number of unique Mailing and Shipping customers that the Company earned revenue from during that
  quarter. Paid customers for the year is calculated as the average of the paid customers for the four quarters during that year. Paid customers include ShipStation customers as
  of Q3-14, ShipWorks customers as of Q4-14, Endicia customers as of Q4-15, ShippingEasy customers as of Q3-16, and MetaPack customers as of Q4-18

                                                                                                                                                                             32
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Customer Churn Rates
                             Paid Customer Churn trends reflect our focus and growth in Shipping

             Quarterly Paid Customer Churn Rate1,2                                                        Annual Average Paid Customer Churn Rate1,2
 4.0%
                           (Mailing & Shipping Business)                                           4.0%
                                                                                                                             (Mailing & Shipping Business)
                                                                                                             3.9%
                                                                                                   3.8%
                                                                                                   3.6%               3.5% 3.5% 3.5%
 3.5%                                                                                                                                             3.4%
                                                                               3.4%                3.4%                                                    3.3%
                                        3.2%                                             3.2%
                                                                     3.1%                          3.2%
           3.0%     3.0%      3.0%                3.0%                                                                                                              3.0%              3.0%
 3.0%                                                                                              3.0%
                                                            2.9%                                                                                                             2.8%
                                                                                                   2.8%
                                                                                                   2.6%
 2.5%
                                                                                                   2.4%
                                                                                                   2.2%
 2.0%                                                                                              2.0%
                                                                                                             2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                                               YoY
           0.0%     0.1%      0.6%      0.4%      0.0%     (0.1%)    0.1%      0.2%      0.2%                  N/A     (0.4%)    0.0%     0.0%    (0.1%) (0.1%) (0.3%) (0.2%)         0.2%
Change                                                                                            Change

 1 Calculated as [ (Lost Paid Customers) / (Prior Quarter Paid Customers + Current Quarter New Paid Customers) ] / 3 months
 2 Includes all mailing and shipping paid customers using any of Stamps.com’s solutions. Paid customers include ShipStation customers as of Q3-14, ShipWorks customers as of Q4-14,
   Endicia customers as of Q4-15, ShippingEasy customers as of Q3-16, and MetaPack customers as of Q4-18
                                                                                                                                                                                         33
                                                                                                                                                                                              33
Avg Monthly Revenue Per Paid Customer (ARPU)
                                             Q3-19 Monthly ARPU was $59.60, down 4% YoY

          Quarterly Average Monthly Revenue per                                                        Annual Average Monthly Revenue
                  Paid Customer (ARPU) 1                                                                  per Paid Customer (ARPU)1
 $90                    (Mailing & Shipping Business)                                       $70                (Mailing & Shipping Business)                          $64.20
 $80                                                $74.93                                  $60
 $70                                                                                                                                                          $51.11
                                $60.79 $62.14                 $60.05 $60.96 $59.60          $50
 $60              $58.28 $58.96                                                                                                                      $44.52
 $50     $48.23                                                                             $40

 $40                                                                                                                         $29.64
                                                                                            $30
                                                                                                                       $23.08
 $30                                                                                                 $19.92$20.86$21.21
                                                                                                $18.01
                                                                                            $20
 $20
                                                                                            $10
 $10

  $0                                                                                         $0
                                                                                                   2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                                      YoY
          7%      16%      24%      20%      29%      29%      2%       0%       -4%                 5%      11%      5%      2%       9%      28%     50%      15%    26%
Growth                                                                                   Growth

 1 Calculated as [ Mailing and Shipping revenue for the quarter] / [Mailing and Shipping paid customers for the quarter] / 3 months. Monthly ARPU for the year is
   calculated as [Mailing and Shipping revenue for the year] / [Mailing and Shipping paid customers for the year] / 12 months.

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Total Postage Printed
                                                Q3-19 Posted Printed was $1.6B, up 3% YoY

                     Quarterly Postage Printed1                                                                Annual Postage Printed1
                                    ($ Millions)                                                                            ($ Millions)
$2,000                                                                                  $7,000                                                                        $6,489
                                                     $1,804                                                                                                  $6,090
$1,800             $1,724
                            $1,591 $1,575                     $1,626 $1,634             $6,000                                                      $5,518
$1,600                                      $1,519                             $1,562
          $1,406
$1,400                                                                                  $5,000

$1,200
                                                                                        $4,000
$1,000
 $800                                                                                   $3,000                                             $2,677

 $600                                                                                   $2,000                                      $1,770
                                                                                                                           $1,565
 $400                                                                                                             $1,148
                                                                                        $1,000             $672
 $200                                                                                             $447
    $0                                                                                      $0
                                                                                                  2010     2011    2012    2013     2014     2015   2016     2017      2018

 YoY                                                                                      YoY
           8%       9%       8%      6%       8%       5%       2%      4%       3%              26%        50%     71%     36%      13%     51%     106%     10%       7%
 Growth                                                                                   Growth

 1 Mailing and shipping postage printed includes postage printed by the Company’s mailing and shipping customers using its solutions. Includes ShipStation as of Q3-14,
   ShipWorks as of Q4-14, Endicia as of the acquisition closing date, and ShippingEasy as of Q3-16. Beginning Q4-16, we updated our methodology for measuring the
   amount of mailing and shipping postage printed. Q1-16 through Q3-16 metrics have also been revised upwards using the updated methodology.
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                                                                                                                                                                               35
Adjusted EBITDA
    Q3-19 Adjusted EBITDA was $34.5M, down 43% YoY with an Adjusted EBITDA margin of 25%

                          Quarterly Adjusted EBITDA1                                                           Annual Adjusted EBITDA1
                                          ($ Millions)                                                                         ($ Millions)
 $80.0                                                                                 $300.0
                                                    $71.3                                                                                                           $258.0
 $70.0                                                                                 $250.0
                  $64.1    $62.1 $63.6                                                                                                                     $229.9
                                            $61.0
 $60.0    $56.6
                                                                                       $200.0
 $50.0                                                                                                                                            $174.4
                                                             $39.2   $39.3             $150.0
 $40.0                                                                        $34.5
 $30.0                                                                                 $100.0                                             $82.6
 $20.0
                                                                                         $50.0                            $40.8 $44.2
 $10.0                                                                                            $13.8   $21.5 $29.8

  $0.0                                                                                    $0.0
                                                                                                  2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY                                                                                     YoY
Growth    24%      15%     21%      10%      8%      11%     (37%)   (38%)    (43%)                32%     55%     38%     37%      8%     87%    111%     32%       12%
                                                                                        Growth
Adj EBITDA                                                                             Adj EBITDA
Margin     49%     48%     46%      46%     43%      42%     29%      28%     25%                 16%      21%     26%     32%     30%     39%     48%     49%       44%
                                                                                       Margin

 1 Adjusted EBITDA is calculated as Non-GAAP Operating Income plus operating depreciation and amortization contained in cost of sales and operating expenses (see
   Company’s 8-K filings for reconciliation of non-GAAP to GAAP).

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Key Investment Takeaways
•   Large global addressable opportunity

•   Significant and differentiated customer benefits

•   Significant strategic assets in the form of technology, integrations, partnerships,
    package volume, customers, and sales force expertise

•   Attractive expected return on sales and marketing spend in our Mailing & Shipping
    business with its recurring revenue model and favorable margins and eCommerce
    trends

•   Attractive strategic opportunities within the domestic and international shipping
    businesses to leverage our assets and expertise

•   Strong cash flow and balance sheet

•   Demonstrated history of returning capital to shareholders

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Agenda
   • Product Overview

   • Industry and Marketing Overview

   • Financial and Metrics Overview

   • Additional slides

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