Pitney Bowes Fourth Quarter and FY 2024 Earnings February 11, 2025 Pitney Bowes | Fourth Quarter and FY 2024 Earnings Forward-Looking Statements and Financial Presentation This document contains "forward-looking statements" about the Company's expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about future revenue and earnings guidance, future events or conditions, capital allocation strategy and expected cost savings, elim ...

Financial Data and Key Metrics Changes - Full year revenue was $2.027 billion, down 3% year-over-year, in line with expectations for a softer point in SendTech's product cycle [8][32] - Adjusted EPS was $0.82, up $0.21, or 34%, over the prior year [9][32] - Adjusted EBIT was $385 million, up $77 million, or 25%, over the prior year [9][32] - Free cash flow was $290 million, excluding $86 million of restructuring payments [9][32] Business Line Data and Key Metrics Changes - In SendTech, shipping technology-related revenue grew 18% in Q4, while equipment revenue declined 16% year-over-year [24][36] - Presort revenue for the full year was $663 million, up from $618 million the prior year, with adjusted EBIT for the quarter increasing by 52% year-over-year [40][41] - SaaS subscription revenue in SendTech improved by 33% year-over-year, ending the year with almost 200,000 paid subscribers [37] Market Data and Key Metrics Changes - The company expects to generate between $1.95 billion and $2 billion in revenue for 2025, representing a modest decline year-over-year [42] - Shipping-related revenues in SendTech are expected to continue growing at double-digit rates, partially offsetting product migration headwinds [48] Company Strategy and Development Direction - The company is focused on simplicity, speed, and sales as guiding principles for growth in 2025 [20][21] - Plans to continue investing in organic growth initiatives and target opportunistic tuck-in acquisitions [28] - The exit from the Global Ecommerce segment is seen as a critical step in simplifying the business structure [12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the opportunities for Pitney Bowes in 2025 and beyond, emphasizing a solid foundation for growth [19][52] - The leadership team is committed to enhancing shareholder value through prudent capital allocation and returning capital to shareholders [29] Other Important Information - The company has removed approximately $30 million in annualized costs during Q4, with a total expected savings of $170 million to $190 million [14][46] - The company has successfully paid off $275 million in Oaktree notes and refinanced near-term maturities [18] Q&A Session Summary Question: Clarification on one-time items affecting EBIT - Management noted that better performance and additional savings contributed to the EBIT outperform, with overhead savings recognized quicker than expected [58] Question: Sustainability of Presort EBIT margins - Management indicated that the high EBIT margins seen in recent quarters are expected to be sustainable, driven by pricing and productivity improvements [61] Question: Future growth in SendTech - Management anticipates that by 2026, shipping growth will outweigh declines in the mailing business, leading to improved margins [64] Question: Capital allocation and share repurchase timing - The $150 million share repurchase program will be executed opportunistically over the next three years, with a focus on market conditions [77] Question: Volume expectations for Presort in 2025 - Management expects similar volumes in Presort, with a focus on the mix of mail types impacting overall performance [88] Question: Future of SendTech and potential Investor Day - Management acknowledged the need for better communication regarding SendTech's growth opportunities and is considering an Investor Day [82] Question: Corporate expenses decline explanation - The decline in corporate expenses was primarily due to cost savings initiatives, with a small impact from compensation accrual adjustments [114] Question: Pension charge explanation - A lump sum campaign in the U.S. and Canada improved the company's pension funding position, resulting in a non-cash charge of $91 million [121] Question: Future refinancing of debt - Management will evaluate all debt securities opportunistically, focusing on nearer-term maturities and more expensive debt [130]

Core Insights - Pitney Bowes (PBI) reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and showing a significant increase from $0.07 per share a year ago, representing an earnings surprise of 100% [1] - The company achieved revenues of $516.12 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.27%, although this is a decline from $871.58 million in the same quarter last year [2] - Pitney Bowes has consistently outperformed consensus EPS estimates over the last four quarters, with a notable earnings surprise of 61.54% in the previous quarter [2][3] Earnings Outlook - The sustainability of Pitney Bowes' stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $501.42 million, and for the current fiscal year, it is $1.12 on revenues of $1.97 billion [7] Industry Context - The Office Automation and Equipment industry, to which Pitney Bowes belongs, is currently ranked in the top 2% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Debt Management and Refinancing - The company will redeem the remaining $96.6 million principal amount of its senior secured notes due March 2028, along with a redemption premium of approximately $4.8 million, funded with cash on hand[4] - The company plans to launch a syndication of a proposed senior secured term loan B facility in an aggregate principal amount of up to $615 million to extend maturity to 2032[7] - The company plans to refinance its existing secured revolving credit facility and term loan A facility with a new three-year $265 million secured revolving credit facility and three-year $160 million term loan A facility[7] Financial Performance and Guidance - The company expects to report full year 2024 financial results within its previously announced revenue guidance range and beat Adjusted EBIT guidance[5]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Pitney Bowes despite lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.16 per share, reflecting a year-over-year increase of +128.6%, while revenues are projected to be $509.65 million, a decrease of 41.5% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.85% higher in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, which complicates predictions of an earnings beat [10][11]. Historical Performance - Pitney Bowes has a history of beating consensus EPS estimates, having done so in the last four quarters, including a +61.54% surprise in the last reported quarter [12][13]. Stock Movement Factors - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment [14]. Investment Considerations - While Pitney Bowes does not appear to be a strong candidate for an earnings beat, investors should consider additional factors before making investment decisions [16].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Pitney Bowes (PBI) - Pitney Bowes currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance in the market [3][4]. - The company has shown significant price performance, with shares up 16.97% over the past week and 22.72% over the past month, compared to the Zacks Office Automation and Equipment industry, which saw increases of 0.94% and 0.83% respectively [6][7]. Price Performance Metrics - Over the last three months, PBI shares have increased by 10.06%, and over the past year, they have gained 113.49%, while the S&P 500 has only moved 4.7% and 24.79% respectively [7]. - The average 20-day trading volume for PBI is 1,922,039 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In terms of earnings estimates, PBI has seen one upward revision in the past two months, raising the consensus estimate from $0.38 to $0.40 for the full year, with no downward revisions [10]. - For the next fiscal year, there has also been one upward estimate revision, indicating positive sentiment regarding future earnings [10]. Conclusion - Given the strong momentum indicators and positive earnings outlook, Pitney Bowes is positioned as a solid momentum pick for investors seeking short-term gains [12].

Have you been paying attention to shares of Pitney Bowes (PBI) ? Shares have been on the move with the stock up 27.6% over the past month. The stock hit a new 52-week high of $9.29 in the previous session. Pitney Bowes has gained 27.6% since the start of the year compared to the 30.3% move for the Zacks Computer and Technology sector and the 110% return for the Zacks Office Automation and Equipment industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it ...

Momentum Investing Strategy - Momentum investors focus on "buying high and selling higher" rather than timing the market or betting on cheap stocks [1] - Fast-moving trending stocks can be risky if their future growth potential fails to justify their valuation, leading to limited upside or downside [2] - Investing in bargain stocks with recent price momentum can be safer, and tools like the Zacks Momentum Style Score help identify such opportunities [3] Pitney Bowes (PBI) Analysis - PBI has shown strong recent price momentum with a 16.3% increase over four weeks, reflecting growing investor interest [4] - The stock has gained 17.8% over the past 12 weeks, demonstrating sustained momentum, and has a beta of 2, indicating it moves 100% more than the market [5] - PBI has a Momentum Score of A, suggesting it is a favorable time to enter the stock to capitalize on its momentum [6] Valuation and Earnings Trends - PBI has an upward trend in earnings estimate revisions, earning it a Zacks Rank 1 (Strong Buy), which is associated with strong momentum effects [7] - The stock is trading at a reasonable valuation with a Price-to-Sales ratio of 0.51, meaning investors pay only 51 cents for each dollar of sales [7] Additional Opportunities and Tools - Several other stocks pass the 'Fast-Paced Momentum at a Bargain' screen, offering potential investment opportunities [8] - Over 45 Zacks Premium Screens are available to help investors find winning stock picks based on their personal investing style [9] - The Zacks Research Wizard allows investors to backtest strategies and access successful stock-picking strategies [10]

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One of my favorite business models is SaaS. I find these companies incredibly appealing because of the high net margins that often accompany this business approach. Examining the past fiscal year's results for Pitney Bowes (NYSE:I work as an investment analyst for a mutual fund. I share the same thoroughness and precision in my daytime work as with my private work found primarily here on Seeking Alpha. My areas of expertise include the tech sector as well as the energy sector. I am not landlocked in my inve ...