This Quarterly Report on Form 10-Q (this "Report") contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). You can find many (but not all) of
these statements by looking for words such as "approximates," "believes,"
"expects," "anticipates," "estimates," "projects," "seeks," "intends," "plans,"
"could," "would," "may" or other similar expressions in this Report. Our
forward-looking statements relate to future events or our future performance and
include, but are not limited to, any statements that refer to future responses
to and effects of COVID-19, statements concerning our business strategy, future
commercial revenues, market growth, capital requirements, new product
introductions, expansion plans and the adequacy of our funding. Other statements
contained in this Report that are not historical facts are also forward-looking
statements.

We claim the protection of the safe harbor contained in the Private Securities
Litigation Reform Act of 1995. We caution investors that any forward-looking
statements presented in this Report, or that we may make orally or in writing
from time to time, are based on beliefs and assumptions made by us and
information available to us at the time made. Such statements are based on
assumptions, and the actual outcome will be affected by known and unknown risks,
trends, uncertainties and factors that are beyond our control or ability to
predict. Although we believe that our assumptions are reasonable, they are not
guarantees of future performance, and some will inevitably prove to be
incorrect. As a result, our actual future results can be expected to differ from
our expectations, and those differences may be material. Accordingly, investors
should use caution in relying on forward-looking statements to anticipate future
results or trends.

Please refer to the risk factors under "Item 1A. Risk Factors" of our Form 10-K
for the year ended December 31, 2020, as well as those described elsewhere in
this Report (if any) and in our other public filings.  Some important factors
which could cause actual results to differ materially from those in the
forward-looking statements include: (i) direct and indirect effects of the
ongoing COVID-19 pandemic and any changes or end to it; (ii) our ability to
monetize our customers' transactions with carriers, including uncertainties
regarding the duration, renegotiation and ultimate impact of existing and
potential future arrangements with carriers and partners and our success in
implementing our strategy over the long term, (iii) our ability to successfully
integrate and realize the benefits of our past or future strategic acquisitions
or investments, (iv) our ability to diversify our relationships with carriers,
(v) the impact of foreign exchange fluctuations and geopolitical risks, and (vi)
other important factors that are detailed in our filings with the Securities and
Exchange Commission made from time to time. Important risk factors that may
cause such a difference also include, but are not limited to, risks related to
the ability of the Company to consummate the proposed transaction with Thoma
Bravo on a timely basis or at all; the satisfaction of the conditions precedent
to consummation of the proposed transaction; the Company's ability to secure
regulatory approvals on the terms expected in a timely manner or at all; the
risk of disruption from the transaction making it more difficult to maintain
business and operational relationships; the risk of negative side effects of the
announcement or the consummation of the proposed transaction on the market price
of the Company's common stock or on the Company's operating results; significant
transaction costs; unknown liabilities; the risk of litigation and/or regulatory
actions related to the proposed transaction; competitive factors, including
competitive responses to the transaction and changes in the competitive
environment, pricing changes and increased competition; customer demand for the
Company's products; the Company's ability to develop and deliver innovative
applications and features; the Company's ability to provide high-quality service
and support offerings; the Company's ability to build and expand its sales
efforts; regulatory requirements or developments; changes in capital resource
requirements; and other business effects, including the effects of industry,
market, economic, political or regulatory conditions; future exchange and
interest rates; changes in tax and other laws, regulations, rates and policies;
and future business combinations or disposals. The risks included are not
exhaustive, and additional factors could adversely affect our business and
financial performance. We operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time, and it is not possible
for management to predict all such risk factors, nor can it assess the impact of
all such risk factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Without limiting the foregoing, the
significant and unprecedented uncertainty regarding the business and economic
impact of the ongoing COVID-19 pandemic (as well as the impact of efforts of
governments, businesses and individuals to mitigate the effects of such
pandemic) on us, our customers, our carrier and integration partners and the
global economy, makes it particularly difficult to predict the nature and extent
of impacts on demand for our products and services, making our business outlook
subject to considerable uncertainty. In addition, the global economic climate
and additional or unforeseen effects from the COVID-19 pandemic amplify many of
the other risks we face. This Report and all subsequent written and oral
forward-looking statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary statements contained
or referred to in this section. We do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect events or
circumstances after the date of this Report.
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Our registered trademarks include Stamps.com, Auctane, Endicia, Metapack,
NetStamps, PhotoStamps, ShipEngine, ShippingEasy, ShipStation, ShipWorks, and
the Stamps.com logo. This Report also references trade names and trademarks of
other entities. References in this Report to "we" "us" "our" or "Company" are
references to Stamps.com Inc. and its subsidiaries.

Pending Transaction



On July 9, 2021, the Company announced the execution of an Agreement and Plan of
Merger (the "Merger Agreement") by and among the Company, Stream Parent, LLC, a
Delaware limited liability company ("Parent"), and Stream Merger Sub, Inc., a
Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"),
pursuant to which, upon the terms and subject to the conditions set forth in the
Merger Agreement, Merger Sub will merge with and into the Company, in an
all-cash transaction valued at approximately $6.6 billion, with the Company
surviving the Merger as a direct wholly owned subsidiary of Parent (the
"Transaction" or the "Merger"). Parent and Merger Sub are affiliates of Thoma
Bravo Fund XIV, L.P. (the "Thoma Bravo Fund") managed by Thoma Bravo, L.P. If
the Transaction is completed, the Company's stockholders will be entitled to
receive $330.00 per share in cash. The Transaction is expected to close in the
third or fourth quarter of 2021, subject to approval by the Company's
stockholders and regulatory authorities and the satisfaction of customary
closing conditions.

Overview



Stamps.com® is a leading provider of Internet-based mailing and shipping
solutions in the United States (US) and Europe. Our portfolio of solutions is
marketed under the brand names Stamps.com®, Endicia®, Metapack®, ShippingEasy®,
ShipEngine®, ShipStation®, and ShipWorks®. Our software solutions allow
customers to print mailing and shipping labels for multiple carriers around the
world through downloadable software, web-based user interfaces (UIs) and
application programming interfaces (APIs). Our solutions provide our customers
with access to discounted carrier rates for select carriers, including the
United States Postal Service (USPS) and United Parcel Service (UPS). Our
solutions also offer customers improved operational efficiency and financial
savings. Our customers primarily include small businesses, home offices,
medium-size businesses, large enterprises, e-commerce merchants, large retailers
and high volume shippers including warehouses, fulfillment houses and
omni-channel retailers.
Segment Information and Geographic Data
Our operations consist of two segments: Stamps.com and Metapack. The Stamps.com
segment includes the results of brand names Stamps.com, Endicia, ShippingEasy,
ShipEngine, ShipStation and ShipWorks. Stamps.com's customers are primarily
located in the US. The Metapack segment offers multi-carrier enterprise-level
shipping software solutions to large e-commerce retailers and brands who are
primarily located in Europe.
Mailing and Shipping Business References

When we refer to our "mailing and shipping business," we are referring to our
mailing and shipping products and services including our USPS® and multi-carrier
mailing and shipping solutions, consolidation services, mailing and shipping
integrations, mailing and shipping supplies stores and branded insurance
offerings. We do not include our historical customized postage business when we
refer to our mailing and shipping business. When we refer to our "mailing and
shipping revenue," we are referring to our service, product and insurance
revenue generated by our mailing and shipping customers. We do not include our
customized postage revenue generated by our customized postage business in our
"mailing and shipping revenue."
Services and Products

Mailing and Shipping Business

We offer the following mailing and shipping services to our customers under the Stamps.com, Endicia, Metapack, ShipEngine, ShippingEasy, ShipStation and ShipWorks brands:


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Mailing Solutions
As part of our mailing and shipping business, we offer our USPS-approved
solutions to mail and ship a variety of domestic and international mail pieces
and packages through the USPS. Our USPS mailing solutions enable our customers
to print "electronic postage" using only a personal computing device, printer
and Internet connection. Our 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®. Our customers can print postage on (1)
NetStamps® labels, which can be used just like regular stamps, (2) envelopes and
postcards or on labels in a single step process that saves time and provides a
professional look, (3) plain 8.5" x 11" paper, (4) special labels for packages,
and (5) on integrated customs forms for international mail and packages. Our
USPS mailing solutions also provide our customers with access to discounted
postage rates on certain mail classes.
Multi-Carrier Shipping Solutions
As part of our mailing and shipping business, we offer our industry leading
domestic and international multi-carrier e-commerce shipping solutions. Our
multi-carrier solutions collectively enable our customers to print approved
shipping labels for more than 350 regional, national and international carriers
and integrate with more than 300 partners including shopping carts,
marketplaces, e-commerce tools and various other software products. Our
multi-carrier solutions also provide our customers with access to discounted
carrier rates, including with USPS and UPS®.
Consolidation Services
As part of our mailing and shipping business, we offer domestic and
international shipping services through our consolidator partners, who group
packages by destination and ship the packages directly or through partners.
These services seek to take advantage of economies of scale by accessing lower
carrier rates that apply to larger volume freight and are not otherwise
accessible to smaller shipments, with the goal of yielding lower shipping costs
for our customers.
Back-End Integrations
As part of our mailing and shipping services, we offer our back-end integration
solutions where we provide the electronic postage for transactions to partners
who manage the front-end users. Our solutions integrate directly into the most
popular e-commerce platforms, allowing web store managers to 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 shipping labels for all types
of packages.
We have integration partnerships with the USPS where we provide electronic
postage for mailing and shipping transactions generated by certain USPS-branded
programs. For example, we 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.
Mailing & Shipping Supplies
As part of our mailing and shipping services, we offer mailing and
shipping-focused office supplies to our customers through our online supplies
stores. Our supplies stores are available within our mailing and shipping
solutions and sell a variety of products including NetStamps labels, shipping
labels, mailing labels, postage printers and scales.
Branded Insurance
As part of our mailing and shipping services, we offer branded insurance for
packages to our customers in an integrated, online process that eliminates any
trips to retail carrier locations or the need to complete any special forms. Our
branded insurance, which is provided by third party insurance providers with
which we contract, is offered by certain brands including Stamps.com, Endicia,
ShippingEasy, ShipEngine, ShipStation, and ShipWorks as part of their solutions.
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Customized Postage
Prior to the third quarter of 2020, we offered customized postage under the
PhotoStamps® brand name. Customized postage is a patented form of USPS postage
that allowed consumers to turn digital photos, designs or images into valid
USPS-approved postage. With this product, individuals or businesses could 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. PhotoStamps was
available from our www.photostamps.com website. As previously disclosed, in the
second quarter of 2020, we received notification from the US Postal Service
(USPS) that it was eliminating its customized postage program and also revoking
our authorization to offer products pursuant to that program effective June 16,
2020.
COVID-19
In March 2020, the World Health Organization declared the outbreak of a novel
strain of the coronavirus ("COVID-19") to be a pandemic. The pandemic is having
widespread, rapidly evolving impacts on economies, financial markets, and
business practices. We are closely monitoring the impact of COVID-19 on all
aspects of our business.
Since the first quarter of 2020, we have taken a number of precautionary
measures to help minimize the risk of exposure to our employees, including
significantly revising travel policies and implementing temporary office
closures as all employees are advised to work remotely where possible.
We experienced negative year-over-year performance for the three months ended
June 30, 2021 as a result of the strong growth experienced in 2020 resulting
from the COVID-19 pandemic and the easing of shelter in place orders. While we
continue to see strong performance in shipping volumes in the context of
difficult year-over-year comparisons which we believe is due to changes in
consumer preferences for e-commerce, we cannot predict how long these
circumstances will continue, and it should not be assumed that they will yield
any net financial benefit to us beyond the second quarter of 2021 and as noted
below, we believe our results of operations for the three months ended June 30,
2021 were impacted by the easing of shelter in place orders and work-from-home
requirements. Further, it is not possible to determine the duration and scope of
the pandemic, including any recurrence, the actions taken in response to the
pandemic, the scale and rate of economic change from the pandemic, any ongoing
effects on consumer demand and spending patterns, or other impacts of the
pandemic, and whether these or other currently unanticipated consequences of the
pandemic are reasonably likely to materially affect our results of operations.
See "Risk Factors - Risks Related to COVID-19" within Item 1A in our Annual
Report on Form 10-K, filed with the SEC on February 26, 2021, for a discussion
of some of the risks posed by the COVID-19 pandemic, and uncertainties we, our
customers, business partners, and the national and global economies face as a
result.
Results of Operations

Three and Six Months Ended June 30, 2021 and June 30, 2020



Total revenue decreased 8% to $191.1 million in the three months ended June 30,
2021 from $206.7 million in the three months ended June 30, 2020. Total revenue
increased 6% to $380.2 million in the six months ended June 30, 2021 from $358.1
million in the six months ended June 30, 2020. Mailing and shipping revenue,
which includes service revenue, product revenue, and insurance revenue, was
$191.1 million in the three months ended June 30, 2021, a decrease of 3% from
$197.9 million in the three months ended June 30, 2020. Mailing and shipping
revenue was $380.2 million in the six months ended June 30, 2021, an increase of
10% from $346.2 million in the six months ended June 30, 2020. There was no
customized postage revenue in the three and six months ended June 30, 2021 due
to the elimination of the program by the United States Postal Service effective
June 16, 2020. The Company does not expect material customized postage revenue
or cost of revenues after June 2020.

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Revenue by Segment

The following table sets forth the revenue by segment for the three and six
months ended June 30, 2021 and June 30, 2020 and the resulting percentage change
(revenue in thousands):

                                           Three Months Ended June 30,                                           Six Months Ended June 30,
                                 2021                  2020               % Change                    2021                    2020               % Change
Segment revenues
Stamps.com                 $      175,618          $ 191,047                    (8.1) %       $     348,228               $ 328,592                     6.0  %
Metapack                           15,456             15,683                    (1.4) %              31,936                  29,484                     8.3  %
Total revenues             $      191,074          $ 206,730                    (7.6) %       $     380,164               $ 358,076                     6.2  %

The majority of the 8% decrease in total revenue is due to a 8% decrease in total revenue from the Stamps.com operating segment.

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